Management services company Mitie saw shares hit their highest level in 12 months on Monday, despite reporting a 139 percent drop in operating profits for the 2016/17 financial year.
The group fell into an operating loss of £42.9 million, drop from a profit of £107.6 million the previous year, after being hit by £88.3 worth of charges relating to accounting changes. The company reassured investors by adding that it expected to return to modest profit growth over the next financial year, after launching a £45 million cost efficiency programme.
Adjusted revenue of £2.14 billion rose marginally over the “challenging year”, with the board not recommending a final dividend. The total dividend for the year is 4.0 pence, down from 12.1 pence the previous year.
Phil Bentley, Chief Executive of Mitie, commented:
“This has been a challenging year for Mitie. We have reported a loss as a result of the one-off accounting adjustments arising from the Accounting Review. We are now focused on the future of the business and I am encouraged that our Order Book has held up and our Pipeline is growing.
“Following a full strategic review we are investing in technology in the workspace to meet our customers’ evolving needs and we are embarking on a major cost reduction programme. With the support of our 53,000 colleagues, we will take Mitie “Beyond FM…to the Connected Workspace”.
Liberum changed their guidance from “sell” to “hold” on the back of the results, noting that underlying trading was in line with estimates.
“The order book is flat but the pipe-line is up”, said John Brent at Liberum. “New leadership and a new strategy will be delivered quickly.”
Mitie (LON:MTO) shares are currently up 6.28 percent at 262.30 (0843GMT).