Contractor takes 拢25.4m hit from losses on design and build contracts
Mitie has announced it is drawing back from design and build work in the energy sector, suffering a 拢25.4m hit as a result.
The contractor said a 鈥渟mall number鈥� of design and build projects in its Energy Solutions business over the past year experienced 鈥渄elays and considerable cost overruns鈥�, prompting it to recognise a 鈥渘umber of non-recurring, exceptional losses鈥�.
The firm said it is consequently 鈥渞educing our exposure鈥� to design and build contracts, but 鈥渄esign and build risk鈥� remains on a 鈥渟mall number of material energy contracts and their financial returns remain uncertain鈥�.
Mitie made the disclosure in its financial results for the year to 31 March 2014.
Pre-tax profit jumped 21.5% to 拢69.4m for the period, up from 拢56.3m the previous year, while revenue grew 4.7% to 拢2,221m, up from 拢2,121m.
The firm鈥檚 facilities management business grew 9.2% over the period to 拢1,686bn revenue, up from 拢1,543m the previous year.
The firm said it made a further exceptional loss of 拢13.6m as a result of closing its mechanical and electrical business, following on from a 拢25.2m exceptional loss the previous year.
Mitie also restructured its defined benefits pension scheme during the period, resulting in a one-off exceptional net credit of 拢10.2m.
Ruby McGregor-Smith, chief executive of Mitie, said: 鈥淲e have made excellent progress, achieving sector-leading organic growth driven by new and expanded contracts, as well as completing a bolt-on acquisition in healthcare.
鈥淲e are very well-positioned as one of the UK鈥檚 leading integrated facilities management providers and we have also invested in higher margin markets which will support our growth aspirations.
鈥淲e expect outsourcing opportunities will continue to grow, with a trend towards more clients seeking to access bundled and integrated services.
鈥淲e are confident that we will continue to build on our track record of delivering sustainable, profitable growth.鈥�
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