Mitie Group (MTO) H2 2024 earnings summary

Executive summary

• Achieved third consecutive year of record performance, completing the previous three-year plan and entering the Facilities Transformation strategy with strong momentum.

• Revenue grew 11.2% year-over-year to £4.5 billion, with operating profit up 29.7% to £210.2 million and EPS up 29.5% to 12.3p.

• Order book increased 18% to £11.4 billion, pipeline up 27% to £18.6 billion, and contract wins/renewals rose 44% to £6.2 billion.

• Customer Net Promoter Score reached +60, up 18 points, and employee engagement hit a record 63%.

Financial highlights

• Organic revenue growth was 7.1%, with acquisitions contributing 4.1 percentage points.

• All divisions contributed to growth: Business Services up 5.4%, Technical Services up 14.9%, CG&D up 13.3%, and Communities up 14.9%.

• Free cash inflow of £158 million, closing net debt at £81 million, and ROIC at 26.4%.

• Dividend increased 38% to 4p per share, with payout ratio rising to 33%.

• Operating margin improved to 4.7% from 4.0% year-over-year.

Outlook and guidance

• FY25 expected to see high single-digit revenue growth, with margins consistent with or above FY24.

• EPS in FY25 will be impacted by a higher tax rate (25%) and increased finance costs.

• Free cash flow expected to exceed £100 million in FY25, with ROIC remaining above 20%.

• By FY27, targeting £5.6 billion revenue, margins above 5%, and £150 million annual free cash inflow.