MITIE looks to public sector gains

Nov 24 2009 by Iain Laing, The Journal

OUTSOURCING specialist MITIE expects to gain from looming public spending cuts as the Government enlists private sector help to deliver savings.

The company is growing its public sector expertise in anticipation of a clampdown on public spending by whichever party wins next year’s general election.

The public sector already accounts for 40% of the group’s revenues, but this could approach 50% in the years ahead, chief executive Ruby McGregor-Smith said.

“We anticipate considerable impetus in the public sector over the next two years as all public sector bodies will be challenged to maintain front line service delivery with reduced budgets,” the company added.

MITIE – which stands for Management Incentive Through Investment Equity – boosted pre-tax profits by 11% to £42.8m in the six months to September 30, on revenues 5% higher at £801.1m.

Altium Securities analyst Karl Green said: “We believe that larger players with extensive multi-service offerings are likely to take market share in these trickier trading conditions.”