MITIE Group PLC (LON:MTO) shares slipped on Thursday as the facilities management group saw its profits hit by the impact of the coronavirus (COVID-19) pandemic, although it said its performance had proven “more resilient” than expected.
In its results for the six months to September 30, 2020, the company reported a pre-tax profit from continuing operations of £14mln, down from £24.9mln in the prior year, while revenues dropped to £972.4mln from £1.08bn a year ago.
READ: Mitie rises as business more resilient than expected in first quarter
MITIE also reported a slight dip in its order book to £4bn from £4.1bn, while its interim dividend was scrapped compared to a 0.69p per share payout in 2019.
Looking ahead, the company said it expected that its variable and project work “will continue to be suppressed” by the continuation of lockdown measures, however as the pandemic subsided in the UK and depending on the state of the economy and client financial strength, it expected that it will “continue to win new business – particularly in the public sector”.
MITIE also said its growth pipeline was “strong, with opportunities to target large-scale existing Mitie customers for cross-sell opportunities and to win new customers”. Despite this, the company said it will not be providing full-year guidance at this time due to the ongoing uncertainties of the impact of coronavirus on the business.
"Although COVID-19 continues to challenge us all, I am incredibly proud of how our business has responded and I am in awe of our 37,500 front-line heroes who have ensured we continued to deliver our exceptional customer service throughout the pandemic”, MITIE chief executive Phil Bentley said in a statement.
The CEO added that the completion of the company’s acquisition of Interserve Facilities Management, expected at the end of the month, will allow the company to “drive faster growth and greater cost synergies, despite the challenges of COVID-19”.
In a note on Thursday, analysts at Liberum Capital increased their target price for MITIE to 45p from 40p and retained a ‘buy’ rating on the stock to reflect what they said was MITIE’s “strong cash and market move” following the completion of its Interserve acquisition.
Shares in MITIE fell 4.2% to 39.7p in early deals.