Final Results

MITIE Group PLC 23 July 2001 ------------------------------------------------------------------------------ EMBARGO: THE CONTENTS OF THIS RELEASE ARE SUBJECT TO EMBARGO UNDER STOCK EXCHANGE REGULATIONS UNTIL 0700 AM 23 JULY 2001. ------------------------------------------------------------------------------ 23 July 2001 MITIE Group PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2001 QUALITY GROWTH * Pre-tax profit up 30% to £25.1m (2000 - £19.2m) * Turnover up 20% to £415.4m (2000 - £346.5m) * Earnings per share up 23% to 5.0p (2000 - 4.1p) * Total dividend per share up 25% to 1.25p (2000 - 1p) David Telling, Chairman, reports 'The year has started well and we look forward to another year of satisfactory growth.' Notes: MITIE: Management Incentive Through Investment Equity. ACTIVITY: MITIE Group PLC provides Support and Building Services to the owners and occupiers of commercial and industrial premises. FOR FURTHER INFORMATION: On 23 July 2001 David Telling, Chairman, MITIE Group PLC 020 7772 2583 John Urquhart, Corporate Affairs, MITIE 020 7772 2583 Group PLC Mobile: 07979 701 006 at Merrill Lynch International 020 7772 1000 (switchboard) Subsequently - MITIE Group PLC, Head Office 01934 862006 EXTRACTS FROM THE CHAIRMAN'S STATEMENT Financial Overview Your Company has had another good year and continues to grow in accordance with expectations. Pre-tax profit amounted to £25.1m, an increase of 30.3% over last year. Turnover reached £415m, an improvement of 19.9% of which organic growth accounted for 17.7%. Earnings per share improved by 23.3% from 4.1p to 5.0p. Proposed Final Dividend Your Directors are proposing a final dividend of 0.7p per share making a total of 1.25p on the sub-divided shares, an increase of 25% from the previous year. This is in line with our policy of linking the dividend to the improvement in earnings per share and leaves the dividend covered four times. This dividend will be paid on 1 October 2001 to Shareholders on the Register on 7 September 2001. New Companies Five new companies were started during the financial year, including two that I mentioned in my last annual report, MITIE Cleanrooms Ltd and MITIE Pharmaceutical Engineering (Southern) Ltd. Both of these are in the Engineering Discipline and were formed as niche market companies, a strategy that is being developed steadily and successfully. Neither made profit during the year, nor was this expected, but the anticipated profitability of these and other nursery companies in the current year will have a beneficial effect on earnings. In addition we formed MITIE Engineering Services (Swansea) Ltd and restructured MITIE Engineering Services (Midlands) Ltd as geographical in-fills and started two entirely new companies namely MITIE PFI Ltd and MITIE Flooring (Southern) Ltd. We acquired the assets of Roofing Services Ltd and put them into a new company, MITIE Roofing Services Ltd. The McCartney Group Ltd, a majority of which was acquired in June 2000, now trades as MITIE McCartney Fire Protection Ltd within our Property Services discipline. Both companies are performing well. Segmental Analysis Activity Turnover Turnover Pre-Tax Pre-Tax Pre-Tax Pre-Tax £'000 2001 £'000 Profit Profit Profit Profit 2000 £'000 £'000 Margin Margin 2001 2000 % 2001 % 2000 Building 249,765 210,462 12,493 10,442 5.0 5.0 Services Support 165,610 136,052 12,582 8,798 7.6 6.5 Services 415,375 346,514 25,075 19,240 6.0 5.6 BUILDING SERVICES The Building Services Division consists of Access Systems, Engineering Services and Property Services, subsequent to the incorporation of MITIE Lindsay Ltd into the latter. Following its large increase in turnover in recent months, the Division has consolidated its position and maintained its margin, whilst strengthening the infrastructure to enable it to handle the new levels of business. The forward workload is strong. Engineering Services MITIE Engineering Services has continued to grow, especially in the South East, North and Midlands and in Wales. The discipline's growing reputation for high quality, fast-track projects in the refurbishment sector has fuelled this and the clients included Coca-Cola, Dresdner Bank, T Rowe Price, Carphone Warehouse and JP Morgan. Work for universities has featured prominently in all regions. MITIE Pharmaceutical Engineering (Southern) Ltd has enhanced MITIE's reputation for specialist chemistry laboratory projects by securing two sizeable contracts at Sussex University. Considerable efforts have been made to drive the concept of partnering through the business and MITIE Engineering Services is a sought-after partner for many companies for work on a nationwide basis. We have continued to win repeat business from major clients such as BT, Cannons Health & Fitness Ltd, The Savoy Group, GE, Cine UK, Primark and Woolworths. Other major projects awarded during the year were Trillium's Head Office and the conversion of the Great Northern Warehouse in Manchester. Property Services MITIE Property Services has had an exciting year at the forefront of change, quickly becoming recognised as the leader in the supply of integrated services in a previously fragmented and parochial market. It is one of a very few companies able to provide a nationwide service and this has enabled it to win such contracts with new and existing clients as well as entering into partnership agreements with suppliers. The discipline is currently involved in tendering for large central and local government contracts. Meanwhile valued repeat business has been won from Durham and Queen Margaret Universities, Greater Glasgow Health Board and Bournemouth, Brent, Colchester, Epping and South Ribble Borough Councils and in the private sector from AXA Sunlife, Trillium and Haden FM. New clients include BUPA, Johnson Controls, First Great Western and City & Counties Housing Association. Roofing companies have won business for HM Prison Service, Marconi, Woolworths and West Yorkshire PTE. The new companies in Flooring and Roofing have made good starts. Access Systems MITIE Access Systems has extended the geographical coverage of its hire and sale business, MITIE Generation Ltd, by opening new branches in Newcastle and Southampton, giving a total of 16 branches. It added new products in response to market opportunities and traded satisfactorily throughout the year. The access contracting businesses in England have been operating satisfactorily and won a major scaffold contract for Gleeson Rail at Crystal Palace Railway Station. In Scotland, Access contracting is now trading profitably. MITIE Powered Access Ltd, now operating from six locations, enjoyed high levels of machine utilisation throughout the year. SUPPORT SERVICES The Support Services Division continues to grow and to improve margin steadily under a strong and experienced management team. The principal disciplines are Cleaning, Engineering Maintenance and Managed Services. The nursery companies of Catering and Security are part of Cleaning, while Managed Services assumes a guiding role for Business Services and PFI. Cleaning The driver for growth has been the ability to compete at the highest level for the ever bigger and often multi-activity contracts that make up the business of servicing the facilities of large companies, government departments and similar establishments. Contracts are getting longer which provides stability for the workforce and assured forward work. Our association with Trillium, forged under pioneering conditions for the Prime contract with the DSS, is an example of the partnerships which are now being formed to service these developing opportunities. We are working closely with Trillium and believe there is further opportunity to extend our partnership with them. I have previously reported a successful contract win for MITIE Cleaning with WS Atkins on behalf of Barclays Bank. An even larger contract was awarded in the second half by Royal Bank of Scotland and NatWest to clean all its buildings in the north of England and Scotland, doubling the existing contract to approximately £8m per annum. Our contract with BAe Systems, with whom we have had a long relationship as their cleaning contractor, was recently re-tendered successfully and now extends to all their sites on a national basis. Cleaning was also successful in retaining and extending its contract with Prudential, which has now become national. Engineering Maintenance A successful year reflects the discipline's increased capacity to deliver a quality service on large contracts nationally. It has won a multi-million pound contract for electrical and mechanical maintenance for the MoD at Corsham, through Interserve. The West Country office has had to move to larger premises in Bristol. In the Midlands, it built on an existing maintenance contract with Alliance & Leicester by extending it to include considerably more office buildings. Additionally it won noteworthy contracts for WorldCom at Reading and Microsoft and Nokia in London. Managed Services I am pleased to report that MITIE Business Services Ltd, which only started trading in December 1999, is already in profit having commenced major contracts with Merrill Lynch, Railtrack and Linklaters. MITIE PFI Ltd has now signed the 25 year service contract for Newbury College and MITIE Managed Services Ltd won and has started the facility management contract for Sainsbury's Head Offices in London. All companies within the Support Services Division have ISO 9002 accreditation and have also achieved OSHAS 18000, with MITIE Engineering Maintenance Ltd also being accredited for REFCOM Environmental. The companies are working closely with the British Quality Foundation with the aim of achieving EFQM accreditation in the near future. Conclusion Your Directors will strive to enhance the Company's reputation, develop its people and provide the best possible service to its customers. The year has started well and we look forward to another year of satisfactory growth. DAVID M TELLING Chairman MITIE Group PLC Group Profit and Loss Account (Unaudited) for the year ended 31 March 2001 2001 2000 £'000 £'000 Turnover 415,375 346,514 Cost of sales (315,328) (266,711) Gross Profit 100,047 79,803 Administrative expenses (75,020) (60,315) Operating Profit 25,027 19,488 Interest 48 (248) Profit on Ordinary Activities Before Tax 25,075 19,240 Tax on Profit on Ordinary Activities (8,420) (6,080) Profit on Ordinary Activities After Tax 16,655 13,160 Minority interest (2,703) (2,067) Attributable Profit for the Financial Year 13,952 11,093 Dividends - equity (3,497) (2,751) Retained Profit for the Financial Year 10,455 8,342 Earnings per Ordinary Share - basic 5.0p 4.1p - diluted 4.9p 4.0p MITIE Group PLC Group Balance Sheet (Unaudited) as at 31 March 2001 2001 2000 £'000 £'000 Fixed Assets Intangible assets 8,597 4,283 Tangible assets 48,123 39,090 56,720 43,373 Current Assets Work in progress and stocks 24,244 17,511 Debtors 70,365 56,855 Cash at bank and in hand 6,135 2,102 100,744 76,468 Creditors - due within one year (94,182) (75,964) Net Current Assets 6,562 504 Total Assets less Current Liabilities 63,282 43,877 Creditors - due after one year (788) (661) Provision for liabilities and charges (2,191) (1,566) 60,303 41,650 Capital and Reserves Called up share capital 6,991 6,851 Share premium account 13,738 7,067 Revaluation reserve (514) (524) Profit and loss account 29,951 19,506 Equity Shareholders' funds 50,166 32,900 Minority interest 10,137 8,750 60,303 41,650 MITIE Group PLC Group Cash Flow Statement (Unaudited) for the year ended 31 March 2001 2001 2000 £'000 £'000 Net cash inflow from operating activities 33,111 22,781 Return on investments and servicing of finance Interest received 75 159 Interest paid (100) (492) Interest element of finance lease rentals (7) (14) (32) (347) Tax UK corporation tax paid (6,763) (6,556) Capital expenditure Payments to acquire intangible fixed assets - (359) Payments to acquire tangible fixed assets (20,057) (17,777) Receipts from sales of tangible fixed assets 1,117 1,993 (18,940) (16,143) Acquisitions and disposals Payments to acquire subsidiary undertakings (1,015) (218) Net Cash/(overdraft) acquired with subsidiary 525 (8) undertakings (490) (226) Equity dividends paid (3,194) (2,451) Cash Inflow/(outflow) before financing 3,692 (2,942) Financing Issue of ordinary share capital 590 1,406 Net unsecured loans received 157 267 Capital element of finance lease rental payments (57) (104) Repayment of unsecured loans due within one year (52) (98) Repayment of unsecured loans due after one year - (5,000) 638 (3,529) Increase/(decrease) in cash in the period 4,330 (6,471) MITIE Group PLC Group net cash inflow from operating activities (Unaudited) 2001 2000 £'000 £'000 Operating profit 25,027 19,488 Depreciation 11,784 8,944 Amortisation of goodwill 73 518 Profit on sale of tangible fixed assets (789) (727) (Increase) in work in progress and stocks (5,955) (1,452) (Increase) in debtors (11,186) (14,597) Increase in creditors 14,157 10,607 33,111 22,781 NOTES: 1. Dividend The Directors are recommending a final dividend of 0.7p per 21/2p Ordinary Share, making a total dividend for the year ended 31 March 2001 of 1.25p per share. If approved at the Annual General Meeting, the final dividend will be paid on 1 October 2001 to Shareholders on the Register on 7 September 2001. On 2 April 2001, each Ordinary Share of 5p was subdivided into two Ordinary Shares of 21/2p each. 2. Earnings Per Share Earnings per share are calculated by reference to the profit after tax and minorities for the financial year of £13,952,000 (2000: £11,093,000) and on the weighted average number of 21/2p Ordinary Shares in issue during the year of 277,603,608 (2000: 272,327,306). 3. The consolidated profit and loss, balance sheet and cash flow statements have been prepared on a basis consistent with the accounts for the year ended 31 March 2000. 4. The Annual General Meeting will be held at The Stable Block, Barley Wood, Wrington, Bristol, BS40 5SA, on 20 September 2001 at Noon. 5. The financial information set out above does not comprise the Company's statutory accounts. Statutory accounts for the previous financial year ended 31 March 2000 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under Section 237(2) or (3) of the Companies Act 1985.

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