Mitie: Turnaround is costlier than expected

Outsourcer Mitie on Friday admitted the cost of its turnaround will be higher than thought, and Carillion’s demise wasn’t helping either.

Chief executive Phil Bentley, who joined in November to turn the business around after a string of profit warnings, said: “The liquidation of Carillion has raised fundamental questions about the industry.”

He added that managing clients’ buildings and offices – the company offers everything from catering to heating control – was “a complex business”. The City wasn’t impressed – shares fell 11.6p, or 7.31%, to 149.41p. The company said the turnaround costs will now be £35 million for the year ending in March 31, up from £24 million.

Bentley, who used to run Cable & Wireless, said he was “making solid progress”. Mitie’s finances from 2015 and 2016 are being scrutinised by watchdogs. Its debt levels are “comfortably within banking covenants”.