Mitie Group PLC (LSE:MTO) shares dropped over 5% on Thursday, retreating from seven-year highs earlier this year, after posting better interim results but warning of a surge in costs ahead due to Budget tax increases.
A hike in employer national insurance contributions (NICs), laid out in last month’s Budget, was set to add £25 million to costs next year, the FTSE 250-listed outsourcing firm said in results.
This would reflect “contractual and commercial recovery through pricing,” it added, while “margin enhancement initiatives and other management actions” would mitigate the hit.
Mitie also reported an 8% increase in revenue to £2.43 billion over the six months to September and 10.5% jump in operating profit to £63 million.
Its interim dividend was lifted from 1.0p to 1.3p per share on the back of the results.
Shares fell 5.3% following the update.