Profits rise but revenue falls at Mitie

Support services group more than doubled annual profit to £112.5mln
Profits rise but revenue falls at Mitie
Mitie said it had no major contract rebids until 2019

Mitie Group PLC (LON:MTO) more than doubled annual profit and launched a £20mln share buyback programme, but revenue fell.

The support services group said a strong performance in its facilities management arm drove a 101% rise in operating profit to £112.5mln in the year to March 31.

It said it had no major contract rebids until 2019 following a successful period of retentions and extensions and recent new contracts would help it return to revenue growth in 2016/17.

Revenue in 2015/16, which fell 1.8% to £2.2bn, took a hit from lower discretionary and project spending, as well as some delayed starts on new contracts.

It said its sales line-up was buoyant at £9.1bn versus £9.7bn in 2014/15 and its order book was still strong at £8.5bn, although that was down from £9bn beforehand.

The company is also launching a buyback programme to return surplus cash to shareholders of up to £20mln in the financial year to March 2017.

Mitie will review it annually going forward and will cancel those shares purchased. It is also increasing its dividend by 3.4% to 12.1p per share.

Chief executive Ruby McGregor-Smith said: "We continue to see a range of good outsourcing opportunities across our key markets and anticipate modest growth in the coming year. We remain positive about the group's prospects."

Shares fell 0.5p to 273.1p in early London trading.

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