(Reuters) - British outsourcer Mitie Group Plc (L:MTO) reported a rise in first-half profit on Thursday, but warned that Brexit and the upcoming election could reduce capital commitments by its clients and change their approach to outsourcing decisions.
"As the vast majority of Mitie's client base is within the UK, we are particularly exposed to uncertainties in the UK's political and economic landscape," the company said in the risks section of its statement.
Mitie, which manages and maintains London's landmarks, high street buildings and homes, said operating profit from continuing operations and before other items rose 5.4% to 33 million pounds ($42.65 million) for the six months ending Sept. 30.
The company, however, said annual revenue growth will be held back by broader economic uncertainty, which will hurt its projects business.
Brexit and the elections could also result in changes to the regulatory framework, as well as restrictions in the supply of labour and materials, it added.
Mitie said revenue growth in the financial year 2020-21 would be in line with this year and operating profit before other items will increase by mid-single digits.
The company is in the midst of a cost-savings drive to revive its fortunes under Chief Executive Officer Phil Bentley, who took over at the end of 2016. It has since restated its historic accounts, announced it would appoint a new auditor and sold a loss-making unit.
Mitie said it is now half-way through its five-year transformation.
The company, which is less dependent than its rivals on public sector work, said its order book grew 1% in the reported period to 4.1 billion pounds, helped by contract wins from the Bank of England, Her Majesty's Revenue and Customs and a major London airport.