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Profits at outsourcer Mitie are set to beat expectations after the group said it had successfully replaced all short-term Covid-related work with new contracts.
During the pandemic, the London-based company helped deliver services at Covid-19 testing sites across the UK, supplied fever-screening technology for businesses and provided security for virus quarantine hotels.
Mitie has found other sources of revenues now these services have been wound down, including a new contract with Eurostar worth £40million and the renewal of contract with ‘a large critical infrastructure organisation’ worth up to £497million.
Upbeat: Mitie said it had successfully replaced all its Covid revenues with new contracts
The group also retained its strategic partnership with the Ministry of Defence for its overseas military base in Cyprus – a contract worth up to £643million – while another ‘substantial’ public sector contract worth £552million is at ‘an advanced stage’, the group said.
After continued growth in the fourth quarter, Mitie expects operating profit for the full-year to the end of March of at least £155million, above its current guidance for ‘at least £145 million’, on revenues ‘slightly ahead’ of last year’s £4billion.
On the back of the strong performance and a ‘robust’ balance sheet, the group also announced a fresh £50million share buyback programme.
‘We are entering the new financial year with a strong order book and a healthy pipeline,’ the group told shareholders in a trading update ahead of its annual results to be published on 8 June.
‘We will provide further details on all our new wins and renewals when we report our full year results,’ it added.
Mitie shares surged 12.3 per cent to 91.6p in morning trading on Tuesday. They have risen by nearly a fifth since the start of the year and are 77 per cent higher than 12 months ago.
In February, Mitie was cleared by Britain’s competition watchdog over an investigation into its bidding process for two Home Office contracts after the regulator said there were ‘no grounds for action’.
The CMA had launched an investigation into Mitie and US firm PAE in March last year into ‘suspected anticompetitive conduct’ related to the procurement of certain services at the Heathrow and Derwentside immigration removal centres.
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