Mitie facing headwinds across its businesses and looks unlikely to shift them in the short term
Companies: Mitie Group
Mitie Group (LSE: MTO) has released a profit warning today ahead of its Interim Results (scheduled for 21 November). The Group is facing significant headwinds across most of its businesses and as a result, is flagging a significant hit to H1 profits:
"...in the first half we expect revenue to be modestly lower and operating profit to be very significantly lower."
Furthermore, Management highlights the material impact to full year expectations:
"Operating profit for the full year is now expected to be materially below management's previous expectations."
The property management business, which accounts for 84% of the Group's revenues, has experienced reduced growth as Management has seen a trend towards customers extending contracts with existing suppliers. Local Authority budget pressures have "severely impacted" the Property Management business, and led to trading in the Healthcare business remaining "challenging".
Mitie's share price has plummeted 24% in early trading this morning as the market takes stock. The next question for investors is whether this is a one-off or could we see further warnings as we approach the FY Results (year-end 31 March 2017).