Mitie in £50m writedown as boss Bentley cuts staff

Mitie’s new chief executive today swung the axe on staff and revealed a £50 million writedown as he attempts to turn around the troubled outsourcer.

Phil Bentley, who joined in December, cut 160 jobs, and brought the total writedowns in the past year to £152 million.

The cleaning-to-office services group is also negotiating with its lenders to increase the amount it can borrow, as it pushes up against its banking covenants because of a string of charges for accounting oversights.

Mitie works in London institutions from Brixton prison to Imperial College and last month won an offices contract with Red Bull racing.

It wants to be able to borrow up to £1.5 billion to give it headroom for more one-off charges. Net debt stood at £146 million at the end of March.

Bentley, the former British Gas and Cable & Wireless chief executive, said 2017 had been a “challenging” year for the business and pushed back the full-year results to June.

He asked KPMG to come in and overhaul the books at the start of the year.

The accountants called Mitie’s accounting methods “less conservative” than others in the sector, resulting in the latest charges.

The healthcare business, bought in 2012, was written down by £115.3 million last year.

RBS analyst Andrew Brooke said Mitie’s debt position was better than expected and the shares rose 6% to 224.6p.