Mitie Group’s exit from its loss-making mechanical and electrical construction businesses was “undoubtedly the right thing to do”, it has said after posting a modest rise in its pre-tax profit for 2014/15.
The outsourcer said the move to reduce its exposure to “high risk” construction related markets “was not an easy decision” but was best for the long-term future of the business.
Its pre-tax profit to for the year ended 31 March 2015 stood at £114.1m, compared with £113.3m for the same period the year before.
Revenue increase by 5.8 per cent to £2.3bn, up from £2.1bn in 2014. Mitie said that 4.9 per cent of its turnover growth for the year was organic.
Mitie issued a profit warning in March ahead of its financial results, blaming pricing pressure in its homecare and social housing arms.
It also revealed it expected to lose up to £16m for 2014/15 as a result of its exit from the mechanical and electrical engineering sector in 2013.
The loss taken on its M&E exit followed a £45.7m hit on its exit from design-and-build work in its asset management business last year, which contributed to a £1.3m overall loss at the half-year stage.
In today’s statement the company said it had made good progress this year with its facilities management business now accounting for 85 per cent of group revenue.
Its contract retention rate in FM was 6 percentage points above target at 96 per cent.
Mitie Group chief executive Ruby McGregor-Smith said: “We have repositioned the business and lowered our risk profile.
“We see considerable opportunities across our markets, to provide clients with higher quality, innovative services that save them money.”