In a trading update, the company says that it has made good progress in the past four months and expects its results for its financial year to 31 March 2011 to be in line with management's expectations.
Both its facilities management (FM) and technical FM divisions have performed well in the private sector, the company said, and it expects to see increasing public sector opportunities over the next 12 months.
Mitie said: “The level of contract awards across the group has increased since October. However, we have seen little recovery in our more cyclical markets within Property Management and there is risk of some delay in delivering both secured and prospective project work before the year end. We are pleased with the progress in our Asset Management division where we are seeing a strong pipeline of energy and technical infrastructure projects.”
It added: “Budgetary pressure in the public sector is beginning to create substantial opportunities for outsourcing and this is evident in both the increasing use of framework agreements and in our growing sales pipeline. Within the private sector, we see increasing opportunities to follow our clients overseas. Across the business, the high level of both our order book and pipeline of contract opportunities makes us confident that Mitie is well positioned for sustainable, profitable growth.”
New contracts include:
- A contract to design and develop a data centre that will be used by a major bank. The 16-month contract started this month and has an estimated value of £34m.
- A five year contract to provide technical FM services to the Transport for London head office portfolio. With a value of £15m over five years, the contract is being mobilised for an April 2011 start.
- Four FM contracts, worth £4m in total, following appointment to the Office of Government Commerce (Buying Solutions) framework agreement, including one with the Department for International Development.
- A £110m partnering contract to deliver repairs and maintenance to 14,000 homes for Orbit Group across East Anglia, London and the Southeast. The 10-year contract starts in April 2011 and has an optional five-year extension.
- Acleaning contract for Hull and East Yorkshire Hospitals NHS Trust first awarded in 2006 has been renewed for a further five years.
- A £25m five-year FM contract at Campsfield House Immigration Removal Centre for the UK Border Agency.
- A five-year FM contract for the Welsh Assembly Government worth £11m and covering 65 buildings.
The company added: “The group continues to see a positive trend in its sales pipeline. There has been an increase in framework contracts across many of our markets. A recent example of our success is our appointment to the NHS Building and Engineering Maintenance Services framework agreement, where we will supply technical FM services to the NHS. We have also been appointed to two framework agreements within the justice sector. There is a growing pipeline of energy opportunities in the health sector and local authority opportunities are also increasing as they seek to generate efficiencies through transformational outsourcing contracts.”
On 16 December 2010, Mitie issued £100m of US private placement loan notes with institutional investors. The proceeds were used to repay shorter dated bank facilities which expire in 2012. The group is now refinancing these facilities.
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