By Li-mei Hoang
LONDON (Reuters) - British outsourcer Mitie (L:MTO) posted a 5.8 percent rise in annual revenue due to a strong performance in its facilities management business, and said it was well positioned for growth for the year ahead.
The company, which runs services from maintenance and cleaning to baggage screening at London's Heathrow airport, also raised its dividend by 6.4 percent to 11.7 pence per share.
Mitie said full-year revenue rose to 2.26 billion pounds for the year ended March 31, from 2.1 billion a year earlier.
Chief Executive Ruby McGregor-Smith said she expected opportunities in the outsourcing market to grow after the firm secured 85 percent of budgeted revenue for the year ahead.
"Outsourcing is going to grow significantly in the UK over the next five years, and it tends to grow two or three times what GDP growth rates are, particularly when you've got big cost pressure," she said.
"Overall, there's a really positive outlook for us."
Pretax profit rose 0.7 percent to 114.1 million pounds, above a forecast of 110.25 million pounds, according to a Thomson Reuters poll of nine analysts.
It also reported operating profit rose 0.9 percent to 128.6 million pounds. It had warned in March that operating profit would be slightly below expectations because of market pressures in its homecare and social housing businesses.
"The healthcare business has some margin pressure as did our social housing business, I think those who were delivering public services would say, that's probably not a surprise," McGregor-Smith said.
"We expect that going forward that pressure should ease over the next two to three years."
Shares in the company were up 3.6 percent at 2.98 pounds by 0947 GMT, making it one of the biggest gainers on the FTSE 250 index (FTMC).
"Management is taking a fresh approach...Greater focus on cash and lower future exceptionals should improve cash and support a progressive dividend covered by cash," said Liberum analysts in a note.