Will Mitie Group Clean Up Following FY Results?
Spreadex | May 30, 2019 10:49
The stock has been all over the place in 2019. Opening at £1.13, it had climbed to a 6-month high of £1.57 in mid-March, only to tank back to £1.11 just a couple of weeks later in early April. It’s then had a hell of a time of it in the last month or so, striking £1.50, then falling to £1.30, then rebounding to a current trading price of £1.39 in the space of a few days.
The company’s latest update came on March 28th. There Mitie stated that, while its committed order book was broadly flat in the second half, for the full year it would be down 10%, blaming a ‘challenging backdrop in the industry’ – shown in the collapse of both Carillion and Interserve (LON:IRV) – and ongoing ‘political uncertainty’.
However, it wasn’t all bad. Its Project Helix transformation plan is expected to be largely completed by the year-end, with around £45 million or run-rate cost savings. Group revenue, meanwhile, is set to rise 7-8%; remove acquisitions, like the well-performing Vision Security Group, and organic growth is still expected to be up c.4%.
Most importantly, operating profit before other items is forecast to come in between £84 million and £87 million. At a mid-point of £85.5 million, that’s a 2.8% improvement on the previous year’s £83.2 million, but below analysts’ previous guidance.
Any word on its plans regarding Interserve – there has been a fair amount of so far disputed takeover talk – will be very much welcome on Thursday.
Mitie Group (LON:MTO) has a consensus rating of ‘Buy’ alongside an average target price of £1.97.
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