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Mitie recovery welcomed by city analysts

21 September 2017

Favourable updates have been published by both UBS and Liberum on the progress of Mitie following its financial difficulties widely publicised last year.

Better growth than expected of 4%, compared with the previous 12 month trading period, is one of the main positive areas, although both reports state that "near-term challenges" remain.

One of these is the issue of cost, which has been recorded to be £24m for its ongoing restructuring programme, compared with a previous figure of £15m.

However, UBS has said that this is driving change at a faster rate than predicted and the impact will therefore reduce in the future.

"Strategic progress is well underway and Mitie's mid-term outlook and targets are unchanged," the report stated.

Although the early retendering of a contract not due for renewal until 2019 is seen as a negative aspect, the 4% growth figure means that this has not impacted the company's progress.

It has continued to make "good strategic progress" within its Helix transformation programme.

Restructuring of human resources, finance and workflow programmes have all been described as "on track", while its IT transformation is "accelerating", according to UBS.

Levels of debt are expected to be between £160m and £180m for the first half of 2018 and progress is expected within the ongoing sale of its Public Services division.

Revenues of over £2.17bn are expected for the first quarter of 2018.

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