Mitie back in City good books after turnaround gathers pace

Ailing UK outsourcer Mitie saw its biggest shares jump for nearly a decade on Monday as the City bet on an end to the crisis dogging the UK giant.

Shares in the struggling company, which plummeted after three profit warnings and a big writedown, rose as much as 15%, the biggest single-day rise since 2008.

Despite revealing a £43 million loss, orders were down less than expected and the pipeline of work Mitie is bidding on, including immigration centre contracts, was up 10% to £8.7 billion.

Chief executive Phil Bentley, who was drafted in to replace Baroness Ruby McGregor-Smith in December, said: “You don’t fix things in six months but we’ve got a plan. We know where we’re going hunting.”

The shares traded as high as 277p, back to levels not seen since its shock September profit warning.

That is despite the board ruling out a final dividend, pushing the total dividend down by two thirds this year to 4p from 12.1p last year.

The shares settled back to trade at 270p later in the day.

Investors were encouraged by Bentley’s fresh cost cutting.

He plans to slash a further £45 million of costs from the company through efficiency savings although he backed away from a fresh round of redundancies, saying: “The chances are we can deploy people in different roles.”

City analysts, long sceptical of the group, also turned positive with Liberum and Canaccord upgrading their ratings to hold and buy from sell.

The group is expected to turn a profit next year but will keep the dividend flat.

Many were encouraged by the fresh move into more high-tech facilities management.

Bentley said Mitie had signed a contract with Microsoft and was using data analytics to tie in with the Internet of Things.

Adjusted revenue for the year ending March 2017 was up 0.3% to £2.14 billion while its £43 million loss reversed a £107.6 million profit from last year.