Facilities management group Mitie (LON:MTO) posted a double-digit increase in revenue and operating profit for FY26. The results include the benefits of the Marlowe acquisition and major contract wins during the year.
Delivering growth
For the year to March, Mitie reported revenue of £5.62 billion, up 10.5% on the previous year. Half the increase was organic, driven by new contract wins, scope increases, pricing and upselling, with the rest from acquisitions.
Operating profit before one-off items increased 13% to £264 million, despite higher NI costs and the loss of some contracts. EPS before items rose 7% to 13.6p as higher finance costs and new shares to finance the Marlowe deal offset higher margins.
During the year, Mitie added new contracts worth £6.3 billion including extensions and renewals. The total order book hit a record £16.3 billion, while the potential pipeline of deals is a record £31.7 billion.
CEO Phil Bentley said the group started FY27 ‘with good momentum, supported by a record order book and bidding pipeline’. Despite higher costs due to the Middle East, margins are still seen growing due to sales mix and operational improvements.
We covered Mitie’s last trading update in January when it confirmed its full-year forecasts. We also flagged the firm’s considerable confirmed order book and its even bigger pipleine of opportunities.
Both the order book and the pipeline continue to grow, and the firm is now generating double-digit sales and earnings growth. Yet the shares have barely budged since the end of January and remain cheap on our calculations.
Maybe it should big up its credentials in the AI space where it manages data cantres for hyperscalers including Alphabet (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT). Providing mechanical, cooling and security for AI projects is part of the margin story so maybe it could drive a re-rating of the shares.
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