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Revenue and profit at Mitie have increased 10% as growth in its energy services business has taken off.

This part of the outsourcing company now accounts for 34% of revenue, according to its preliminary results to 31 March 2011. It said that most of its contracts now include some kind of energy management.

锘縏he increase in energy prices and the move towards taxes on carbon, means there is more demand

John Telling, Mitie

John Telling, corporate affairs manager, said 鈥淭he increase in energy prices, and the move towards taxes on carbon, means there is demand.鈥�

The technical facilities management division, which includes energy, grew from 拢345m in revenue to 拢437m.

The company is pushing into decentralised energy, including combined heat and power plants and solar PV, Telling said.

He said that Mitie was looking into insulating homes as part of the government鈥檚 Green Deal plan to cut the carbon emissions of the residential stock, but said it would have to look at how a scheme targeted at individual homes would work at a 鈥渟calable commercial model鈥�.

Mitie鈥檚 share price jumped 5% on the day of the announcement, up from 210p a share to 220p.

Guy Hewett, an analyst at Investec Securities, said: 鈥淭hey were in line with analysts鈥� expectations, but the cash flow was stronger than we thought. They鈥檙e on an improving trend.鈥�

He said focusing on energy was an effective strategy: 鈥淓nergy costs are significant for clients. Plus, some brands have material carbon reduction targets.鈥�

Most revenue growth came through acquisition, including Irish facilities manager Dalkia FM in June last year. This meant the company鈥檚 organic growth was just 2.1%, although it grew more than three times the speed in the second half as the first.

Telling said public sector work had not increased this year, despite the hopes of outsourcing companies that government cuts would lead to surge of deals with government.

鈥淪eventy-five per cent of the contracts we won this year are in the private sector, so most of the growth is from there,鈥� he said.

He said it would be up to two years before demand from the public sector took hold.

鈥淭he amount of public sector opportunities in the pipeline has increased. In 18-24 months we鈥檒l get back to better conditions.鈥�

Mitie in numbers to year ending 31 March, 拢m