REG - MITIE Group PLC - H1 FY26 Results
Today 07:00
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RNS Number : 2522I MITIE Group PLC 20 November 2025
20 November 2025
Mitie Group plc
LEI number: 213800MTCLTKEHWZMJ03
Interim results for the six months to 30 September 2025
Growing momentum after strong first half performance
Record contract awards, order book and bidding pipeline
Confidence in delivery of FY25-FY27 Strategic Plan and financial targets
H1 highlights:
· Group revenue up 10.4% to £2,677m (H1 FY25: £2,426m), including 6.4% organic
growth driven primarily by net contract wins, projects and pricing, plus a
4.0% contribution from acquisitions
· Record contract awards of £3.8bn total contract value (H1 FY25: £3.7bn)
· Order book(2) up 7% to £16.5bn (end FY25: £15.4bn); book to bill ratio(3)
141%; renewals 86% (FY25: 59%)
· Bidding pipeline up 39% to £33.0bn (end FY25: £23.7bn); over 70% to be
awarded in next 18 months
· Operating profit before Other items(1) up 8% to £109m (H1 FY25: £101m)
· Operating profit margin before Other items resilient at 4.1% (H1 FY25: 4.2%),
reflecting margin enhancement initiatives, offset by strategic investments as
well as inflation and National Insurance headwinds
· Basic EPS before Other items up 6% to 5.7p (H1 FY25: 5.4p), reflecting the
increase in operating profit and reduction in average share count driven by
share buybacks in the prior year, offset by higher interest costs
· Operating profit down 3% to £61m (H1 FY25: £63m) and EPS down 13% to 2.6p
(H1 FY25: 3.0p); Other items(1) of £48m (H1 FY25: £38m) incl. Marlowe
transaction costs (£7m) and costs to achieve synergies (£2m)
· Free cash flow generation of £52m (H1 FY25: £34m); operating cash flow of
£115m (H1 FY25: £81m)
· Average net debt up £113m to £332m, primarily reflecting the Marlowe
acquisition
· Marlowe acquisition delivers 'Facilities Compliance' market leadership;
integration continues to progress well, and synergies delivery remains on
track
· Refinancing of Marlowe bridge facility completed post-H1 with £180m of 3-7
year US Private Placement notes at average coupon of 5.4%
· Interim dividend up 8% to 1.4p per share (H1 FY25: 1.3p)
· AI delivering early positive impact by reimagining and automating workflow and
workforce management
· New share buyback programme of £100m underway; 15m shares purchased for £24m
to date
· Full year guidance reiterated for operating profit before Other items of at
least £260m and free cash flow of at least £120m
Six months to 30 September 2025 Six months to 30 September 2024
Before Other items(1,3) Other items(1) Total Before other items(1,3) Other items(1) Total
£m unless otherwise specified
Revenue 2,677.2 - 2,677.2 2,425.6 - 2,425.6
Operating profit 108.8 (48.2) 60.6 101.1 (37.7) 63.4
Operating profit margin 4.1% - 2.3% 4.2% - 2.6%
Profit before tax 98.0 (48.2) 49.8 94.5 (37.7) 56.8
Profit for the period 73.8 (39.1) 34.7 71.1 (31.0) 40.1
Basic earnings per share 5.7p 2.6p 5.4p 3.0p
Dividend per share 1.4p 1.3p
Cash generated from operations 114.8 81.4
Free cash inflow(3) 51.9 34.3
Average daily net debt(3) (331.6) (219.0)
Closing net debt(3) (471.4) (187.5)
Total order book(2) £16.5bn £12.6bn
Return on invested capital (ROIC)(3) 16.3% 25.4%
1. Other items are described in Note 3 to the condensed consolidated
financial statements
2. Order book includes secured fixed term contracts and estimates
for projects & variable works. Book to bill ratio is relationship of
orders received to revenue recognised
3. Performance before Other items, net debt, free cash flow, EBITDA
(rolling 12-month) and ROIC are presented as Alternative Performance Measures.
Explanations as to why these measures are presented, and reconciliations to
the equivalent statutory measures, are set out in Appendix 1 to the condensed
consolidated financial statements
Commenting on the first six months and the outlook, Phil Bentley, Group Chief
Executive, said:
"As we reach the halfway mark in our Three-Year Strategic Plan (FY25-FY27), it
is good to see the progress that has been made and the growing momentum
towards achieving our targets, and beyond, as the order book and pipeline
continue to build. We are building a larger, more profitable and more cash
generative business with greater capacity to invest for growth, as we have
demonstrated with the acquisition of Marlowe. Our mission is to deliver
increasing returns for shareholders, through share price appreciation,
dividends and share buybacks.
"At the start of our Strategic Plan, our ambition was to increase revenue by
£1.2bn to £5.6bn in FY27 through high single digit annual revenue growth. We
are comfortably on track to exceed this target, having delivered double digit
growth over several successive periods, including in the first half of this
year.
"This sustained performance is a result of investments in sales &
marketing; higher margin projects and compliance capabilities; and
best-in-class customer-facing technologies and Artificial Intelligence (AI).
It also reflects the hard work of our 84,000 colleagues who continue to
deliver outstanding service to our customers. I am hugely thankful for their
efforts not only in winning, retaining and growing contracts, but also making
Mitie a truly inspiring environment, building better places and helping
communities to thrive.
"Our business continues to demonstrate resilience and agility in navigating
headwinds, including to mitigate the rise in employer National Insurance
Contributions since April. We remain focused on delivering an operating margin
of at least 5% by FY27 through higher margin Facilities Transformation and
Facilities Compliance growth; operational leverage; and through accelerating
automation and AI efficiencies.
"As we look ahead to the second half of our Strategic Plan, over the next 18
months, I am confident that the positive macro trends underpinning our
business will continue to support our accelerating growth ambitions, with
Mitie being uniquely positioned to both expand its market reach and capture
further market share.
"Our scale, technology, broad capabilities and ability to adapt to the
changing needs of our customers are increasingly making us the partner of
choice across the public and private sectors. We will continue to unlock the
value in our customers' estates through Facilities Management, Transformation
and Compliance, and deliver the Future of High Performing Places."
- END -
Analyst Presentation and Q&A
Phil Bentley (CEO) and Simon Kirkpatrick (CFO) will host a presentation and
Q&A session today (20 November 2025) at 9.30am at The Shard and via a
webcast. For dial in details please contact kate.heseltine@mitie.com
(mailto:kate.heseltine@mitie.com) . A copy of the presentation will be
available on the company website in advance of the live presentation,
www.mitie.com/investors (http://www.mitie.com/investors) .
For further information
Kate Heseltine M: +44 (0)738 443 9112 E: kate.heseltine@mitie.com (mailto:kate.heseltine@mitie.com)
Group IR and Corporate Finance Director
Claire Lovegrove M: +44 (0)790 027 6400 E: claire.lovegrove@mitie.com (mailto:claire.lovegrove@mitie.com)
Director of Corporate Affairs
Neil Bennett M: +44 (0)790 000 0777 E: mitie@h-advisors.global (mailto:mitie@h-advisors.global)
H/Advisors Maitland
About Mitie: The Future of High Performing Places
Founded in 1987, Mitie employs 84,000 colleagues and is the leading
technology-led Facilities Management, Transformation and Compliance company in
the UK. We are a trusted partner to blue-chip customers across the public
and private sectors, working with them to transform their built estates, and
the lived experience for their colleagues and customers, as well as providing
data-driven insights to inform better decision-making.
In each of our core services of engineering (hard services) and security and
hygiene (soft services) we hold market leadership positions. We also deliver
transformational projects in the areas of power and grid connections, building
fit outs & modernisation, decarbonisation, fire safety & security and
telecoms infrastructure, alongside compliance capabilities in fire safety
& security and environmental services. Our sector expertise includes
central government, critical national infrastructure, defence, financial
services, healthcare & life sciences, local government & education,
retail & logistics, manufacturing & media and transport &
aviation.
We hold industry-leading ESG credentials, including a place on the CDP Climate
change A List, and we have received multiple awards including Best Low Carbon
Solution and Net Zero Carbon Strategy of the year. We have validated
science-based targets that support our ambitions to reach Net Zero. We have
been recognised as a UK Top Employer for the seventh consecutive year and Most
Admired Company in the Support Services sector. We are also ranked 16th in the
Top 100 Apprenticeship Employers and ninth in the Inclusive Top 50 UK
Employers list. Find out more at www.mitie.com
(https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.mitie.com%2F&data=05%7C02%7CClaire.Lovegrove%40mitie.com%7Cd2d1ed53d7494b4f5d1608ddcea686e0%7C9e66e0b4768c4506a1b67e44c80595f2%7C0%7C0%7C638893936794778789%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=WzGlhZ8UAN0yTYDWe7yLrRnGZNbgLQw8E7Cm4zAF51A%3D&reserved=0)
Chief Executive's strategic review
Overview
Mitie's strong momentum continued in the six months ended 30 September 2025
(H1 FY26), driving further progress towards the delivery our Three-Year
Strategic Plan (FY25-FY27) and financial targets.
Revenue in H1 FY26 grew by 10.4% to £2,677m (H1 FY25: £2,426m), including
organic growth of 6.4% - significantly ahead of core FM market growth at
c.3-4% per annum. Operating profit before Other items grew by 7.6% to £108.8m
(H1 FY25: £101.1m), whilst basic EPS before Other items grew by 5.6% to 5.7p
(H1 FY25: 5.4p).
The Group operating profit margin before Other items of 4.1% (H1 FY25: 4.2%),
reflects our continued trading momentum and progress with our programme of
margin enhancement initiatives, offset by strategic investments and
inflationary cost headwinds. The prior year margin had also benefited (by
20bps) from higher margin 'surge response' security work, which was mobilised
and demobilised at short notice.
Looking ahead, H2 margins are structurally higher than H1. We have a clear
path to our operating margin target of at least 5.0% by FY27, driven by growth
in higher margin projects and compliance work, operational leverage and our
ongoing programme of margin enhancement initiatives, including those relating
to AI and process automation.
Based on the equivalent statutory measure, operating profit reduced to £60.6m
(H1 FY25: £63.4m), due to a £10.5m increase in Other items, largely due to
acquisition-related costs for Marlowe. Basic EPS reduced to 2.6p (H1 FY25:
3.0p) due to the increase in Other items and higher net finance costs (also
largely relating to Marlowe). Further details are set out in the Finance
Review.
Three-Year Strategic Plan (FY25 - FY27)
Our Strategic Plan set out to pivot Mitie from traditional 'Facilities
Management' to technology and project-led 'Facilities Transformation'
leadership in the UK, with deep capabilities to aggregate workflow and
workforce data across the built environment as a trusted partner to thousands
of large public and private sector organisations.
The acquisition of Marlowe, in August, consolidated our leadership position
and extended it further, into business-critical 'Facilities Compliance', with
significant opportunities to cross-sell regulatory-driven fire safety &
security and environmental services to Mitie's client base. As a result, we
are well positioned to meet the evolving needs of our customers - underpinned
by attractive macro trends - and deliver the 'Future of High Performing
Places'.
At our Capital Markets Event in October 2023, where we launched our Facilities
Transformation strategy, we set ambitious financial targets (based on
alternative performance measures), inclusive of M&A, to accelerate growth
and deliver superior returns to shareholders over the Strategic Plan:
· High single digit compound annual revenue growth
· Operating margin >5% by FY27
· Basic EPS growth above that of revenue growth, despite higher
corporation tax rates
· Annual free cash flow of £150m by FY27
Our targets are underpinned by a proactive capital deployment policy, modest
leverage of 0.75-1.5x (post-IFRS 16 average net debt/EBITDA) and a return on
invested capital (ROIC) above 20%.
Growing momentum
Our Strategic Plan is expected to deliver growth through the three pillars of
1) key account growth and scope increases; 2) projects upsell/infill; and 3)
M&A. We are targeting high single digit revenue growth annually, inclusive
of the contribution from M&A.
In H1 FY26, organic growth through key accounts (net wins and contract growth)
and projects upsell contributed 6.4% to revenue growth, including pricing of
3.2%. Inorganic growth of 4.0% primarily related to the acquisition of
Marlowe, alongside infill M&A completed in the prior year.
Pillar 1: Record key account contract awards, order book and pipeline of
bidding opportunities
During the period, we won, extended or renewed contracts worth up to £3.8bn
total contract value, a record six-month performance following a strong
out-turn in the same period last year (H1 FY25: £3.7bn).
Notable new contract wins in the period included Integrated Facilities
Management (IFM) for Aviva; Immigration services for the Home Office; Hygiene
services for Landsec's Liverpool ONE complex, Manchester Airport Group and
Walgreens Boots Alliance; Security services for the Metropolitan Police
Authority and Tate Gallery; Engineering services for Transport for London; and
projects work for Willmott Dixon.
Our contract renewals performance was strong in the period at 86% (FY25: 59%),
with notable contract renewals/extensions included Security services for
Associated British Ports, Co-operative Group and one of the UK's largest
supermarket chains; IFM for GSK, JLL and Manchester Airport Group; Soft
services for Barking Havering & Redbridge University Hospital NHS Trust;
and Engineering services at RAF Mildenhall.
Our total order book increased by £1.1bn (7%) to a record £16.5bn (end FY25:
£15.4bn), net of £2.7bn revenue produced. This comprises a Facilities
Management order book of £13.6bn (end FY25: £12.6bn) and a Projects order
book of £2.9bn (end FY25: £2.8bn), with the latter typically being shorter
term in nature than FM contracts.
Our bidding pipeline stands at a record £33.0bn (end FY25: £23.7bn),
comprised of Facilities Management opportunities of £26.1bn (end FY25:
£18.9bn) and Projects opportunities of £6.9bn (end FY25: £4.8bn). Across
the pipeline, significant sectors include Immigration & Justice, Defence
and Central Government in the public sector, alongside Retail, Critical
National Infrastructure (including data centres), Transport & Aviation and
Financial Services in the private sector. Over 70% of the pipeline is due to
be awarded in the next 18 months.
Pillar 2: Transformational projects growth underpinned by attractive macro
trends
We continue to see strong demand from our customers for transformational
projects across their estates, reflected in a 15% increase in projects revenue
to £636m (H1 FY25: £552m) across our two divisions. At our Capital Markets
Event in October 2023, we set out plans to grow our Projects business to at
least £1.5bn by the end of FY27. Based on the good progress to date, we
expect to reach c.£2bn over the medium term.
Building modernisation, including lifecycle upgrades, continues to be a key
driver of growth, where we are integrating systems to create 'intelligent
buildings', and ensuring that buildings meet evolving legislative and
regulatory requirements. This includes new fire and security legislation,
which places a greater responsibility on building owners and managers to
protect occupants, and minimum energy efficiency standards for commercial
buildings. Decarbonisation technologies, such as air and ground source heat
pumps, solar, electric vehicle charging and battery storage, are also
increasingly being sought by our customers, alongside power and grid
connections and upgrades.
The UK is one of the largest data centre markets in Europe and is growing
rapidly as a result of the increasing demand for AI infrastructure. We have
built leading capabilities to deliver mechanical & electrical, cooling and
fire & security systems fit outs in these buildings, and across wider
critical environments, and we have a good pipeline of opportunities to drive
future growth.
We continue to deliver a range of projects work across our Defence contracts,
reflecting the UK government's commitment to invest in the country's defence
capabilities and the modernisation and decarbonisation of its estate. Across
Healthcare, Local Government & Education contracts, lifecycle projects
work is also a key driver of growth.
We have undertaken a number of management actions to turn around the telecoms
infrastructure business over the last year, which have resulted in a small
profit in H1 FY26, reversing a loss of £10m in the same period last year.
Revenue reduced by 39% to £20m (H1 FY25: £33m) as we continue to hand back
unprofitable work.
Pillar 3: Growth from M&A - Marlowe acquisition delivers 'Facilities
Compliance' leadership
On 5 August, we completed the acquisition of Testing, Inspection and
Certification specialist, Marlowe, for c.£350m, comprising 290p in cash
(£228m) and 1.1 Mitie shares per Marlowe share (86.6m new Mitie shares).
Marlowe has outstanding and highly complementary fire safety & security
and water & air hygiene capabilities in the fast growing £7.6bn UK
'Facilities Compliance' market. The combination of Mitie and Marlowe, with
c.£550m of revenue, is now the leader in this market, with the potential to
become a c.£1bn business in the medium term. Demand for compliance services
is underpinned by increasing requirements for business-critical assurance as a
result of new legislation and tighter regulation impacting buildings and their
owners, including those relating to fire and building safety, energy and the
environment.
Marlowe trading since acquisition has been in line with our expectations
(£51m revenue and £3.1m operating profit over the period from 5 August to 30
September). We expect the business to contribute to Mitie an operating profit
before Other items of at least £12m in FY26 (Marlowe plc reported FY25:
£20m). Our integration programme, comprising resources from both Mitie and
Marlowe, continues to progress at pace across multiple workstreams. We remain
on track to deliver at least £30m of cost synergies by FY28, together with
accelerated revenue growth through the cross-sell of regulatory driven
services to existing Mitie clients.
Key integration workstreams include optimisation of field force deployments
onto a single AI-enabled system; consolidation of certain roles and
responsibilities in Finance, HR, IT and Admin; rationalisation of the Marlowe
property portfolio; and the migration of Marlowe onto Mitie's cyber-secure and
AI-enabled systems. Negotiations with key suppliers have commenced as part of
the consolidation of procurement activities, and we are beginning the
transition of compliance work that Mitie currently subcontracts to third
parties to Marlowe companies. In addition, we have engaged specialist
consultants to review the opportunities for Marlowe in the latest Water
Industry Regulatory Cycle (Asset Management Period 8, £104bn investment
between 2025-2030).
Operating margin progression
We have a clear path to our targeted operating profit margin before Other
items of at least 5% by FY27. This will be achieved through our ongoing
programme of margin enhancement initiatives, underpinned by AI, as well as
operational leverage, alongside the contribution from higher margin projects
and compliance work. We expect these management actions to more than offset
headwinds from inflation and contract re-pricing dynamics in a competitive
environment.
During the period we delivered margin enhancement initiative cost savings of
£10m, which we expect to increase to £25m over the full year. Key
workstreams included the use of technology and AI to streamline tasks and
deploy resources more efficiently (see 'technology' section below); our 'Mitie
First' initiative to increase self-delivery to customers and reducing our
reliance on third-party contractors; working with strategic client accounts to
define a best practice service delivery model; the continued outsourcing of
certain finance functions; and the ongoing consolidation of Mitie's core
systems and processes. We also completed the roll out of Coupa, our
procurement supplier platform, in Technical Services during the period.
The investments we have been making into sales & marketing, contract
re-bids and training and incentives for 'in-contract' teams to drive growth
over the contract life are delivering tangible results, including strong
revenue growth, good wins and renewals and a record pipeline of bidding
opportunities. We also continue to invest in technology, by developing our
'Intelligent360' solutions and enabling AI in our core systems.
Sustainable free cash flow generation
We are targeting free cash flow generation of c.£150m per annum by FY27. As
previously noted, we expect increased profitability and improved working
capital management to offset the higher working capital requirements of our
growing projects business, together with some customers (particularly in
retail) demanding longer payment terms and the one-off negative impact
(c.£10m) arising from the Procurement Act 2023 requiring faster payments to
our SME suppliers.
In H1 FY26, the Group generated £115m of cash from operations (H1 FY25:
£81m), leading to a free cash inflow of £52m (H1 FY25: £34m). Higher cash
from operations reflects growth in operating profit before Other items,
primarily offset by higher capex, leases and interest payments alongside a
£24m seasonal working capital outflow in H1. We remain on track to deliver at
least £120m of free cash flow in FY26.
Proactive and growing capital deployment
Our capital deployment policy is determined by the best use of capital to
deliver superior returns to shareholders and drive growth in the business,
whilst maintaining a strong financial position, with leverage of between
0.75-1.5x (post-IFRS 16 average net debt / EBITDA).
We prioritise a progressive dividend at a payout ratio of between 30-40%. We
have also committed to purchase all shares required to fulfil colleague
incentive schemes to prevent shareholder dilution. We will continue to pursue
infill M&A opportunities that are a good strategic fit for our business
although, following the Marlowe acquisition, these are likely to be modest in
scale over the remainder of the Three-Year Plan. We remain committed to the
return of surplus funds to shareholders to maintain leverage within our target
range.
The Board has declared an interim dividend of 1.4p per share (H1 FY25: 1.3p),
consistent with our approach of setting the interim dividend at one third of
the prior year total dividend (FY25: 4.3p per share). The interim dividend
will be paid on 20 February 2026 to all shareholders on the register at 9
January. Shares in Mitie will be quoted ex-dividend on 8 January, and the
Dividend Reinvestment Plan election date is 26 January.
During the period, we completed the acquisition of Marlowe for c.£350m,
comprising 290p in cash (£228m) and 1.1 Mitie shares per Marlowe share (86.6m
new Mitie shares issued). As part of the acquisition, we incurred transaction
costs of £7m (of which £5.7m was paid in H1). We also spent £3.7m on
earnouts relating to infill acquisitions completed in prior periods.
On 14 October, we launched a new £100m share buyback programme to be
completed over 12 months. Since the start of FY26, we have purchased 17m
shares (£27m) at an average price of c.160p. This includes the 2m shares
(£3m) purchased under our previous programme, which was paused to accommodate
the Marlowe acquisition. In total we are holding 5m of the 17m shares
purchased in treasury to fulfil the 2022 Save As You Earn scheme, vesting in
February 2026, and we are cancelling all shares purchased in excess of this.
Finally, separate to the share buybacks, we acquired 17m shares at a cost of
£23m in H1 to fulfil colleague incentive schemes.
Strong balance sheet and modest leverage
Average daily net debt increased by £113m to £332m in H1 FY26 (H1 FY25:
£219m), reflecting our proactive capital deployments across dividends,
buybacks, share purchases for incentive schemes and M&A, and rolling
12-month leverage was 1.0x post-IFRS 16 average net debt / EBITDA (H1 FY25:
0.7x), within our targeted leverage range of 0.75-1.5x.
Closing net debt of £471m (FY25: £199m) reflects our proactive capital
deployments totalling £305m, alongside a £19m increase in lease obligations
as a result of the addition of Marlowe vehicles and leased properties,
partially offset by good free cash flow generation of £52m.
Liquidity and funding
To facilitate the acquisition of Marlowe, Mitie put in place a £240m
short-term bridge facility, which was fully drawn down upon completion of the
acquisition in August. After the period end, in mid-October, £60m of the
outstanding bridge loan was repaid from our existing balance sheet capacity.
The balance of the bridge loan was refinanced by the issuance of £180m of US
Private Placement notes on 12 November, and the bridge loan was fully repaid
and cancelled on 13 November.
The new US Private Placement notes have maturities of between 3-7 years with a
weighted average coupon of 5.44%. Mitie now has £360m of committed funding
with maturities between 2028-2034, at an overall weighted average interest
rate fixed at 4.65%, alongside a £250m Revolving Credit Facility maturing in
October 2028.
Technology leadership
Our competitive advantage is embedded in our people and industry-leading
technology, enabling us to deliver transformative, data-driven, 'intelligent'
solutions to meet the changing needs of our customers.
This includes Intelligent Engineering - supporting the 24x7 remote monitoring
and predictive maintenance of connected assets and promoting 'well-being' in
the built environment; Intelligent Security - enabling the deployment of
resources in response to the changing risk and threat profiles of our
customers' estates; Intelligent Hygiene - delivering demand-led hygiene based
on building usage data and sensor technology; and Intelligent Projects - where
our 'Emissions Intelligence' platform is enabling the automation of carbon
emissions data capture and reporting as well as the creation of Net Zero
carbon pathways for clients.
During the period we launched our leading Enterprise Insight Platform, Mozaic
360. Developed on Microsoft Fabric, the platform integrates operational data
across each of our 'intelligent' solutions with customer and third-party
information to provide comprehensive operational and strategic insights into
the daily operations in the 'Built Environment'. It utilises AI to identify
patterns and deliver in-depth analysis, creating value maximising strategies
for clients.
For example, four of the UK's largest retailers use 'Intelligent Security' to
assess store risk profiles and optimise resource allocation, while
'Intelligent Hygiene' has been implemented by organisations such as GSK, NATS
and an international e-commerce business. Our new IoT platform, 'Hark', is
being fully integrated with our Computer-Aided Facilities Management systems
to enhance our remote monitoring, energy management and predictive maintenance
capabilities.
We have introduced Sphere, a WELL-certified workplace wellbeing solution,
which enables our consulting team to measure and enhance the workplace
effectiveness. Our customer-facing mobile app, 'Aria', now processes c.40% of
service requests without human intervention, having upgraded our 'ESME'
chatbot with OpenAI's large language model, and has been shortlisted for the
UK IT Industry Award for innovation.
Intelligent Process Automation is central to our AI strategy, automating
systems and processes from start to finish. Building on the success of our
autonomous AI email agent, 'Barry', we have extended its use beyond the
Engineering helpdesk to Business Services and HR helpdesks. We have also
introduced an autonomous AI voice agent, 'Ava', to answer calls and create
service requests for the Engineering field force. The autonomous AI email
agent is now used by 38 customers, achieving over 90% success and saving
c.9,000 hours within the Engineering helpdesk team.
Across areas such as supply chain management, scheduling, HR and transactional
admin, we have launched AI-bots including 'Jeff', 'Sunita', 'Sally' and
'Hazel' to deliver efficiencies and cost savings. In Finance, 'Alan' and
'Karim' are identifying real-time savings in Fleet and enhancing purchase card
data analysis. We have also upgraded our Government and Commercial Maximo
systems to IBM MAS 9.1, enabling us to embed AI features into core engineering
workflow processes.
Environmental, Social and Governance (ESG) leadership
Mitie is recognised as a leader in ESG and social value among global industry
peers, with these initiatives forming a key part of how we do business. Our
leading credentials, including CDP 'A List' and MSCI ESG 'AA' rating, also
enable us to partner with our customers to realise their own sustainability
and Net Zero carbon ambitions.
We launched our Plan Zero strategy in 2020, with the ambitious 'Phase 1' goal
of becoming carbon neutral for our direct operations by the end of 2025. In
recognition of our progress to date, including the electrification of our
vehicle fleet and procurement of renewable energy, we marked the completion of
Phase 1 ahead of schedule, in July 2025. We are now establishing a new
emissions baseline and Plan Zero 2.0 will guide the next phase of our
decarbonisation journey.
In July, we also launched our new 'Plan Thrive' initiative, supporting our
corporate purpose: 'Better Places; Thriving Communities'. This strategic
framework is designed to embed social value across Mitie's operations, with
key pledges including to 'uplift one million lives and enable 1,000 places to
prosper'. Mitie has a strong track record of delivering impactful social
initiatives, including through the Mitie Foundation, apprenticeship schemes,
recruitment from disadvantaged cohorts, learning and development programmes
and responsible supply chain management.
We continue to offer career development opportunities and industry-leading
benefits to our colleagues to attract and retain the best talent. During the
period, c.1,600 colleagues were actively learning on over 90 technical,
professional and leadership programmes, and we welcomed 150 external
apprentices in H1, our highest ever intake. We have expanded our 'Women in
Leadership' pathway with a Level 7 Leadership cohort and continued our
Inclusion Allies programme, underpinning our broader ED&I commitments.
Operating review
As part of our Facilities Transformation Three-Year Plan (FY25-FY27), we
continue to simplify our organisational structure to align to our core service
line capabilities of Engineering, Security and Hygiene. As such, from the
start of FY26 we have absorbed the Communities division into Business Services
(Care & Custody has been renamed Immigration & Justice) and Technical
Services (Healthcare, Local Government & Education).
Business Services
Business Services is the UK's largest provider of technology-led Security and
Hygiene services across c.2,500 larger contracts, including public sector
expertise in Central Government and Immigration & Justice. Following the
acquisition of Marlowe, it is also the largest provider of Facilities
Compliance services alongside Landscaping and Waste Environmental services.
Mitie's Spanish business is reported within the division.
Business Services, £m H1 FY26 Restated(1) Change Restated(1)
H1 FY25 FY25
Revenue 1,415 1,229 15% 2,538
Security 580 517 12% 1,067
Hygiene & Environmental services 340 300 13% 629
Central Government 187 185 1% 384
Immigration & Justice 153 148 3% 291
Marlowe 51 - - -
Spain 104 79 32% 167
Operating profit before Other items 85.3 85.1 0.2% 180.4
Operating profit margin before Other items 6.0% 6.9% (0.9ppt) 7.1%
Total order book £7.1bn £4.2bn 69% £6.2bn
(1) Restated to combine Waste and Landscapes (as Environmental) with Hygiene
services and include Immigration & Justice (formerly Care & Custody
within the Communities division). Marlowe has also been reported in Business
Services.
Performance highlights
· Revenue +15% to £1,415m (H1 FY25: £1,229m), reflects new wins, fire safety
& security projects, pricing and acquisitions, partially offset by the
completion of certain projects programmes in central government
· Operating profit before Other items of £85.3m (H1 FY25: £85.1m), with
revenue growth and margin enhancement initiatives replacing the one-off
benefits in the prior year from higher margin 'surge response' security work
and a legal settlement
· £2.2bn total contract value of wins and extensions/renewals across key public
and private sectors, resulting in a 15% increase in total order book to
£7.1bn (end FY25: £6.2bn)
· UK market leadership position in 'Facilities Compliance' through the
acquisition of Marlowe, complementing existing fire safety & security
capabilities and adding new water & air hygiene capabilities
Operational performance
Business Services delivered a strong revenue performance, with the division
benefiting from net wins in the current and prior year, projects and pricing,
alongside contributions from the acquisition of Marlowe in August, and Argus
Fire and Grupo Visegurity in the prior year.
The 90bps reduction in operating margin largely reflects one-off benefits in
the prior year, including the provision of higher margin 'surge response'
security work (which had also benefited prior year revenue by £41m) and a
legal settlement, alongside higher employer National Insurance Contributions
in the current period, which are being recovered or mitigated through
management actions. This has been partially offset by margin enhancement
initiatives, including the technology-driven optimisation of workforce
deployment, automation and AI-led solutions to improve productivity and
procurement initiatives to consolidate spend across our Preferred Supplier
List.
The division secured £2.2bn total contract value of contract wins and
extensions/renewals across key sectors including retail, transport &
aviation, financial services, pharmaceuticals and in the public sector. Retail
is one of the division's largest sectors, with c.£450m of annual revenue and
a blue-chip customer base of national retailers and flagship shopping
centres. Alongside continued growth in existing accounts, the division won
new contracts to deliver hygiene services for Landsec's Liverpool ONE complex
and Walgreens Boots Alliance. The largest contract renewals in the period were
for the provision of security services to one of the UK's largest supermarket
chains, alongside Co-operative Group.
More widely, notable wins included security and hygiene services for Aviva,
alongside contracts with the Home Office, Metropolitan Police Authority, Tate
Gallery and Decathlon, whilst renewals included GSK, JLL, Manchester Airport
Group, Associated British Ports and Transport for London.
Within the sub-divisions, Security delivered a strong performance against a
tough prior year comparative, which had benefited from the 'surge response'
security work noted above. In addition to net wins, pricing and prior year
M&A (Argus Fire), RHI Industrials and GBE Converge delivered notably
strong growth in fire safety & security projects work.
Overall, projects revenue within the division increased by 30% to £167m (H1
FY25: £128m). This included the delivery of end-to-end security, and fire
detection & protection solutions for an Iron Mountain data centre, as well
as the fit outs of an Ark data centre in Middlesex as part of a new
relationship with Microsoft as an approved security integrator, and a Google
data centre in Norway. For National Grid, the division delivered civil works,
including perimeter fencing, concrete anti-burrow beams and automated sliding
gate foundations, at the Didcot national storage facility alongside civil,
structural and engineering works on 10 substations across the National Grid
Electricity Transmission estate, whilst in Scotland it delivered essential
earthing solutions for an expanding network of SSE and Scottish Power
substations.
Hygiene and Environmental services benefited from prior and current year wins,
with notable contracts including Community Health Partnerships, Pladis Global
and Walgreens Boots Alliance, whilst in Central Government the completion of
certain larger programmes of projects work in FY25 resulted in modest growth.
In Immigration & Justice, HMP Millsike, the UK's first all-electric
prison, became operational in April 2025, following a period, of mobilisation
and is expected to reach capacity to house and rehabilitate c.1,500 Category C
inmates by early 2026.
In August, Mitie extended its leadership position into the fast growing
'Facilities Compliance' market through the acquisition of Testing, Inspection
and Certification specialist, Marlowe. Combined with the division's existing
fire safety & security capabilities, the acquisition creates a unique
'Total Fire' offering across active and passive fire solutions and enhances
our security systems offering. Marlowe also adds water & air hygiene
services, complementing our Energy and Waste businesses. This enables the
development of a 'Total Managed Water' offer in a rapidly expanding market
with growth driven by increasingly stringent regulatory requirements,
including those relating to water scarcity and quality, alongside customer
sustainability and resilience targets.
The Marlowe integration programme is progressing well and to plan. Steps are
also being taken to identify and facilitate the significant opportunities to
cross sell Marlowe's compliance services to Mitie clients via our Strategic
Client Directors, with initial awards including to Rolls Royce, University
Hospitals Coventry & Warwickshire, NATS and Decathlon. Mitie's compliance
works that are currently subcontracted to third parties are being transitioned
to Marlowe, consistent with our wider 'Mitie First' initiative.
The strong performance in Mitie Spain reflected new contract wins (including
AENA in the Canary Islands and Autonomous University of Madrid), scope
increases and the contribution from Grupo Visegurity. At the end of the
period, Mitie Spain acquired the client portfolio of SPM for a total
consideration of up to €5m (of which €1.5m was paid during the period), as
it continues to build its Security capability in the region. This complements
the earlier acquisitions of Grupo Visegurity and Biservicus.
Technical Services
Technical Services is the UK's largest provider of Engineering services to
manage facilities and critical assets across c.450 contracts, including
contracts for the Ministry of Defence (MoD). The division also delivers
transformational projects in the high growth areas of buildings
infrastructure, decarbonisation and power and grid connections.
Technical Services, £m H1 FY26 Restated(1) Change Restated
H1 FY25 FY25(1)
Revenue 1,262 1,197 5% 2,545
Engineering 683 652 5% 1,395
Defence 261 248 5% 556
Healthcare, Local Government & Education(1) 318 297 7% 594
Operating profit before Other items 50.4 41.0 22.9% 109.1
Operating profit margin before Other items 4.0% 3.4% 0.6ppt 4.3%
Total order book £9.5bn £8.1bn 17% £9.2bn
(1) Restated to include Healthcare, Local Government & Education (formerly
within the Communities division) within Technical Services
Performance highlights
· Revenue +5% to £1,262m (H1 FY25: £1,197m), reflects new wins, projects and
lifecycle works, partially offset by one notable public sector contract that
ended in FY25
· Operating profit before Other items +22.9% to £50.4m (H1 FY25: £41.0m),
reflecting margin enhancement initiatives and the telecoms infrastructure
business turnaround, offset by inflation and a provision on one contract
ending in May 2026
· £1.6bn total contract value of contract wins and extensions/renewals resulted
in a 3% increase in the total order book to £9.5bn (end FY25: £9.2bn)
Operational performance
Technical Services benefited from steady revenue growth across each
subdivision, driven by new contract wins in the current and prior year, the
acquisition of ESM Power in the prior year, pricing and projects and lifecycle
works, partially offset by one notable, albeit relatively lower margin, public
sector contract that was not renewed at the end of FY25.
The 60bps improvement in the operating margin to 4.0% (H1 FY25: 3.4%) largely
reflected margin enhancement initiatives and management actions to address
challenges in our telecoms infrastructure business. This has been partially
offset by the impact of inflation and employer National Insurance
Contributions, alongside a £5m provision against one loss-making maintenance
contract which ends in May 2026 and will not be renewed. The telecoms
infrastructure business delivered a small profit in H1 (compared to a loss of
£10m in H1 FY25), as we continue to implement steps to improve profitability,
whilst revenue reduced by 39% to £20m (H1 FY25: £33m), reflecting the
planned exit from unprofitable contracts.
Divisional margin enhancement initiatives continued to focus on streamlining
account structures, increasing self-delivery, cost savings following the
divisional consolidation exercise as well as reducing divisional overheads.
Additionally, work has been undertaken to implement GenAI assistants and drive
process simplification and standardisation in order to deliver efficiency
gains.
Notable new contracts awards during the period included IFM for Aviva,
engineering services for Transport for London and projects work for Willmott
Dixon. Notable extensions and renewals included for Barking, Havering &
Redbridge University Hospital NHS Trust, GSK, Manchester Airport Group and RAF
Mildenhall and Starbucks.
Overall, projects revenue within the division increased by 11% to £469m (H1
FY25: £424m). Projects included the award and mobilisation of multi-site
solar photovoltaic installations for customers including David Lloyd Clubs,
Co-operative Group and Tesco; the completion of the mechanical &
electrical design and build of the first phase of a new data centre for Ark at
Longcross Park in Surrey; and the design and construction of the second of
four planned data centres at Kao's campus in Harlow.
In the division's power & grid connections business, investments to
rebuild the order book for G2 Energy (acquired from liquidation in 2023)
facilitated a £72m contract award from international renewable energy
developer, Elements Green, to design and build Staythorpe Battery Energy
System, one of the largest in Europe. Works commenced during the period, and
the system is expected to be connected to the neighbouring National Grid power
station by mid-2027. Upon completion it will have the capacity to store enough
energy to power 95,000 homes daily, supporting UK energy resilience and
accelerating the transition to net zero.
Mitie has been a trusted partner to the UK Armed Forces for over 30 years with
Defence contracts now accounting for c.10% of Group revenue. To support a new
era of modern, sustainable infrastructure, both domestically and in overseas
military locations, we continue to deliver a range of projects work. In H1,
this included the completion of refurbishment works on a critical airfield at
RAF Mount Pleasant in the Falkland Islands, the installation and commissioning
of a new bulk fuel facility at RAF Akrotiri in Cyprus and ongoing works to
deliver phased roofing replacements at MoD Corsham.
In Healthcare, Local Government & Education, the one historically
challenging PFI contract acquired with Interserve in 2020 delivered a small
profit for the first time (H1 FY25: £0.7m loss), following a series of
management actions to improve productivity and re-set pricing. Projects in the
sub-division included a new urgent treatment centre at the Cumberland
Infirmary in Carlisle and the construction of a new emergency department
resuscitation building for Dudley Hospital, alongside wider lifecycle works.
After the period end, Mitie completed the acquisition of Forest Group, a
specialist engineering business delivering critical refrigeration maintenance
services, for a maximum cash consideration of £7m (comprising an initial
payment of £4.5m and deferred payments of up to £2.5m over three years,
linked to performance). The acquisition will enable Mitie to self-deliver
critical refrigeration services, including into the Retail sector, where it
already has a strong presence in Security and Hygiene through a customer base
of national high street retailers and the major supermarket chains.
Corporate overheads
Corporate overheads represent the costs of running the Group and include costs
for central functions such as commercial sales and business development,
finance, marketing, legal and HR. Corporate overhead costs increased by 7.6%
to £26.9m (H1 FY25: £25.0m), primarily reflecting the addition of Marlowe's
central costs and strategic investments, offset by cost savings from margin
enhancement initiative programmes.
Finance review
Alternative Performance Measures
In addition to presenting statutory measures, the Group presents its results
before Other items. Management believes this is useful for users of the
financial statements, providing both a balanced view of the financial
statements, and relevant information on the Group's financial performance.
Accordingly, the Group separately reports the cost of restructuring
programmes, acquisition and disposal related costs (including the amortisation
of acquisition-related intangible assets), gains or losses on business
disposals, and other exceptional items as 'Other items'.
Financial performance
The reported Income Statement is set out below:
£m unless otherwise specified H1 FY26 H1 FY25
Revenue 2,677.2 2,425.6
Operating profit before Other items 108.8 101.1
Other items (48.2) (37.7)
Operating profit 60.6 63.4
Net finance costs (10.8) (6.6)
Profit before tax 49.8 56.8
Tax (15.1) (16.7)
Profit after tax 34.7 40.1
Less: Profit attributable to non-controlling interest (3.2) (2.9)
Profit attributable to owners of the parent 31.5 37.2
Basic earnings per share before Other items 5.7p 5.4p
Basic earnings per share 2.6p 3.0p
Revenue
Revenue for H1 FY26 of £2,677m has grown by 10.4% (H1 FY25: £2,426m). Of
this growth, 6.4% (£154m) was organic, driven by growth in Core FM (+2.9ppt),
Projects (+2.0ppt), and pricing (+3.2ppt), offset by the completion of 'surge
response' security work (-1.7ppt). The remaining 4.0% (£97m) of growth was
inorganic.
Organic Core FM growth of £70m reflects significant contract wins, such as
Integrated Facilities Management (IFM) for Aviva and security for the
Metropolitan Police Authority. Contract renewals have also been strong
including security for Associated British Ports and one of the UK's largest
supermarket chains, and IFM for GSK and JLL, resulting in a renewal rate of
86% for HY26 (FY25: 59%).
Organic Projects growth of £48m in the period was driven by good momentum in
the Defence sector, and in Healthcare, Local Government & Education.
Building modernisation and decarbonisation projects have also helped to drive
growth, together with increasing demand for services related to fits outs for
the fast growing data centre market.
The impact of the repricing of revenue in H1 FY26 was £77m (H1 FY25: £68m),
which related to inflation and employer National Insurance Contribution
increases.
The £97m of inorganic growth primarily related to the strategic acquisition
of Marlowe, completed in August 2025, combined with the full year impact of
the prior year acquisitions of ESM Power, Argus Fire and Grupo Visegurity.
Operating profit
Operating profit before Other items was £108.8m (H1 FY25: £101.1m), an
increase of £7.7m (+7.6%). This improvement was driven by Core FM and
Projects growth (£6.4m), the turnaround of our Telecoms business (£10.2m),
and inorganic growth (£4.7m), partially offset by the completion of 'surge
response' security work (-£7.8m) and investments being made to underpin our
growth strategy (-£6.2m). Unrecovered costs associated with inflation and
the changes to employer National Insurance Contributions (-£9.6m) have been
more than offset by margin enhancement initiative savings (£10.0m).
The Core FM and Projects profit growth was driven by the revenue growth
outlined above, in particular from some higher margin projects works, as well
as contract margin improvements in a number of different sectors. This
increase came despite the headwinds from a £5.4m charge relating to a
provision for a loss-making maintenance contract that will complete in May
2026, which sits in a structurally low margin sector that we are exiting.
Of the incremental £10.0m of profit from margin enhancement initiatives, the
Target Operating Model programme contributed £5.2m, through overhead
efficiencies, primarily through optimisation of the Group's organisational
structure and outsourcing of back office functions, as well as £1.8m from
efficiencies on contracts and operations. Savings on contracts and
operations were achieved through focusing on the design and optimisation of
our account structures, and increasing the levels of 'self-delivery' to
customers by reducing our reliance on third-party contractors. We completed
the roll out of Coupa (our digital supplier platform) during the period, which
generated an incremental £3.0m of savings.
Of the £4.7m of inorganic profit growth, £3.1m relates to the acquisition of
Marlowe, and £1.6m to the prior year acquisitions of ESM Power, Argus Fire
and Grupo Visegurity.
The investments of £6.2m have largely focused on enhancing our sales
capabilities and investing in technology to help to drive growth in the final
18 months of our Three-Year Plan, and into FY28 and beyond. We have incurred
above average mobilisation costs of £2.8m in H1 FY26 as a result of our
ongoing success at winning large contracts, with the most notable cost being
our investment in Millsike prison, which will drive good revenue and profit
growth in future periods.
Operating profit after Other items was £60.6m (H1 FY25: £63.4m), with the
increase in operating profit from the factors outlined above being more than
offset by higher Other items of £48.2m (H1 FY25: £37.7m), which are
explained below.
Other items
£m H1 FY26 H1 FY25
Target Operating Model (9.9) (8.2)
Digital supplier platform (0.7) (1.8)
Margin enhancement initiatives costs (10.6) (10.0)
Acquisition transaction costs (7.0) (1.9)
Employment-linked earnout charges (4.4) (5.3)
Other acquisition-related costs (3.6) (0.4)
Acquisition-related cash costs (15.0) (7.6)
Amortisation of acquisition-related intangible assets (15.6) (14.0)
Acquisition-related costs (30.6) (21.6)
Pension-related cash costs - (3.0)
Pension-related non-cash costs (7.0) (3.1)
Pension-related costs (7.0) (6.1)
Total Other items (48.2) (37.7)
of which cash Other items (25.6) (20.6)
Cash Other items of £25.6m in H1 FY26 were £5.0m higher than H1 FY25
(£20.6m), and comprised the costs of delivering the Group's margin
enhancement initiatives of £10.6m (H1 FY25: £10.0m) and acquisition-related
costs of £15.0m (H1 FY25: £7.6m).
The margin enhancement initiative costs included the implementation teams,
related redundancy costs, professional fees and dual running costs incurred to
decommission systems.
Acquisition-related costs in H1 FY26 included professional fees for the
Marlowe acquisition of £7.0m, and employment-linked earnout charges of £4.4m
(H1 FY25: £5.3m) which are cash in nature and will be payable to former
owners of acquired businesses if post-acquisition performance targets are
achieved and employment conditions are satisfied. Other acquisition-related
costs include £2.0m in H1 FY26 related to the integration of Marlowe.
Non-cash Other items of £22.6m (H1 FY25: £17.1m) comprised £15.6m (H1 FY25:
£14.0m) of amortisation of acquisition-related intangible assets, and £7.0m
(H1 FY25: £3.1m) of pension-related costs (which are further explained in
Note 3 to the condensed consolidated financial statements).
Net finance costs
Net finance costs increased to £10.8m in H1 FY26 (H1 FY25: £6.6m), primarily
due to the interest costs on the £240m bridge facility drawn down in August
to finance the Marlowe acquisition, and the issuance of £60m of US Private
Placement notes in December 2024 (at a coupon of 5.71%), to replace £30m of
maturing notes (at a coupon on 4.04%). The interest charge on leases
increased by £0.9m due to the higher lease liabilities, which are explained
below.
Tax
The tax charge for the period was £15.1m (H1 FY25: £16.7m), comprising a tax
charge on profit before Other items of £24.2m (H1 FY25: £23.4m) and a tax
credit for Other items of £9.1m (H1 FY25: £6.7m).
The effective tax rate on profit before Other items of 24.7% (H1 FY25: 24.8%)
is slightly lower than the UK statutory rate of 25%, primarily due to the
impact of lower tax rates on overseas profits.
After Other items, the tax charge for the period equated to an effective tax
rate of 30.3%, which is higher than the standard corporation tax rate of 25%
due to certain Other items costs, primarily related to acquisitions, not being
deductible for tax purposes.
The Group paid corporation tax of £9.5m in the period (H1 FY25: £10.3m), of
which £7.7m (H1 FY25: £8.6m) was paid in the UK, and £1.8m (H1 FY25:
£1.7m) overseas.
Earnings per share
Basic earnings per share before Other items increased to 5.7p in the period
(H1 FY25: 5.4p). This improvement was a result of the increase in operating
profit before Other items in the period (+0.4p), and the reduction in the
weighted average number of shares driven by the full year impact of the prior
year share buyback programme (+0.2p), partially offset by the increase in net
finance charges (-0.3p).
Basic earnings per share reduced to 2.6p (H1 FY25: 3.0p), with the improvement
from the factors outlined above being more than offset by the increase in
Other items (explained above, but primarily relating to the Marlowe
acquisition costs).
Return on invested capital (ROIC)
£m unless otherwise specified H1 FY26 H1 FY25
(R12M)(1) (R12M)(1)
Operating profit before Other items 241.8 222.5
Tax(2) (58.3) (48.0)
Operating profit before Other items after tax 183.5 174.5
Invested capital 1,125.3 688.0
ROIC % 16.3% 25.4%
(1) R12M represents a rolling 12-month basis
(2) Tax charge has been calculated on operating profits before Other items
using the effective tax rate for the last 12 months of 24.1% (H1 FY25: 21.6%)
ROIC on a rolling 12-month basis has decreased by 9.1ppt to 16.3% in H1 FY26
(H1 FY25: 25.4%), as a result of the temporary impact of the Marlowe
acquisition, which completed in August 2025. ROIC is adversely impacted by
the Marlowe acquisition because invested capital increases by the full balance
sheet value, whereas operating profit before Other items only benefits from
the two month period post acquisition. ROIC is expected to improve
significantly in FY27, once a full 12 months of profit is included for Marlowe
and as we start to realise the planned synergy savings.
Balance sheet
£m H1 FY26 FY25
Goodwill and intangible assets 1,001.6 664.5
Property, plant and equipment 279.9 246.9
Working capital balances (175.5) (202.9)
Provisions (97.4) (84.1)
Net debt (471.4) (199.0)
Net retirement benefit assets 18.0 13.9
Deferred tax liabilities (25.6) (17.9)
Other net assets 14.6 6.6
Net assets 544.2 428.0
As at 30 September 2025 the Group's reported net assets were £544.2m, an
increase of £116.2m since 31 March 2025. This increase is primarily driven
by the acquisition of Marlowe, which added £123.3m to Group net assets,
including £342.0m of provisional goodwill, partially offset by the increase
in net debt related to the cash consideration for the acquisition of
£228.2m. The £123.3m increase in net assets from the Marlowe acquisition
resulted from the shares issued as part of the total consideration (86.6m
shares at £1.42 per share).
The other elements of the overall increase in net debt of £272.4m are
explained further below (in the Cash flow and net debt section).
Goodwill and intangible assets
As noted above, the increase of £337.1m is primarily driven by £342.0m of
provisional goodwill related to the Marlowe acquisition that was completed
during the period. Given that we are still in the 12 month 'measurement
period' following the date of acquisition, a review is currently underway to
determine the fair value of assets and liabilities acquired with Marlowe,
including valuing the intangible assets acquired, such as customer contracts
and relationships. The completion of this review is expected to reduce the
value attributed to goodwill, compared with the provisional value reported at
30 September 2025. See Note 15 to the condensed consolidated interim
financial statements for further details on the acquisition of Marlowe.
The remaining increase relates to software acquired with Marlowe of £2.9m,
goodwill and intangible assets arising from other current and prior year
acquisitions of £10.1m and the capitalisation of software development costs
of £2.4m. This increase is partially offset by the amortisation of
intangible assets of £20.3m.
Property, plant and equipment
The increase of £33.0m is primarily due to the acquisition of Marlowe, which
expanded our property and vehicle fleet lease portfolio by £25.3m and added a
further £8.1m of owned assets.
Provisions
At 30 September 2025, provisions totalled £97.4m (FY25: £84.1m), which
largely comprised contract specific costs of £25.4m (FY25: £33.0m), onerous
contracts of £14.4m (FY25: £10.0m) and the insurance reserve of £36.0m
(FY25: £27.3m). The net increase in provisions during the period of £13.3m
included the acquisition of Marlowe, which added £12.7m, primarily related to
insurance reserves and dilapidation provisions. The reduction in contract
specific provisions was a result of commercial settlements with customers that
led to utilisation of the related provisions. The increase in onerous
contracts provision included £5.4m against one loss-making maintenance
contract which ends in May 2026, and will not be renewed. See Note 10 to the
condensed consolidated interim financial statements for further details on
provisions.
Retirement benefit schemes
At 30 September 2025, the Group's net retirement benefit assets on an IAS 19
basis were £18.0m (FY25: £13.9m net assets). The net improvement of £4.1m
was driven by favourable movements in financial assumptions, which resulted in
an increase in the surplus on the main Group scheme to £18.8m (FY25: £14.4m
surplus).
The latest triennial valuation for the main Group scheme, which concluded in
March 2024, showed an actuarial deficit of £19.4m at 31 March 2023
(materially lower than the previous £72.7m triennial valuation deficit). As a
result, deficit repair contributions reduced from c.£14m in FY24 to £8.4m in
FY25, and the Group paid a further £3.2m in H1 FY26.
The scheme actuary provides a quarterly funding update on the main Group
scheme. As a result of the continued improvement in the funding position
(through a combination of deficit repair contributions and investment
returns), the Group has agreed with the trustees that the remaining £4.8m of
deficit repair contributions (£1.61m quarterly) due between October 2025 and
April 2026 will only become payable if, and to the extent that, the quarterly
funding position falls below the level reported at 30 June 2025.
As previously reported, the Group reached a settlement agreement with the
trustees on certain Section 75 liabilities (related to the multi-employer
defined benefit Plumbing & Mechanical Services (UK) Industry Pension
Scheme), which will extinguish any future liabilities relating to this
scheme. The total £24.5m liability is being settled over a three-year
period in equal monthly payments (which commenced in H2 FY25).
Deferred tax
The net deferred tax liability was £25.6m at 30 September 2025, which
increased by £7.7m compared with the liability at 31 March 2025, primarily as
a result of net deferred tax liabilities acquired with Marlowe and the
utilisation of tax losses which reduced deferred tax assets.
Cash flow and net debt
£m H1 FY26 H1 FY25
Operating profit before Other items 108.8 101.1
Add back: depreciation, amortisation & impairment 45.5 35.6
EBITDA 154.3 136.7
Other items (25.6) (20.6)
Other operating movements 8.7 3.1
Operating cash flows before movements in working capital 137.4 119.2
Working capital movements(1) (24.4) (37.6)
Capex, capital element of lease payments & other (41.8) (30.9)
Interest payments (9.8) (6.1)
Tax payments (9.5) (10.3)
Free cash inflow 51.9 34.3
Share buybacks (2.9) (54.6)
Purchase of own shares into trusts (22.6) (9.4)
Acquisitions(2) (239.1) (12.2)
Dividends paid (40.5) (44.5)
Lease liabilities & other (19.2) (20.3)
Increase in net debt during the period (272.4) (106.7)
Closing net debt (471.4) (187.5)
Average daily net debt (331.6) (219.0)
Leverage(3) (average daily net debt/EBITDA) 1.0x 0.7x
(1 ) Adjusted to exclude movements in restricted cash and other adjustments
which do not form part of net debt (as explained in the Alternative
Performance Measures Appendix to the condensed consolidated financial
statements)
(2 ) Acquisitions includes acquisition transaction cost payments and
employment-linked earnout payments, the related charges for which are reported
within Other items
(3 ) Leverage is calculated on a 12-month rolling basis, and uses post-IFRS
16 net debt
Operating cash flows before movements in working capital improved by £18.2m
to £137.4m (H1 FY25: £119.2m), driven by the good trading performance
reflected in the increased EBITDA. This flowed through to an increased free
cash inflow of £51.9m (H1 FY25: £34.3m), with the lower cash outflows from
working capital broadly offsetting the higher capex, lease payments and tax
payments compared to H1 FY25.
The cash outflow from working capital of £24.4m (H1 FY25: £37.6m) reflects
our seasonal working capital outflow in H1, with the improvement compared with
prior year reflecting the ongoing working capital process improvements,
partially offset by the impact of longer payment terms being demanded by some
customers.
Capex, capital element of lease payments & other increased by £10.9m
compared to H1 FY25. Capex increased by £8.7m in H1 FY26, primarily related
to the mobilisation of the Millsike prison contract and the DWP Security
contract, together with AI investments in the apps that support the services
we provide to our customers. Capital lease repayments increased by £5.2m,
due to the continued transition of our leased fleet to electric vehicles, as
well as the expansion of the fleet through acquisitions and new contracts,
both in the UK and overseas. Net interest payments increased by £3.7m due to
the higher levels of net debt associated with our capital deployment actions
and higher lease liabilities.
Net debt movements associated with acquisitions totalled £239.1m, largely
relating to the strategic acquisition of Marlowe, which included net cash
consideration of £219.4m (after offsetting net cash acquired of £8.8m) and
debt acquired of £9.0m. Acquisitions also included employment-linked
earnout payments of £3.7m related to prior periods acquisitions, initial
consideration of £1.3m for a Spanish security business (SPM) acquired during
the period, and payments related to acquisition transaction costs of £5.7m,
mainly for Marlowe.
During the period, we purchased 2m shares for £2.9m into treasury to fulfil
the 2022 Save as You Earn scheme, and a further 17m shares were purchased into
employee trusts to satisfy share incentive schemes (at a cost of £22.6m).
In October, we resumed our share buyback programme, with a £100m programme to
be completed over 12 months.
Dividends paid of £40.5m include the final FY25 dividend of £36.6m (3.0p per
share), which was paid in August 2025, and a £3.9m dividend paid to the
Landmarc minority shareholder.
Lease liabilities & other include an increase in lease liabilities in H1
FY26 (net of capital repayments) of £19.6m (H1 FY25: £20.7m), primarily
driven by the lease liabilities acquired with Marlowe of £25.3m.
Net debt
Average daily net debt of £331.6m for H1 FY26 was £67.6m higher than in FY25
(£264.0m), contributing to a leverage ratio (average daily net debt / EBITDA)
of 1.0x for H1 FY26 on a rolling 12-month basis (FY25: 0.8x), which is at the
lower end of our target range of 0.75-1.5x. Closing net debt at 30 September
2025 of £471.4m was £272.4m higher than at 31 March 2025 (£199.0m).
As noted above, the increases in net debt during H1 FY26 were driven by
acquisitions and distributions to shareholders (totalling £305.1m), combined
with the additional lease liabilities & other of £19.2m, partially offset
by the free cash inflow of £51.9m.
Liquidity and covenants
As at 30 September 2025, the Group had £670.0m of committed funding
arrangements, comprising £180m of US Private Placement notes with long-dated
maturities between 2030 and 2034 at a blended average interest rate of 3.86%,
a £250m Revolving Credit Facility maturing in October 2028, and a £240m
short-term bridge facility, which was put in place to facilitate the
acquisition of Marlowe.
On 13 October 2025, £60m of the Marlowe bridge facility was repaid from
Mitie's existing balance sheet capacity, and the balance was refinanced by the
issuance of £180m of US Private Placement notes on 12 November 2025. The new
US Private Placement notes have maturities of between 3-7 years, and a
weighted average interest rate fixed at 5.44%.
On 18 July 2025, DBRS Morningstar confirmed that Mitie's BBB investment grade
credit rating remains unchanged.
Mitie's two key covenant ratios are leverage (ratio of consolidated total net
borrowings to adjusted consolidated EBITDA) and interest cover (ratio of
consolidated EBITDA to consolidated net finance costs), with a maximum of 3.0x
and minimum of 4.0x respectively. Covenant ratios are measured on a post-IFRS
16 basis with appropriate adjustments for leases, being primarily the
exclusion of lease liabilities from net debt and the inclusion of a charge
equivalent to lease payments against EBITDA.
As at 30 September 2025, the Group was operating well within these ratios at
0.88x covenant leverage and 25.4x interest cover. A reconciliation of the
calculations is set out in the table below:
H1 FY26 H1 FY25 (R12M)(6)
£m (R12M)(6)
Operating profit before Other items 241.8 222.5
Add: depreciation, amortisation & impairment 86.8 67.2
Headline EBITDA 328.6 289.7
Add: covenant adjustments(1) 19.8 21.6
Leases adjustment(2) (71.7) (53.8)
Consolidated EBITDA (a) 276.7 257.5
Full-year effect of acquisitions & disposals 15.8 6.6
Full-year effect of Landmarc step acquisition - 0.3
Adjusted consolidated EBITDA (b) 292.5 264.4
Net finance costs 20.4 11.5
Less: covenant adjustments - (0.6)
Leases adjustment(3) (9.5) (7.1)
Consolidated net finance costs (c) 10.9 3.8
Interest cover (ratio of (a) to (c)) 25.4x 68.0x
Net debt 471.4 187.5
Covenant adjustment(4) 0.1 -
Impact of hedge accounting & upfront fees 2.7 2.2
Leases adjustment(5) (217.8) (194.7)
Consolidated total net debt/(cash) (d) 256.4 (5.0)
Covenant leverage (ratio of (d) to (b)) 0.88x < 0x
(1) Covenant adjustments to EBITDA relate to share-based payments charges, and
pension administration expenses and past service costs
(2) Leases adjustment for EBITDA relates to depreciation charge for leased
assets and interest charge for lease liabilities (i.e. application of a charge
equivalent to lease payments)
(3) Leases adjustment for net finance costs relates to interest charge for
lease liabilities (i.e. removal of interest on lease liabilities)
(4) Covenant adjustment for net debt relates to cash held in a bank in Cyprus
(5) Leases adjustment for net cash relates to lease liabilities (i.e. removal
of lease liabilities)
(6) R12M represents a rolling 12-month basis
Principal risks and uncertainties affecting the business
Mitie continues to demonstrate its commitment to effective risk management
practices while navigating a rapidly evolving external environment
characterised by global instability and economic volatility. The Group remains
responsive to challenges spanning political, economic, environmental, and
technological domains, which present ongoing risks to the broader business
landscape. In the first half of FY26, Mitie addressed significant
developments, including heightened geopolitical tensions, evolving labour
policies, and threats to critical infrastructure, all of which influenced its
operational and strategic landscape. This period was underlined by a notable
rise in sophisticated cyber-attacks, particularly ransomware incidents
targeting prominent UK organisations. Such events have underscored the
importance of safeguarding critical systems and driven increased investment in
cybersecurity measures and risk mitigation strategies.
Importantly, Mitie successfully oversaw the go-live of HMP Millsike (a new
1,468 place Category C resettlement prison), marking a critical milestone in
its work within the prison sector. This development underlines Mitie's
expansion into key infrastructure settings, strengthening its position in
delivering essential services to communities across the UK. Through its active
involvement in the prison sector, Mitie continues to leverage its expertise to
ensure effective operational outcomes, while robust risk oversight remains
integral to its approach. This focus aligns with the Group's broader strategy
of maintaining resilience and delivering high-quality services under
challenging economic and social conditions.
The Group also completed the acquisition of Marlowe during this period,
significantly enhancing its capabilities in compliance, environmental, and
safety services. While this acquisition offers substantial growth potential,
it introduces inherent integration risks that Mitie continues to manage
proactively. Comprehensive efforts are underway to align Marlowe's operations
with Mitie's processes and culture, ensuring a seamless transition,
operational efficiency, and long-term value creation.
A cornerstone of Mitie's resilience is its enterprise risk management
framework, which it continues to prioritise with rigour. Central to this
framework is the Group's advanced online risk management tool, which currently
captures over 6,000 risks across its operations. This system enables the
ongoing monitoring of control effectiveness through assurance activities,
allowing the Group to identify, mitigate, and manage risks at both strategic
and operational levels. By maintaining this robust approach, Mitie enhances
accountability and resilience in an increasingly complex and volatile business
environment.
The adoption of the "three lines of defence" model remains fundamental to
Mitie's risk management approach. The first line consists of operational
management teams, who are responsible for identifying and managing risks
within their day-to-day roles. The second line comprises the Group's
enterprise risk management function, which provides oversight, offering
guidance, policies, and tools to support risk assessment and mitigation.
Finally, the third line is formed by the Group's internal audit function,
which delivers independent assurance on the effectiveness of risk controls and
processes. This structured approach ensures risks are managed comprehensively
at every level of the Group, fostering a strong culture of accountability and
continual improvement.
As Mitie transitions into the second half of FY26, the Group anticipates
facing key risks including escalating geopolitical instability, economic
uncertainty, threats to critical infrastructure, and increasingly
sophisticated cyber-attacks. Additionally, it remains focused on aligning its
operations with forthcoming policy changes and maintaining the momentum in
integrating Marlowe's capabilities seamlessly into its existing framework and
enhancing its work in the prison management sector. Despite these pressures,
Mitie has demonstrated resilience, adaptability, and a proactive stance in
managing risks, ensuring its operations remain robust and responsive to the
external challenges.
Further details on Mitie's risk management strategies, controls, and
mitigation measures can be found in the Group's Annual Report and Accounts
2025, pages 76 to 87.
Responsibility statement
The Directors of Mitie Group plc confirm that, to the best of their knowledge:
· the unaudited condensed consolidated financial statements have been prepared
in accordance with UK-adopted International Accounting Standard 34 Interim
Financial Reporting; and
· the interim management report, as required by rules 4.2.7R and 4.2.8R of the
Disclosure Guidance and Transparency Rules, includes a fair review of:
- important events during the six months ended 30 September 2025 and
their impact on the unaudited condensed consolidated financial statements;
- a description of the principal risks and uncertainties for the
second half of the year; and
- related parties' transactions and changes therein.
The names and functions of the Directors of Mitie Group plc are available on
the Group's website:
www.mitie.com/investors/corporate-governance/our-board
(http://www.mitie.com/investors/corporate-governance/our-board) .
On behalf of the Board
Phil Bentley
Chief Executive Officer
19 November 2025
INDEPENDENT REVIEW REPORT TO Mitie Group plc
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2025 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2025 which comprises the condensed consolidated income statement,
the condensed consolidated statement of comprehensive income, the condensed
consolidated statement of financial position, the condensed consolidated
statement of changes in equity, the condensed consolidated statement of cash
flows and the related Notes 1 to 18.
Basis for conclusion
We conducted our review in accordance with the International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in Note 1 (a), the annual financial statements of the Group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the Directors have
inappropriately adopted the going concern basis of accounting or that the
Directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the Group to
cease to continue as a going concern.
Responsibilities of directors
The Directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the Directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
relating to going concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
19 November 2025
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Condensed consolidated income statement
For the six months ended 30 September 2025
30 September 2024
30 September 2025
Notes Before Other Total Before Other Total
Other items
items(1
£m
Other items
items(1
£m
£m ) £m
£m ) £m
Revenue 2 2,677.2 - 2,677.2 2,425.6 - 2,425.6
Cost of sales (2,386.1) - (2,386.1) (2,171.8) - (2,171.8)
Gross profit 291.1 - 291.1 253.8 - 253.8
Administrative expenses (182.8) (48.2) (231.0) (157.5) (37.7) (195.2)
Other income 0.8 - 0.8 4.5 - 4.5
Share of (loss)/profit of joint ventures and associates (0.3) - (0.3) 0.3 - 0.3
Operating profit/(loss)(2) 2 108.8 (48.2) 60.6 101.1 (37.7) 63.4
Finance income 2.2 - 2.2 1.9 - 1.9
Finance costs (13.0) - (13.0) (8.5) - (8.5)
Net finance costs (10.8) - (10.8) (6.6) - (6.6)
Profit/(loss) before tax 98.0 (48.2) 49.8 94.5 (37.7) 56.8
Tax 4 (24.2) 9.1 (15.1) (23.4) 6.7 (16.7)
Profit/(loss) for the period 73.8 (39.1) 34.7 71.1 (31.0) 40.1
Attributable to:
Equity holders of the parent 69.9 (38.4) 31.5 67.4 (30.2) 37.2
Non-controlling interests 3.9 (0.7) 3.2 3.7 (0.8) 2.9
Profit/(loss) for the period 73.8 (39.1) 34.7 71.1 (31.0) 40.1
Earnings per share (EPS) attributable to
owners of the parent
Basic 6 5.7p 2.6p 5.4p 3.0p
Diluted 6 5.3p 2.4p 5.0p 2.7p
Notes:
1. Other items are as described in Note 3.
2. Including impairment losses on trade receivables, other receivables and
accrued income of £1.7m (2024: £3.2m).
Condensed consolidated statement of comprehensive income
For the six months ended 30 September 2025
Notes 30 September 30 September
2025 2024
£m
£m
Profit for the period 34.7 40.1
Items that will not be reclassified to profit or loss in subsequent periods
Remeasurement of retirement benefit assets/liabilities 16 7.9 6.9
Tax charge relating to items that will not be reclassified to profit or loss (2.0) (0.5)
in subsequent periods
5.9 6.4
Items that may be reclassified to profit or loss in subsequent periods
Exchange differences on translation of foreign operations 1.2 (0.9)
1.2 (0.9)
Other comprehensive income for the period 7.1 5.5
Total comprehensive income for the period 41.8 45.6
Attributable to:
Equity holders of the parent 38.6 42.6
Non-controlling interests 3.2 3.0
Total comprehensive income for the period 41.8 45.6
Condensed consolidated statement of financial position
As at 30 September 2025
Notes 30 September 31 March
2025 2025
£m
£m
Non-current assets
Goodwill 7 747.6 397.8
Other intangible assets 254.0 266.7
Property, plant and equipment(1) 13 279.9 246.9
Interests in joint ventures and associates 1.3 1.6
Trade and other receivables 8 22.8 20.5
Contract assets 1.6 1.9
Retirement benefit assets 16 20.7 16.3
Deferred tax assets 0.3 -
Total non-current assets 1,328.2 951.7
Current assets
Inventories 26.6 14.9
Trade and other receivables 8 1,056.3 967.9
Contract assets 1.4 0.7
Current tax receivable 12.6 4.1
Cash and cash equivalents 11 169.8 180.4
Total current assets 1,266.7 1,168.0
Total assets 2,594.9 2,119.7
Current liabilities
Trade and other payables 9 (1,089.0) (1,012.6)
Deferred income (143.7) (140.9)
Current tax payable (5.4) (3.4)
Financing liabilities 12 (61.4) (52.2)
Provisions 10 (44.1) (37.4)
Total current liabilities (1,343.6) (1,246.5)
Net current liabilities (76.9) (78.5)
Non-current liabilities
Trade and other payables 9 (14.7) (22.2)
Deferred income (36.8) (33.1)
Financing liabilities 12 (573.7) (322.9)
Provisions 10 (53.3) (46.7)
Retirement benefit liabilities 16 (2.7) (2.4)
Deferred tax liabilities (25.9) (17.9)
Total non-current liabilities (707.1) (445.2)
Total liabilities (2,050.7) (1,691.7)
Net assets 544.2 428.0
Note:
1. Includes owned property, plant and equipment of £68.3m (31 March 2025:
£54.5m) and right-of-use assets of £211.6m (31 March 2025: £192.4m). During
the six months ended 30 September 2025, owned property, plant and equipment
additions were £13.4m, and acquisitions of businesses added a further £8.1m.
These increases were partially offset by depreciation of £7.5m and disposals
of £0.2m. Refer to Note 13 for right-of-use assets.
Condensed consolidated statement of financial position continued
For the six months ended 30 September 2025
30 September 2025 31 March
£m
2025
£m
Equity
Share capital 33.5 31.3
Share premium 132.0 132.0
Merger reserve 278.1 157.0
Own shares reserve (72.0) (65.1)
Share-based payments reserve 44.2 40.4
Capital redemption reserve 5.3 5.3
Hedging and translation reserve (1.6) (2.8)
Retained profits 107.8 112.3
Equity attributable to owners of the parent 527.3 410.4
Non-controlling interests 16.9 17.6
Total equity 544.2 428.0
Condensed consolidated statement of changes in equity
For the six months ended 30 September 2025
30 September 2025
Share capital Share Merger Own shares Capital redemption reserve Hedging and Retained Total attributable to owners of parent
£m premium reserve(1) reserve
translation profits
£m
£m
£m
£m Share-based payments reserve £m
reserve
£m Non-controlling interests
£m
£m £m Total equity
£m
At 1 April 2025 31.3 132.0 157.0 (65.1) 40.4 5.3 (2.8) 112.3 410.4 17.6 428.0
Profit for the period - - - - - - - 31.5 31.5 3.2 34.7
Other comprehensive income - - - - - - 1.2 5.9 7.1 - 7.1
Total comprehensive income - - - - - - 1.2 37.4 38.6 3.2 41.8
Transactions with owners
Issue of shares(2) 2.2 - 121.1 - - - - - 123.3 - 123.3
Dividends paid - - - - - - - (36.6) (36.6) - (36.6)
Purchase of own shares(3) - - - (22.6) - - - - (22.6) - (22.6)
Share buybacks(4) - - - (2.9) - - - - (2.9) - (2.9)
Share-based payments - - - 18.6 3.8 - - (12.1) 10.3 - 10.3
Tax on share-based payments - - - - - - - 6.8 6.8 - 6.8
Dividends paid to Non-controlling interest - - - - - - - - - (3.9) (3.9)
Total transactions with owners 2.2 - 121.1 (6.9) 3.8 - - (41.9) 78.3 (3.9) 74.4
At 30 September 2025 33.5 132.0 278.1 (72.0) 44.2 5.3 (1.6) 107.8 527.3 16.9 544.2
Notes:
1. The merger reserve represents amounts relating to premiums arising on
shares issued subject to the provisions of Section 612 of the Companies Act
2006.
2. As part of consideration for the acquisition of Marlowe plc (Marlowe),
86.6 million shares were issued with premium of £121.1m arising (see Note
15). These share issues qualified for merger relief under Section 612 of the
Companies Act 2006, such that total premium arising of £121.1m was not
required to be credited to the share premium account.
3. During the period the Employee Benefit Trust acquired 16.8m ordinary
shares through market purchases for a consideration of £21.8m and the Share
Incentive Plan Trust acquired 0.6m shares for a consideration of £0.8m.
4. The share buybacks resulted in the purchase of 2.0m ordinary shares for
a consideration of £2.9m, which were bought into Treasury.
30 September 2024
Share capital Share Merger Own shares Capital redemption reserve Hedging and Retained Total attributable to owners of parent
£m premium reserve reserve
translation profits
£m
£m
£m
£m Share-based payments reserve £m
reserve
£m Non-controlling interests
£m
£m £m Total equity
£m
At 1 April 2024 33.3 132.0 157.0 (69.8) 42.1 3.3 (2.1) 157.4 453.2 20.5 473.7
Profit for the period - - - - - - - 37.2 37.2 2.9 40.1
Other comprehensive income - - - - - - (0.9) 6.3 5.4 0.1 5.5
Total comprehensive income - - - - - - (0.9) 43.5 42.6 3.0 45.6
Transactions with owners
Dividends paid - - - - - - - (38.5) (38.5) - (38.5)
Purchase of own shares(1) - - - (9.4) - - - - (9.4) - (9.4)
Share buybacks(2) (0.8) - - (13.4) - 0.8 - (41.2) (54.6) - (54.6)
Share-based payments - - - 21.3 (5.3) - - (7.6) 8.4 - 8.4
Tax on share-based payments - - - - - - - (0.7) (0.7) - (0.7)
Dividends paid to Non-controlling interest - - - - - - - - - (6.0) (6.0)
Total transactions with owners (0.8) - - (1.5) (5.3) 0.8 - (88.0) (94.8) (6.0) (100.8)
At 30 September 2024 32.5 132.0 157.0 (71.3) 36.8 4.1 (3.0) 112.9 401.0 17.5 418.5
Notes:
1. During the period the Employee Benefit Trust acquired 7.7m ordinary
shares through market purchases for a consideration of £8.8m and the Share
Incentive Plan Trust acquired 0.5m shares for a consideration of £0.6m.
2. The share buybacks resulted in market purchases of 45.2m ordinary shares
for a consideration of £54.6m, of which 33.9m shares were subsequently
cancelled and 11.3m shares were bought into Treasury.
Condensed consolidated statement of cash flows
For the six months ended 30 September 2025
Notes 30 September 30 September 2024
£m
2025
£m
Operating profit before Other items 2 108.8 101.1
Other items 3 (48.2) (37.7)
Operating profit 60.6 63.4
Adjustments for:
Share-based payments expense 10.9 8.5
Defined benefit pension costs 16 8.3 4.5
Defined benefit pension contributions 16 (3.9) (6.4)
Depreciation of property, plant and equipment 40.2 31.5
Amortisation of other intangible assets 20.3 17.8
Share of loss/(profit) of joint ventures and associates 0.3 (0.3)
Amortisation of contract assets 0.4 0.3
Impairment of non-current assets 0.2 -
Loss/(gain) on disposal of property, plant and equipment 0.1 (0.1)
Operating cash flows before movements in working capital 137.4 119.2
Increase in inventories (0.7) (0.4)
Increase in receivables (25.2) (146.8)
Increase in contract assets (0.9) (0.3)
Increase in deferred income 2.3 34.3
Increase in payables 7.0 82.2
Decrease in provisions (5.1) (6.8)
Cash generated from operations 114.8 81.4
Income taxes paid 4 (9.5) (10.3)
Interest paid(1) (11.5) (7.9)
Net cash generated from operating activities 93.8 63.2
Investing activities
Acquisition of businesses, net of cash acquired(2) 15 (220.7) (5.8)
Interest received 1.7 1.8
Purchase of property, plant and equipment (16.0) (7.0)
Purchase of other intangible assets (3.3) (3.7)
Disposal of property, plant and equipment 0.1 0.2
Net cash used in investing activities (238.2) (14.5)
Notes:
1. Interest paid includes £4.9m (2024: £4.1m) in relation to lease
liabilities. Refer to Note 13.
2. Acquisition of businesses is net of cash acquired of £8.8m (2024:
£1.4m). Refer to Note 15.
Condensed consolidated statement of cash flows continued
For the six months ended 30 September 2025
Notes 30 September 2025 30 September 2024
£m
£m
Financing activities
Purchase of own shares (22.6) (9.4)
Shares bought back (2.9) (54.6)
Capital element of lease rentals 13 (32.0) (26.8)
Proceeds from new bridge loan facility 240.0 -
Repayment of bank loans (9.0) -
Payment of arrangement fees (0.7) -
Proceeds received on settlement of share-based payment transactions 1.2 0.9
Equity dividends paid 5 (36.6) (38.5)
Dividends paid to non-controlling interest (3.9) (6.0)
Net cash generated/(used) in financing activities 133.5 (134.4)
Net decrease in cash and cash equivalents (10.9) (85.7)
Net cash and cash equivalents at beginning of the period 180.4 244.9
Effect of foreign exchange rate changes 0.3 (0.2)
Net cash and cash equivalents at end of the period 11 169.8 159.0
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2025
1. Basis of preparation and material accounting policies
(a) Basis of preparation
Mitie Group plc (the Company) is a company incorporated in the United Kingdom
and registered in Scotland. The Company's registered office is at 35 Duchess
Road, Rutherglen, Glasgow, G73 1AU. The Group comprises the Company and all
its subsidiaries.
These unaudited condensed consolidated financial statements (the condensed
consolidated financial statements) for the six months ended 30 September 2025
have been prepared in accordance with UK-adopted International Accounting
Standard (IAS) 34 Interim Financial Reporting, and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The condensed consolidated financial statements have been reviewed by BDO LLP
but have not been audited. They do not include all the information and
disclosures required in the annual financial statements, and therefore should
be read in conjunction with the Group's Annual Report and Accounts for the
year ended 31 March 2025 (Annual Report and Accounts 2025).
These condensed consolidated financial statements do not comprise statutory
accounts within the meaning of Section 434 of the Companies Act 2006. A copy
of the statutory accounts for the year ended 31 March 2025 has been delivered
to the Registrar of Companies and is available upon request from the Company's
registered office or at mitie.com/investors. The independent auditor's report
for the year ended 31 March 2025 was unqualified and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act 2006.
The condensed consolidated financial statements were approved by the Board of
Directors on 19 November 2025.
Going concern
The condensed consolidated financial statements for the six months ended 30
September 2025 have been prepared on a going concern basis. In adopting the
going concern basis, the Directors have considered the Group's business
activities as set out on pages 3 to 75 of the Annual Report and Accounts 2025
and the principal risks and uncertainties as set out on pages 76 to 87 and the
viability statement on page 89 of the same.
The Directors have carried out an assessment of the Group's ability to
continue as a going concern for the period of at least 12 months from the date
of approval of the condensed consolidated financial statements (the Going
Concern Assessment Period). This assessment was based on the latest
medium-term cash forecasts from the Group's cash flow model (the Base Case
Forecasts), which is based on the Board approved budget. These Base Case
Forecasts indicate that the debt facilities currently in place are adequate to
support the Group over the Going Concern Assessment Period.
The Group's principal debt financing arrangements as at 30 September 2025 were
a £250m Revolving Credit Facility maturing in October 2028, which was undrawn
as at 30 September 2025, £180m of US Private Placement notes and a £240m
bridge facility which was fully drawn as at 30 September 2025. These financing
arrangements are subject to certain financial covenants which are tested every
six months on a rolling 12-month basis, as set out in the Finance review.
Of the US Private Placement notes, £120.0m were issued in December 2022 and
are split equally between 8, 10 and 12-year maturities, and were issued with
an average coupon of 2.94%. The remaining £60m of US Private Placement notes
were drawn from the shelf facility in December 2024 at a coupon rate of 5.71%
and mature in December 2031. The remaining undrawn capacity of this
uncommitted US Private Placement shelf facility was c.£260m as at 30
September 2025, which can be drawn down until October 2027.
The bridge facility was put in place and drawn down to facilitate the
acquisition of Marlowe. In October 2025, £60m of the outstanding bridge loan
amount was repaid from our existing balance sheet capacity, with the balance
being refinanced by the issuance of £180m of US Private Placement notes on 12
November 2025. The new US Private Placement notes have maturities of between
3-7 years, and a weighted average coupon of 5.44%.
Mitie currently operates within the terms of its agreements with its lenders,
with consolidated net debt (i.e. net debt adjusted for covenant purposes,
primarily by the exclusion of lease liabilities) of £254m at 30 September
2025. The Base Case Forecasts indicate that the Group will continue to operate
within these terms and that the headroom provided by the Group's debt
facilities currently in place is adequate to support the Group over the Going
Concern Assessment Period.
The Directors have also completed a reverse stress test using the Group cash
flow model to assess the point at which the financial covenants, or facility
headroom, would be breached. The sensitivities considered have been chosen
after considering the Group's principal risks and uncertainties.
The primary financial risks related to adverse changes in the economic
environment and/or a deterioration in commercial or operational conditions are
listed below. These risks have been considered in the context of any further
UK fiscal or monetary policy changes, the current economic climate including
high inflation, as well as wider geopolitical uncertainties such as the
Russian invasion of Ukraine and conflict in the Middle East:
• A downturn in revenues: this reflects the risks of not being able to deliver
services to existing customers, or contracts being terminated or not renewed;
• A deterioration of gross margin: this reflects the risks of contracts being
renegotiated at lower margins, or planned cost savings not being delivered;
• An increase in costs: this reflects the risks of a shortfall in planned
overhead cost savings, including margin enhancement initiatives not being
delivered, or other cost increases such as sustained higher cost inflation;
and
• A downturn in cash generation: this reflects the risks of customers delaying
payments due to liquidity constraints, the removal of ancillary debt
facilities or any substantial one-off settlements related to commercial
issues.
As a result of completing this assessment, the Directors concluded that the
likelihood of the reverse stress scenarios arising was remote. In reaching the
conclusion of remote, the Directors considered the following:
• All stress test scenarios would require a very severe deterioration compared
to the Base Case Forecasts. Revenue is considered to be the key risk, as this
is less within the control of management. Revenue would need to decline by
approximately 27% in the 12 months to 30 September 2026 compared to the Base
Case Forecasts, which is considered to be very severe given the high
proportion of Mitie's revenue that is fixed in nature and the fact that even
in the Covid-hit year ended 31 March 2021, Mitie's revenue excluding
Interserve declined by only 1.6%; and
• In the event that results started to trend significantly below those included
in the Base Case Forecasts, additional mitigation actions have been identified
that would be implemented. These include the short-term scaling down of
capital expenditure, overhead efficiency/reduction measures including
cancellation of discretionary bonuses and reduced discretionary spend, asset
disposals and reductions in cash distributions and share buybacks.
Based on these assessments, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for a
period of no less than 12 months from the date of approval of these condensed
consolidated financial statements. In addition, the Directors have concluded
that the likelihood of the reverse stress scenarios arising is remote and
therefore no material uncertainty exists.
(b) Material accounting policies
In preparing these condensed consolidated financial statements for the six
months ended 30 September 2025, the Group's accounting policies and methods of
computation are consistent with those applied in the preparation of the
Group's annual consolidated financial statements for the year ended 31 March
2025, which were prepared in accordance with UK-adopted International
Accounting Standards in conformity with the requirements of the Companies Act
2006.
The only IFRS amendment effective for the first time in the financial year
ending 31 March 2026 relates to IAS 21 The Effects of Changes in Foreign
Exchange Rates - Lack of Exchangeability. This amendment did not have a
material effect on the Group.
None of the new standards and amendments that are not yet effective are
expected to have a material effect on the Group other than presentational
changes that will be required for the year ending 31 March 2028 under IFRS 18
Presentation and Disclosure In Financial Statements, the impact of which is
being assessed.
Statutory and non-statutory measures of performance
In the condensed consolidated financial statements, the Group has elected to
provide some further non-statutory disclosures and performance measures,
reported as 'before Other items', in order to assist in understanding the
underlying financial performance achieved by the Group. The accounting policy
used in determining the non-statutory measures of performance has remained
unchanged in the six months ended 30 September 2025, and is set out below.
Other items are items of financial performance which management believes
should be separately identified on the face of the condensed consolidated
income statement to assist in understanding the underlying financial
performance achieved by the Group. The Group separately reports impairment of
goodwill, impairment and amortisation of acquisition related intangible
assets, acquisition and disposal costs, charges with respect to
employment-linked earnouts, gain or loss on business disposals, cost of
restructuring programmes, charges arising on exit of pension schemes and other
exceptional items and their related tax effect as Other items. Should these
items be reversed, disclosure of this would also be as Other items. The
associated post-acquisition trading results generated by acquired businesses
and the benefits from restructuring programmes are not included as Other
items.
Separate presentation of these items is intended to enhance understanding of
the financial performance of the Group in the period and the extent to which
results are influenced by material unusual and/or non-recurring items. Further
detail of Other items is set out in Note 3.
In addition, following the guidelines on Alternative Performance Measures
issued by the European Securities and Markets Authority, the Group has
included an Alternative Performance Measures appendix to the condensed
consolidated financial statements (refer to Appendix 1).
(c) Critical accounting judgements and key sources of estimation uncertainty
In preparing these condensed consolidated financial statements, the
significant estimates and judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the Annual Report and Accounts 2025.
2. Business segment information
The Group's operating segments are established on the basis of those
components of the Group that are evaluated regularly by the Chief Operating
Decision Maker in deciding how to allocate resources and in assessing
performance. The Group has determined the Chief Operating Decision Maker to be
its Board of Directors.
The Group manages its business on a service division basis. During the period,
the Group re-organised its Communities division, where the Healthcare, Local
Government & Education business was moved into the Technical Services
division and the Immigration & Justice business was moved into the
Business Services division. The Compliance business, which was previously
reported within the Technical Services division, has also moved to the
Business Services division.
As a result of the re-organisation, Communities is not considered to be an
operating segment for the six months ended 30 September 2025, and the Group
has two reportable segments (2025: three segments). The change in operating
segments reflects how the Chief Operating Decision Maker evaluates the
divisions and their performance and decides on resource allocation.
The comparatives for the six months ended 30 September 2024 have been restated
for the change in the composition of reportable segments.
Revenue, operating profit before Other items and operating profit margin
before Other items are the primary measures of performance that are reported
to and reviewed by the Board. Segment assets and liabilities have not been
disclosed as they are not reviewed by the Board.
No single customer accounted for more than 10% of external revenue in the
period ended 30 September 2025 or in the comparative period. The UK Government
is not considered to be a single customer.
Income statement information
Restated(1)
Six months ended 30 September 2025 Six months ended 30 September 2024
Revenue Operating profit/(loss) before Other items(2 Operating margin before Other items(2 Revenue Operating profit/(loss) before Other items(2) Operating
£m ) £m ) %
£m
£m
margin before Other items(2)
%
Business Services 1,415.3 85.3 6.0 1,228.8 85.1 6.9
Technical Services 1,261.9 50.4 4.0 1,196.8 41.0 3.4
Corporate centre - (26.9) - - (25.0) -
Total for the Group 2,677.2 108.8 4.1 2,425.6 101.1 4.2
Notes:
1. The comparatives for the six months ended 30 September 2024 have been
restated for the change in the composition of reportable segments.
2. Other items are as described in Note 3.
A reconciliation of operating profit before Other items to total profit before
tax is provided below:
Six months ended Six months ended
30 September 2025 30 September 2024
£m £m
Operating profit before Other items 108.8 101.1
Other items(1) (48.2) (37.7)
Net finance costs (10.8) (6.6)
Profit before tax 49.8 56.8
Note:
1. Other items are as described in Note 3.
Disaggregated revenue
The Group disaggregates revenue from contracts with customers by sector
(government and non-government). Management believes this best depicts how the
nature and amount of revenue and cash flows are affected by economic factors.
The following table includes a reconciliation of disaggregated revenue with
the Group's reportable segments.
Restated(1)
Six months ended 30 September 2025 Six months ended 30 September 2024
Sector(2) Sector(2)
Government Non-government Total Government Non-government Total
£m
£m
£m
£m
£m
£m
Business Services 610.9 804.4 1,415.3 605.3 623.5 1,228.8
Technical Services 728.9 533.0 1,261.9 680.4 516.4 1,196.8
Revenue 1,339.8 1,337.4 2,677.2 1,285.7 1,139.9 2,425.6
Notes:
1. The comparatives for the six months ended 30 September 2024 have been
restated for the change in composition of reportable segments.
2. Sector is defined by the end customer on any contract, for example, if the
Group is a subcontractor to a company repairing a government building, then
the contract would be classified as government.
3. Other items
Other items are items of financial performance which management believes
should be separately identified on the face of the condensed consolidated
income statement to assist in understanding the underlying financial
performance achieved by the Group.
The Group separately reports impairment of goodwill, impairment and
amortisation of acquisition related intangible assets, acquisition and
disposal costs, charges with respect to employment-linked earnouts, gain or
loss on business disposals, cost of restructuring programmes, charges arising
on exit of pension schemes and other exceptional items and their related tax
effect as Other items.
Six months ended 30 September 2025
Restructure costs Acquisition and disposal Other exceptional Total
£m
related costs
items
£m
£m
£m
Other items before tax (9.9) (30.6) (7.7) (48.2)
Tax 2.5 4.7 1.9 9.1
Other items after tax (7.4) (25.9) (5.8) (39.1)
Restated(1)
Six months ended 30 September 2024
Restructure costs Acquisition and disposal Other exceptional Total
£m
related costs
items
£m
£m
£m
Other items before tax (8.2) (21.6) (7.9) (37.7)
Tax 2.1 2.7 1.9 6.7
Other items after tax (6.1) (18.9) (6.0) (31.0)
Note:
1. Other items for the six months ended 30 September 2024 have been
re-presented to reclassify £6.1m of pension costs, and the associated tax
credit of £1.5m, between two Other items categories. These costs were
previously reported within the 'acquisition and disposal related costs'
category, and have been reclassified to 'other exceptional items', to ensure
consistency with the presentation adopted in the Annual Report and Accounts
2025.
Restructure costs
The Group has been undertaking a major transformation programme involving the
restructuring of operations to reposition the business for its next phase of
growth. Material transformation programmes are included as Other items where
initiatives are not considered to be normal operating costs of the business.
Restructure costs of £9.9m (2024: £8.2m) are in respect of the Target
Operating Model transformation programme, and includes the further outsourcing
of back-office functions, intelligent automation initiatives, consolidating
systems and processes, and optimising the organisation structure. Since its
launch in the year ended 31 March 2022, cumulative costs of £55.1m have been
recognised within the condensed consolidated income statement and classified
as Other items, of which £52.9m were cash costs.
The costs associated with the Group transformation programme include
professional fees for external consultancy of £3.2m (2024: £2.7m),
fixed-term staff costs of £2.9m (2024: £2.6m) to manage and implement
changes, redundancy costs of £2.0m (2024: £2.9m). In addition, dual run
licence costs of £1.1m were incurred in relation to a decommissioned
operating system, and costs associated with lease exits of £0.7m were also
incurred. The associated tax credit for restructure costs recognised as Other
items is £2.5m (2024: £2.1m).
Acquisition and disposal related costs
Six months ended Restated(1)
30 September 2025 Six months ended
30 September 2024
£m £m
Amortisation of acquisition related intangible assets (15.6) (14.0)
Transaction costs(2) (7.0) (1.9)
Employment-linked earnout charges (4.4) (5.3)
Integration costs(3) (2.3) (0.3)
Other acquisition related costs (1.3) (0.1)
Acquisition and disposal costs (30.6) (21.6)
Tax 4.7 2.7
Acquisition and disposal costs net of tax (25.9) (18.9)
Note:
1. Other items for the six months ended 30 September 2024 have been
re-presented to reclassify £6.1m of pension costs, and the associated tax
credit of £1.5m, between two Other items categories. These costs were
previously reported within the 'acquisition and disposal related costs'
category, and have been reclassified to 'other exceptional items', to ensure
consistency with the presentation adopted in the Annual Report and Accounts
2025.
2. Relates to professional fees.
3. Comprises costs in relation to professional fees of £0.9m, redundancy
costs of £0.6m, cost associated with lease exits of £0.6m and fixed-term
staff costs of £0.2m.
Other exceptional items
Six months ended Restated(1)
30 September 2025 Six months ended
30 September 2024
£m £m
Pension-related costs(1,2) (7.0) (6.1)
Digital supplier platform(3) (0.7) (1.8)
Other exceptional items (7.7) (7.9)
Tax 1.9 1.9
Other exceptional items, net of tax (5.8) (6.0)
Notes:
1. Other items for the six months ended 30 September 2024 have been
re-presented to reclassify £6.1m of pension costs, and the associated tax
credit of £1.5m, between two Other items categories. These costs were
previously reported within the 'acquisition and disposal related costs'
category, and have been reclassified to 'other exceptional items', to ensure
consistency with the presentation adopted in the Annual Report and Accounts
2025.
2. For the six months ended 30 September 2025, a £7.3m contract settlement
charge has been recognised to reverse the gross surplus on a Local Government
Pension Scheme (2024: £2.0m), however an asset ceiling had been applied, and
therefore no net surplus was recognised on the condensed consolidated
statement of financial position. The reversal of the asset ceiling has been
credited to other comprehensive income. There is also a £0.3m income for the
final settlement agreement (2024: £2.8m charge) with the trustees of the
Plumbing Scheme with respect to its Section 75 debt in relation to the
previously disposed Social Housing business. For the six months ended 30
September 2024, a £1.1m past service cost and £0.2m of administrative
expenses were charged with respect to the Landmarc pension scheme.
3. Comprises costs in relation to the implementation of a new digital
supplier platform resulting in a step change in the Group's supply chain
management capabilities. These comprise fixed-term staff costs of £0.7m
(2024: £1.3m). For the six months ended 30 September 2024, there were
additional third-party implementation costs of £0.5m. This implementation,
which is transformational in nature, is expected to be completed during the
year ending 31 March 2026. Since its launch in 2022, cumulative cash costs of
£15.6m have been recognised within the condensed consolidated income
statement and classified as Other items.
4. Tax
The tax charge for the period has been calculated based upon the effective tax
rate expected to apply to the Group for the year ending 31 March 2026 using
rates substantively enacted by 30 September 2025. The rate of tax on profit
before Other items for the period was 24.7% (2024: 24.8%). The rate of 24.7%
is slightly lower than the UK statutory rate of 25%, mainly due to the
effective rate on overseas profits being lower than 25%. The rate incorporates
the impact of Pillar Two income taxes, which is estimated to be a charge of
£0.2m for the year ending 31 March 2026 (31 March 2025: £0.2m).
The effective tax rate on total profits was 30.3% (2024: 29.4%), which is
higher than the UK statutory rate primarily due to non-tax deductible
acquisition related costs which are charged to Other items. The tax credit on
Other items equates to a rate of tax of 18.9% (2024: 17.8%).
Corporation tax payments for the period amounted to £9.5m (2024: £10.3m), of
which £7.7m (2024: £8.6m) was paid in the UK and £1.8m (2024: £1.7m) was
paid overseas.
The Group has unutilised income tax losses of £85.0m (31 March 2025: £88.7m)
that are available for offset against future profits. A deferred tax asset has
been recognised in respect of £46.7m (31 March 2025: £56.5m) of these losses
to the extent that it is probable that taxable profits will be generated in
the future and be available for utilisation. When considering the
recoverability of deferred tax assets, the taxable profit forecasts are based
on the same information used to support the going concern and goodwill
assessments.
No deferred tax asset has been recognised in respect of losses of £23.1m (31
March 2025: £17.0m) and disallowed interest under UK corporate interest
restriction rules of £15.2m (31 March 2025: £15.2m) because recoverability
is uncertain. All amounts may be carried forward indefinitely. Deferred tax
has been calculated using tax rates that were substantively enacted at the
condensed consolidated statement of financial position date.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax receivables against current tax
payables; or when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax receivables and
payables on a net basis.
5. Dividends
During the six months ended 30 September 2025, the Group paid £36.6m in
respect of the final dividend for the year ended 31 March 2025 of 3.0p per
share (31 March 2024: 3.0p). The Board has declared an interim dividend for
the year ending 31 March 2026 of 1.4p per share (31 March 2025: 1.3p per
share) which will be paid on 20 February 2026 to all shareholders on the
register at the close of business on 9 January 2026.
6. Earnings per share
The calculation of the basic and diluted EPS is based on the following data:
Six months ended Six months ended
30 September 2025 30 September 2024
£m £m
Profit before Other items attributable to owners of the parent 69.9 67.4
Other items net of tax(1) (38.4) (30.2)
Profit attributable to owners of the parent 31.5 37.2
Note:
1. Other items are as described in Note 3.
Number of shares Six months ended Six months ended
30 September 2025
30 September 2024
million
million
Weighted average number of ordinary shares for the purpose of basic EPS(1) 1,223.7 1,258.5
Effect of dilutive potential ordinary shares 104.2 101.1
Weighted average number of ordinary shares for the purpose of diluted EPS(1) 1,327.9 1,359.6
Note:
1. The weighted average number of ordinary shares in issue during the period
excludes those accounted for in the own shares reserve.
Six months ended Six months ended
30 September 2025 30 September 2024
pence per share pence per share
Basic EPS before Other items(1) 5.7 5.4
Basic EPS 2.6 3.0
Diluted EPS before Other items(1) 5.3 5.0
Diluted EPS 2.4 2.7
Note:
1. Other items are as described in Note 3.
7. Goodwill
£m
Cost
At 31 March 2025 430.3
Arising on business combinations(1) 349.8
At 30 September 2025 780.1
Accumulated impairment losses
At 31 March 2025 32.5
At 30 September 2025 32.5
Net book value
At 31 March 2025 397.8
At 30 September 2025 747.6
Note:
1. During the six months ended 30 September 2025, the Group completed the
acquisitions of Marlowe and SPM, resulting in initial goodwill recognition of
£342.0m and £2.5m, respectively. Additionally, measurement period
adjustments related to the prior acquisitions of ESM and Argus led to
increases in goodwill of £4.5m and £0.8m, respectively. Further details are
provided in Note 15.
8. Trade and other receivables
30 September 31 March
2025 2025
£m £m
Trade receivables 549.4 538.3
Accrued income 387.2 339.3
Prepayments 91.5 59.5
Other receivables 51.0 51.3
Total 1,079.1 988.4
Included in current assets 1,056.3 967.9
Included in non-current assets 22.8 20.5
Total 1,079.1 988.4
Management considers that the carrying amount of trade and other receivables
approximates their fair value.
9. Trade and other payables
30 September 31 March
2025 2025
£m £m
Trade payables 290.1 205.0
Other taxes and social security 205.0 202.1
Other payables 74.3 70.5
Accruals 534.3 557.2
Total 1,103.7 1,034.8
Included in current liabilities 1,089.0 1,012.6
Included in non-current liabilities 14.7 22.2
Total 1,103.7 1,034.8
Management considers that the carrying amount of trade and other payables
approximates their fair value.
10. Provisions
Contract Insurance Dilapidations Other Total
specific
reserve
£m
£m
£m
costs
£m
£m
Onerous
contracts £m
At 31 March 2025 33.0 10.0 27.3 10.4 3.4 84.1
Additional provisions 1.0 5.4 11.4 0.2 0.5 18.5
Released to the income statement (0.6) (0.2) - (0.4) - (1.2)
Utilised (8.0) (5.0) (7.0) (0.3) (0.6) (20.9)
Arising on business combinations(1) - 4.2 4.3 7.7 0.7 16.9
At 30 September 2025 25.4 14.4 36.0 17.6 4.0 97.4
Included in current liabilities 10.8 9.6 15.4 4.3 4.0 44.1
Included in non-current liabilities 14.6 4.8 20.6 13.3 - 53.3
Total 25.4 14.4 36.0 17.6 4.0 97.4
Note:
1. Onerous contract provisions arising on business combinations relate to
the prior year acquisition of ESM Power Limited. The insurance reserve and
dilapidations provisions arising on business combinations relate to the
acquisition of Marlowe. Refer to Note 15.
Contract specific costs
Contract specific provisions have been made primarily to cover remedial and
rectification costs required to meet clients' contract terms, and include a
£10.8m (31 March 2025: £10.8m) provision relating to a liability risk on a
certain contract which is subject to dispute and £4.1m (31 March 2025:
£5.3m) for rectification works on a certain contract. The value of these
provisions reflects the single most likely outcome and is expected to be
utilised over a maximum period of seven years. In the period ended 30
September 2025, a settlement has been reached on a certain contract, resulting
in provision utilisation of £4.7m. Given the complex nature of these
contracts, the calculation of contract specific provisions is a key source of
estimation uncertainty, as disclosed in the Annual Report and Accounts 2025.
The remaining provision relates to other potential commercial claims and
rectification work for other contracts.
Onerous contracts
Onerous contracts include provisions for certain long-term Private Finance
Initiative, and other contracts. Due to the long-term nature of Private
Finance Initiative contracts, it is expected that these provisions will be
utilised over a weighted average period of nine years. During the six months
ended 30 September 2025, an onerous contract provision held for a certain
contract was increased by £5.4m, where the contract will expire within twelve
months from the condensed consolidated statement of financial position date.
Insurance reserve
The Group retains a portion of the exposure in relation to insurance policies
for employer liabilities and motor and fleet liabilities. The provision
includes claims incurred but not yet reported and is based on information
available at the statement of financial position date. The provision is
expected to be utilised over five years.
The insurance reserve of £36.0m is presented gross of an insurer
reimbursement asset of £6.9m (31 March 2025: £4.2m), which represents the
amount the Group is virtually certain to recover for claims under its
insurance policies. Of this other receivable, £2.1m (31 March 2025: £2.7m)
is presented as non-current.
Dilapidations
The provision for dilapidations relates to the legal obligation for leased
properties to be returned to the landlord in the contracted condition at the
end of the lease period. This cost would include repairs of any damage and
wear and tear, and is expected to be utilised over the next ten years.
11. Cash and cash equivalents
30 September 31 March
2025 2025
£m £m
Cash and cash equivalents 169.8 180.4
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The Group operates
cash-pooling arrangements with certain banks for cash management purposes.
At 30 September 2025, included within cash and cash equivalents is £6.1m (31
March 2025: £4.3m) which is subject to various constraints on the Group's
ability to utilise these balances. These constraints relate to amounts held
through a joint operation, where cash is not available for use by the Group.
12. Financing liabilities
30 September 31 March
2025
2025
£m
£m
Bridge loan facility 240.0 -
Private placement notes 180.0 180.0
Lease liabilities (Note 13) 217.8 197.5
Prepaid arrangement fees (2.7) (2.4)
Total 635.1 375.1
Included in current liabilities 61.4 52.2
Included in non-current liabilities 573.7 322.9
Total 635.1 375.1
The Group has a Revolving Credit Facility of £250m with a maturity date of
October 2028. During the period to 30 September 2025, the Revolving Credit
Facility was utilised for short-term borrowings, with the average borrowing
amounting to £20.0m (31 March 2025: £22.6m) over an average period of 7 days
(31 March 2025: 10 days). Amounts drawn down during the period accumulated to
£120m (31 March 2025: £812m) with equal amounts repaid (31 March 2025:
£812m). There were no amounts outstanding as at 30 September 2025 (31 March
2025: £nil).
In December 2022, the Group issued £120m of US Private Placement notes, which
are split equally between 8, 10 and 12 year maturities, and were issued with
an average coupon of 2.94%.
In October 2024, the Group additionally entered into a three-year uncommitted
shelf facility with total undrawn capacity of c.£260m as at 30 September 2025
(31 March 2025: c.£260m at constant currency to 30 September 2025), which can
be drawn until October 2027. In December 2024, the Group issued £60m of new
US Private Placement notes, drawn from the new shelf facility to replace the
existing £30m note that matured in the same month. The new notes have a
seven-year maturity and were issued with a coupon rate of 5.71%.
To facilitate the acquisition of Marlowe, a £240m bridge facility was
secured, which was fully drawn as at 30 September 2025. The facility was due
to mature in June 2026, with an option to extend to June 2027. In October
2025, £60m of the bridge facility loan was repaid, with the remaining £180m
refinanced through a US Private Placement draw down from the shelf facility on
12 November 2025. The new US Private Placement notes have maturities of
between 3-7 years, and a weighted average interest rate fixed at 5.44%.
The Revolving Credit Facility, bridge facility, and US Private Placement notes
are unsecured but have financial and non-financial covenants and obligations
commonly associated with these arrangements. The two key covenant ratios are
leverage (ratio of 'consolidated total net borrowings' to 'adjusted
consolidated EBITDA') and interest cover (ratio of 'consolidated EBITDA' to
'consolidated net finance costs'), with a maximum of 3.0x and a minimum of
4.0x respectively. Covenant ratios are measured after adjustments for IFRS 16
primarily excluding lease liabilities from net debt and the inclusion of a
charge equivalent to lease payments against EBITDA. The Group was compliant
with these covenants as at 30 September 2025, with leverage of 0.88x (31 March
2025: 0.04x) and interest cover of 25.4x (31 March 2025: 38.7x) (as set out in
the Finance review) and hence all amounts are classified in line with
repayment dates. The covenants are measured bi-annually on a rolling 12-month
basis at 31 March and 30 September.
As at 30 September 2025, the Group had available £250m (31 March 2025:
£250m) of undrawn committed borrowing facilities in respect of the Revolving
Credit Facility to which all conditions precedent had been
met.
13. Leases
Right-of-use assets Properties Plant and vehicles £m Total
£m £m
At 31 March 2025 34.7 157.7 192.4
Additions 2.3 20.9 23.2
Arising on business combinations 6.2 19.1 25.3
Modifications to lease terms and disposals 1.0 1.7 2.7
Depreciation (4.9) (27.8) (32.7)
Effect of movements in exchange rates 0.1 0.6 0.7
At 30 September 2025 39.4 172.2 211.6
Lease liabilities £m
At 31 March 2025 197.5
Additions 23.2
Arising on business combinations 25.3
Modifications to lease terms and disposals 3.1
Interest expense related to lease liabilities 4.9
Repayment of lease liabilities (including interest) (36.9)
Effect of movements in exchange rates 0.7
At 30 September 2025 217.8
Included in current liabilities 62.6
Included in non-current liabilities 155.2
Total 217.8
14. Analysis of net debt
Notes 30 September 31 March
2025
2025
£m
£m
Cash and cash equivalents 11 169.8 180.4
Adjusted for: restricted cash 11 (6.1) (4.3)
Bridge loan facility 12 (240.0) -
Private placement notes 12 (180.0) (180.0)
Prepaid arrangement fees 12 2.7 2.4
Net debt before lease obligations (253.6) (1.5)
Lease liabilities 13 (217.8) (197.5)
Net debt (471.4) (199.0)
Reconciliation of net cash flow to movements in net debt Notes Six months ended 30 September Six months ended 30 September 2024
2025 £m
£m
Net decrease in cash and cash equivalents (10.9) (85.7)
(Increase)/decrease in restricted cash (1.8) 0.2
Net decrease in unrestricted cash and cash equivalents (12.7) (85.5)
Cash drivers
Proceeds from new bridge loan facility (240.0) -
Repayment of bank loans 9.0 -
Payment of arrangement fees 0.7 -
Capital element of lease rentals 13 32.0 26.8
Non-cash drivers
Non-cash movement in bank loans (0.4) (0.3)
Non-cash movement in lease liabilities 13 (26.3) (47.5)
Effect of foreign exchange rate changes (0.4) (0.2)
Increase in net debt during the period (238.1) (106.7)
Opening net debt (199.0) (80.8)
Debt acquired as part of business combinations(1) 15 (34.3) -
Closing net debt (471.4) (187.5)
Note:
1. As part of the Marlowe acquisition, the Group assumed total debt of
£34.3 million, comprising lease liabilities of £25.3m and a £9.0m loan. The
loan was subsequently repaid by the Group following completion of the
transaction. For further details, refer to Note 15.
15. Acquisitions
Marlowe
On 4 August 2025, the Group completed the acquisition of the entire issued
share capital of Marlowe plc (Marlowe) for a total transaction consideration
of £351.5m. This comprised a cash payment of £228.2m, and the issuance of
86.6 million ordinary shares valued at £123.3m. Marlowe is a leading provider
of Testing, Inspection & Certification services in the UK.
The acquisition of Marlowe will enhance Mitie's existing Testing, Inspection
& Certification business, allowing it to become a leading Facilities
Compliance provider across each of the key sub-sectors of Testing, Inspection
& Certification. Since acquisition, Marlowe contributed £51.2m of revenue
and £3.1m of operating profit before Other items.
The Group's assessments of the fair values of the assets and liabilities
recognised as a result of the acquisition are provisional. The purchase price
allocation, including the valuation of identifiable intangible assets arising
on acquisition, will be finalised within 12 months of the acquisition date.
The provisional purchase price allocation is as follows:
Provisional fair value
£m
Property, plant and equipment (owned) 8.1
Right-of-use assets 25.3
Other intangible assets 2.9
Trade and other receivables 64.0
Inventories 11.0
Cash and cash equivalents 8.8
Current tax asset 2.3
Trade and other payables (63.4)
Lease liabilities (25.3)
Financing liabilities (9.0)
Provisions (12.7)
Deferred tax liabilities (2.5)
Net identifiable assets acquired 9.5
Goodwill 342.0
Total consideration 351.5
Cash consideration 228.2
Shares consideration(1) 123.3
Total consideration 351.5
Note:
1. The share based consideration consisted of 86.6m ordinary shares issued,
valued at £1.424 per share based on the closing price on 4 August 2025..
SPM
On 30 September 2025, the Group completed the acquisition of trade and assets
of 'Seguridad Professional Mediterranea' and 'Serveis Puntuals i Manteniment'
(together SPM), a security services business in Spain. The transaction
consideration comprised £4.3m in cash, of which £3.0m is deferred over the
next three years.
The provisional fair value of the identifiable acquired assets and liabilities
totalled £1.8m, and comprised of £2.3m of customer relationships, £0.6m of
deferred tax liability associated with customer relationships, and £0.1m of
property, plant and equipment. The Group's assessments of the fair values of
the assets and liabilities recognised as a result of the acquisition are
provisional and will be finalised within 12 months of the acquisition date.
As a result of the acquisition, goodwill of £2.5m has been recognised
provisionally, which represents the premium associated with acquiring a
mobilised workforce and achieving expansion of security services in Spain.
Prior year acquisitions
On 1 August 2024, the Group completed the acquisition of Woodford Investments
Limited and its subsidiary ESM Power Limited (together ESM). Subsequently on
24 October 2024, Slademain Limited and its subsidiary Argus Fire Protection
Company Limited (together Argus) were also acquired by the Group.
The accounting for these acquisitions was disclosed as provisional within the
Group's Annual Report and Accounts 2025, as these acquired businesses were in
the 12-month measurement period as allowed by IFRS 3 Business Combinations.
During the six months ended 30 September 2025, Management have finalised the
acquisition accounting for these businesses, and measurement period
adjustments have been recognised to reflect new information about conditions
and circumstances that existed at the acquisition date.
Following the measurement period adjustments, the fair value of acquired net
assets for ESM decreased by £4.5m. This reduction was due to an increase in
onerous contract provisions of £4.2m and deferred income of £1.8m related to
specific projects, and an increase in deferred tax assets of £1.5m resulting
in a corresponding increase in goodwill of £4.5m.
Additionally, the fair value of acquired net assets for Argus decreased by
£0.8m due to derecognition of certain reimbursement assets of £1.1m, and an
increase in current tax receivables of £0.3m, resulting in a corresponding
increase in goodwill of £0.8m.
As these adjustments to acquisition accounting are not material for the Group,
goodwill values have been adjusted in the current period rather than
re-presenting goodwill as at 31 March 2025.
Cash flows on acquisitions
Six months ended Six months ended
30 September 2025 30 September 2024
£m
£m
Cash consideration 229.5 7.2
Less: cash balance acquired (8.8) (1.4)
Net outflow of cash - investing activities 220.7 5.8
16. Retirement benefit schemes
The Group has a number of pension arrangements for employees:
• Defined contribution schemes for the majority of its employees; and
• Certain Defined benefit schemes.
The Group operates a number of defined contribution pension schemes for
qualifying employees. During the six months ended 30 September 2025, the Group
made a total contribution to defined contribution schemes of £12.0m (2024:
£10.3m) and contributions to the auto-enrolment scheme of £13.7m (2024:
£12.2m), which are included in the income statement charge.
The defined benefit schemes include the Mitie Group plc Pension Scheme (Group
scheme), which is comprised of two segregated sections: the Group section
(Group Part A) and the Interserve section (Group Part B), the Landmarc Pension
Scheme (the Landmarc scheme) and other smaller schemes.
In December 2022 the Trustee of the Landmarc scheme entered into a qualifying
insurance buy-in to secure the remaining uninsured benefits of the scheme.
The Group also operates a number of smaller defined benefit schemes; MacLellan
Group 2000 Retirement Benefit Scheme, THK Insulation Limited Retirement
Benefits Scheme and Cyprus Provident Fund. Due to the size of the smaller
schemes, the Directors present the results and position of these schemes
within this disclosure note as 'Other schemes'. Other schemes also include the
Admitted Body schemes, which are largely sections of Local Government Pension
Schemes, in respect of certain employees who joined the Group under the
Transfer of Undertakings (Protection of Employment) Regulations 2006 or
through the acquisition of subsidiary companies.
Principal accounting assumptions at statement of financial position date
Group Part A Group Part B Other schemes
Landmarc scheme
30 September 2025 31 March 2025 30 September 2025 31 March 30 September 2025 31 March 30 September 2025 31 March 2025
%
%
%
%
%
%
2025 2025
%
%
Key assumptions used for IAS 19 valuation:
Discount rate 5.83 5.79 5.87 5.82 5.80 5.70 5.87 5.82
Expected rate of pensionable pay increases 2.38 2.57 2.55 2.70 2.50 2.60 3.20 3.39
Retail price inflation 2.96 3.18 2.97 3.15 3.00 3.20 2.97 3.15
Consumer price inflation 2.38 2.57 2.55 2.70 2.50 2.60 2.55 2.70
Future pension increases 2.38 2.57 2.55 2.70 2.90 3.10 2.67 2.82
Sensitivity of defined benefit obligations to key assumptions
The sensitivity of defined benefit obligations to changes in principal
actuarial assumptions is shown below.
Impact on defined benefit obligations
Change in (Decrease)/increase (Decrease)/increase
assumption
in obligations
in obligations
%
£m
Increase in discount rate 0.25% (3.1) (7.6)
Increase in retail price inflation 0.25% 2.1 5.2
Increase in consumer price inflation (excluding pay) 0.25% 0.9 2.2
Increase in life expectancy 1 year 3.2 7.9
Some of the above changes in assumptions may have an impact on the value of
the scheme's investment holdings, such as a change in discount rates as a
result of a change in UK corporate bond yields.
Amounts recognised in financial statements
Amounts recognised in the condensed consolidated income statement are as
follows:
30 September 2025 30 September 2024
Group Group Part B Landmarc scheme £m Other Total Group Group Part B Landmarc scheme £m Other Total
Part A
£m
schemes
£m
Part A
£m
schemes
£m
£m
£m
£m
£m
Current service cost - (0.1) - (0.3) (0.4) - (0.2) - (0.4) (0.6)
Past service cost (including curtailments/settlements)(1) - - - (7.3) (7.3) - - (1.1) (2.0) (3.1)
Total administrative expense (0.3) (0.1) (0.2) - (0.6) (0.5) - (0.2) (0.1) (0.8)
Amounts recognised in operating profit (0.3) (0.2) (0.2) (7.6) (8.3) (0.5) (0.2) (1.3) (2.5) (4.5)
Net interest income 0.3 0.1 0.1 - 0.5 - - 0.1 - 0.1
Amounts recognised in profit before tax - (0.1) (0.1) (7.6) (7.8) (0.5) (0.2) (1.2) (2.5) (4.4)
Notes:
1. During the six months ended 30 September 2025, the Group formally exited
a certain Local Government Pension Scheme, resulting in a £7.3m (2024:
£2.0m) contract settlement charge, which was recognised within Other items.
Refer to Note 3.
Amounts recognised in the condensed consolidated statement of comprehensive
income are as follows:
30 September 2025 30 September 2024
Group Other Total Group Other Total
Part A
schemes
£m
Part A
£m
£m Group Part B Landmarc scheme £m
£m
£m schemes
£m
Group Landmarc scheme £m
Part B
£m £m
Actuarial gains arising due to changes 3.3 0.5 0.7 0.8 5.3 8.0 1.0 1.6 2.7 13.3
in financial assumptions
Actuarial (losses)/gains arising from liability experience (1.5) (0.1) (0.6) (0.7) (2.9) - 2.0 (0.3) (0.2) 1.5
Actuarial (losses)/gains arising due to changes in demographic assumptions (0.4) (0.1) - - (0.5) (0.2) 0.3 - 0.5 0.6
Movement in asset ceiling, excluding interest(1) - - - 3.6 3.6 - - - (2.6) (2.6)
Return on scheme assets, excluding interest income (1.1) 0.1 - 3.4 2.4 (5.6) (1.2) (1.1) 2.0 (5.9)
Amounts recognised in condensed consolidated statement of comprehensive income 0.3 0.4 0.1 7.1 7.9 2.2 2.1 0.2 2.4 6.9
Note:
1. During the six months ended 30 September 2025, the Group formally exited
a certain Local Government Pension Scheme, resulting in reversal of asset
ceiling of £7.3m (2024: £2.0m). Excluded within the movement in asset
ceiling is £0.6m of interest which is recorded within finance costs.
The amounts included in the condensed consolidated statement of financial
position are as follows:
30 September 2025 31 March 2025
Group Group Part B Landmarc scheme £m Other Total Group Group Landmarc scheme Other Total
Part A
£m
schemes
£m
Part A
Part B
schemes
£m
£m
£m
£m
£m £m
£m
Fair value of scheme assets 167.4 23.2 36.5 61.5 288.6 165.3 22.7 36.7 69.1 293.8
Present value of defined benefit obligations (152.8) (19.0) (34.6) (39.5) (245.9) (154.7) (18.9) (34.8) (43.8) (252.2)
Surplus without restriction 14.6 4.2 1.9 22.0 42.7 10.6 3.8 1.9 25.3 41.6
Effect of asset ceiling - - - (24.7) (24.7) - - - (27.7) (27.7)
Net pension asset/(liability) 14.6 4.2 1.9 (2.7) 18.0 10.6 3.8 1.9 (2.4) 13.9
The total of schemes in surplus position is £20.7m (31 March 2025: £16.3m)
Movements in the present value of defined benefit obligations were as follows:
Group Group Landmarc scheme £m Other Total
Part A
Part B
schemes
£m
£m
£m
£m
At 31 March 2025 154.7 18.9 34.8 43.8 252.2
Current service cost - 0.1 - 0.3 0.4
Interest cost 4.5 0.5 0.9 1.0 6.9
Contributions from scheme members - 0.1 - 0.1 0.2
Actuarial gains arising due to changes in financial assumptions (3.3) (0.5) (0.7) (0.8) (5.3)
Actuarial losses arising from experience 1.5 0.1 0.6 0.7 2.9
Actuarial losses due to changes in demographic assumptions 0.4 0.1 - - 0.5
Benefits paid (5.0) (0.3) (1.0) (0.6) (6.9)
Contract settlement - - - (5.0) (5.0)
At 30 September 2025 152.8 19.0 34.6 39.5 245.9
Movements in the fair value of scheme assets were as follows:
Group Group Landmarc scheme Other Total
Part A
Part B
schemes
£m
£m
£m £m
£m
At 31 March 2025 165.3 22.7 36.7 69.1 293.8
Interest income 4.8 0.6 1.0 1.7 8.1
Actuarial (losses)/gains on assets (1.1) 0.1 - 3.4 2.4
Contributions from the sponsoring companies 3.7 0.1 - 0.1 3.9
Contributions from scheme members - 0.1 - 0.1 0.2
Expenses paid (0.3) (0.1) (0.2) - (0.6)
Benefits paid (5.0) (0.3) (1.0) (0.6) (6.9)
Contract settlement - - - (12.3) (12.3)
At 30 September 2025 167.4 23.2 36.5 61.5 288.6
17. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
Note.
Mitie Group plc has a related party relationship with the Mitie Foundation, a
charitable company. During the six months ended 30 September 2025, the Group
made payments of £0.2m (2024: £0.2m) to the Mitie Foundation to fund
operations.
During the six months ended 30 September 2025, the Group recognised revenue
from transactions with joint ventures and associates of £0.4m (2024: £2.0m),
and no expense has been recognised in the period for bad or doubtful debts in
respect of the amounts owed by joint ventures and associates (2024: £nil).
The amounts due from joint ventures and associates at 30 September 2025 was
£nil (31 March 2025: £0.1m).
All transactions with these related parties were made on terms equivalent to
those that prevail in arm's length transactions.
No other transactions during the six months ended 30 September 2025 meet the
definition of related party transactions.
18. Events after the reporting period
On 14 October 2025, the Group announced the initiation of a new £100m share
buyback programme. The programme commenced on the date of the announcement and
is scheduled to conclude by October 2026.
On 12 November 2025, the Group issued £180m of US Private Placement notes to
refinance the previous bridge loan, which on 13 November 2025 was repaid in
full.
On 19 November 2025, the Group acquired Forest Group Holdings Limited for a
cash consideration of £4.5m. In addition, amounts up to a maximum of £2.5m
are payable to the former owners of the business, subject to certain
performance conditions and post-acquisition employment services. Given the
proximity of the acquisition to the reporting date, management has provided
information available at the time of approval of the condensed consolidated
financial statements. Further disclosures will be made within the Group's
Annual Report and Accounts for the year ending 31 March 2026.
Appendix 1 - Alternative Performance Measures
The Group presents various Alternative Performance Measures as management
believes that these are useful for users of the financial statements in
helping to provide a balanced view of, and relevant information on, the
Group's financial performance.
In assessing its performance, the Group has adopted certain non-statutory
measures which, unlike its statutory measures, cannot be derived directly from
its financial statements. The Group commonly uses the following measures to
assess its performance:
Performance before Other items
The Group adjusts the statutory income statement for Other items which, in
management's judgement, need to be disclosed separately by virtue of their
nature, size and incidence in order to assist in understanding the underlying
financial performance achieved by the Group.
These Other items include impairment of goodwill, impairment and amortisation
of acquisition related intangible assets, acquisition and disposal costs,
charges with respect to employment-linked earnouts, gain or loss on business
disposals, cost of restructuring programmes, charges arising on exit of
pension schemes and other exceptional items, and their related tax effect as
Other items. Further details of these Other items are provided in Note 3.
Operating profit Six months ended 30 September 2025 Restated(1)
£m
Six months ended 30 September 2024
£m
Operating profit Statutory measures 60.6 63.4
Adjust for: restructure costs Note 3 9.9 8.2
Adjust for: acquisition and disposal related costs Note 3 30.6 21.6
Adjust for: other exceptional items Note 3 7.7 7.9
Operating profit before Other items Performance measures 108.8 101.1
Note:
1. Other items for the six months ended 30 September 2024 have been
re-presented to reclassify £6.1m of pension costs, and the associated tax
credit of £1.5m, between two Other items categories. These costs were
previously reported within the 'acquisition and disposal related costs'
category, and have been reclassified to 'other exceptional items', to ensure
consistency with the presentation adopted in the Annual Report and Accounts
2025.
Reconciliations are provided below to show how the Group's segmental reported
results are adjusted to exclude Other items.
Six months ended 30 September 2025 Restated(1)
£m
Six months ended 30 September 2024
£m
Operating profit/(loss) Reported Adjust for: Performance measures Reported Adjust for: Performance
results
Other items
results
Other items
measures
(Note 3)
(Note 3)
Segment
Business Services 75.4 9.9 85.3 81.9 3.2 85.1
Technical Services 41.7 8.7 50.4 31.9 9.1 41.0
Corporate centre (56.5) 29.6 (26.9) (50.4) 25.4 (25.0)
Total 60.6 48.2 108.8 63.4 37.7 101.1
Note:
1. The comparatives for the six months ended 30 September 2024 have been
restated for the change in the composition of reportable segments.
In line with the Group's measurement of profit from operations before Other
items, the Group also presents its basic earnings per share before Other
items. The table below reconciles this to the statutory basic earnings per
share.
Earnings per share Six months ended Six months ended
30 September 2025
30 September 2024
pence
pence
Statutory basic earnings per share Statutory measures 2.6 3.0
Adjust for: Other items per share 3.1 2.4
Basic earnings per share before Other items Performance measures 5.7 5.4
Net debt
Net debt is defined as the difference between total borrowings and cash and
cash equivalents. It is a measure that provides additional information on the
Group's financial position. Restricted cash, which is subject to various
constraints on the Group's ability to utilise these balances, has been
excluded from the net debt measure.
Total Financial Obligations is defined as the Group's net debt including net
retirement benefit liabilities. Total Financial Obligations represents all
debt-like financing items the Group has made use of at period end.
A reconciliation from reported figures is presented below:
Net debt 30 September 2025 31 March 2025 30 September
£m
£m 2024
£m
Cash and cash equivalents Statutory measures 169.8 180.4 159.0
Adjusted for: restricted cash Note 11 (6.1) (4.3) (4.0)
Financing liabilities Note 12 (635.1) (375.1) (342.5)
Net debt Performance measures (471.4) (199.0) (187.5)
Net retirement benefit assets Note 16 18.0 13.9 8.2
Total Financial Obligations Performance measures (453.4) (185.1) (179.3)
The Group uses an average net debt measure as this reflects its financing
requirements throughout the period. The Group calculates its average net debt
based on the daily closing figures, including its foreign currency bank loans
translated at the closing exchange rate for the previous month end. This
measure showed average daily net debt of £331.6m for the six months ended 30
September 2025, compared with £264.0m for the year ended 31 March 2025 and
£219.0m for the six months ended 30 September 2024.
Free cash flow
Free cash flow is a measure representing the cash that the Group generates
after accounting for cash flows to support operations and maintain its capital
assets. It is a measure that provides additional information on the Group's
financial performance as it highlights the cash that is available to the Group
after operating and capital expenditure requirements are met.
The table below reconciles net cash generated from operating activities to
free cash inflow.
Free cash flow Six months ended Six months ended
30 September 2025
30 September 2024
£m
£m
Net cash generated from operating activities Statutory measures 93.8 63.2
Add: net (increase)/decrease in restricted cash Note 11 (1.8) 0.2
Interest received 1.7 1.8
Employment-linked earnouts(1) 3.7 6.4
Acquisition transaction costs(2) 5.7 -
Purchase of property, plant and equipment (16.0) (7.0)
Purchase of other intangible assets (3.3) (3.7)
Disposal of property, plant and equipment 0.1 0.2
Capital element of lease rentals paid Note 13 (32.0) (26.8)
Free cash inflow Performance measures 51.9 34.3
Note:
1. During the six months ended 30 September 2025, payments totalling £3.7m
(2024: £6.4m) have been made to the former owners of certain acquired
businesses with respect to earnout payments, which are conditional on the
owners remaining employed with the Group as well as the underlying performance
of the acquired business. During the period, costs related to such
performance-based employment-linked earnouts of £4.4m were charged to the
condensed consolidated income statement and classified as Other items. Refer
to Note 3.
2. During the six months ended 30 September 2025, acquisition transaction
costs charged to the income statement totalled £7.0m (Refer to Note 3), of
which £5.7m has been settled in cash during the period. Free cash flow has
been adjusted to exclude the impact of acquisition transaction costs,
reflecting the significant transaction expenses incurred on the acquisition of
Marlowe. The comparative free cash flow for the period ended 30 September 2024
has not been adjusted to reflect £1.9m of acquisition transaction costs, as
the amount is immaterial for a prior period re-presentation.
Earnings before interest, tax, depreciation and amortisation
Earnings before interest, tax, depreciation and amortisation (EBITDA) is a
measure of the Group's profitability. EBITDA is measured as profit before tax
excluding the impact of net finance costs, Other items, depreciation on
property, plant and equipment, amortisation and impairment of non-current
assets and amortisation of contract assets.
EBITDA Six months ended 30 September 2025 Six months ended 30 September 2024
£m
£m
Profit before tax Statutory measures 49.8 56.8
Add: net finance costs 10.8 6.6
Operating profit 60.6 63.4
Add: Other items Note 3 48.2 37.7
Operating profit before Other items 108.8 101.1
Add:
Depreciation of property, plant and equipment 40.2 31.5
Amortisation of non-current assets(1) 4.7 3.8
Amortisation of contract assets 0.4 0.3
Impairment of non-current assets 0.2 -
EBITDA Performance measures 154.3 136.7
Note:
1. Excludes amortisation of acquisition related intangible assets of £15.6m
(2024: £14.0m), as these are classified as Other items in the condensed
consolidated income statement. Refer to Note 3.
Revenue including share of joint ventures and associates
Revenue including share of joint ventures and associates is a measure of the
Group's revenue performance including the contribution from joint ventures and
associates, which is excluded from statutory Group revenue.
Six months ended 30 September 2025 Six months ended 30 September 2024
£m
£m
Group revenue Statutory measures 2,677.2 2,425.6
Add: share of revenue of joint ventures and associates 2.0 4.8
Revenue including share of joint ventures and associates Performance measures 2,679.2 2,430.4
Return on invested capital
Return on invested capital (ROIC) is a measure of how efficiently the Group
utilises its invested capital to generate profits. The table below reconciles
the Group's net assets to invested capital and summarises how the ROIC is
derived, based on a 12-month rolling operating profit before Other items after
tax.
30 September 2025 31 March
£m
2025 30 September 2024
£m
£m
Net assets Statutory measures 544.2 428.0 418.5
Add:
Non-current liabilities 707.1 445.2 359.1
Current provisions Note 10 44.1 37.4 39.4
Current Private Placement notes - - 30.0
Deduct:
Non-current deferred tax assets (0.3) - -
Cash and cash equivalents Note 11 (169.8) (180.4) (159.0)
Invested capital Performance measures 1,125.3 730.2 688.0
Operating profit before Other items(1) 241.8 234.1 222.5
Tax(2) (58.3) (55.5) (48.0)
Operating profit before Other items after tax(1) 183.5 178.6 174.5
ROIC % Performance measures 16.3% 24.5% 25.4%
Notes:
1. Operating profit is presented on a rolling 12-month basis.
2. The tax charge has been calculated at the effective tax rate on pre-tax
profits before other items on a rolling 12-month basis of 24.1% (31 March
2025: 23.7%, 30 September 2024: 21.6%).
Appendix 2 - Change in divisional reporting
As part of the Group's Facilities Transformation Three-Year Plan (FY25 -
FY27), the Group has further simplified its organisational structure. From 1
April 2025, the Communities division was absorbed into Technical Services
(Healthcare, Local Government & Education) and Business Services
(Immigration & Justice). The Compliance business, which was previously
reported within the Technical Services division, has also moved to the
Business Services division.
The prior year/period comparatives, restated to reflect the resulting change
in reportable segments, are provided below.
For the six months ended 30 September 2024
Restated As reported
Six months ended 30 September 2024 Six months ended 30 September 2024
£m
£m
Revenue(1) Operating profit/(loss) before Other items Revenue(1) Operating profit/(loss) before Other items
Business Services 1,228.8 85.1 1,079.2 72.8
Technical Services 1,196.8 41.0 913.1 30.1
Communities - - 433.3 23.2
Corporate centre - (25.0) - (25.0)
Total 2,425.6 101.1 2,425.6 101.1
Note:
1. Revenue excludes the share of revenue from joint ventures and
associates of £4.8m within Technical Services that was previously reported
within Communities.
For the year ended 31 March 2025
Restated As reported
Year ended 31 March 2025 Year ended 31 March 2025
£m
£m
Revenue(1) Operating profit/(loss) before Other items Revenue(1) Operating profit/(loss) before Other items
Business Services 2,538.0 180.4 2,244.0 163.0
Technical Services 2,544.6 109.1 1,977.4 79.0
Communities - - 861.2 47.5
Corporate centre - (55.4) - (55.4)
Total 5,082.6 234.1 5,082.6 234.1
Note:
1. Revenue excludes the share of revenue from joint ventures and
associates of £8.6m within Technical Services that was previously reported
within Communities.
For the year ended 31 March 2024
Restated As reported
Year ended 31 March 2024 Year ended 31 March 2024
£m
£m
Revenue(1) Operating profit/(loss) before Other items Revenue(1) Operating profit/(loss) before Other items
Business Services 2,198.1 165.2 1,977.2 149.8
Technical Services 2,247.1 95.6 1,761.4 74.9
Communities - - 706.6 36.1
Corporate centre - (50.6) - (50.6)
Total 4,445.2 210.2 4,445.2 210.2
Note:
1. Revenue excludes the share of revenue from joint ventures and
associates of £65.5m within Technical Services. Of the £65.5m, £10.0m was
previously reported within Communities and £55.5m relating to the Landmarc
joint venture was reported within Technical Services. From 16 November 2023,
Landmarc has been consolidated as a subsidiary of the Group.
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