Interim Results
MITIE Group PLC
27 November 2006
27 November 2006
MITIE Group PLC
INTERIM RESULTS
FOR THE SIX MONTHS TO 30 SEPTEMBER 2006
'MITIE has made a very good start to the year and enjoyed an encouraging level
of organic growth. We are benefiting from favourable market conditions
throughout the sectors in which we operate'.
Ian Stewart, Chief Executive
OPERATIONAL HIGHLIGHTS
•Strong revenue growth of 30.2% to £585.0m
•Integration of Security and Landscape acquisitions on target
•Profit before interest, tax and amortisation up 28.3% to £28.1m
•Operating profit margin of 5.0% achieved, before integration costs *
•Earnings per share before amortisation up 32.6% to 5.7p
•Dividend up 26.3% to 2.4p
* See note 2 to the Interim Consolidated Financial Statements
FINANCIAL HIGHLIGHTS
2006 2005 Growth
£m £m £m %
Revenue 585.0 449.2 135.8 30.2
Profit before interest, tax and amortisation 28.1 21.9 6.2 28.3
Profit before tax and amortisation 27.1 23.4 3.7 15.8
Profit before tax 26.3 23.4 2.9 12.4
2006 2005 Growth
p p p %
Basic earnings per share 5.5 4.3 1.2 27.9
Dividend per share 2.4 1.9 0.5 26.3
Basic earnings per share before amortisation 5.7 4.3 1.4 32.6
Notes to editors
For further information, please contact:
Emma Woollaston, Investor Relations Manager
T: 020 7022 8476 M: 07920 765125
An audio webcast of MITIE's results presentation will be available online at
www.mitie.co.uk at 0930hrs on Monday 27 November 2006. A copy of the slides will
also be made available online later that morning. Both can be found in the
'Investors' section of the website.
High resolution images are available for media to download free of charge from
www.vismedia.co.uk
MITIE is one of the UK's leading support services companies and delivers
facilities, engineering and property services to a wide cross section of
clients. Our extensive range of activities includes building refurbishment and
maintenance, catering, cleaning, landscaping and grounds maintenance, mechanical
and electrical engineering, engineering maintenance, pest control, document
management and distribution, security, and facilities management and services.
MITIE aspires to be the first choice provider. We offer professional, flexible
and cost effective services by establishing close relationships with our
clients. From national to local, public to private, our services meet the
everyday demands of the markets in which we operate. By motivating our people to
deliver services successfully and with passion, MITIE can offer single services,
bundled services or a complete facilities management package, each individually
tailored to the requirements of the client.
MITIE, which is an acronym for Management Incentive Through Investment Equity,
employs a unique equity model that delivers services with the personal
commitment of a small business and the professionalism and quality expected from
a large national organisation.
For further information, please visit our website www.mitie.co.uk
CHIEF EXECUTIVE'S STATEMENT
MITIE has made a very good start to the year and enjoyed an encouraging level of
organic growth. The integration of our recent acquisitions, in Security and
Landscape, are progressing well and we are benefiting from favourable market
conditions throughout the sectors in which we operate.
Overview
Revenue for the period under review was up 30.2% to £585.0m (2005: £449.2m).
Profit before tax for the period increased by 12.4% to £26.3m (2005: £23.4m),
profit before amortisation increased by 15.8% to £27.1m (2005: £23.4m) and our
basic earnings per share grew by 27.9% to 5.5p (2005: 4.3p).
We are particularly pleased with the level of organic growth achieved across the
businesses in the first half of the year and with our retention rate of existing
contracts.
The operating and financial performance of our individual businesses is covered
in more detail in the Operating and Financial Reviews.
Acquisitions
The acquisitions made in Security and Landscape last year are integrating well
with the rest of the Group and I am particularly encouraged by the progress that
has already been made with our largest acquisition, Initial Security Limited
(ISL), now MITIE Security Limited.
The MITIE model continues to play an important part in the overall strategy and
culture of the Group, and on 24 August 2006 we announced the acquisition of the
minority shareholdings of four MITIE start ups: MITIE Air Conditioning (London)
Ltd; MITIE Engineering Maintenance (South West) Ltd; MITIE Engineering Services
(Retail) Ltd; and MITIE Air Conditioning (Wales) Ltd.
We will continue to provide the opportunity for people to run their own
business, and we believe that there are a number of exciting opportunities for
our smaller businesses to develop further using the MITIE model. An important
example of this was the recent launch of a second generation equity scheme for
MITIE Property Services, following shareholder approval in August 2006.
Board changes
On 27 July 2006, Graeme Potts was appointed to the Board of MITIE as a
Non-Executive Director.
Graeme, 49, was previously Managing Director of Inchcape UK, Europe and South
America Retail, part of Inchcape plc, and before that Chief Executive of Reg
Vardy plc and Group Managing Director of RAC Motoring Services.
Graeme brings with him a considerable level of operational and commercial
experience of the corporate environment, and we are delighted to welcome him to
the Group.
Dividend
I am pleased to report that the Board has declared an interim dividend of 2.4p
per share (2005: 1.9p), which represents an increase of 26.3%. The dividend
cover, based on Group profit for this period, is 2.5 times.
The dividend will be paid on 30 March 2007 to shareholders on the register at
the close of business on 9 March 2007.
Outlook
Going forward we will continue our strategy of targeting double digit growth by
building on our experience and ability to offer bundled services whilst further
developing the levels of expertise within our existing businesses. We are also
taking a more integrated approach to major contract bid activity and continue to
seek acquisition opportunities and start-ups that would fit within the MITIE
model framework.
In order to maintain the best possible level of service for our clients, we will
continue investing in our people and we remain committed to our corporate
responsibility programmes throughout the Group.
Part of this commitment involves ongoing support for our MITIE Skills Centres,
which enable young people to develop their vocational skills in the construction
sector.
In the first half of the year we opened two MITIE Skills Centres in Ipswich and
Birmingham, and a third, in London, in October. This is in addition to the
existing centres in Portsmouth, Manchester, Sunderland and Bristol.
Overall, the Group is set to perform in line with the Board's expectations and
continue its track record of delivering profitable growth.
Ian Stewart
Chief Executive
OPERATING REVIEW
MITIE Support Services and MITIE Property Services have continued to produce
good results, following their exceptional performances last year. Support
Services has seen a strong level of organic growth and has also been focused on
the integration of recent acquisitions. MITIE Engineering Services has seen a
positive start to the year.
The number of new and retained contracts MITIE has secured in the first half,
across the full range of our services, is very positive for the Group and
reflects our success in providing tailored services for our clients.
We continue to offer our clients the flexibility of having one of three
different types of contract with MITIE: a single service contract; a bundled
contract; or a facilities management contract.
Our single service contracts demonstrate our ability to operate seamlessly as
part of our customer's organisation, providing a focused, professional service.
Bundled contracts occur when a customer wishes to employ more than one MITIE
service on the same site. The client will typically maintain an active
involvement in their facilities management, but will be looking to rationalise
its supply chain and engage a number of our services.
The third type of contract we offer is a total facilities management service,
which is where clients ask us to manage all aspects of their facilities and we
operate as an extension to their existing businesses.
MITIE is extremely well positioned to manage all three types of service
agreements, but we are seeing a trend for large blue chip companies to move
increasingly towards bundled contracts.
The bundling of contracts can develop from any of the MITIE businesses,
especially where we already have excellent relationships with our customers on
site, and we believe it is this type of contract that will help drive further
organic growth within the Group. We will therefore continue to focus on
improving our customer knowledge, sharing that information across our individual
businesses in order to meet our clients' needs more effectively.
The increasing trend towards outsourcing continues to offer MITIE excellent
opportunities and we remain focused on building national businesses, each
capable of achieving a top five market share in their sector.
MITIE Support Services
Within Support Services we offer a number of complementary services, including
Cleaning, Security, Engineering Maintenance, Managed Services, Business
Services, PFI, Catering, Landscape and Pest Control.
Support Services won a number of important single and bundled service contracts
in the first half, with significant growth coming from our Business Services,
Catering and Managed Services businesses. Overall, Support Services has
increased its revenue to £346.5m and grown its profit before interest, tax and
amortisation by 29.1%, to £19.5m.
2006 2005 Growth
£m £m £m %
------ ------ ------ ------
Revenue 346.5 238.7 107.8 45.2
Profit before interest, tax and amortisation 19.5 15.1 4.4 29.1
Margin 5.6% 6.3%
Profit before interest, tax, amortisation and
integration costs 20.6 15.1 5.5 36.4
Margin 5.9% 6.3%
MITIE Cleaning
Cleaning provides services to offices, retail and transport premises, and
commercial buildings. Services include recycling, waste management and
specialist cleaning.
Revenue: Up by 6.7% to £105.4m in 2006 (2005: £98.8m)
Our Cleaning business has had a solid start to the year and has retained a
number of its key contracts, including those at Aberdeen College, and
outsourcing and technology company Xansa. We also retained the national contract
with Sun Microsystems through their managing agent partner.
New work includes contracts with Walt Disney's UK head office and Camden Borough
Council, as well as a new three year contract with the new landmark parliament
in Wales, the Welsh Assembly Senedd. Securing this contract means that MITIE now
provides cleaning services for all three parliament buildings in the UK.
Our retail cleaning business is a good example of how the MITIE model drives
further organic growth by focusing on a niche area in the sector. In the first
half of the year this business secured work with Somerfield for over 500 of its
stores. Other new contracts include a brand new concept store for H&M and a
number of prominent shopping malls including Crystal Peaks in Sheffield.
Our Health and Hygiene business has won a full domestic services contract with
Great Ormond Street Hospital, which has a term of five years.
Cleaning's Waste and Environmental business is progressing well and during the
period it was awarded several new contracts including work with Bank of America.
This business has also just launched its revolutionary TREEHUGGER(R) Truck, a
bespoke vehicle which carries out recycling activities for clients along the M4
corridor. We are seeing an increasing demand for innovative services such as
this, as our clients look to manage their environmental responsibilities more
effectively within the workplace.
Cleaning continues to be recognised externally for its environmentally friendly
work with clients and was recently awarded the 'Green Hero' environmental
accolade for its contract with London based Foster and Partners. Together, they
were amongst the first in the country to be awarded a prize by the environmental
group, The Green Organisation.
Our specialist transport cleaning business has secured further work with
Transport for London after winning an additional contract to clean London's
traffic light infrastructure, often a target for graffiti and other types of
criminal damage. A 'hit squad' of three 'smart cars' was procured especially for
this contract to help tackle the problem in a timely and efficient manner.
MITIE Security
Security provides static guarding, mobile patrol, retail security, key holding
and alarm response, electronic security systems, aviation and transport
security.
Revenue: Up by 233.0% to £121.2m in 2006 (2005: £36.5m)
Security has experienced strong organic growth of 11.5% during the period and
has seen a significant increase in its revenue and profits due to the
acquisition of ISL in March this year.
Since the ISL acquisition the principal focus for Security has been to fully
integrate our existing and acquired businesses, and to create a leading national
security business. The organisational integration activities are on track to be
completed by 31 March 2007, and are expected to deliver annualised synergy
benefits of £3.0m in the year ended 31 March 2008.
The industry as a whole continues to be impacted by the Security Industry
Authority's new regulations. The latest requirement, introduced on 1 August
2006, is for companies to have a minimum of 85.0% of their staff licensed in
order for them to qualify for Approved Contractor Status, which we have
achieved.
We believe this legislation will continue to provide opportunities for the Group
as smaller businesses struggle to meet the additional costs and commitment
required to invest in new training for staff.
New work during the period included contracts with Bath Museum and First Bus.
The integrated Security business remains focused on service excellence for its
clients. As the second largest manned guarding business in the UK we believe
that our training and people place us in an excellent position to continue
winning new and retaining existing business.
MITIE Engineering Maintenance
Engineering Maintenance provides heating, ventilation and air conditioning
maintenance, mechanical and electrical systems maintenance, statutory
inspections and testing, estate maintenance and asset care for a variety of
clients in all major market sectors throughout the UK.
Revenue: Up by 8.3% to £49.0m in 2006 (2005: £45.2m)
Engineering Maintenance has seen good organic growth in this period and
continues to build long-term relationships with its customers, having
successfully re-negotiated a number of existing contracts. The Birmingham
Bullring Shopping Centre contract was secured for a further three years, and the
Ministry of Defence contract in Corsham was retained and extended to include
additional services throughout the portfolio of United States Air Force defence
estates in the UK.
The business has grown a number of its regional contracts into national
contracts, and continues to introduce other MITIE companies in order to add
further value for its customers and increase the number of bundled contracts for
the Group. A recent example of this is the contract with Computer 2000
Distribution Ltd, which has been developed into a bundled services contract with
Cleaning and Security.
Engineering Maintenance has also won an encouraging amount of new work with
contract wins in the private sector including Cardiff International Business
Park, Walt Disney, and Fort Dunlop in Birmingham. In the education sector, work
has been secured with the University of London, the London Metropolitan
University and the University College of Creative Arts.
Engineering Maintenance leads the MITIE bundled contract with Sellafield, which
was recently re-tendered. The contract now includes Cleaning, Security and
Business Services. This contract is typical of the trend we are seeing where
organisations look to procure bundled services from fewer providers in an effort
to control costs and improve the quality of services delivered.
Engineering Maintenance has also secured a major new five year contract with
Birmingham City Council for the maintenance and repair of many of the City's
schools, museums, libraries and art galleries.
MITIE Managed Services
Managed Services encompasses facilities management and consultancy, project
management, integrated service delivery, energy and environmental management to
a wide range of customers across a number of sectors.
Revenue: Up by 16.4% to £39.7m in 2006 (2005: £34.0m)
Managed Services has had a strong start to the year retaining all of the
contracts re-bid in the period, and has seen new contract wins across both its
public and private sector client base.
New contract wins in the public sector include the recently opened Grace Academy
in the West Midlands, whilst new private sector work has commenced with home
shopping company, Littlewoods Shop Direct Home Shopping Ltd. The business also
secured new contracts with RWE npower and healthcare product manufacturer and
distributor SSL International.
Earlier this year Managed Services secured preferred supplier status with OGC
(Office of Government Commerce) Buying Solutions, the Government's leading
procurement services organisation for the UK. This has already led to four new
contracts across the UK, and we anticipate this will continue to be a major
source of opportunities going forward.
MITIE Business Services
Business Services provides mailroom management, reception and switchboard,
records management, print and reprographics, creative services and document
distribution to its clients.
Revenue: Up by 28.6% to £10.5m in 2006 (2005: £8.2m)
Business Services achieved excellent first half organic growth, and has built on
the success it had last year with major contract awards in both single and
bundled services.
Business Services has successfully mobilised the PricewaterhouseCoopers
contract, its largest win to date. This contract is for the provision of
document management and distribution services, including reprographics, mail,
publications, and stationery for the entire PricewaterhouseCoopers network
throughout the UK.
Retained contracts include mailroom services for a major financial institution
and our Network Rail contract which has now been extended to include Cleaning,
Security and Engineering Maintenance in addition to the reception, mail and
reprographics services originally provided.
Business Services is also involved with the bundled services contract at
Sellafield, and will be providing mail services to the site.
MITIE PFI
Our PFI business provides support to Private Finance Initiative (PFI) programmes
in the education sector. It focuses on the provision of facilities and
operational support services, rather than participation in PFI equity schemes.
Revenue: Up by 10.7% to £4.9m in 2006 (2005: £4.4m)
Our PFI business has had a strong start to the year with the focus being
primarily on the mobilisation of new contracts. Our earlier investment in the
business is now making a contribution and we are now delivering services at the
schools which have completed their construction phase.
An example of this was the Darlington Education Village which was opened in July
this year by the Prime Minister. A further six new schools were also opened in
time for the beginning of the Autumn 2006 term.
In addition we have reached financial close on the East Ayrshire schools
portfolio contract, although the contract is not scheduled to start for another
18 months.
MITIE now has a strong market share, which positions us firmly as one of the
major market leaders in this sector. The investment focus for this business
going forward will therefore be on the Government's new 'Building Schools for
the Future' initiative, which is scheduled for some £50bn of investment. MITIE
remains very well placed to secure future work within this programme.
MITIE Catering
Catering provides hospitality and executive dining, vending and consultancy
services, events, and staff catering to a wide range of clients across the UK.
Revenue: Up by 6.2% to £7.7m in 2006 (2005: £7.3m)
Catering continues to make good progress with existing and new contracts, with
each of the regional start up companies performing well in the period.
The contract with Bookham Technology has been enlarged as a bundle, which is led
by Catering, and includes Cleaning, Landscape, Security, Engineering Maintenance
and Pest Control.
Strong levels of growth in the London business have also been achieved by a
series of new contract wins, which include The Brewery in Chiswell Street and
commercial law firm, Beachcroft LLP, at both their offices in London and
Bristol.
In the North of England, Catering has secured new business with retailer
Matalan, semi-conductor business Zetex, and car parts manufacturer Hashimoto.
The business will continue to focus on niche catering and has recently launched
fair trade coffee for all its hospitality services.
MITIE Landscape
Landscape provides a traditional range of services including grounds and estate
maintenance, landscape design and installation, gritting and winter maintenance,
together with estate lighting and drainage. The business also provides
arboricultural works and interior tropical plant services.
Revenue: Up by 200.0% to £5.4m in 2006 (2005: £1.8m)
The acquisition of grounds maintenance company Lyndhurst Services Ltd in
February this year increased our national coverage and we now have a significant
presence in the market. We have improved our garden design capability and we
were delighted when the MITIE sponsored garden, exhibited at the Chelsea Flower
Show in May this year, won a Silver Gilt Medal.
Landscape has secured a number of contracts with housing associations including
the Cosmopolitan Housing Association in Liverpool and the Charlton Triangle
Housing Association in London.
The business continues to target the education sector and has been awarded a new
contract with Thames Valley University. Elsewhere, Landscape has secured new
work with NCP Ltd.
Retained work includes Cable & Wireless, and the recently expanded contract with
commercial property consultants King Sturge.
MITIE Pest Control
Pest Control offers its clients service contracts, reactive contracts, insect
control, bird control, wildlife management and hygiene services.
Revenue: Up by 6.5% to £2.7m in 2006 (2005: £2.5m)
Pest Control continues to operate in a very competitive market with challenging
conditions. The business, however, has made good progress in the period. In
October we acquired the contract base of Antipest in the East Midlands for a
total consideration of £0.35m and started MITIE Pest Control (London) Limited
under the MITIE model. Pest Control has also enjoyed new contract wins and is
further investing in its regional sales and management structure to better
position itself for future growth.
New work during the period includes contracts with Motorola, Lloyds TSB and the
Bank of England.
Pest Control has also won a contract with Network Rail Framework to birdproof a
number of bridges.
Retained work includes the BAA contract at Heathrow, Gatwick, Southampton and
Stansted airports.
MITIE Property Services
Property Services provides refurbishment, interior fit out work, office
furniture supply, painting, repair and maintenance, roofing and fire protection
to clients across several market sectors. Our Social Housing offering
encompasses many of these activities.
2006 2005 Growth
£m £m £m %
------ ------ ------ ------
Revenue 102.1 78.2 23.9 30.6
Profit before interest, tax and amortisation 4.8 4.2 0.6 14.3
Margin 4.7% 5.4%
During the period, Property Services has focused on the mobilisation and
integration of the Birmingham City Council and Milton Keynes social housing
contracts. Both contracts commenced on 1 April 2006.
The business has continued to achieve good levels of organic growth. Property
Services secured Decent Homes contracts with Magna Housing Association in
Bournemouth, the Procurement for All consortia in London, Preston and Leeds,
Preston City Council and Partick Housing Association. The business also won
long-term, response maintenance contracts with Fife Special Housing Association
and Kingdom Housing Association.
Within other areas of the business, painting has secured partnering contracts
with Great Yarmouth Council and Dudley Metropolitan Borough Council, and a
repair and maintenance contract with Birmingham City Council for a large
proportion of the City's public building portfolio.
Property Services' existing contract with private property company Bruntwood Ltd
has been expanded during the period, with the potential for more work in the
second half.
In addition, the business was awarded a refurbishment contract by Brunel Care
following the completion of another successful project earlier in the year.
The interiors division, our specialist fit out business, is currently working on
contracts with property investment company D2 Private, Mercedes- Benz, Land
Securities Trillium and global law firm Milbank, Tweed, Hadley & McCloy LLP.
MITIE Engineering Services
Engineering Services covers mechanical and electrical design and installation,
air conditioning design and installation, retail engineering, life cycle
solutions, utilities, and business critical technology.
2006 2005 Growth
£m £m £m %
------ ------ ------ ------
Revenue 136.4 132.3 4.1 3.1
Profit before interest, tax and amortisation 3.8 2.6 1.2 46.2
Margin 2.8% 2.0%
Engineering Services has had a positive start to the year and remains focused on
margin improvement.
Engineering Services' activities in Technology have been awarded new data
centres and business critical contracts with blue chip clients such as IBM and
Centrica. Their services in the retail sector continue to win work with Primark,
Marks & Spencer and Bhs.
The regional contracting businesses are all performing well and are currently
building a good forward workload for the next 12 months. In Wales, the business
has been appointed preferred contractor with Laing O'Rourke for the 'Designed
for Life' partnering programme with the NHS of Wales. The first project, with
Aberystwyth Hospital, will commence later this year. New work secured last year
with Rhondda Hospital and the University of Manchester has started and the
business has grown its existing long term contracts with Plymouth University and
Land Securities Trillium.
Other new contracts include the installation of two combined heating and power
units at Bristol University, which have been designed to reduce CO2 emissions by
30.0%. A similar system is being installed at the University of Sussex, which
will generate 20.0% of the University's electricity.
Engineering Services also won a multi-million pound refurbishment contract with
Kestrel Property Developers in the centre of Birmingham, a contract with
Sheffield Retirement Village, and work with regenerator Urban Splash at Fort
Dunlop.
FINANCIAL REVIEW
Our Interim results continue the trend of good profitable growth from MITIE,
driven both organically and from our recent acquisitions. Margins for the Group
before integration costs associated with acquisitions are being maintained. We
are starting to see the benefits of post acquisition synergy savings from our
enlarged MITIE Security business. Cash management remains a focus, and underpins
the Group's result for the period through the efficient conversion of operating
profit to cash.
Revenue
Revenue from continuing operations for the Group increased by 30.2% to £585.0m
(2005: £449.2m) in the six months to 30 September 2006.
This result has been driven by organic revenue growth for the Group as a whole
of 11.6% and from the impact of acquisitions made in the previous year. Those
acquisitions generated revenue of £90.7m (2005: £6.3m) in the period in our
Support Services business sector, the majority of which was attributable to the
ISL acquisition made in March 2006.
Our Support Services business achieved an overall growth rate of 45.2% in the
period, and underlying organic growth of 10.1%. The acquisitions, in Security
and Landscape, have supported the substantial growth in revenue in those
businesses. Further strong growth has also been achieved in Managed Services,
PFI and Business Services.
Revenues in Property Services have increased organically by 30.6% in the period,
largely reflecting the impact of new social housing contracts that commenced in
April 2006. Engineering Services revenues have increased by 3.1% compared to the
previous period as the business continues its focus on selective bidding and
profit improvement.
We have secured 94.0% (2005: 92.0%) of our budgeted revenue for 2006/07.
Profit before interest, tax and amortisation
Profit before interest, tax and amortisation for the period of £28.1m (2005:
£21.9m) is stated after the impact of integration costs of £1.1m in respect of
the consolidation of our enlarged Security business.
Group profit before interest, tax, amortisation and integration costs was £29.2m
(2005: £21.9m) reflecting a margin on revenue of 5.0% (2005: 4.9%) - see note 2
to the Interim Consolidated Financial Statements. The maintenance of margins at
a Group level has been achieved through the improvement in profit margins before
interest, tax and amortisation in our traditional Support Services business
(before acquisitions) and through the improvement in results from Engineering
Services.
The Group's profit margin improvements have been partly offset by lower margins
in Property Services as expected, following the impact of longer term, but lower
margin, social housing contracts, and by the effect of the acquisitions in
Support Services which are currently in an integration phase.
Intangible amortisation
The charge in respect of intangible asset amortisation has increased to £0.8m
(2005: £nil). Intangible assets in respect of the value attributable to customer
lists were recognised in the prior year on businesses acquired from third
parties. The intangible asset attributable to each acquisition is amortised on a
straight line basis over its expected useful life and is reviewed annually for
impairment.
Investment and finance costs
Investment and finance costs for the period were £1.0m (2005: income £1.5m) and
reflect the funding costs on the servicing of the Group's net debt position
(2005: net cash). The Group moved from a net cash to a net debt position in
March 2006 following the acquisition of ISL.
Profit before tax
Profit before tax from continuing operations grew by 12.4% to £26.3m (2005:
£23.4m). Profit before tax and amortisation from continuing operations for the
period increased by 15.8% to £27.1m (2005: £23.4m).
Tax
The tax charge for the period was £8.1m (2005: £6.9m).The effective rate of tax
for the period was 30.9% (2005: 29.7%).The effective rate of tax on profits
before amortisation was 30.9% (2005: 29.7%).
Profit for the period
The profit for the period was £18.2m (2005: £14.1m) an increase of 29.1%. All
profit for the period has been generated from continuing operations (2005:
£16.5m). In 2005, losses from discontinued operations were £2.4m.
Minority interests
The minority interest in profit for the period was £1.2m (2005: £1.1m). This
reflects the interest in the profitability of certain subsidiary undertakings
which have arisen from the investment in those companies under the MITIE model.
Earnings per share (EPS)
Basic EPS before intangible amortisation increased by 32.6% to 5.7p per share
(2005: 4.3p per share).The increase in basic EPS is attributable to the growth
in underlying profits from continuing operations and to the impact of losses of
£2.4m from discontinued operations in 2005.
After intangible amortisation, basic EPS was 5.5p per share (2005: 4.3p). On the
same basis, diluted EPS was 5.4p (2005: 4.2p).
The weighted average numbers of shares in issue on which basic EPS and diluted
EPS have been calculated are 309.2m (2005: 303.7m) and 312.8m (2005: 306.5m)
respectively.
Dividends
In 2004, we set a dividend policy to achieve an annual dividend cover of no more
than three times. We review this policy on a regular basis. The interim dividend
of 2.4p per share (2005: 1.9p) represents an increase of 26.3% and dividend
cover of 2.5 times (2005: 2.4 times).
Pensions
At 30 September 2006, the net amount included in the balance sheet arising from
our defined benefit pension scheme obligations before tax was a deficit of £0.5m
(2005: deficit - £11.4m). At 31 March 2006, the net amount included in our
balance sheet in respect of those obligations was a net surplus of £1.8m.The
movement in the net position of the fund in the six months to 30 September 2006
is largely attributable to the movement in equity prices in that period.
Acquisition of minority interests
On 24 August 2006, the Group acquired some or all of the minority interests in
the shares of four subsidiaries.
The total maximum consideration payable in respect of these acquisitions of
shares is £2.9m.The consideration will be largely settled in the shares of MITIE
Group PLC. Further details are shown in note 7 to the interim consolidated
financial statements.
Also on 24 August 2006, the Group settled deferred consideration of £0.8m in
respect of the acquisition of shares in MITIE Business Services Ltd, MITIE
Engineering Services (Swansea) Ltd and MITIE Security (North) Ltd on 24 August
2005.
The total number of MITIE Group PLC shares issued in respect of these
transactions was 1,727,180.
In addition, £1.9m of deferred consideration was paid in the period in respect
of MITIE Security (London) Limited (formerly MITIE Trident Security Limited). A
further £8.9m of loan notes were issued to the original shareholders of MITIE
Security (London) Limited in respect of the settlement of deferred consideration.
Cash flow
The net debt position of the Group at 30 September 2006 was £20.8m (2005: net
cash £62.6m). As noted above, the Group moved to a net debt position in March
2006 following the acquisition of ISL. Loans of £30.0m were drawn at 30
September 2006 (2005: nil), whilst cash held by the Group's insurance
subsidiary, which is not readily available to the Group, totalled £9.2m at the
period end (2005: £9.6m).
The underlying cash flow performance of the Group remains strong with £28.7m
(2005: £29.4m) of cash generated from operations.
Interim Consolidated Income Statement
For the six months to 30 September 2006
30 September 30 September
2006 2005
(unaudited) (unaudited)
----------- ----- -------- -------- -------- -------- -------- --------
Notes Before Amortisation Total Before Amortisation Total
amortisation and amortisation and
and discontinued and discontinued
discontinued operations discontinued operations
operations operations
£m £m £m £m £m £m
----------- ----- -------- -------- -------- -------- -------- --------
Continuing
operations
Revenue 2 585.0 - 585.0 449.2 - 449.2
Cost of sales (476.6) - (476.6) (362.8) - (362.8)
----------- ----- -------- -------- -------- -------- -------- --------
Gross profit 108.4 - 108.4 86.4 - 86.4
----------- ----- -------- -------- -------- -------- -------- --------
Other
administrative
expenses (80.3) - (80.3) (64.5) - (64.5)
Amortisation
of intangible
assets - (0.8) (0.8) - - -
----------- ----- -------- -------- -------- -------- -------- --------
Total
administrative
expenses (80.3) (0.8) (81.1) (64.5) - (64.5)
----------- ----- -------- -------- -------- -------- -------- --------
Operating
profit 2 28.1 (0.8) 27.3 21.9 - 21.9
Investment
revenue 0.2 - 0.2 1.2 - 1.2
Finance costs (1.2) - (1.2) 0.3 - 0.3
----------- ----- -------- -------- -------- -------- -------- --------
Profit before
tax 27.1 (0.8) 26.3 23.4 - 23.4
----------- ----- -------- -------- -------- -------- -------- --------
Tax (8.3) 0.2 (8.1) (6.9) - (6.9)
----------- ----- -------- -------- -------- -------- -------- --------
Profit for the
period from
continuing
operations 18.8 (0.6) 18.2 16.5 - 16.5
----------- ----- -------- -------- -------- -------- -------- --------
Discontinued
operations
Loss for the
period from
discontinued
operations - - - - (2.4) (2.4)
----------- ----- -------- -------- -------- -------- -------- --------
Profit for the
period 18.8 (0.6) 18.2 16.5 (2.4) 14.1
----------- ----- -------- -------- -------- -------- -------- --------
Attributable
to:
Equity holders
of the parent 17.6 (0.6) 17.0 15.4 (2.4) 13.0
Minority
interests 1.2 - 1.2 1.1 - 1.1
----------- ----- -------- -------- -------- -------- -------- --------
18.8 (0.6) 18.2 16.5 (2.4) 14.1
----------- ----- -------- -------- -------- -------- -------- --------
Earnings per
share (EPS)
- basic 5 5.7 p (0.2) p 5.5 p 5.1 p (0.8) p 4.3 p
- diluted 5 5.6 p (0.2) p 5.4 p 5.0 p (0.8) p 4.2 p
----------- ----- -------- -------- -------- -------- -------- --------
Interim Consolidated Income Statement continued
31 March
2006
(audited)
---------------------- ----- ---------- ---------- ----------
Notes Before Amortisation Total
amortisation and
and discontinued
discontinued operations
operations
£m £m £m
---------------------- ----- ---------- ---------- ----------
Continuing operations
Revenue 2 935.6 - 935.6
Cost of sales (757.0) - (757.0)
---------------------- ----- ---------- ---------- ----------
Gross profit 178.6 - 178.6
---------------------- ----- ---------- ---------- ----------
Other
administrative
expenses (130.3) - (130.3)
Amortisation
of intangible
assets - (0.2) (0.2)
---------------------- ----- ---------- ---------- ----------
Total
administrative
expenses (130.3) (0.2) (130.5)
---------------------- ----- ---------- ---------- ----------
Operating
profit 2 48.3 (0.2) 48.1
Investment
revenue 2.6 - 2.6
Finance costs (0.2) - (0.2)
---------------------- ----- ---------- ---------- ----------
Profit before
tax 50.7 (0.2) 50.5
---------------------- ----- ---------- ---------- ----------
Tax (15.5) - (15.5)
---------------------- ----- ---------- ---------- ----------
Profit for the
period from
continuing
operations 35.2 (0.2) 35.0
---------------------- ----- ---------- ---------- ----------
Discontinued operations
Loss for the
period from
discontinued
operations - (2.4) (2.4)
---------------------- ----- ---------- ---------- ----------
Profit for the
period 35.2 (2.6) 32.6
---------------------- ----- ---------- ---------- ----------
Attributable to:
Equity holders
of the parent 32.8 (2.6) 30.2
Minority
interests 2.4 - 2.4
---------------------- ----- ---------- ---------- ----------
35.2 (2.6) 32.6
---------------------- ----- ---------- ---------- ----------
Earnings per share (EPS)
- basic 5 10.6 p (0.8) p 9.8 p
- diluted 5 10.5 p (0.8) p 9.7 p
---------------------- ----- ---------- ---------- ----------
Interim Consolidated Statement of Recognised Income and Expense
For the six months to 30 September 2006
30 September Year to 31
-------------- March
2006 2005 2006
(unaudited) (unaudited) (audited)
£m £m £m
---------------------------- ---------- ---------- --------
Actuarial (losses)/gains on defined
benefit pension schemes (3.2) (4.3) 1.1
Tax credit/(charge) on items taken
directly to equity 1.0 1.1 (2.6)
---------------------------- ---------- ---------- --------
Net expense recognised directly in
equity (2.2) (3.2) (1.5)
Profit for the period 18.2 14.1 32.6
---------------------------- ---------- ---------- --------
Total recognised income and expense
for the financial period 16.0 10.9 31.1
Attributable to:
Equity holders of the parent 14.8 9.8 28.7
Minority interests 1.2 1.1 2.4
---------------------------- ---------- ---------- --------
Interim Consolidated Balance Sheet
At 30 September 2006
30 September 31 March
--------------
2006 2005 2006
--------------------- -------- --------- --------- ---------
Notes (unaudited) (unaudited) (audited)
£m £m £m
--------------------- -------- --------- --------- ---------
Non-current assets
Goodwill 146.6 70.3 143.8
Other intangible assets 10.7 - 11.5
Property, plant and equipment 36.4 31.2 34.5
Deferred tax assets 5.1 4.4 4.9
Retirement benefit surplus - - 1.8
--------------------- -------- --------- --------- ---------
Total non-current assets 198.8 105.9 196.5
--------------------- -------- --------- --------- ---------
Current assets
Inventories 10.1 6.1 8.8
Trade and other receivables 256.4 212.7 244.3
Cash and cash equivalents 9.2 62.6 9.6
--------------------- -------- --------- --------- ---------
Total current assets 275.7 281.4 262.7
--------------------- -------- --------- --------- ---------
--------------------- -------- --------- --------- ---------
Total assets 474.5 387.3 459.2
--------------------- -------- --------- --------- ---------
Current liabilities
Trade and other payables (220.4) (196.1) (214.5)
Current tax liabilities (7.0) (8.0) (7.6)
Provisions (2.9) - (11.7)
Obligations under finance
leases (0.5) (0.3) (0.8)
Bank overdrafts and loans (30.0) - (33.0)
--------------------- -------- --------- --------- ---------
Total current liabilities (260.8) (204.4) (267.6)
--------------------- -------- --------- --------- ---------
--------------------- -------- --------- --------- ---------
Net current assets 14.9 77.0 (4.9)
--------------------- -------- --------- --------- ---------
Non-current liabilities
Obligations under finance
leases (1.2) (0.8) (1.0)
Retirement benefit obligation (0.5) (11.4) -
Provisions (10.3) (13.7) (10.2)
Deferred tax liabilities (3.7) (0.2) (4.7)
Other non-current liabilities (8.9) - -
--------------------- -------- --------- --------- ---------
Total non-current liabilities (24.6) (26.1) (15.9)
--------------------- -------- --------- --------- ---------
--------------------- -------- --------- --------- ---------
Total liabilities (285.4) (230.5) (283.5)
--------------------- -------- --------- --------- ---------
--------------------- -------- --------- --------- ---------
Net assets 2 189.1 156.8 175.7
--------------------- -------- --------- --------- ---------
Equity 8
Share capital 7.8 7.7 7.7
Share premium account 15.0 12.4 13.7
Merger reserve 54.9 52.0 52.0
Revaluation reserve (0.2) (0.2) (0.2)
Capital redemption reserve 0.3 0.3 0.3
Other reserve 0.3 0.4 0.3
Share-based payments reserve 1.5 1.0 1.4
Retained earnings 97.8 74.0 90.1
--------------------- -------- --------- --------- ---------
Equity attributable to equity
holders of the parent 177.4 147.6 165.3
--------------------- -------- --------- --------- ---------
Minority interests 11.7 9.2 10.4
--------------------- -------- --------- --------- ---------
Total equity 189.1 156.8 175.7
--------------------- -------- --------- --------- ---------
Interim Consolidated Cash Flow Statement
For the six months to 30 September 2006
30 September 31 March
--------------
2006 2005 2006
--------------------- -------- --------- --------- ---------
Notes (unaudited) (unaudited) (audited)
£m £m £m
--------------------- -------- --------- --------- ---------
Net cash from operating
activities 6 19.0 21.9 32.1
Investing activities
Interest received 0.2 1.3 2.5
Purchase of property, plant
and equipment (9.6) (7.4) (13.8)
Purchase of subsidiary
undertakings (2.3) (9.4) (85.5)
Disposals of property, plant
and equipment 2.1 0.9 2.6
--------------------- -------- --------- --------- ---------
Net cash outflow from
investing activities (9.6) (14.6) (94.2)
--------------------- -------- --------- --------- ---------
Financing activities
Repayments of obligations
under finance leases (0.1) (0.1) (0.2)
Proceeds on issue of share
capital 0.9 1.0 2.1
Repayments of loans on
purchase of subsidiary
undertakings - - (11.6)
Bank loans (repaid)/raised (1.0) - 31.0
Share buybacks - (1.6) (1.6)
Equity dividends paid (7.4) (5.4) (11.3)
Minority dividends paid (0.2) (0.1) (0.2)
--------------------- -------- --------- --------- ---------
Net cash (outflow)/inflow from
financing (7.8) (6.2) 8.2
--------------------- -------- --------- --------- ---------
--------------------- -------- --------- --------- ---------
Net increase/(decrease) in
cash and cash equivalents 1.6 1.1 (53.9)
--------------------- -------- --------- --------- ---------
Net cash and cash equivalents
at beginning of year 7.6 61.5 61.5
--------------------- -------- --------- --------- ---------
Net cash and cash equivalents
at end of year 9.2 62.6 7.6
--------------------- -------- --------- --------- ---------
Net cash and cash equivalents
comprises:
Cash at bank 9.2 62.6 9.6
Overdraft - - (2.0)
--------------------- -------- --------- --------- ---------
9.2 62.6 7.6
--------------------- -------- --------- --------- ---------
Notes to the Interim Consolidated Financial Statements
At 30 September 2006
1 Basis of preparation
The interim financial statements for the six months to 30 September 2006 have
been prepared on the basis of the accounting policies set out in the Group's
latest annual financial statements for the year ended 31 March 2006. These
accounting policies are drawn up in accordance with International Accounting
Standards (IAS) and International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board.
The interim consolidated financial statements are unaudited, have not been
subject to audit review and do not include all the information and disclosures
required in the annual financial statements, and therefore should be read in
conjunction with the Group's annual financial statements as at 31 March 2006.
The financial information presented for the year ended 31 March 2006 does not
represent full statutory accounts within the meaning of Section 240 of the
Companies Act 1985. A copy of the statutory accounts for that year has been
delivered to the Registrar of Companies. The auditor's report on those accounts
was not qualified and did not contain statements under section 237(2) or (3) of
the Companies Act 1985.
Significant accounting policies
The accounting policies adopted in the preparation of the interim financial
statements are consistent with those followed in the preparation of the Group's
annual financial statements for the year ended 31 March 2006.
2 Segmental analysis
Six months to Six months to
30 September 30 September
2006 2005
----------------- -----------------
Revenue Profit before Margin Profit before Revenue Profit before Margin Profit before
interest tax tax interest tax tax
and and
amortisation amortisation
£m £m % £m £m £m % £m
----------- ------- ------- ------- ------- ------- ------- ------- -------
Support
Services 346.5 19.5 5.6 17.5 238.7 15.1 6.3 16.0
Property
Services 102.1 4.8 4.7 4.8 78.2 4.2 5.4 4.4
Engineering
Services 136.4 3.8 2.8 4.0 132.3 2.6 2.0 3.0
----------- ------- ------- ------- ------- ------- ------- ------- -------
Continuing
operations 585.0 28.1 4.8 26.3 449.2 21.9 4.9 23.4
----------- ------- ------- ------- ------- ------- ------- ------- -------
Discontinued
operations - - - - - (2.4) - (2.4)
----------- ------- ------- ------- ------- ------- ------- ------- -------
Total 585.0 28.1 4.8 26.3 449.2 19.5 4.3 21.0
----------- ------- ------- ------- ------- ------- ------- ------- -------
The results set out above are stated after integration costs of £1.1m relating
to acquisitions made in the prior year. The results of the Group before the
effect of integration costs are as follows:
Six months to
30 September
2006
Revenue Profit before Margin Profit
interest tax before
and tax
amortisation
£m £m % £m
------------------------------- ------- ------- ------ -------
Support
Services 346.5 19.5 5.6 17.5
Add:
Integration
costs - 1.1 - 1.1
------------------------------- ------- ------- ------ -------
Total 346.5 20.6 5.9 18.6
------------------------------- ------- ------- ------ -------
Property
Services 102.1 4.8 4.7 4.8
Engineering
Services 136.4 3.8 2.8 4.0
------------------------------- ------- ------- ------ -------
Total
continuing
operations 585.0 29.2 5.0 27.4
------------------------------- ------- ------- ------ -------
2 Segmental analysis continued
Year to 31
March 2006
Revenue Profit before Margin Profit before
interest tax tax
and
amortisation
£m £m % £m
------------------------------- ------- ------- ------ -------
Support
Services 516.0 33.0 6.4 34.3
Property
Services 163.5 8.9 5.4 9.0
Engineering
Services 256.1 6.4 2.5 7.2
------------------------------- ------- ------- ------ -------
Continuing
operations 935.6 48.3 5.1 50.5
------------------------------- ------- ------- ------ -------
Discontinued
operations - (2.4) - (2.4)
------------------------------- ------- ------- ------ -------
Total 935.6 45.9 4.9 48.1
------------------------------- ------- ------- ------ -------
Other segmental analysis:
Six months to Six months to
30 September 30 September
2006 2005
Support Property Engineering Total upport Property Engineering Total
Services Services Services Services Services Services
£m £m £m £m £m £m £m £m
----------- ------- ------- ------- ------- ------- ------- ------- -------
Assets by
segment
Intangible
assets 139.7 5.5 12.1 157.3 53.2 5.5 11.6 70.3
Assets 141.3 78.7 97.2 317.2 159.6 60.7 96.7 317.0
----------- ------- ------- ------- ------- ------- ------- ------- -------
Total assets 281.0 84.2 109.3 474.5 212.8 66.2 108.3 387.3
----------- ------- ------- ------- ------- ------- ------- ------- -------
Liabilities
by segment
Liabilities (159.4) (53.0) (73.0) (285.4) (117.6) (40.2) (72.7) (230.5)
----------- ------- ------- ------- ------- ------- ------- ------- -------
Total
liabilities (159.4) (53.0) (73.0) (285.4) (117.6) (40.2) (72.7) (230.5)
----------- ------- ------- ------- ------- ------- ------- ------- -------
----------- ------- ------- ------- ------- ------- ------- ------- -------
Total net
assets 121.6 31.2 36.3 189.1 95.2 26.0 35.6 156.8
----------- ------- ------- ------- ------- ------- ------- ------- -------
Capital
expenditure
Tangible 4.7 3.8 1.1 9.6 4.3 1.5 1.6 7.4
assets
Depreciation
charge 4.1 1.0 0.8 5.9 3.0 0.8 0.8 4.6
Intangible
assets 2.3 - 0.5 2.8 16.3 - 1.3 17.6
Intangible
amortisation 0.8 - - 0.8 - - - -
----------- ------- ------- ------- ------- ------- ------- ------- -------
Year to 31
March 2006
Support Property Engineering Total
Services Services Services
£m £m £m £m
------------------------------- ------- ------- ------- -------
Assets by segment
Intangible
assets 138.3 5.4 11.6 155.3
Assets 140.2 65.8 97.9 303.9
------------------------------- ------- ------- ------- -------
Total assets 278.5 71.2 109.5 459.2
------------------------------- ------- ------- ------- -------
Liabilities by segment
Liabilities (167.3) (42.8) (73.4) (283.5)
------------------------------- ------- ------- ------- -------
Total
liabilities (167.3) (42.8) (73.4) (283.5)
------------------------------- ------- ------- ------- -------
------------------------------- ------- ------- ------- -------
Total net
assets 111.2 28.4 36.1 175.7
------------------------------- ------- ------- ------- -------
Capital expenditure
Tangible assets 10.0 2.1 1.7 13.8
Depreciation
charge 6.8 1.5 1.5 9.8
Intangible
assets 101.5 - 1.3 102.8
Intangible
amortisation 0.2 - - 0.2
------------------------------- ------- ------- ------- -------
Segmental analysis continued
Revenue analysis:
Revenue Six months to Year to 31
30 September March
-----------------------------
2006 2005 2006
£m £m £m
----------------------------- ---------- ---------- ----------
Support Services
Cleaning 105.4 98.8 204.7
Security 121.2 36.5 87.2
Engineering Maintenance 49.0 45.2 102.3
Managed Services 39.7 34.0 71.6
Business Services 10.5 8.2 16.8
PFI 4.9 4.4 10.7
Catering 7.7 7.3 13.6
Landscape 5.4 1.8 4.4
Pest Control 2.7 2.5 4.7
----------------------------- ---------- ---------- ----------
Total Support Services 346.5 238.7 516.0
----------------------------- ---------- ---------- ----------
Property Services 102.1 78.2 163.5
Engineering Services 136.4 132.3 256.1
----------------------------- ---------- ---------- ----------
Total 585.0 449.2 935.6
----------------------------- ---------- ---------- ----------
3 Dividends
The proposed interim dividend of 2.4p (2005: 1.9p) per share (not recognised as
a liability at 30 September 2006) will be paid on 30 March 2007 to shareholders
on the Register on 9 March 2007.
The dividend disclosed in the cash flow represents the final ordinary dividend
of 2.4p (2005: 1.8p) per share as proposed in the 31 March 2006 financial
statements and approved at the Group's AGM (not recognised as a liability at 31
March 2006).
4 Taxation
Income tax on the profit before intangible amortisation for the six months ended
30 September 2006 is based on an effective rate of 30.9 per cent, which has been
calculated by reference to the projected charge for the full year.
5 Earnings per share
Basic and diluted earnings per share have been calculated in accordance with IAS
33 'Earnings Per Share'.
The calculation of the basic and diluted EPS is based on the following data:
Number of shares Six months to 30 September Year to
----------------------------
31 March
2006 2005 2006
------------------------------ --------- --------- ---------
Weighted average number of ordinary
shares for the purpose of basic EPS 309.2 303.7 305.9
Effect of dilutive potential ordinary
shares: share options 3.6 2.8 3.2
Weighted average number of ordinary
shares for the purpose of diluted EPS 312.8 306.5 309.1
------------------------------ --------- --------- ---------
6 Notes to the cash flow statement
Six months to Year to 31
30 September March
2006 2005 2006
---------------------------- ---------- ---------- ----------
Reconciliation of operating profit to (unaudited) (unaudited) (audited)
net cash from operating activities
£m £m £m
---------------------------- ---------- ---------- ----------
Operating profit from
continuing operations 27.3 21.9 48.1
Operating loss from
discontinued operations - (2.4) (2.4)
Adjustments for:
Share-based payment expense 0.6 0.3 0.7
Pension charge 0.8 1.7 2.6
Pension contributions (1.7) (1.4) (3.2)
Depreciation of property,
plant and equipment 5.9 4.6 9.8
Amortisation of intangible
assets 0.8 - 0.2
Gain on disposal of property,
plant and equipment (0.6) (0.2) (0.6)
---------------------------- ---------- ---------- ----------
Operating cash flows before
movements in working capital 33.1 24.5 55.2
---------------------------- ---------- ---------- ----------
(Increase)/decrease in
inventories (1.3) 0.4 (2.2)
Increase in receivables (12.1) (34.2) (29.5)
Increase in payables 6.4 36.2 31.2
Increase in provisions 2.6 2.5 0.5
---------------------------- ---------- ---------- ----------
Cash generated by operations 28.7 29.4 55.2
---------------------------- ---------- ---------- ----------
Additional pension
contributions - - (7.8)
Income taxes paid (8.5) (7.5) (15.1)
Interest paid (1.2) - (0.2)
---------------------------- ---------- ---------- ----------
Net cash from operating
activities 19.0 21.9 32.1
---------------------------- ---------- ---------- ----------
7 Purchase of minority interests
-------------------- -------- -------- -------- -------- --------
MITIE MITIE Air MITIE Air MITIE Total
Engineering Conditioning Conditioning Engineering
Maintenance (London) Ltd (Wales) Ltd Services Retail
Ltd
(South West) £m £m £m £m
Ltd
£m
-------------------- -------- -------- -------- -------- --------
Minority
interests 0.6 0.1 0.0 0.1 0.8
-------------------- -------- -------- -------- -------- --------
Goodwill 1.6 0.3 0.1 0.1 2.1
Total purchase
consideration 2.2 0.4 0.1 0.2 2.9
Shares issued
- MITIE Group
PLC 1.8 0.4 0.1 0.2 2.5
Deferred
consideration 0.2 - - - 0.2
-------------------- -------- -------- -------- -------- --------
Cash
consideration
being cash
outflow in the
period 0.2 - - - 0.2
-------------------- -------- -------- -------- -------- --------
During the period £1.9 million of deferred consideration was paid in respect of
MITIE Security (London) Limited (formerly MITIE Trident Security Limited). In
addition, £8.9m of loan notes were issued to the original shareholders of MITIE
Security (London) Limited (formerly MITIE Trident Security Limited) in respect
of the settlement of deferred consideration.
Furthermore £0.8m of deferred consideration in respect of the purchase last year
of the minority shareholdings in MITIE Business Services Limited, MITIE
Engineering Services (Swansea) Limited and MITIE Security (North) Limited was
settled by the issue of new MITIE shares.
8 Reserves
Called-up Share Merger Revaluation Capital Other Share-based Retained Total
share premium reserve reserve redemption reserve payment reserve earnings
capital account reserve (i)
£m £m £m £m £m £m £m £m £m
------------- ------- ------- ------ ------- ------- ------ ------- ------- -------
At beginning
of year 7.7 13.7 52.0 (0.2) 0.3 0.3 1.4 90.1 165.3
Shares issued
and net
premium
arising in
respect of
acquisitions 0.1 0.4 2.9 - - - - - 3.4
Shares issued
and net
premium in
connection
with exercise
of share
options - 0.9 - - - - - - 0.9
Profit for the
period
attributable
to equity
holders of the
parent - - - - - - - 17.0 17.0
Dividend paid - - - - - - - (7.6) (7.6)
Expense in
relation to
share- based
payments - - - - - - 0.6 - 0.6
Transfer in
relation to
share- based
payments (0.5) 0.5 -
------------- ------ ------- ------ ------- ------- ------ ------- ------- -------
Net actuarial
loss on
defined
benefit
schemes - - - - - - - (3.2) (3.2)
Tax credit on
items taken
directly to
equity - - - - - - - 1.0 1.0
------------- ------- ------- ------ ------- ------- ------ ------- ------- ------
Net expense
recognised
directly in
equity in the
period - - - - - - - (2.2) (2.2)
------------- ------- ------- ------ ------- ------- ------ ------- ------- ------
Balance at 30
September 2006 7.8 15.0 54.9 (0.2) 0.3 0.3 1.5 97.8 177.4
------------- ------- ------- ------ ------- ------- ------ ------- ------- ------
(i) This is a non-distributable reserve
END OF ANNOUNCEMENT
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