Market's view on Mitie
Published on April 2024
- Mitie shares surged due to new contracts from both public and private sectors, resulting in record annual revenues and a share buyback. The stock increased by 6.6% to 119p.
- A steady trend in delivery has been established.
- Queries about a significant stock price drop were raised, with concerns about the underlying reasons since overall performance seemed stable.
- Mitie Group plc released a pre-close trading update, showing an 11% increase in H1 revenue to £2.1bn, robust order books with £2.2bn in contract wins, and ongoing expansion through strategic acquisitions. The updated FY24 operating profit forecast is at least £190m, supported by margin enhancement initiatives.
- The CEO’s departure was discussed as a potential positive catalyst for stock price movement.
- Concerns about excessive middle management and high turnover at entry-level positions were expressed, highlighting inefficiencies within the company structure.
- Criticism was directed towards regional managers, perceived as ineffective and more focused on perks like company cars than performance.
- Disappointment with senior management was voiced, emphasizing a lack of focus on business improvement, efficiency, and cost savings despite revenue increases.
- Positive financial results were noted with an increase in dividends and a promising profit forecast.
- Anticipation of upcoming financial results and trading updates was discussed, with hopes that these would reaffirm positive trends and help regain lost stock momentum.