REG - MITIE Group PLC - Full year results for the year ended 31 March 2025
Thu 07:00
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RNS Number : 5143L MITIE Group PLC 05 June 2025
5 June 2025
Mitie Group plc
Full year results for the year ended 31 March 2025
Strong progress in foundation year of FY25-FY27 Strategic Plan
Double digit revenue and operating profit growth; strong cash generation
Record contract awards, order book and pipeline of bidding opportunities
Recommended £366m cash and share offer for Marlowe plc
Highlights
· Revenue(1) up 13% to £5,091m (FY24: £4,511m), including 9% organic growth
primarily driven by new contract wins and scope increases, pricing and
projects upsell, alongside a 4% contribution from acquisitions
· Record contract awards(2) up 21% to £7.5bn TCV of wins and
renewals/extensions (FY24: £6.2bn)
· Record total order book(2) up 35% to £15.4bn (FY24: £11.4bn), reflecting
book-to-bill ratio of 1.47x; renewals rate fell to 59% (FY24: 79%) reflecting
the loss of two public sector contracts
· Record pipeline up 27% to £23.7bn (FY24: £18.6bn), of which >70% is due
to be awarded in next 18 months
· Operating profit before Other items(3,4) up 11% to £234m (FY24: £210m)
· Operating profit margin before Other items(3,4) of 4.6% (FY24: 4.7%),
reflecting investments in our Three-Year Facilities Transformation Plan and a
loss in our telecoms infrastructure business
· Basic EPS before Other items(3) up 3% to 12.7p (FY24: 12.3p), with the
benefits of higher operating profit and share buybacks offsetting a 4.8ppt
increase in the effective tax rate to 23.7%, and higher finance costs
· Operating profit of £162m (FY24: £166m) and basic EPS of 8.2p (FY24: 9.8p);
Other items(3) include non-cash amortisation, acquisition earn-outs and costs
of margin enhancement initiatives
· Strong free cash flow generation of £143m (FY24: £158m); operating cash flow
of £249m (FY24: £228m)
· Three infill acquisitions completed for a total consideration of £48m, adding
key projects capabilities
· Closing net debt of £199m (FY24: £81m), reflecting increased returns to
shareholders, acquisitions and increased electric vehicle lease obligations,
offset by strong free cash flow(5) generation
· Strong balance sheet with post-IFRS 16 leverage of 0.8x average net
debt/EBITDA(5) (FY24: 0.6x), at the low end of our 0.75-1.5x target range;
covenant leverage of zero
· Recommended final dividend of 3.0p per share; total dividend up 8% to 4.3p per
share (FY24: 4.0p)
· £100m share buyback programme completed; continued commitment to return
surplus capital to shareholders
· Entering FY26 with good momentum and growing confidence in delivering our
ambitious Three-Year Plan targets to create further value for shareholders
· Recommended acquisition of Marlowe plc will deliver revenue growth and £30m
of cost synergies, representing a strategically and financially compelling
opportunity to create a leader in 'Facilities Compliance' and accelerating
progress towards our Three-Year Plan targets. Refer to Rule 2.7 announcement
published today
Twelve months to 31 March 2025 Twelve months to 31 March 2024
Before Other items(3,5) Other items(3) Total Before Other items(3,5) Other items(3) Total
£m unless otherwise specified
Revenue (including share of JVs & associates) 5,091.2 - 5,091.2 4,510.7 - 4,510.7
Group revenue 5,082.6 - 5,082.6 4,445.2 - 4,445.2
Operating profit(4) 234.1 (72.5) 161.6 210.2 (44.5) 165.7
Operating profit margin(4) 4.6% - 3.2% 4.7% - 3.7%
Profit before tax 217.9 (72.5) 145.4 200.8 (44.5) 156.3
Profit for the period 166.3 (57.9) 108.4 162.9 (32.0) 130.9
Basic earnings per share 12.7p 8.2p 12.3p 9.8p
Dividend per share 4.3p 4.0p
Cash generated from operations 248.7 227.9
Free cash inflow(5) 142.8 157.6
Post-IFRS 16 average daily net debt(5) 264.0 160.7
Post-IFRS 16 closing net debt(5) 199.0 80.8
Total order book(2) £15.4bn £11.4bn
Return on invested capital (ROIC)(5) 24.5% 26.4%
1. Including share of joint ventures (JVs) and associates.
2. Total Contract Value (TCV). Total order book includes secured
fixed term contract work, and estimates for projects and variable works.
Book-to-bill ratio is the relationship between orders received during the year
and revenue recognised for the year.
3. Other items are described in Note 4 to the condensed consolidated
financial statements.
4. Operating profit includes share of profit after tax from JVs and
associates. Operating profit margin is operating profit as a percentage of
revenue including share of JVs and associates.
5. Performance before Other items, net debt, free cash flow, EBITDA
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 year and the outlook, Phil Bentley, Group Chief Executive,
said:
"FY25 was a year of good financial and operational progress for Mitie, as we
embarked on our new Three-Year Plan for Facilities Transformation. Our mission
is clear - to transform our customers' estates and create smarter, safer,
cleaner and greener places that are not only fit for today but are
'future-proofed' for the rapid changes that will come in the next few years.
We are the future of high-performing places.
"The investments we made in the foundation year of our Plan contributed to the
delivery of double-digit revenue and operating profit growth, alongside a
return on invested capital that significantly exceeds our weighted average
cost of capital. Our divisions all performed well, and I am pleased that
following a series of proactive actions our telecoms infrastructure business
in Technical Services, which had negatively impacted margins in the year,
returned to breakeven in the fourth quarter.
"Our strong free cash flow generation and low leverage provides significant
capacity to proactively deploy capital and deliver growing shareholder
returns. We completed a £100m share buyback programme in the year, our
largest to date, and launched a new £125m programme in April. Dividends per
share grew by 8% year-on-year, and we invested in three acquisitions to add
projects capability and to grow our security presence in Spain.
"As part of our new Three-Year Plan, we launched a new corporate narrative and
branding alongside a bold social value pledge to uplift one million lives,
reflecting our purpose-led commitment to creating 'Better Places; Thriving
Communities'. Mitie colleagues, our growing presence in the Communities we
serve, and our technology leadership, are integral to delivery of this
commitment. As ever, I am hugely grateful and indebted to all our 76,000 Mitie
colleagues who delivered outstanding service to our customers throughout FY25,
as reflected in a record Net Promoter Score of +63pts.
"We continue to make good progress with our margin enhancement initiatives,
delivering £25m of cost savings in the year. Looking ahead, our estimate of
the cost increase from the rise in Employers' National Insurance Contributions
in FY26 is c.£50m (down from an initial estimate of £60m). Contractual
recoveries from customers are expected to be at least £35m, with the balance
mitigated through new margin enhancement initiatives.
Our strategic focus on AI and intelligent process automation will contribute
to the expected delivery of an operating margin above 5% by FY27, underpinned
by higher margin M&A opportunities in our targeted sectors.
"We have entered FY26 with good sales momentum, and a record order book and
pipeline of bidding opportunities. With this positive outlook, we have growing
confidence in delivering our ambitious Facilities Transformation Three-Year
Plan targets and creating increasing value for our stakeholders."
Analyst Presentation and Q&A
Phil Bentley (CEO) and Simon Kirkpatrick (CFO) will host a presentation and
Q&A session today (5 June 2025) at 9.30am at The Shard and via a webcast:
https://webcasts.umcdn.com/mit037
(https://urldefense.com/v3/__https:/webcasts.umcdn.com/mit037__;!!G416Ov7nCA!uXuD2k9qQav24vWOhHZ3lAxegIi85v7xeQq0y0dLQmZaH6pFMV7maepwdpGun5G43x9qZu1e335b-BGzVIZCF3NGk1g$)
.
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 76,000 colleagues and is the leading
technology-led Facilities Transformation company in the UK. We are a trusted
partner to a diverse range of 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
projects capabilities in the areas of power and grid connections, building
fit-outs & modernisation, decarbonisation, fire & security, and
telecoms infrastructure. Our sector expertise includes central government,
critical national infrastructure, defence, financial services, healthcare
& life sciences, local government & education, manufacturing, media,
retail & logistics and transport & aviation.
We hold industry-leading ESG credentials, including a place on the CDP Climate
change A List, and we have received multiple industry awards recently
including B2B Marketing Team of the Year, Best Low Carbon Solution and Net
Zero Carbon Strategy of the year. Targeting Net Zero by the end of 2025, our
ambitious emissions reduction plans have been validated by the Science Based
Targets initiative (SBTi). We have been recognised as a 'UK Top Employer' for
the seventh consecutive year and 'Britain's Most Admired Company' in the
Support Services sector. Find out more at www.mitie.com.
Chief Executive's review
Overview
In the foundation year of our Facilities Transformation Three-Year Plan
(FY25-FY27), Mitie delivered a good financial performance and made further
strategic and operational progress. Revenue (including share of JVs and
associates) for the 12 months ended 31 March 2025 ("FY25") grew by 13% to
£5,091m (FY24: £4,511m), including organic growth of 9% - significantly
ahead of UK Facilities Management (FM) market growth of c.3% p.a.
Operating profit before Other items grew by 11% to £234m (FY24: £210m) and
basic EPS before Other items grew by 3% to 12.7p (FY24: 12.3p) despite a
480bps increase in our effective tax rate to 23.7% (FY24: 18.9%) and a 72%
increase in finance costs to £16.2m (FY24: £9.4m).
Operationally, we secured a record £7.5bn total contract value (TCV) of
contract wins/renewals/extensions, up 21% on a strong prior year comparative
(FY24: £6.2bn). This included a £1bn TCV new security contract award for
seven years (plus three-year extension option) from the Department for Work
and Pensions (DWP), commencing in October 2025. We are entering FY26 with a
record order book of £15.4bn and a £23.7bn pipeline of upcoming bidding
opportunities.
This good sales performance reflects the benefits from £17m of strategic
investments in the business to develop our 'Facilities Transformation' service
offering and drive growth through better sales/bidding capabilities. Margin
expansion is a key element of our strategy, and we delivered £25m of savings
from our ongoing programmes of margin enhancement initiatives (MEIs).
The FY25 operating margin before Other items was 4.6% (FY24: 4.7%), primarily
reflecting strategic investments, the impact of inflation, and a loss in the
telecoms infrastructure business, which returned to breakeven in Q4 following
a series of actions taken to address the underperformance. Looking ahead, we
are confident in our ability to contractually recover or mitigate through new
MEIs the increase in employer's National Insurance Contributions, and we have
a clear path to our >5% operating margin target by FY27.
Based on the equivalent IFRS measures, Group revenue increased by 14% to
£5,083m (FY24: £4,445m), operating profit decreased by 2% to £162m (FY24:
£166m) and basic EPS reduced by 16% to 8.2p (FY24: 9.8p). The reduction in
operating profit and basic EPS reflects a £26m increase in Other items after
tax to £58m (FY24: £32m) due to a one-off credit to Other items relating to
the Landmarc consolidation in FY24, as well as higher acquisition-related
costs (predominantly from non-cash amortisation) and pension related costs in
FY25. Further details are set out in the Finance review.
Facilities Transformation Three-Year Plan (FY25-FY27)
Our Three-Year Plan pivots the business from traditional Facilities Management
to technology-driven Facilities Transformation. Mitie is the FM market leader
in the UK, with deep capabilities to aggregate workflow and workforce data to
be a trusted partner to thousands of blue-chip public and private sector
organisations.
As such, we are well positioned to meet the evolving needs of our customers
and unlock the value that exists in each of their environments. These needs
are underpinned by attractive macro trends, including meeting evolving
legislative and regulatory compliance requirements, alongside significant
investments required in data centre capacity, decarbonisation technologies,
and power & grid connections in the UK.
We have set ambitious financial targets (based on Alternative Performance
Measures) to accelerate growth and enhance shareholder returns over the
Three-Year Plan period, underpinned by proactive capital deployment, whilst
maintaining leverage between 0.75-1.5x (post-IFRS 16 average net debt/EBITDA):
· High single digit revenue growth (inclusive of the contribution from
M&A)
· >5% operating margin by FY27
· £150m annual free cash flow by FY27
· Return on Invested Capital (ROIC) >20%
Accelerating growth
Our technology-led Facilities Transformation Three-Year Plan is expected to
deliver accelerated growth through the key pillars of: 1) key account growth
and scope increases; 2) projects upsell; and 3) infill M&A. We are
targeting high single digit revenue growth annually (inclusive of the
contribution from M&A).
In FY25, organic growth through key accounts and scope increases alongside
projects upsell contributed 9% to revenue growth, inclusive of contract
pricing of 3%. Infill M&A completed since 1 April 2023 contributed a
further 4% of inorganic growth, resulting in total revenue growth of 13% -
well ahead of our target.
Pillar 1: Record contract wins and renewals/extensions delivered
New contract wins and extensions/renewals increased by 21% to a record £7.5bn
TCV (FY24: £6.2bn), reflecting the investments we have made in our sales and
marketing teams.
Notable new wins of £5.0bn TCV (FY24: £4.4bn) included a £1bn TCV seven
year contract award from the DWP, with a three year extension option, to
deliver security services from October 2025, alongside a £400m TCV 10-year
contract from the Ministry of Justice to operate the UK's first all-electric
'zero carbon' prison (HMP Millsike), which opened in April 2025. Other notable
awards included Aldi, Boots, The Coventry and Rugby Hospital, Community Health
Partnerships, Driver and Vehicle Licensing Authority (DVLA), EY, Halfords, HM
Revenue and Customs (HMRC), Lidl and the Metropolitan Police Service.
Notable contract extensions/renewals of £2.5bn TCV (FY24: £1.8bn) included
integrated facilities management (IFM) services for Lloyds Banking Group (LBG)
- our largest private sector customer, Heathrow Airport, Vodafone, Thales and
EON. Our market leading position in the retail sector supported several
extensions/renewals including the provision of security services for M&S,
engineering services for Primark and engineering and hygiene services for an
international e-commerce business.
We have a large, diversified portfolio of customers and contract renewals
therefore arise on a rolling basis. During the year two notable public sector
contracts were not renewed, including one Central Government engineering and
hygiene contract that was lost on marginal scoring judgements and will end in
September 2025. The other smaller public sector contract was lost on pricing
and ended in March 2025.
Due to the above average size of these contracts and their tenure, Mitie's
renewal rate was 59% (FY24: 79%), with the two lost contracts contributing a
29ppts impact. We expect our renewal rate to increase significantly in FY26
given the strong commercial momentum in the business, and a much-reduced
number of contracts that are due to be renewed.
Our total order book increased by 35% to a record £15.4bn (FY24: £11.4bn),
and our pipeline of new bidding opportunities increased by 27% to a record
£23.7bn (FY24: £18.6bn) across a range of public and private sectors, the
largest of which include immigration & justice, central government,
defence, healthcare, critical national infrastructure, retail and transport
& aviation.
Pillar 2: Projects work underpinned by attractive macro trends
We continue to see demand from our customers for transformational projects
across their estates and have expanded our technical capabilities through
targeted acquisitions. As a result, Group projects revenue (delivered across
all three of our divisions) increased by 14% to £1.2bn (FY24: £1.1bn), and
our projects pipeline of opportunities, included within the Group's total
pipeline, expanded to £4.8bn (FY24: £3.3bn).
Transforming the built environment, including lifecycle upgrades, remains a
key driver of growth, where we are integrating systems to create 'intelligent
buildings', saving money for our customers and ensuring that buildings meet
evolving legislative and regulatory compliance 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 solar, electric vehicle (EV) charging and battery storage, alongside
our expanded suite of power and grid connections capabilities, are also
increasingly being sought by our customers, with £1.4trn of investment
expected for the UK to achieve Net Zero by 2050.
The UK is one of the largest data centre markets in Europe, and we are
expanding our delivery of mechanical & electrical, earthing, and fire
& security systems fit-outs in these buildings. We saw a pause in some
data centre projects during the year, as customers reassess the significant
increase in scale, power and cooling requirements arising from Artificial
Intelligence (AI). We are well placed to meet these changing demands, and
expect c.£13bn of UK data centre investment over the medium term to be a key
driver of our growth.
We also continue to deliver a range of projects work across wider critical
environments, including heating and lighting systems upgrades in the
healthcare sector and bespoke engineering projects in the defence sector, and
benefit from investment in the resilience and security of critical national
infrastructure across the UK.
Our telecoms infrastructure business has faced a challenging market,
characterised by poor contracting terms with major network operators and
delays in the completion of projects, resulting in a loss of £11m in FY25.
Following a series of actions which included renegotiating or exiting from
certain unprofitable frameworks and the appointment of a new management team,
the business returned to breakeven during the final quarter of the year.
Revenue reduced by 19% to £57m in FY25 (FY24: £70m) and is expected to
reduce again by a similar percentage in FY26, as we hand back unprofitable
work.
Pillar 3: Three strategic acquisitions completed
When we set out our Three-Year Plan in October 2023, we guided to c.£75m p.a.
spend on infill M&A, to deepen our capabilities in the high-growth,
high-margin areas of buildings infrastructure and compliance, decarbonisation,
power & grid connections and fire & security. We continue to evaluate
strategic M&A opportunities in the pipeline.
During FY25, we completed three strategic acquisitions for a combined
consideration of £48m (excluding employment-linked earnouts). The largest of
these was Argus Fire, one of the UK's leading fire systems businesses, for
£36m in October 2024. This enhances our scale and self-delivered offering in
the £3bn UK fire & security market where Mitie is a top three operator
and complements the prior year acquisitions of GBE Converge and RHI
Industrials.
We also acquired ESM Power, a leading high-voltage electrical engineering
business, for £5m in July 2024. In combination with our Rock Power
Connections and G2 Energy businesses, we have built a full suite of services
in the growing power & grid connections market, which continues to benefit
from significant capital investment in energy networks for the UK to achieve
Net Zero.
In Spain, we acquired Grupo Visegurity, a leading national security business,
for £7m in October 2025. This, alongside the acquisition of Biservicus in
September 2023, supports the strategic expansion of our security services
capabilities in the attractive c.£13bn Spanish FM market.
Operating margin progression
We have a clear path to an operating profit margin before Other items of at
least 5% by FY27. This will be achieved through our ongoing programme of
margin enhancement initiatives (MEIs) and improved operational leverage,
alongside the contribution from M&A and projects works. We expect these
management actions to more than offset the continued impact of inflation and
contract pricing dynamics in a highly competitive environment, in addition to
the increase in employers National Insurance Contributions in FY26.
In FY25, the operating profit margin before Other items was 4.6% (FY24: 4.7%),
reflecting strategic investments to drive growth and margin expansion (£17m),
headwinds from inflation (£7m), a loss in our telecoms infrastructure
business (£11m) and the completion of higher margin contracts. Offsetting
these factors, the operating margin benefited from a good trading performance
and the delivery of £25m of savings through MEIs.
We expanded the scope of our MEIs from overhead efficiencies to operations and
in-contract opportunities during the year. Workstreams included increasing
self-delivery to customers in areas such as fire, water and asbestos
compliance in Defence and reducing our reliance on third-party contractors;
working with key accounts to define a best practice account model; using
technology and AI to increase productivity and deploy resources more
efficiently; the continued outsourcing of certain finance functions; and the
continued consolidation of Mitie's core systems and processes.
Investments in the foundation year of our Plan are delivering tangible
results, including record contract wins and renewals/extensions. We have
invested in our sales and marketing teams to develop sector and
customer-driven strategies, while enhancing our customer relationship
management functionality and business development skillset. We have put more
resource into contract re-bids, and improved training and incentive structures
for 'in contract' teams to drive growth over the contract life. We are
continuing to invest in technology by developing our 'intelligent' solutions
and enabling AI in our core systems (see Technology leadership section).
Sustainable free cash flow generation
We are targeting sustainable free cash flow generation of c.£150m per annum
by FY27. This, combined with our robust balance sheet and low leverage,
underpins our proactive approach to deploying capital and delivering
shareholder returns.
We expect increased profitability, working capital process improvements and
disciplined capex to offset the increased working capital required to support
our growing projects business, longer payment terms being demanded by some
customers (particularly in retail), and a one-off impact to working capital
expected in FY26 arising from the Procurement Act 2023. This Act came into
effect in February 2025 and requires mandatory 30-day payment terms for all
subcontractors and suppliers on Government Framework Contracts (of which over
70% of Mitie's are already aligned).
In FY25, the Group generated £249m of cash from operations (FY24: £228m),
leading to a free cash inflow of £143m (FY24: £158m), well ahead of our
guidance for 'at least £100m'. The reduction in free cash flow year-on-year
reflects a one-off benefit to working capital of c.£25m in the prior year
relating to working capital process improvements, including the consolidation
of activities into the shared service centre and implementation of the Coupa
digital supplier platform. We continued to implement new process improvements
in FY25, offsetting longer payment terms on several new or renewed contracts
in the retail sector.
Proactive and growing capital deployment
Our capital deployments are determined by the best use of capital to deliver
attractive returns to shareholders and drive growth in the business, while
maintaining a strong financial position, and leverage within our 0.75-1.5x
target range (post-IFRS 16 average net debt / EBITDA).
In this context, the Board's policy prioritises strategic M&A at returns
materially above our weighted average cost of capital; a progressive dividend
policy (30-40% payout ratio); and the purchase of all shares to fulfil
employee incentive schemes (c.15m shares p.a.). Surplus funds are returned to
shareholders via share buybacks to remain within our target leverage range.
The Board is recommending a final dividend of 3.0p per share, which, when
added to the 1.3p interim dividend paid, takes the total dividend for FY25 to
4.3p per share. This is an 8% increase on the prior year (FY24: 4.0p) and
represents a payout ratio of 34% (FY24: 33%). The final dividend will be paid
on 4 August 2025, following approval at the 2025 AGM.
During FY25, we invested £48m in strategic acquisitions, purchased 13m shares
at a cost of £15m to fulfil employee incentive schemes and completed our
largest share buyback programme to date of £100m. Within this programme we
purchased 89m shares, of which 79m were cancelled and 10m were held in
treasury to fulfil Mitie's 2021 Save As You Earn (SAYE) scheme.
With a strong balance sheet, and leverage at the lower end of our targeted
range, we launched a new £125m share buyback programme for FY26 on 16 April
2025, which will bring the cumulative total undertaken since FY23 to £325m.
Within the FY26 programme we will hold c.6m shares in treasury to fulfil the
2022 SAYE scheme (vesting in February 2026), and cancel all other shares
purchased in excess of this within the programme. To date, we have purchased
2m shares at an average price of 140p. The Board will keep this share buyback
programme under review, considering the timing of value-creating acquisitions,
and in order to maintain leverage within our target range.
Strong balance sheet and low leverage
Post-IFRS 16 closing net debt at 31 March 2025 increased by £118m to £199m
(FY24: £81m), reflecting proactive capital deployments across dividends,
share buybacks, share purchases for incentive schemes and M&A totalling
£237m, alongside a £24m increase in lease obligations as we continue to
transition our fleet to electric vehicles (EVs), partially offset by good free
cashflow generation of £143m.
Post-IFRS 16 average daily net debt in FY25 was £264m (FY24: £161m) and
leverage was 0.8x average net debt / EBITDA (FY24: 0.6x) - at the lower end of
our 0.75x to 1.5x target leverage range. Covenant leverage was zero.
Technology leadership
Our strength lies in a combination of exceptional colleagues and cutting-edge
technology, empowering us to deliver transformative, data-driven 'intelligent'
solutions that evolve with the needs of our customers.
This encompasses Intelligent Engineering Maintenance - ensuring
round-the-clock remote monitoring and predictive maintenance for connected
assets; Intelligent Security - optimising resource deployment to address
dynamic risk and threat profiles across customer estates; Intelligent Hygiene
- leveraging building usage data and sensor technology to deliver demand-led
hygiene services; and Intelligent Projects - utilising our Emissions
Intelligence platform to automate emissions data capture and reporting, and
establish Net Zero pathways for customers.
During FY25, we deployed Intelligent Engineering Maintenance across 700
connected sites and Intelligent Hygiene across over 100 sites, whilst
Intelligent Security has focused on assessing risk based on crime, deprivation
indices, demography, intelligence alerting and shrinkage data at more than
8,200 retail customer sites. Emissions Intelligence has been activated for 25
customers, and we have a strong pipeline to continue this rapid pace of
adoption.
We integrated our 'intelligent' solutions into Mozaic360 - a unified platform
that enables customers to monitor service, asset and environment performance,
manage their contracts and conduct benchmarking analysis efficiently across
all IFM services provided by Mitie. Our customer-facing mobile app, Aria, with
its built-in AI chatbot, ESME, has been deployed across 38 of our largest
strategic accounts and now handles c.30% of service requests, automatically
processing work orders without human intervention.
Internally, Intelligent Process Automation (IPA) is a key pillar of our AI
strategy to enable end-to-end AI automation of systems and processes. During
the year, we implemented an autonomous AI email agent for the engineering
helpdesk to automate the process of raising service requests or responding to
status updates on a service request. The agent is live for eight customers,
achieving a success rate of 90% and saving more than 900 hours of time within
the helpdesk team. Roll-out to the remaining 50 engineering helpdesk customers
will continue in FY26. We have also started to deploy IPA to enable
operational digital twins for back-office business processes, delivering
further efficiencies and cost savings.
We have upgraded our Government and Commercial Maximo systems to MAS 9.0,
enabling us to embed AI features into core engineering processes to enhance
work order management, monitor asset health, and predict failures, ensuring
uninterrupted productivity for our customers. MAS 9.0 now includes workflow in
security and hygiene, enabling a fully rounded picture of a customer's estate
to be developed.
Additionally, we have equipped thousands of colleagues with Microsoft Copilot
tools to streamline routine tasks and improve decision-making. We are
collaborating with Corndel, Imperial College London, and Microsoft to
introduce a pioneering AI apprenticeship programme, ensuring that our
workforce is equipped with practical expertise to lead in the AI-driven
future.
ESG and social value leadership
Mitie is recognised as a leader in Environmental, Social and Governance (ESG)
matters and social value among global industry peers, with these initiatives
forming a key part of how we do business. Our leading credentials also enable
us to work with our customers to realise their own sustainability and Net Zero
ambitions.
We recently launched our new corporate purpose: 'Better Places; Thriving
Communities' - uniting everyone at Mitie, from the Board to frontline
colleagues, around a shared commitment to help shape the communities where we
live and work. To further support our purpose, we have set bold social value
pledges through our new 'Plan Thrive' initiative, including to uplift one
million lives across the UK.
Mitie has a strong track record of delivering impactful social initiatives,
including through the Mitie Foundation, apprenticeship schemes, learning and
development programmes and responsible supply chain management. For example,
we are currently supporting over 1,500 colleagues through apprenticeships
across 90 technical, professional and managerial courses. Last September, we
welcomed our largest ever cohort of early career and new hires into our
technical apprenticeship schemes and launched a graduate engineering
programme. We expanded our investment in developing women in leadership. At 31
March 2025, 42% of our senior leadership team are now women, an increase of
10ppt during the year and exceeding our target of 40%.
Finally, we completed a 'double materiality' assessment, identifying the
sustainability issues that are most material to our business and stakeholders
by evaluating both their impacts on the environment and society and their
potential financial impacts on Mitie. We also published our first Climate
Transition Plan, building on the success of our 2020 Plan Zero initiative to
become Net Zero for our direct operations by the end of 2025. Our largest
carbon emissions relate to our vehicles, and we transitioned a further c.1,200
to EVs during the year. At 31 March 2025, we had c.6,250 EVs, one of the
largest electric fleets in the UK, representing 85% of our total fleet where
EV technology is available.
Operating review
As part of our Facilities Transformation Three-Year Plan (FY25 - FY27), we
have simplified our organisational structure to align to our core service line
capabilities of Engineering Maintenance, Security and Hygiene. As such, from
the start of FY25, we absorbed the Central Government & Defence division
into Business Services (Central Government) and into Technical Services
(Defence). Police services, which was previously reported within Care &
Custody in Communities, is now reported within Business Services.
Business Services
Business Services is the UK's largest provider of technology-led security and
hygiene services across c.2,500 contracts, with sector expertise in retail,
transport & aviation, central government and financial & professional
services. It also provides landscaping and waste services, and Mitie's Spanish
business is reported within the division.
Business Services, £m FY25 Restated(1) Change
FY24
Revenue (including share of JVs and associates) 2,244 1,977 14%
Security(1) 1,067 863 24%
Hygiene 461 407 13%
Central Government(1) 384 447 (14%)
Spain 167 114 46%
Waste 85 77 10%
Landscapes 80 69 16%
Operating profit before Other items 163.0 149.8 8.8%
Operating profit margin before Other items 7.3% 7.6% (0.3)ppt
Total order book £5.3bn £3.3bn 61%
(1) Restated to reflect the change to divisional reporting to include Police
services (within Security) and Central Government in Business Services. FY24
restated Central Government revenue excludes £77m reclassified to Defence
relating to the Landmarc step acquisition
Performance highlights
· Revenue +14% to £2,244m (FY24: £1,977m), reflects new wins, the provision of
'surge response' security services, growth in projects, pricing and
acquisitions, offset by the completion of certain public sector contracts
· Operating profit before Other items +8.8% to £163.0m (FY24: £149.8m),
reflects revenue growth and MEIs, offset by the higher margin public sector
contracts that have ended and unfavourable weather conditions in Landscapes
· £3.9bn TCV of wins and extensions/renewals, primarily in Central Government
and the retail sector, resulted in a 61% increase in the total order book to
£5.3bn (FY24: £3.3bn)
· Mitie's position as a leading integrated fire & security systems provider
enhanced via the acquisition of Argus Fire
· Spanish security capability expanded through the acquisition of Grupo
Visegurity
Operational performance
Business Services delivered a good performance in FY25, with revenue
benefiting from new wins, the provision of short-term 'surge response'
security services to the Home Office during the summer, projects work, pricing
and the contribution from recent acquisitions (Argus Fire, Grupo Visegurity
and GBE). This growth was partially offset by the completion of
higher-margin, short-term public sector works, such as the Afghan Relocations
and Assistance and Inland Border Forces contracts, and one notable Central
Government contract that ended in March 2024.
The division secured £3.9bn TCV of contract wins and extensions/renewals,
primarily in Central Government and the retail sector. This included Mitie's
largest contract award to date of £1bn TCV (£136m p.a.) over seven years
plus a three-year extension, to provide security services across the DWP's
national estate (from October 2025). Other wins included security and
hygiene services for Community Health Partnerships and contracts with DVLA,
Home Office and HMRC.
Retail is one of the division's largest sectors, with revenue of c.£400m p.a.
and a blue-chip customer base of national retailers and flagship shopping
centres. Alongside the continued growth in existing accounts, the division
won new contracts to deliver security services for Aldi and Lidl, as well as
fire maintenance work for Halfords. The largest contract renewals and
extensions in the year were for the provision of hygiene services to a large
e-commerce business and security services for Marks & Spencer (M&S).
The demand for risk-based 'intelligent' security and remote monitoring
services continues to grow in the retail sector. During the year, the division
completed a large-scale extension of its M&S Security Operations Centre
(SOC) in Northampton, a large furniture retailer approved a dedicated SOC
following a successful trial, and the division has a strong pipeline of
opportunities to add to this unique offer with other national retailers. This
capability is complemented by the ongoing development of leading technologies
such as Vision AI theft analytics in partnership with SeeChange, which will be
rolled out in FY26 following successful trials.
The increased revenue and benefit from MEIs were offset by the completion of
the higher margin public sector contracts, a £1m debt provision relating to
the administration of ISG (net of c.£2m recovered in H2) and the impact of
unfavourable weather conditions on our Landscapes business. MEIs primarily
focused on operational excellence and productivity improvements, including the
outsourcing of mobile security response services.
Mitie's fire & security projects business enhanced its position as a top
three integrated systems provider through the acquisition of Argus Fire in
October 2024. This significantly increases Mitie's scale and self-delivered
offering in the higher-growth, higher-margin c.£3bn p.a. UK fire &
security market, and complements the prior year acquisitions of GBE Converge
and RHI Industrials.
Overall, projects revenue in Business Services increased by 29% to £281m
(FY24: £217m). Key projects work included the upgrade of critical security
infrastructure across central government offices, the design and delivery of
an integrated physical security, fire and civil engineering solution across 10
sub-stations for Scottish Power, the fit-out of fire & security systems
within two data centres for Google and asset upgrades for National Grid. The
projects order book and pipeline remain strong for FY26.
Mitie Spain benefited from net wins and acquisitions, including Grupo
Visegurity, a leading security business acquired in October 2024. The
acquisition builds Mitie Spain's security capabilities following the
acquisition of Biservicus in FY24, providing an increasingly differentiated
offering in an FM market dominated by single service providers.
Recent awards include British Security Awards - Business of the Year; Fire
& Security Matters - Security Guarding Company and Security Project of the
Year; Retail Risk, Fraud Awards - Physical Risk Management Team of the Year;
OSPAS - Security Team of the Year.
Technical Services
Technical Services is the UK's largest provider of engineering maintenance
services, managing facilities and critical assets across c.350 contracts,
including for the Ministry of Defence (MoD). The division also delivers
projects in high-growth areas including buildings infrastructure,
decarbonisation and power & grid connections to help customers transform
their built estates.
Technical Services, £m FY25 Restated(1) Change
FY24
Revenue (including share of JVs and associates) 1,977 1,817 9%
Engineering maintenance and projects 1,421 1,326 7%
Defence(1) 556 491 13%
Operating profit before Other items 79.0 74.9 5.5%
Operating profit margin before Other items 4.0% 4.1% (0.1)ppt
Total order book £5.0bn £4.0bn 25%
(1) Restated to reflect the change to divisional reporting to include Defence
within Technical Services. FY24 restated Defence revenue includes £77m
reclassified from Central Government relating to the Landmarc step acquisition
Performance highlights
· Revenue +9% to £1,977m (FY24: £1,817m), primarily driven by new wins and
scope increases, acquisitions and pricing, offsetting the loss of one notable
contract at the end of the prior year
· Operating profit before Other items +5.5% to £79.0m (FY24: £74.9m), reflects
MEIs and acquisitions, partially offset by net contract losses and a loss in
the telecoms infrastructure business
· £1.8bn TCV of contract wins and extensions/renewals resulted in a 25%
increase in the total order book to £5.0bn (FY24: £4.0bn)
· Expertise in the growing power & grid connections market enhanced through
the acquisition of ESM Power
Operational performance
Technical Services revenue benefited from good growth in Defence, reflecting
the new Germany and wider Europe Defence Infrastructure Organisation contract
which commenced in Q1, pricing, and the consolidation of Landmarc in the prior
year. In Engineering the contribution from contract wins, scope increases and
acquisitions (JCA and ESM Power) was partially offset by contract losses. The
latter primarily related to one private sector IFM contract that ended in
March 2024, although the division continues to deliver engineering project
works on the contract (alongside subcontracted security, waste and landscaping
services via Business Services).
Notable new engineering and IFM contract awards during the year included Colt
Technologies, Dublin City University, EY, Grosvenor Ltd, Halfords,
Metropolitan Police Service and Port of Dover. The division was also awarded a
further contract extension with Mitie's largest private sector customer, LBG,
in addition to notable extensions for Government Estate Management, Heathrow
Airport, Marsh & McLennan, Primark and Vodafone.
MEIs focused on streamlining account structures, driving efficiency gains
through the introduction of generative AI (GenAI) assistants and AI-driven
tools to predict asset failures and optimise predictive maintenance, as well
as reducing divisional overheads. The increased self-delivery of certain
works, such as fire, water and asbestos compliance in Defence, is also gaining
momentum as part of a Group-wide initiative.
Overall, the Technical Services operating margin was 4.0% (FY24: 4.1%), after
factoring in an £11m loss (60bps) in the telecoms infrastructure business,
which we have taken steps to address and returned to breakeven in Q4. Other
factors that impact the margin include the division absorbing the management
cost of IFM contracts and exposure to non-recoverable cost inflation. The
division is expected to achieve an operating margin >5% by FY27 through
projects upsell and further MEIs, including help desk consolidation.
Projects revenue in Technical Services increased by 7% to £821m (FY24:
£765m), reflecting underlying growth offset by the anticipated closure of
Mitie's roofing business and the exit from certain unprofitable frameworks in
the telecoms infrastructure business. Technical Services projects included the
installation of solar photovoltaic (PV) panels for NATS, Nuclear Restoration
Services and across multiple David Lloyd sports centre sites. For NATS, over
2,600 solar panels were installed on the roof of its Swanwick control centre
as part of their commitment to Net Zero, supplying up to 10% of the centre's
electricity needs - equivalent to the annual consumption of c.330 family
homes. At Heathrow Terminal 3, a new cooling package was designed and
installed to maintain resilience ahead of the busy summer period. The division
also undertook the restoration of a prominent LBG branch and commenced the
refurbishment of a 1960s scenery workshop to create editing suites and offices
for the BBC.
Across MoD contracts the division continued to deliver a range of projects,
including to refurbish 174 service family accommodation properties, commence
work to resurface a critical airfield at RAF Mount Pleasant in the Falkland
Islands, and undertake refurbishment programmes, power reconfigurations and
demolition works for Future Defence Infrastructure Services (FDIS) in Scotland
and Northern Ireland.
Further projects capability was added in the growing power & grid
connections market during the year through the acquisition of ESM Power, such
that Mitie now offers a full suite of services of any size and voltage.
Recent awards include PFM Awards - Partners in Workplace Re-development (Royal
London) and Partners in Cleaning for Large Estates (Heathrow); RoSPA - 'Gold'
Award (GSK contract); Global FM Awards - Silver Award for People &
Development; INEOS - European Safe Contractor of the Year Award.
Communities
The Communities division delivers sustainable outcomes as a trusted partner to
the public sector across Local Government & Education, Healthcare and Care
& Custody. The division operates over 100 private finance initiative (PFI)
and traditional commercial contracts.
Communities, £m FY25 Restated(1) Change
FY24
Revenue (including share of JVs and associates) 870 717 21%
Local Government & Education 300 265 13%
Healthcare 321 275 17%
Care & Custody(1) 249 177 41%
Operating profit before Other items 47.5 36.1 31.6%
Operating profit margin before Other items 5.5% 5.0% 0.5ppt
Total order book £5.1bn £4.1bn 24%
(1) Restated to reflect the change to divisional reporting to report Police
services (previously in Care & Custody) in Business Services.
Performance highlights
· Revenue +21% to £870m (FY24: £717m), reflecting contract scope increases in
Care & Custody, new wins, projects and variable works, and pricing
· Operating profit before Other items up 31.6% to £47.5m (FY24: £36.1m),
largely reflecting good trading momentum, MEIs, reduced losses on one PFI
contract and a one-off legal settlement
· £1.8bn TCV of contract wins, extensions/renewals and scope increases,
resulted in a 24% increase in the total order book to £5.1bn (FY24: £4.1bn)
Operational performance
Communities delivered strong revenue growth, reflecting sustained higher
volumes on the Immigration Escorting Services contract in Care & Custody,
projects and variable works, pricing, and the contribution from current and
prior year contract wins.
During the year, the division secured £1.8bn TCV of contract wins,
extensions/renewals and scope increases to existing contracts. Notable wins
included a 10-year £400m TCV contract to operate HMP Millsike and a hard
services contract for Coventry and Rugby Hospital, which commenced in Q1 FY25.
Notable extensions/renewals included University Hospitals Dorset and
Birmingham Community Healthcare NHS Foundation Trusts.
Operating profit benefited from good trading momentum across several
Healthcare & Education accounts, MEIs, a further reduction in losses on
one historically challenging PFI hospital contract to £0.6m (FY24: £3.9m
loss) as a result of management actions to improve productivity and re-set
pricing, as well as a one-off legal settlement. As part of the MEI programme,
the division has driven cost savings through an enhanced procurement strategy
to further consolidate its list of preferred suppliers, as well as adding
additional commercial team capability to optimise long-term PFI contracts.
These improvements more than offset the costs associated with mobilising the
HMP Millsike contract, including the recruitment and training of colleagues to
facilitate the opening of the prison. Following handover to Mitie, the first
prisoners were accepted in April 2025, and the prison has capacity for c.1,500
Category C inmates.
A standalone PFI hand-back team has been established to monitor and manage
long-term PFI contracts as they approach maturity, and a playbook has been
created to manage the contracts during the final five to seven years through
standardised controls and processes. During FY25, one small PFI contract was
successfully handed back, with a further two due in FY26.
Overall, projects revenue in Communities increased by 26% to £144m (FY24:
£114m). Healthcare projects included starting work on 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 project works. Across the education sector, Mitie delivered
lifecycle and upgrade projects to over 150 schools, including roof and asset
replacements and energy efficiency works. The division also delivered several
large refurbishment projects in the local government sector, while working
towards securing over £5m in Public Sector Decarbonisation Scheme projects.
For Essex County Council, decarbonisation and energy projects across the
portfolio included the replacement of gas fired boilers with ground source
heat pumps, LED lighting upgrades and the installation of ground mounted solar
PV panels.
Communities has continued to develop its technology capabilities, including to
use the Internet of Things (IoT) to track the location of wheelchairs and
other mobile critical care appliances at a major acute care hospital in
partnership with Vodafone. This has resulted in a reduction in response and
porter task times and an increase in the number of daily hygiene tasks
completed. Trials of Mitie's Merlin for Hygiene application have been
successfully completed in a health and care partnership facility to enhance
productivity.
Recent awards include PFI Partnerships Bulletin Awards - Best FM and
Technology Provider (recognising the leading technology that we have deployed
at Cumberland Royal Infirmary); IWFM Positive Impact Climate Action - Towards
Net Zero (Essex County Council).
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 have increased by
9% to £55.4m (FY24: £50.6m), reflecting growth in the business, partially
offset by overhead savings across functions and shared services.
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 FY25 FY24
Revenue including share of joint ventures and associates 5,091.2 4,510.7
Group revenue 5,082.6 4,445.2
Operating profit before Other items 234.1 210.2
Other items (72.5) (44.5)
Operating profit 161.6 165.7
Net finance costs (16.2) (9.4)
Profit before tax 145.4 156.3
Tax (37.0) (25.4)
Profit after tax 108.4 130.9
Profit attributable to non-controlling interest (7.0) (4.6)
Profit attributable to owners of the parent 101.4 126.3
Basic earnings per share before Other items 12.7p 12.3p
Basic earnings per share 8.2p 9.8p
Revenue
Revenue for FY25 of £5,091m, including share of revenue from joint ventures
and associates, has improved by 12.9% compared to last year (FY24:
£4,511m). Of this growth, 8.5% (£383m) was organic, driven by growth in
Core FM (+5.6ppt), Projects (+0.2ppt) and pricing (+2.7ppt). The remaining
4.4% (£197m) of growth was inorganic.
Organic Core FM growth of £251m included revenue from new key accounts such
as Aldi, Lidl and EY, higher volumes for the existing immigration services
contract, and the provision of 'surge response' security services for the Home
Office during the summer. This more than offset the completion of the Afghan
Relocations & Assistance and Inland Border Force contracts, and the prior
year losses of two notable contracts; one Central Government contract, and one
private sector contract that transitioned to a global provider.
Organic Projects growth was £11m in the period, driven by good growth in
Business Services and Communities, as a result of the upgrade of critical
security infrastructure across Central Government offices, decarbonisation
works, and asset lifecycle upgrades. This was largely offset by a reduction
in organic projects revenue in Technical Services, where we took strategic
decisions to exit certain unprofitable frameworks in the telecoms
infrastructure business and close the legacy roofing business, combined with a
number of delayed data centre builds, where customers have been reassessing
the significant increase in scale, power and cooling requirements arising from
AI.
The repricing of revenue for inflation has added £121m in FY25 (FY24:
£177m), reflecting the lower CPI rates this year, which drive repricing in
the majority of our contracts.
The £197m of inorganic growth related to the strategic acquisitions of ESM
Power, Argus Fire and Grupo Visegurity this year, combined with the full-year
impact of prior year M&A, related to the consolidation of Landmarc
(explained below) and the acquisitions of JCA Engineering and GBE Converge.
Operating profit
Operating profit before Other items was £234.1m (FY24: £210.2m), an increase
of £23.9m (+11.4%) in the year. The improvement was driven by Core FM and
Projects growth (£12.2m), margin enhancement initiative savings (£25.2m),
and inorganic growth (£12.7m), partially offset by investments being made to
underpin our growth strategy (-£17.3m), and unrecovered costs associated with
inflation and the changes to employers' National Insurance Contributions
(-£8.9m).
The Core FM and Projects growth was driven by the revenue growth outlined
above, combined with contract margin improvements, in particular in
Communities where the profitability on one notable loss-making contract
acquired with Interserve has significantly improved as a result of the
successful execution of a turnaround plan, and some commercial contract
settlements. Core FM and Projects also includes a loss of £10.7m from the
telecoms infrastructure business which has been undergoing a turnaround,
resulting in it returning to breakeven in the last quarter.
Savings from margin enhancement initiatives (MEI) are largely driven by the
Target Operating Model programme, which contributed £8.6m of savings through
overhead efficiencies such as optimisation of the Group's organisational
structure, and consolidating core systems and processes. As previously
highlighted, this programme has been extended into contracts and operations,
which contributed a further £5.4m of savings during the year, 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. In addition, we have continued to deliver
incremental savings through the roll-out of Coupa (our digital supplier
platform) across the Group which was completed this year, with an incremental
£11.2m of savings.
Inorganic profit growth included profits from the FY25 acquisitions of ESM
Power, Argus Fire and Grupo Visegurity, together with the full-year impact of
prior year M&A, including £6.4m from the consolidation of Landmarc
(explained below), and the acquisitions of JCA Engineering and GBE Converge.
The investments that we have made in FY25 (£17.3m) have largely focused on
sales, marketing and technology, and will help to drive growth in the final
two years of our Three-Year Plan. The investments include £7.0m of
mobilisation costs for the Millsike prison contract, which commenced
operations in April 2025.
Operating profit after Other items was £161.6m (FY24: £165.7m), with the
increase in operating profit from the factors outlined above being more than
offset by higher non-cash Other items, which are explained below.
Other items
£m FY25 FY24
Target Operating Model (14.4) (20.4)
Digital supplier platform (3.4) (3.7)
Margin enhancement initiative cash costs (17.8) (24.1)
Target Operating Model non-cash costs (2.2) -
Margin enhancement initiative costs (20.0) (24.1)
Employment-linked earnout charges (8.6) (9.5)
Other acquisition-related costs (4.9) (4.0)
Acquisition-related cash costs (13.5) (13.5)
Landmarc step acquisition gain - 17.9
Amortisation of acquisition-related intangible assets (29.6) (24.8)
Acquisition-related costs (43.1) (20.4)
Pension-related cash costs (3.0) -
Pension-related non-cash costs (6.4) -
Pension-related costs (9.4) -
Total Other items (72.5) (44.5)
of which cash Other items (34.3) (37.6)
The Group incurred £72.5m of Other items in FY25 (FY24: £44.5m), of which
£34.3m were cash Other items, and £38.2m were non-cash.
Cash Other items of £34.3m in FY25 were £3.3m lower than in FY24 (FY24:
£37.6m), and comprised the costs of delivering the Group's margin enhancement
initiatives of £17.8m (FY24: £24.1m), acquisition-related costs of £13.5m
(FY24: £13.5m) and pension-related costs of £3.0m (FY24: £nil).
The margin enhancement initiative costs of £17.8m (FY24: £24.1m) included
the implementation teams, related redundancy costs, professional fees and dual
running costs as part of decommissioning systems.
Acquisition-related costs include employment-linked earnout charges of £8.6m
in FY25 (FY24: £9.5m), which 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 of £4.9m (FY24: £4.0m) comprise transaction
costs of £4.3m (FY24: £2.9m), primarily related to professional fees, and
movements on opening balance sheet provisions recognised on acquisition of
Interserve and GBE of £0.6m (FY24: £1.1m).
Pension-related cash costs of £3.0m (FY24: £nil) largely relate to the
£2.8m settlement charge incurred in relation to Mitie's Section 75 pension
liabilities under the Plumbers' Pension Scheme. This was part of a full and
final settlement, which protects Mitie from any future liabilities from the
scheme. Further details are set out in Note 19 to the condensed consolidated
financial statements.
Non-cash Other items of £38.2m (FY24: £6.9m) comprised £29.6m (FY24:
£24.8m) of amortisation of acquisition-related intangible assets, £6.4m
(FY24: £nil) of pension-related costs (which are further explained in Note 4
to the condensed consolidated financial statements), and £2.2m (FY24: £nil)
of Target Operating Model costs related to the disposal of software. The
non-cash Other items number in FY24 included a £17.9m fair value gain
(credit) from the Landmarc consolidation (which is explained below).
Net finance costs
Net finance costs increased to £16.2m in FY25 (FY24: £9.4m), as a result of
the increased utilisation of our Revolving Credit Facility (RCF) and a
decrease in surplus cash available to place on deposit, reflecting the higher
levels of net debt explained below. The interest charge on leases increased
by £3.1m, due to the higher lease liabilities explained below.
Tax
The tax charge for the year was £37.0m (FY24: £25.4m), comprising a tax
charge on profit before Other items of £51.6m (FY24: £37.9m) and a tax
credit on Other items of £14.6m (FY24: £12.5m).
The effective tax rate (ETR) on profit before Other items of 23.7% (FY24:
18.9%) is higher than in FY24, because FY24 benefited from the recognition of
deferred tax assets related to the losses acquired with the Interserve
business. Excluding the impact of this benefit, the ETR before Other items
in FY24 would have been 23.3%.
After Other items, the tax charge for the year equated to an ETR of 25.4%,
which is higher than the standard UK corporation tax rate of 25% due to
certain Other items costs, primarily related to acquisitions, not being
deductible for tax purposes.
Mitie is a significant contributor of revenues to the UK Exchequer, paying
£1.1bn of taxes in the year (FY24: £963m). Of this total, £201m (FY24:
£174m) relates to taxes borne by Mitie (principally UK corporation tax and
employers' National Insurance Contributions) and £902m (FY24: £789m) relates
to taxes collected by Mitie on behalf of the UK Exchequer (principally VAT,
income tax under PAYE and employees' National Insurance Contributions).
The Group paid corporation tax of £11.0m (FY24: £16.9m) in the year, of
which £6.4m (FY24: £12.7m) was paid in the UK, and £4.6m (FY24: £4.2m)
overseas. The corporation tax paid in the UK is lower than the corporation
tax charge for the year due to the utilisation of deferred tax assets related
to losses.
Mitie has recently been awarded a Fair Tax Mark from the Fair Tax Foundation,
demonstrating the Group's commitment to being a responsible taxpayer.
Consolidation of Landmarc
As previously reported, Landmarc has been consolidated as a subsidiary since
November 2023, prior to which it was reported as a joint venture. As a
result of this change (known as a 'step acquisition'), the Group has reported
an increase in revenue (including share of JVs and associates) from Landmarc
of £57.4m in FY25, comprising £53.3m from the step acquisition (i.e.
inorganic growth) and £4.0m of organic growth.
Operating profit before Other items from Landmarc increased by £5.5m,
comprising £6.4m from the step acquisition (i.e. inorganic growth), partially
offset by an organic reduction of £0.9m. The organic reduction was driven
by a change in mix, with reduced volumes on certain higher-margin services in
the year.
The consolidation of Landmarc from November 2023 also gave rise to the
recognition of a non-controlling interest deduction of £7.0m for FY25, which
represents the non-controlling interest's (49%) share of Landmarc's profit
after tax. As a result of this non-controlling interest deduction, the
consolidation of Landmarc has no impact on earnings per share before Other
items.
Earnings per share
Basic earnings per share before Other items increased by 3.3% to 12.7p (FY24:
12.3p). This improvement is due to the increase in operating profit in the
year (+1.2p) and the reduction in the weighted average number of shares as a
result of the ongoing share buyback programme (+0.4p), partially offset by the
increase in the effective tax rate (-0.8p) and net finance charges (-0.4p).
Basic earnings per share reduced to 8.2p (FY24: 9.8p), with the factors
outlined above being more than offset by the increase in non-cash Other items
(explained above, but primarily related to the prior year fair value gain
arising on the Landmarc step acquisition).
Return on invested capital (ROIC)
£m unless otherwise specified FY25 FY24
Operating profit before Other items 234.1 210.2
Tax(1) (55.5) (39.7)
Operating profit before Other items after tax 178.6 170.5
Invested capital 730.2 645.0
ROIC % 24.5% 26.4%
(1) Tax charge has been calculated on operating profit before Other items
using the ETR for the year of 23.7% (FY24: 18.9%)
ROIC for FY25 was 24.5% (FY24: 26.4%), with the reduction being driven by the
increase in invested capital, related to the acquisitions completed in FY25
and the increased value of leased assets due to the continued transition of
our fleet to EVs. ROIC is adversely impacted by in-year acquisitions,
because invested capital is increased by the full balance sheet value, whereas
operating profit only benefits by a part-year contribution.
Balance sheet
£m FY25 FY24
Goodwill and intangible assets 664.5 645.1
Property, plant and equipment 246.9 204.7
Interests in joint ventures and associates 1.6 0.9
Working capital balances (202.9) (200.1)
Provisions (84.1) (113.2)
Net debt (199.0) (80.8)
Net retirement benefit assets / (liabilities) 13.9 (0.8)
Deferred tax (17.9) 7.9
Other net assets 5.0 10.0
Net assets 428.0 473.7
At 31 March 2025, the Group's reported net assets stood at £428.0m, a
decrease of £45.7m since 31 March 2024. This reduction is driven by the
planned distributions of £179.2m, in the form of share buybacks, dividends
and the purchase of own shares into trusts for share incentive schemes.
This reduction in net assets was partially offset by the profit generated for
the period of £123.9m (excluding share-based payments charges of £15.5m
which are held in equity, rather than as a liability on the balance sheet),
and movements in pension balances of £9.1m after tax, which are recorded
directly in equity rather than through the income statement.
Goodwill and intangible assets
Goodwill and intangible assets have increased by £19.4m, with acquisitions
completed in FY25 adding goodwill of £36.1m and acquired intangible assets of
£14.9m, which have been partially offset by the amortisation of intangible
assets during the year.
Property, plant and equipment
Property, plant and equipment increased by £42.2m due to the continued
transition of our leased fleet to EVs, including a higher proportion of more
expensive vans compared to FY24, as well as the expansion of the fleet as
result of acquisitions and new contracts.
Provisions
At 31 March 2025, provisions totalled £84.1m (FY24: £113.2m), which largely
comprised contract-specific costs of £43.0m (FY24: £49.2m) and the insurance
reserve of £27.3m (FY24: £27.2m). Provisions decreased during the period
by £29.1m, primarily due to the reclassification of Section 75 pension
liabilities of £21.7m to other payables following the agreement of a schedule
of payments to settle the liability related to the Plumbers' Pension Scheme.
The reduction in contract-specific provisions of £6.2m was a result of
commercial settlements with customers that enabled the release of provisions,
or the utilisation of provisions as operations on site progressed.
See Note 12 to the condensed consolidated financial statements for further
details on provisions.
Retirement benefit schemes
At 31 March 2025, the Group's net retirement benefit assets across all schemes
on an IAS 19 basis were £13.9m (FY24: £0.8m net liabilities). The net
improvement (£14.7m) was due to favourable movements in financial assumptions
that have resulted in the main Group scheme moving to a surplus of £14.4m
(FY24: £1.4m deficit).
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 p.a. to £8.4m in
FY25, with £6.4m planned for FY26.
As noted above, 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. This will result in
equal monthly payments totalling £24.5m over a three-year period (which
commenced in H2 FY25). This debt has been fully recognised in other payables
at 31 March 2025, through the transfer of £21.7m from provisions and a £2.8m
charge arising from the settlement agreement which was included in Other items
in FY25.
Deferred tax
The net deferred tax balance in FY25 was a liability of £17.9m (FY24: asset
of £7.9m). This change of £25.8m was primarily the result of a reduction in
deferred tax assets due to the utilisation of tax losses, and an increase in
deferred tax liabilities related to the higher pension scheme surpluses and
new acquisition-related intangible assets.
Cash flow and net debt
£m FY25 FY24
Operating profit before Other items 234.1 210.2
Add back: depreciation & amortisation 76.8 57.9
EBITDA 310.9 268.1
Other items (34.3) (37.6)
Other operating movements 9.0 3.9
Operating cash flows before movements in working capital 285.6 234.4
Working capital movements(1) (37.0) (4.3)
Capex, capital element of lease payments & other (80.1) (54.3)
Interest payments (14.7) (9.7)
Tax payments (11.0) (16.9)
Dividends from joint ventures - 8.4
Free cash inflow 142.8 157.6
Share buybacks(2) (100.0) (50.4)
Purchase of own shares into trusts (14.6) (19.6)
Acquisitions & employment-linked earnout payments (57.3) (34.7)
Dividends paid (64.6) (44.0)
Lease liabilities & other (24.5) (45.6)
Increase in net debt during the year (118.2) (36.7)
Closing net (debt) (199.0) (80.8)
Average daily net (debt) (264.0) (160.7)
Leverage(3) (average daily net debt/EBITDA) 0.8x 0.6x
(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 ) Share buybacks are presented net of the proceeds received from the
exercise of SAYE schemes of £4.7m in FY25 (FY24: £8.0m)
(3) ( )Leverage uses post-IFRS 16 net debt
Operating cash flows before movements in working capital increased to £285.6m
in FY25 (FY24: £234.4m), with the £51.2m improvement driven by the strong
trading performance reflected in the increased EBITDA. Other operating
movements were £9.0m for FY25, primarily related to the add back of non-cash
share based payment charges of £15.5m, partially offset by pension deficit
repair contributions of £8.4m.
The Group generated a free cash inflow of £142.8m for FY25, with the strong
trading performance partially offset by anticipated cash outflows from
increased working capital and capex, as well as higher lease and interest
payments compared to FY24. Dividends received from joint ventures in FY24
(of £8.4m) mainly related to Landmarc when it was still reported as a joint
venture.
In FY25 there was a cash outflow from working capital of £37.0m (FY24:
£4.3m), reflecting the investments required to support growth in our projects
business, as well as the longer payment terms agreed on several new or renewed
contracts in the retail sector.
Capex, the capital element of lease payments & other increased by £25.8m
compared to FY24. Capex increased by £11.3m in FY25, primarily related to
the mobilisation of the Millsike prison contract and the replacement of fleet
vehicles on the Landmarc contract. Capital lease repayments increased by
£15.1m, due to the continued transition of our leased fleet to EVs, including
a higher proportion of more expensive vans compared to FY24, as well as the
expansion of the fleet through acquisitions and new contracts, both in the UK
and overseas. Net interest payments increased by £5.0m due to the higher
levels of net debt, including higher lease liabilities. Tax payments reduced
by £5.9m, primarily due to tax refunds received during the year.
The planned £100m share buyback programme was completed in FY25 and resulted
in the purchase of 89m shares, of which 79m shares were cancelled with the
remainder held to settle the 2021 Save As You Earn (SAYE) share scheme. A
further 12.8m shares have been purchased in relation to the settlement of
other share incentive schemes.
Acquisitions increased net debt by £57.3m during the year, largely comprising
net consideration paid of £47.6m relating to the FY25 acquisitions of ESM
Power, Argus Fire and Grupo Visegurity (after offsetting net cash acquired of
£9.7m). Acquisitions also include employment-linked earnout payments of
£7.0m related to prior period acquisitions, and an increase to the
consideration paid for GBE Converge resulting from the completion accounts
process.
Dividend payments of £64.6m in FY25 comprised the FY24 final dividend of
£38.5m, the FY25 interim dividend of £16.0m, together with dividends paid to
the Landmarc minority shareholder of £10.1m. The recommended final FY25
dividend of 3.0p will result in an 8% increase in the total dividend per share
to 4.3p for FY25 (FY24: 4.0p), representing a payout ratio of 34% (FY24: 33%).
Lease liabilities & other includes an increase in lease liabilities in
FY25 (net of capital repayments) of £23.5m (FY24: £44.6m), as we continue to
transition our fleet to EVs. By the end of FY25, 74% of our UK fleet was
electric, compared with 66% at the end of FY24.
Net debt
Average daily net debt for FY25 was £264.0m FY24 (£160.7m), resulting in an
average leverage ratio (average daily net debt / EBITDA) of 0.8x for FY25, at
the lower end of our target range of 0.75x - 1.5x (FY24: 0.6x).
Closing net debt at 31 March 2025 of £199.0m was £118.2m higher than in FY24
(£80.8m), contributing to Total Financial Obligations (TFO), including a net
retirement benefit asset of £13.9m (FY24: £0.8m liability), of £185.1m
(FY24: £81.6m).
The increases in net debt during FY25 were largely driven by capital returns
to shareholders and acquisitions totalling £236.5m, combined with the net
increase in lease liabilities of £23.5m, exceeding the free cash inflow of
£142.8m. These planned capital returns to shareholders included share
buybacks (£100.0m), share purchases for employee incentive schemes (£14.6m)
and dividends paid (£64.6m).
Liquidity and covenants
At 31 March 2025, the Group had £430.0m of committed funding arrangements,
comprising £180m of US Private Placement (USPP) notes with long-dated
maturities between 2030 and 2034 at a blended average interest rate of 3.86%,
alongside a £250m RCF maturing in October 2028. In December 2024, Mitie
issued £60m of USPP notes with a seven-year maturity at an interest rate
fixed at 5.71%, following the maturity of a £30m 12-year USPP note with a
fixed interest rate of 4.04% in the same month.
On 25 July 2024, DBRS Morningstar confirmed Mitie's credit rating of BBB with
a 'stable' outlook.
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.
At 31 March 2025, the Group was operating well within these ratios at 0.04x
covenant leverage and 38.7x interest cover. A reconciliation of the
calculations is set out in the table below:
£m FY25 FY24
Operating profit before Other items 234.1 210.2
Add: depreciation & amortisation 76.8 57.9
Headline EBITDA 310.9 268.1
Add: covenant adjustments(1) 23.8 21.9
Leases adjustment(2) (64.1) (43.3)
Consolidated EBITDA (a) 270.6 246.7
Full-year effect of acquisitions & disposals 3.5 11.1
Full-year effect of Landmarc step acquisition - 5.7
Adjusted consolidated EBITDA (b) 274.1 263.5
Net finance costs 16.2 9.4
Less: covenant adjustments (0.5) (0.4)
Leases adjustment(3) (8.7) (5.6)
Consolidated net finance costs (c) 7.0 3.4
Interest cover (ratio of (a) to (c)) 38.7x 72.6x
Net debt 199.0 80.8
Covenant adjustment(4) 5.7 0.0
Impact of hedge accounting & upfront fees 2.4 2.5
Leases adjustment(5) (197.5) (174.0)
Consolidated total net debt/(cash) (d) 9.6 (90.7)
Covenant leverage (ratio of (d) to (b)) 0.04x < 0x
1( )Covenant adjustments for 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)
Condensed consolidated income statement
For the year ended 31 March 2025
Notes 2025 2024
Before Other items £m Other items(1) Total Before Other items £m Other items(1) Total
£m
£m
£m
£m
Revenue including share of joint ventures and associates 3 5,091.2 - 5,091.2 4,510.7 - 4,510.7
Less: share of revenue of joint ventures and associates(2) (8.6) - (8.6) (65.5) - (65.5)
Group revenue 3 5,082.6 - 5,082.6 4,445.2 - 4,445.2
Cost of sales (4,512.9) - (4,512.9) (3,945.3) - (3,945.3)
Gross profit 569.7 - 569.7 499.9 - 499.9
Administrative expenses (341.4) (72.5) (413.9) (297.8) (62.4) (360.2)
Other income 5.9 - 5.9 1.7 17.9 19.6
Share of (loss)/profit of joint ventures and associates(2) (0.1) - (0.1) 6.4 - 6.4
Operating profit/(loss)(3) 3 234.1 (72.5) 161.6 210.2 (44.5) 165.7
Finance income 3.3 - 3.3 4.2 - 4.2
Finance costs (19.5) - (19.5) (13.6) - (13.6)
Net finance costs (16.2) - (16.2) (9.4) - (9.4)
Profit/(loss) before tax 217.9 (72.5) 145.4 200.8 (44.5) 156.3
Tax 5 (51.6) 14.6 (37.0) (37.9) 12.5 (25.4)
Profit/(loss) after tax 166.3 (57.9) 108.4 162.9 (32.0) 130.9
Attributable to:
Equity holders of the parent 157.6 (56.2) 101.4 157.8 (31.5) 126.3
Non-controlling interests 8.7 (1.7) 7.0 5.1 (0.5) 4.6
Profit/(loss) for the year 166.3 (57.9) 108.4 162.9 (32.0) 130.9
Earnings per share (EPS) attributable to owners of the parent
Basic 7 12.7p 8.2p 12.3p 9.8p
Diluted 7 11.8p 7.6p 11.3p 9.1p
Notes:
1. Other items are as described in Note 4.
2. The Group obtained control of Landmarc Support Services Limited
(Landmarc) on 16 November 2023, and since that date Landmarc's financial
results have been consolidated as a subsidiary of the Group. Prior to 16
November 2023, Landmarc was accounted for as a joint venture of the Group.
3. Including net impairment losses on trade receivables, accrued income
and other receivables of £1.0m (2024: £2.6m).
Condensed consolidated statement of comprehensive income
For the year ended 31 March 2025
Notes 2025 2024
£m
£m
Profit for the year 108.4 130.9
Items that will not be reclassified to profit or loss in subsequent years
Remeasurement of net retirement benefit pension assets/liabilities 19 13.7 (14.2)
Share of other comprehensive expense of joint ventures - (0.1)
Tax (charge)/credit relating to items that will not be reclassified to profit 5 (4.6) 3.6
or loss in subsequent years
9.1 (10.7)
Items that may be reclassified to profit or loss in subsequent years
Exchange differences on translation of foreign operations (0.7) (0.8)
Tax credit relating to items that may be reclassified to profit or loss in 5 - 0.1
subsequent years
(0.7) (0.7)
Other comprehensive income/(expense) for the year 8.4 (11.4)
Total comprehensive income for the year 116.8 119.5
Attributable to:
Equity holders of the parent 109.6 114.8
Non-controlling interests 7.2 4.7
Total comprehensive income for the year 116.8 119.5
Condensed consolidated statement of financial position
As at 31 March 2025
Notes 2025 2024
£m
£m
Non-current assets
Goodwill 8 397.8 361.7
Other intangible assets 9 266.7 283.4
Property, plant and equipment 246.9 204.7
Interests in associates 1.6 0.9
Trade and other receivables 10 20.5 21.0
Contract assets 1.9 0.5
Retirement benefit assets 19 16.3 4.2
Deferred tax assets 13 - 7.9
Total non-current assets 951.7 884.3
Current assets
Inventories 14.9 14.7
Trade and other receivables 10 967.9 775.1
Contract assets 0.7 1.0
Current tax receivable 4.1 7.8
Cash and cash equivalents 14 180.4 244.9
Total current assets 1,168.0 1,043.5
Total assets 2,119.7 1,927.8
Current liabilities
Trade and other payables 11 (1,012.6) (892.4)
Deferred income (140.9) (91.8)
Current tax payable (3.4) (2.0)
Financing liabilities 15 (52.2) (73.8)
Provisions 12 (37.4) (66.5)
Total current liabilities (1,246.5) (1,126.5)
Net current liabilities (78.5) (83.0)
Non-current liabilities
Trade and other payables 11 (22.2) (12.7)
Deferred income (33.1) (15.5)
Financing liabilities 15 (322.9) (247.7)
Provisions 12 (46.7) (46.7)
Retirement benefit liabilities 19 (2.4) (5.0)
Deferred tax liabilities 13 (17.9) -
Total non-current liabilities (445.2) (327.6)
Total liabilities (1,691.7) (1,454.1)
Net assets 428.0 473.7
2025 2024
£m
£m
Equity
Share capital 31.3 33.3
Share premium 132.0 132.0
Merger reserve 157.0 157.0
Own shares reserve (65.1) (69.8)
Share-based payments reserve 40.4 42.1
Capital redemption reserve 5.3 3.3
Hedging and translation reserve (2.8) (2.1)
Retained profits 112.3 157.4
Equity attributable to owners of the parent 410.4 453.2
Non-controlling interests 17.6 20.5
Total equity 428.0 473.7
Condensed consolidated statement of changes in equity
For the year ended 31 March 2025
Share capital Share premium Merger reserve Own shares reserve Share-based payments reserve Capital redemption reserve Hedging and translation reserve Retained profits/ Equity attributable to owners of parent Non-controlling interests Total
£m
£m
£m
£m
£m
(losses)
£m
equity
£m £m
£m £m
£m
At 1 April 2023 34.0 131.5 157.0 (59.0) 33.7 2.6 (1.4) 123.3 421.7 - 421.7
Profit for the year - - - - - - - 126.3 126.3 4.6 130.9
Other comprehensive (expense)/income - - - - - - (0.7) (10.8) (11.5) 0.1 (11.4)
Total comprehensive (expense)/income - - - - - - (0.7) 115.5 114.8 4.7 119.5
Transactions with owners
Dividends paid - - - - - - - (41.5) (41.5) - (41.5)
Purchase of own shares(1) - - - (19.6) - - - - (19.6) - (19.6)
Share buybacks(2) (0.7) - - (31.8) - 0.7 - (26.6) (58.4) - (58.4)
Share-based payments - 0.5 - 40.6 8.4 - - (24.0) 25.5 - 25.5
Tax on share-based payments - - - - - - - 10.7 10.7 - 10.7
Non-controlling interest arising on acquisition(3) - - - - - - - - - 18.3 18.3
Non-controlling interest dividends - - - - - - - - - (2.5) (2.5)
Total transactions with owners (0.7) 0.5 - (10.8) 8.4 0.7 - (81.4) (83.3) 15.8 (67.5)
At 31 March 2024 33.3 132.0 157.0 (69.8) 42.1 3.3 (2.1) 157.4 453.2 20.5 473.7
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 year - - - - - - - 101.4 101.4 7.0 108.4
Other comprehensive (expense)/income - - - - - - (0.7) 8.9 8.2 0.2 8.4
Total comprehensive (expense)/income - - - - - - (0.7) 110.3 109.6 7.2 116.8
Transactions with owners
Dividends paid - - - - - - - (54.5) (54.5) - (54.5)
Purchase of own shares(1) - - - (14.6) - - - - (14.6) - (14.6)
Share buybacks(2) (2.0) - - (12.2) - 2.0 - (92.5) (104.7) - (104.7)
Share-based payments - - - 31.5 (1.7) - - (11.0) 18.8 - 18.8
Tax on share-based payments - - - - - - - 2.6 2.6 - 2.6
Non-controlling interest dividends - - - - - - - - - (10.1) (10.1)
Total transactions with owners (2.0) - - 4.7 (1.7) 2.0 - (155.4) (152.4) (10.1) (162.5)
At 31 March 2025 31.3 132.0 157.0 (65.1) 40.4 5.3 (2.8) 112.3 410.4 17.6 428.0
Notes:
1. The Employee Benefit Trust acquired 11.7m (2024: 19.1m) ordinary shares
through market purchases for a consideration together with associated fees and
stamp duty of £13.2m (2024: £18.9m) and the Share Incentive Plan Trust
acquired 1.1m (2024: 0.6m) shares for a consideration of £1.4m (2024:
£0.7m).
2. The share buybacks resulted in the purchase of 89.0m ordinary shares
(2024: 58.6m) for a consideration of £92.5m (2024: £26.6m), of which 78.9m
ordinary shares (2024: 26.1m) have subsequently been cancelled. In addition,
10.1m ordinary shares (2024: 32.5m) were bought into treasury for a
consideration of £12.2m (2024: £31.8m).
3. During the year ended 31 March 2024, the Group obtained control of
Landmarc (from 16 November 2023), resulting in recognition of non-controlling
interest of £18.3m.
Condensed consolidated statement of cash flows
For the year ended 31 March 2025
Notes 2025 2024
£m
£m
Operating profit before Other items 3 234.1 210.2
Other items 4 (72.5) (44.5)
Operating profit 161.6 165.7
Adjustments for:
Share-based payments expense 15.5 20.3
Defined benefit pension expense 19 9.4 3.1
Defined benefit pension contributions 19 (10.1) (13.2)
Fair value gain on acquisition of Landmarc 4 - (17.9)
Depreciation of property, plant and equipment 67.9 48.2
Amortisation of other intangible assets 9 38.1 33.0
Share of loss/(profit) of joint ventures and associates 0.1 (6.4)
Amortisation of contract assets 0.4 1.4
Impairment of non-current assets - 0.1
Loss on disposal of other intangible assets 2.4 -
Loss on disposal of property, plant and equipment 0.3 0.1
Operating cash flows before movements in working capital 285.6 234.4
Increase in inventories (0.2) (0.6)
(Increase)/decrease in receivables (168.9) 70.6
Increase in contract assets (1.5) (0.9)
Increase in deferred income 61.9 -
Increase/(decrease) in payables 82.5 (73.5)
Decrease in provisions (10.7) (2.1)
Cash generated from operations 248.7 227.9
Income taxes paid (11.0) (16.9)
Interest paid (17.7) (13.3)
Net cash generated from operating activities 220.0 197.7
Investing activities
Acquisition of businesses, net of cash acquired(1) 18 (49.1) (34.0)
Investment in associates and joint ventures (0.8) -
Interest received 3.0 3.6
Purchase of property, plant and equipment (24.0) (11.5)
Dividends received from joint ventures and associates - 8.4
Purchase of other intangible assets 9 (7.6) (8.4)
Disposal of property, plant and equipment 0.6 0.2
Net cash used in investing activities (77.9) (41.7)
Note:
1. Acquisition of businesses is net of cash acquired of £9.7m (2024:
£53.6m). See Note 18.
Notes 2025 2024
£m
£m
Financing activities
Purchase of own shares(1) (14.6) (19.6)
Shares bought back(2) (104.7) (58.4)
Capital element of lease rentals 16 (56.1) (41.0)
Lease incentives received - 5.7
Proceeds from new private placement notes 15 60.0 -
Repayment of private placement notes 15 (30.0) -
Repayment of bank loans (0.4) (8.4)
Payment of arrangement fees (0.6) (1.2)
Proceeds received on settlement of share-based payment transactions 4.7 8.0
Equity dividends paid 6 (54.5) (41.5)
Dividends paid to non-controlling interest (10.1) (2.5)
Net cash used in financing activities (206.3) (158.9)
Net decrease in cash and cash equivalents (64.2) (2.9)
Net cash and cash equivalents at beginning of the year 244.9 248.3
Effect of foreign exchange rate changes (0.3) (0.5)
Net cash and cash equivalents at end of the year 14 180.4 244.9
Notes:
1. The purchase of own shares includes shares acquired by the Employee
Benefit Trust and the Share Incentive Plan Trust of £13.2m (2024: £18.8m)
and £1.4m (2024: £0.8m) respectively.
2. Shares bought back includes £92.5m (2024: £26.6m) of consideration
for shares bought back and cancelled, and £12.2m (2024: £31.8m) of shares
bought into treasury.
Notes to the condensed consolidated financial statements
For the year ended 31 March 2025
1. Basis of preparation and material accounting policies
(a) Basis of preparation
The financial information in this announcement has been extracted from the
Group's Annual Report and Accounts for the year ended 31 March 2025 and is
prepared in accordance with UK-adopted International Accounting Standards
(IAS).
Whilst the financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting Standards
(IFRS), this announcement does not itself contain sufficient information to
comply with IFRS and the financial information set out does not constitute
Mitie Group plc's (the Company) statutory accounts for the current or prior
years.
Statutory accounts for the years ended 31 March 2025 and 31 March 2024 have
been reported on by the independent auditor.
The independent auditor's reports for the years ended 31 March 2025 and 31
March 2024 were unqualified and did not draw attention to any matters by way
of emphasis. The independent auditor's reports for the years ended 31 March
2025 and 31 March 2024 did not contain a statement under Section 498(2) or
498(3) of the Companies Act 2006. Statutory accounts for the year ended 31
March 2024 have been filed with the Registrar and the statutory accounts for
the year ended 31 March 2025 will be delivered following the Company's annual
general meeting.
The condensed consolidated financial statements have been prepared on the
historical cost basis, except for certain financial instruments which are
required to be measured at fair value.
Going concern
The condensed consolidated financial statements for the year ended 31 March
2025 have been prepared on a going concern basis. In adopting the going
concern basis, Directors have considered the Group's business activities and
the principal risks and uncertainties.
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 31 March 2025 were a
£250m revolving credit facility maturing in October 2028, which was undrawn
as at 31 March 2025, and £180m of US private placement (USPP) notes. These
financing arrangements are subject to certain financial covenants which are
tested every six months on a rolling 12-month basis.
In September 2023, the revolving credit facility was amended from £150m to
£250m and its maturity date was extended by one year to October 2027, on the
same terms, with an option to extend for a further one-year period. This
option was exercised in October 2024, such that the facility now matures in
October 2028.
Of the USPP notes, £120m were issued in December 2022, were split equally
between 8, 10 and 12-year maturities, and were issued with an average coupon
of 2.94%. The remaining £30m of USPP notes, which matured in December 2024,
were replaced with £60m of new USPP notes drawn from the new shelf facility
at a coupon rate of 5.71% and mature in December 2031. The remaining undrawn
capacity of this uncommitted USPP shelf facility was c.£270m at 31 March
2025, which can be drawn down until October 2027.
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 £9.6m as at 31 March
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 and 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
• 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 34% in the 12 months to 31 March 2026 compared to the Base Case
Forecasts, which is considered to be very severe given the high proportion of
the Group'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%
• 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.
Accounting standards that are newly effective in the current year
The following new standards and amendments became effective during the year
ended 31 March 2025, none of which have had a material impact on the Group:
• Amendments to IFRS 16 - Leases - Lease Liability in a Sale-and-Leaseback
• Amendments to IAS 1 - Presentation of Financial Statements - Classification of
Liabilities as Current or Non-current
• Amendments to IAS 7 - Statement of Cash Flows and IFRS 7 Financial Instruments
- Supplier Finance Arrangements
Accounting standards that are not yet mandatory and have not been applied by
the Group
At the date of authorisation of these condensed consolidated financial
statements, the Group has not applied the following revised standards that
have been issued but are not yet effective, none of which are expected to have
a material effect on the Group other than presentational changes required
under IFRS 18 - Presentation and Disclosure in Financial Statements, the
impact of which is still being assessed:
• Amendments to IAS 21 - The Effects of Changes in Foreign Exchange Rates - Lack
of Exchangeability
• Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and
Measurement of Financial Instruments
• Amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent
Electricity
• IFRS 18 - Presentation and Disclosure in Financial Statements
• IFRS 19 - Subsidiaries without Public Accountability: Disclosures
2. Critical accounting judgements and sources of estimation uncertainty
The preparation of condensed consolidated financial statements under IFRS
requires management to make judgements, estimates and assumptions that affect
amounts recognised for assets and liabilities at the reporting date and the
amounts of revenue and expenses incurred during the reporting period. Actual
results may differ from these judgements, estimates and assumptions.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, made by management in the process
of applying the Group's accounting policies, that have the most significant
effect on the amounts recognised in the Group's condensed consolidated
financial statements.
Revenue recognition
The Group's revenue recognition policies are central to how the Group measures
the work it has performed in each financial year.
Some of the Group's contracts, including PFI contracts, contain variable
consideration where management assesses the extent to which revenue is
recognised. For certain contracts, key judgements were made on whether it is
considered highly probable that a significant reversal of revenue will not
occur when the associated uncertainty with the variable consideration is
subsequently resolved.
Profit before Other items
Other items are items of financial performance which management believes
should be separately identified on the face of the consolidated income
statement to assist in understanding the underlying financial performance
achieved by the Group. Determining whether an item should be classified within
Other items requires judgement as to whether an item is or is not part of the
underlying performance of the Group.
Other items after tax of £57.9m were charged (2024: £32.0m) to the condensed
consolidated income statement for the year ended 31 March 2025. A complete
analysis of the amounts included in Other items is detailed in Note 4.
Landmarc joint venture
The Group holds 51% of the equity shares in Landmarc Support Services Limited
(Landmarc). The remaining 49% of the equity shares in Landmarc are held by a
single third party. Until 16 November 2023, when the shareholders' agreement
was amended, the Group did not control Landmarc and therefore did not
recognise it as a subsidiary. Management's judgement is that the revisions
made to the shareholders' agreement resulted in the Group obtaining control of
Landmarc, and therefore Landmarc has been consolidated as a subsidiary of the
Group from that date.
Significant sources of estimation uncertainty
The significant accounting estimates that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below:
Contract-specific cost provisions
The Company and various of its subsidiaries are, from time to time, party to
legal proceedings and claims. Judgements are required in order to assess
whether these legal proceedings and claims are probable, and the liability can
be reasonably estimated, resulting in a provision or, alternatively, whether
the items meet the definition of contingent liabilities.
Provisions are liabilities of uncertain timing or amount and, therefore, in
making a reliable estimate of the quantum and timing of liabilities, judgement
is applied and re-evaluated at each reporting date. Those subject to
estimation uncertainty relate to contract-specific costs, for which the Group
recognised provisions at 31 March 2025 of £33.0m (2024: £40.4m).
Within this total, £10.8m (2024: £10.9m) has significant estimation
uncertainty and relates to a certain contract where a liability has been
estimated in relation to a commercial dispute. Management sought external
assistance at the time of the acquisition of Interserve to value the potential
risk exposure to the Group and has periodically updated this assessment,
including a revised cost estimation for the current period. The actual
exposure to the Group may differ from the amount provided at 31 March 2025 due
to the compounding effect of multiple variables associated with the particular
issues involved in the dispute. The value of the provision represents
management's best estimate. Management considers that, to the extent that it
is agreed or determined that the Group has a liability, the assessed range of
possible future outcomes could potentially lead to a reduction in the
provision of up to £6m or a further increase of up to £9m being recognised,
and other possible outcomes could increase the liability further. Management
will continue to assess the value of the provision recorded in arriving at its
best estimate of any potential resolution at each subsequent reporting date.
Provisions in relation to certain contracts are also subject to negotiation
with the customers.
Measurement of defined benefit pension obligations
At 31 March 2025, retirement benefit assets of £16.3m (2024: £4.2m) and
retirement benefit liabilities of £2.4m (2024: £5.0m) were recognised. The
measurement of defined benefit obligations requires judgement. It is dependent
on material key assumptions, including discount rates, inflation and life
expectancy rates. See Note 19 for further details and a sensitivity analysis
for the key assumptions.
Other sources of estimation uncertainty
Onerous contract provisions
The recognition of onerous contract provisions is an area of focus for
management which, while not considered to be a significant source of
estimation uncertainty as per the requirements of IAS 1 - Presentation of
Financial Statements, is based on assumptions that are subject to longer-term
uncertainties.
Onerous contract provisions totalling £10.0m have been recognised at 31 March
2025 (2024: £8.8m). These primarily arose on the acquisition of Interserve.
Onerous contract assessments are performed by the Group at an individual
contract level at each reporting date. Determining the carrying value of
onerous contract provisions requires assumptions and judgements to be made
about the future performance of the Group's contracts. The level of
uncertainty in the estimates made, either in determining whether a provision
is required, or in the measurement of a provision booked, is linked to the
complexity of the underlying contracts.
The sources of judgement when measuring the level of provision to book are:
• The level of accuracy in forecasting future variable revenue and costs to
complete the contract
• The ability of the Group to maintain or improve operational performance to
ensure cost assumptions are in line with expected levels, including
contract-specific key performance indicators (KPIs)
• Identifying cost-saving initiatives that are considered to be probable in
terms of timing and scale
• Expectations around the resolution of contract-specific disputes and the
likelihood of incurring future costs associated with remediation or reactive
work
Management regularly compares actual contract performance against previous
forecasts used to measure the onerous contract provisions and considers if
revised judgements are required.
3. 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 (CODM) in deciding how to allocate resources and in assessing
performance. The Group has determined the CODM to be its Board of Directors.
The Group manages its business on a service division basis. During the period,
the Group re-organised its Central Government and Defence (CG&D) division,
where the Central Government business was moved into the Business Services
division, and the Defence business was moved into the Technical Services
division. As a result of the re-organisation, CG&D is not considered to be
an operating segment for the 12 months ended 31 March 2025, and the Group has
three reportable segments (2024: four segments). Furthermore, the Police
Services business has been re-organised from the Communities division to the
Business Services division. The change in operating segments reflects how the
CODM evaluates the divisions and their performance and decides on resource
allocation.
The comparatives for the year ended 31 March 2024 have been restated for the
change in the composition of reportable segments.
Revenue including share of joint ventures and associates, 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 year
ended 31 March 2025 or in the comparative year. The UK Government is not
considered to be a single customer.
Consolidated income statement information
2025 2024 (restated)(1)
Revenue(2) Operating profit/(loss) before Operating margin before Other items(3) Revenue(2) Operating profit/(loss) before Operating margin before Other items(3)
£m
Other items(3)
%
£m
Other items(3)
%
£m
£m
Business Services 2,244.0 163.0 7.3 1,977.2 149.8 7.6
Technical Services 1,977.4 79.0 4.0 1,816.9 74.9 4.1
Communities 869.8 47.5 5.5 716.6 36.1 5.0
Corporate Centre - (55.4) - - (50.6) -
Total Group 5,091.2 234.1 4.6 4,510.7 210.2 4.7
Notes:
1. The comparatives for the year ended 31 March 2024 have been restated
for the change in the composition of reportable segments.
2. Revenue includes share of associates of £8.6m (2024: £10.0m) within
Communities. For Technical Services, revenue for the year ended 31 March 2024
includes the share of revenue from the Landmarc joint venture of £55.5m. From
16 November 2023, Landmarc has been consolidated as a subsidiary of the Group.
3. Other items are as described in Note 4.
A reconciliation of segment operating profit before Other items to total
profit before tax is provided below:
2025 2024
£m
£m
Operating profit before Other items 234.1 210.2
Other items(1) (72.5) (44.5)
Net finance costs (16.2) (9.4)
Profit before tax 145.4 156.3
Note:
1. Other items are as described in Note 4.
Geographical segments
Revenue, operating profit and operating margin from external customers by
geographical segment are shown below:
2025 2024
Revenue(1) Operating Operating margin before Other items(2) Revenue(1) Operating Operating margin before Other items(2)
£m
profit before
%
£m
profit before Other items(2)
%
Other items(2)
£m
£m
United Kingdom 4,860.7 221.1 4.5 4,336.9 200.1 4.6
Other countries 230.5 13.0 5.6 173.8 10.1 5.8
Total 5,091.2 234.1 4.6 4,510.7 210.2 4.7
Notes:
1. Revenue for the year ended 31 March 2025 includes share of associates
of £8.6m (2024: £10.0m). For the year ended 31 March 2024 revenue includes
the share of revenue from the Landmarc joint venture of £55.5m. From 16
November 2023, Landmarc has been consolidated as a subsidiary of the Group.
2. Other items are as described in Note 4.
The carrying amount of non-current assets, excluding financial instruments,
retirement benefits, interest in associates and deferred tax assets, by
geographical segment is shown below:
2025 2024(1)
£m
£m
United Kingdom 879.0 825.3
Other countries 34.3 25.0
Total 913.3 850.3
Note:
1. The comparatives for the year ended 31 March 2024 have been restated
to exclude £21.0m of non-current financial instruments.
Supplementary information
2025 2024 (restated)(1)
Depreciation of property, plant and equipment £m Amortisation of other intangible assets Amortisation of contract assets Depreciation of property, plant and equipment Amortisation of other intangible assets Amortisation of contract assets
£m
£m
£m
£m £m
Business Services 7.3 0.1 0.3 4.9 0.1 0.2
Technical Services 3.1 0.3 - 2.3 0.2 0.4
Communities 1.0 - 0.1 1.2 - 0.8
Corporate Centre 56.5 37.7 - 39.8 32.7 -
Total 67.9 38.1 0.4 48.2 33.0 1.4
Note:
1. The comparatives for the year ended 31 March 2024 have been restated
for the change in the composition of reportable segments.
Disaggregated revenue
The Group disaggregates revenue from contracts with customers by sector
(government and non-government). Management believes that 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.
2025 2024 (restated)(1)
Sector(2) Sector(2)
Government Non-government Total Government Non-government Total
£m
£m
£m
£m
£m
£m
Business Services 935.5 1,308.5 2,244.0 905.6 1,071.6 1,977.2
Technical Services 846.2 1,131.2 1,977.4 765.1 1,051.8 1,816.9
Communities 867.9 1.9 869.8 714.7 1.9 716.6
Total Group including joint ventures and associates 2,649.6 2,441.6 5,091.2 2,385.4 2,125.3 4,510.7
Less: Joint ventures and associates(3) (8.6) - (8.6) (65.5) - (65.5)
Total Group excluding joint ventures and associates 2,641.0 2,441.6 5,082.6 2,319.9 2,125.3 4,445.2
Notes:
1. The comparatives for the year ended 31 March 2024 have been restated
for the change in the 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. Revenue includes share of associates of £8.6m (2024: £10.0m) within
Communities. For Technical Services, revenue for the year ended 31 March 2024
includes the share of revenue from the Landmarc joint venture of £55.5m. From
16 November 2023, Landmarc has been consolidated as a subsidiary of the Group.
Transaction price allocation to the remaining performance obligations
The table below shows the secured forward order book for each segment at the
reporting date with the time bands of when the Group expects to recognise
secured revenue on its contracts with customers. Secured revenue corresponds
to all fixed work contracted with customers and excludes the impact of
anticipated variable works.
2025 2024 (restated)(1)
Less than 1 year More than 1 year Total secured revenue Less than 1 year More than 1 year Total secured revenue
£m
£m
£m
£m
£m
£m
Business Services 1,003.3 4,233.9 5,237.2 1,008.0 1,638.3 2,646.3
Technical Services(2) 787.6 1,949.9 2,737.5 745.4 1,889.9 2,635.3
Communities(2) 579.8 3,347.2 3,927.0 466.2 2,753.4 3,219.6
Total Group 2,370.7 9,531.0 11,901.7 2,219.6 6,281.6 8,501.2
Notes:
1. The comparatives for the year ended 31 March 2024 have been restated
for the change in the composition of reportable segments.
2. Forward order book includes share of joint ventures and associates.
4. Other items
Other items are items of financial performance which management believes
should be separately identified on the face of the consolidated income
statement to assist in understanding the underlying financial performance
achieved by the Group.
The Group separately reports acquisition- and disposal-related costs which
includes amortisation of acquisition-related intangible assets and charges
with respect to employment-linked earnouts, cost of restructuring programmes,
impairment of goodwill and acquired intangible assets, gain or loss on
business disposals, charges arising on exit of pension schemes and other
exceptional items as Other items, together with their related tax effect.
2025
Restructure costs Acquisition- Other exceptional items Total
£m
and disposal-related costs
£m
£m
£m
Other items before tax (16.6) (43.1) (12.8) (72.5)
Tax 4.1 7.6 2.9 14.6
Other items after tax (12.5) (35.5) (9.9) (57.9)
2024
Fair value gain on acquisition of Landmarc(1) Restructure costs Acquisition- Other exceptional items Total
£m
£m
and disposal-related costs
£m
£m
£m
Other items before tax 17.9 (20.4) (38.3) (3.7) (44.5)
Tax - 5.1 6.5 0.9 12.5
Other items after tax 17.9 (15.3) (31.8) (2.8) (32.0)
Note:
1. During the year ended 31 March 2024, the Group obtained
control of Landmarc and fair valued its investment in the joint venture as at
16 November 2023. This resulted in a fair value gain of £17.9m as at the
acquisition date.
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 £16.6m (2024: £20.4m) are in respect of the Target
Operating Model (TOM) transformation programme, and includes the further
outsourcing of back-office functions, consolidating systems and processes, and
optimising the organisation structure. Since its launch in the year ended 31
March 2022, cumulative costs of £45.2m have been recognised within the
consolidated income statement and classified as Other items, of which £43.0m
were cash costs. The programme is expected to complete by 31 March 2026.
The costs associated with the Group transformation programme include
fixed-term staff costs of £5.5m (2024: £7.1m) to manage and implement
changes, redundancy costs of £4.7m (2024: £4.5m), £3.7m of external
consultancy costs (2024: £5.7m), loss on disposal of software of £2.2m
(2024: £nil) and dual-run licence costs in relation to decommissioned
operating systems of £0.5m (2024: £2.6m). For the year ended 31 March 2024
certain property exit costs of £0.5m were also incurred. The associated tax
credit for restructure costs recognised as Other items is £4.1m (2024:
£5.1m).
Acquisition- and disposal-related costs
2025 2024
£m
£m
Amortisation of acquisition-related intangible assets (29.6) (24.8)
Employment-linked earnout charges(1) (8.6) (9.5)
Transaction costs(2) (4.3) (2.9)
Other acquisition-related costs (0.6) (1.1)
Acquisition and disposal costs (43.1) (38.3)
Tax 7.6 6.5
Acquisition and disposal costs net of tax (35.5) (31.8)
Notes:
1. Comprises amounts payable to former owners of acquired
businesses where a condition of receiving the payment is the continued
employment by the Group of the individual receiving the payment. These
payments are accrued over the period that the related employment services are
received up until the point at which the consideration becomes payable.
2. Comprises professional fees of £3.6m (2024: £3.1m) and
integration costs of £0.7m (2024: £0.4m). In the year ended 31 March 2024,
this was offset by professional fee accrual releases of £0.6m for completed
acquisitions where no further costs were expected.
Other exceptional items
2025 2024
£m
£m
Digital supplier platform(1) (3.4) (3.7)
Pension-related costs(2) (9.4) -
Other exceptional items (12.8) (3.7)
Tax 2.9 0.9
Other exceptional items net of tax (9.9) (2.8)
Notes:
1. 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 £2.3m
(2024: £2.8m) and third-party implementation costs of £1.1m (2024: £0.9m).
This implementation, which is transformational in nature, is expected to be
completed during the year ending 31 March 2026. Cumulative cash costs of
£14.9m have been recognised within the consolidated income statement and
classified as Other items since its launch in 2022.
2. Includes a £2.8m charge where the Group entered into a
settlement agreement with the trustees of the Plumbing Scheme with respect to
its Section 75 debt in relation to the previously disposed Social Housing
business. In addition, a £5.3m contract settlement charge has been recognised
to reverse the gross surplus on certain Local Government Pension Schemes
(LGPS), 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 £1.1m past service cost charge and a related £0.2m
of administrative expense arising on changes to the Landmarc pension scheme
rules that increase member benefits for pre-acquisition services. See Note 19.
5. Tax
Total Group 2025 2024
£m
£m
Current tax 20.4 22.1
Deferred tax (Note 13) 16.6 3.3
Tax charge for the year 37.0 25.4
Corporation tax is calculated at 25% (2024: 25%) of the estimated taxable
profit for the year. A reconciliation of the tax charge to the elements of
profit before tax per the consolidated income statement is as follows:
Total Group 2025 2024
Before Other items(1) Total Before Other items(1) Total
Other items
£m
£m
Other items
£m
£m
£m
£m
Profit/(loss) before tax 217.9 (72.5) 145.4 200.8 (44.5) 156.3
Tax at UK rate of 25% (2024: 25%) 54.5 (18.1) 36.4 50.2 (11.1) 39.1
Reconciling tax charges for:
Non-deductible/(taxable) items 0.5 3.5 4.0 (1.0) (1.1) (2.1)
Impact of equity accounted investments - - - (1.6) - (1.6)
Credit for losses not previously recognised - - - (8.8) - (8.8)
Overseas tax rates (1.0) - (1.0) (1.3) - (1.3)
Adjustments in respect of prior years (2.4) - (2.4) 0.4 (0.3) 0.1
Tax charge/(credit) for the year 51.6 (14.6) 37.0 37.9 (12.5) 25.4
Effective tax rate for the year 23.7% 20.1% 25.4% 18.9% 28.1% 16.3%
Note:
1. Other items are as described in Note 4.
The tax charge during the year ended 31 March 2025, consists of charges with
respect to current tax and deferred tax of £20.4m and £16.6m respectively.
The current tax element of the Group's total tax charge of 14.0% is lower than
the UK headline rate of 25% primarily due to the utilisation of brought
forward tax losses against current year profits. The utilisation of tax losses
generates a deferred tax rather than a current tax charge.
Certain expenditure is not deductible for tax purposes as set out in tax
legislation. The main categories of non-deductible expenditure are certain
acquisition-related costs, such as employment-linked earnout charges and
professional fees that are classified as capital in nature for tax purposes.
Profits from joint ventures and associates are included in the condensed
consolidated financial statements on an after-tax basis.
Deferred tax is provided on items where the timing of tax relief differs from
when the amounts are included in the financial statements such as tax
depreciation, retirement benefit assets/liabilities, share options and
short-term timing differences.
The Group does not have any material uncertain tax positions.
In addition to the amounts charged to the condensed consolidated income
statement: (i) a £1.2m charge for current tax (2024: £3.6m credit) and a
£3.4m charge for deferred tax (2024: £nil) relating to remeasurements of
retirement benefit assets/liabilities has been recognised within the condensed
consolidated statement of comprehensive income; (ii) no deferred tax relating
to hedged items has been recognised within the condensed consolidated
statement of comprehensive income (2024: £0.1m); and (iii) a £4.7m credit
for current tax (2024: £7.3m) and a £2.1m charge for deferred tax (2024:
£3.4m credit) relating to share options have been recognised directly within
equity.
Impact of Pillar Two legislation
Pillar Two legislation has been enacted or substantively enacted in
jurisdictions in which the Group operates. The legislation is effective for
the Group's financial year beginning 1 April 2024. The Group is in scope of
the enacted or substantively enacted legislation and has performed an
assessment of the Group's potential exposure to Pillar Two income taxes.
The assessment of the potential exposure to Pillar Two income taxes is based
on the most recent tax filings, country-by-country reporting and financial
statements for the constituent entities in the Group. Based on the assessment,
the Pillar Two effective tax rates in most of the jurisdictions in which the
Group operates are above 15%. However, there are a limited number of
jurisdictions where the transitional safe harbour relief does not apply and
the Pillar Two effective tax rate is close to 15%. A charge of £0.2m (2024:
not applicable) as a result of the Pillar Two income taxes has been included
in the overall tax charge for the year.
Tax strategy
The Group's tax strategy is published on its website and has been adhered to
during the year (www.mitie.com
(https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.mitie.com%2F&data=05%7C02%7CTim.Moult%40mitie.com%7C33732ace2a784adb721108dd96ba06f6%7C9e66e0b4768c4506a1b67e44c80595f2%7C0%7C0%7C638832447897392421%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=DOGez4x%2BdYC7Na%2BLjHVnc9ZcsdbxU%2Bo6IsR8OwqWLGM%3D&reserved=0)
).
6. Dividends
2025 2025 2024 2024
Pence
£m
Pence
£m
per share
per share
Amounts recognised as distributions in the year:
Final dividend for the prior year 3.0 38.5 2.2 28.6
Interim dividend for the current year 1.3 16.0 1.0 12.9
4.3 54.5 3.2 41.5
Proposed final dividend for the year ended 31 March 3.0 36.7 3.0 38.6
Dividends are recognised as distributions in the year in which they are paid.
Subject to approval at the Annual General Meeting on 22 July 2025, the final
dividend for the year ended 31 March 2025 will be paid on 4 August 2025 to
holders on the register on 20 June 2025. The ordinary shares will be quoted
ex-dividend on 19 June 2025.
7. Earnings per share
The calculation of the basic and diluted earnings per share (EPS) is based on
the following data:
2025 2024
£m £m
Net profit before Other items attributable to owners of the parent 157.6 157.8
Other items net of tax attributable to owners of the parent(1) (56.2) (31.5)
Net profit attributable to owners of the parent 101.4 126.3
Note:
1. Other items are as described in Note 4.
Number of shares 2025 2024
million
million
Weighted average number of ordinary shares for the purpose of basic EPS(1) 1,237.7 1,282.9
Effect of dilutive potential ordinary shares(2) 101.5 108.9
Weighted average number of ordinary shares for the purpose of diluted EPS(1,2) 1,339.2 1,391.8
Notes:
1. The weighted average number of ordinary shares in issue during the
year excludes those accounted for in the Own shares reserve.
2. The dilutive potential ordinary shares relate to instruments that
could potentially dilute basic earnings per share in the future, such as
share-based payments. The diluted earnings per share uses the weighted average
number of shares adjusted for potentially dilutive ordinary shares, unless it
has the effect of increasing the earnings per share.
2025 2024
Pence Pence per
per share share
Basic earnings before Other items(1) 12.7 12.3
Basic earnings 8.2 9.8
Diluted earnings before Other items(1) 11.8 11.3
Diluted earnings 7.6 9.1
Note:
1. Other items are as described in Note 4.
8. Goodwill
£m
Cost
At 1 April 2023 344.8
Arising on business combinations 49.4
At 31 March 2024 394.2
Arising on business combinations(1) 36.1
At 31 March 2025 430.3
Accumulated impairment losses
At 1 April 2023, 31 March 2024 and 31 March 2025 32.5
Net book value
At 31 March 2025 397.8
At 31 March 2024 361.7
Note:
1. See Note 18 for details of the current year acquisitions.
Goodwill impairment testing
Goodwill acquired in a business combination is allocated, at acquisition, to
the cash-generating units (CGUs) that are expected to benefit from that
business combination. The Group tests goodwill at least annually for
impairment or more frequently if there are indicators that goodwill may be
impaired.
The Group has reorganised its business in the year ended 31 March 2025, and
the determination of CGUs has been updated accordingly to meet the criteria
included in IAS 36 - Impairment of Assets. Business Services, Technical
Services, Communities and Spain have been determined to be the relevant CGUs
for the year ended 31 March 2025. The information presented for the year ended
31 March 2024 has been re-presented to reflect these changes, and, as a
result, the £7.4m of goodwill previously allocated to the Central Government
& Defence CGU has been reallocated on a relative value approach.
A summary of the goodwill balances and the discount rates used to assess the
forecast cash flows from each CGU are as follows:
2025 2024
Pre-tax discount rate Goodwill
%
(restated)(1)
Goodwill
£m
£m
Business Services 9.5 167.5 139.1
Technical Services 9.5 144.1 139.4
Communities 9.5 81.0 81.0
Spain 10.2 5.2 2.2
Total 397.8 361.7
Note:
1. The 2024 goodwill allocation by CGU has been restated to reflect the
changes in the year to the way in which the Group monitors CGUs for goodwill
impairment purposes.
At 31 March 2024 and under the previous organisational structure, the goodwill
was allocated as follows:
2024
Goodwill
(as presented)
Pre-tax
£m
discount rate
%
Business Services 10.6 138.1
Technical Services 10.6 133.0
Communities 10.7 81.0
Central Government & Defence 10.7 7.4
Spain 11.0 2.2
Total 361.7
Key assumptions
The recoverable amounts for each CGU are based on value-in-use, which is
derived from discounted cash flow calculations. The key assumptions applied in
value-in-use calculations are those regarding forecast operating profits,
growth rates and discount rates.
Forecast operating profits
For all CGUs, the Group prepared cash flow projections derived from the most
recent forecasts for the year ending 31 March 2026 and the Group's strategic
plan to 31 March 2030. Forecast revenue and direct costs are based on past
performance and expectations of future changes in the market, operating model
and cost base including the impact of inflation.
Growth rates and terminal values
Medium-term revenue growth rates applied to the value-in-use calculations of
each CGU reflect management's strategy for a period of five years. Terminal
values were determined using a long-term growth assumption of 2.0% (2024:
2.0%).
Discount rates
The pre-tax discount rates used to assess the forecast cash flows from CGUs
are derived from the Group's post-tax weighted average cost of capital, which
was 7.1% as at the time of the Group's annual impairment review (2024: 7.9%).
These rates are reviewed annually by external advisors and adjusted for the
risks specific to the business being assessed and the market in which the CGU
operates. All CGUs have the same access to the Group's treasury functions and
borrowing lines to fund their operations.
Sensitivity analysis
A sensitivity analysis has been performed and management has concluded that no
reasonably foreseeable change in the key assumptions would result in an
impairment of the goodwill of any of the Group's CGUs.
9. Other intangible assets
Acquisition-related Total Software and development expenditure Total
acquisition-related
£m
£m
£m
Customer contracts and relationships Other
£m
£m
Cost or valuation
At 1 April 2023 338.2 10.9 349.1 90.8 439.9
Additions - - - 8.4 8.4
Arising on business combinations 53.7 1.2 54.9 0.6 55.5
Disposals (82.9) (9.8) (92.7) (0.1) (92.8)
At 31 March 2024 309.0 2.3 311.3 99.7 411.0
Additions(1) - - - 8.9 8.9
Arising on business combinations 14.7 0.2 14.9 - 14.9
Disposals - (1.2) (1.2) (30.7) (31.9)
At 31 March 2025 323.7 1.3 325.0 77.9 402.9
Amortisation and impairment
At 1 April 2023 135.2 10.8 146.0 41.3 187.3
Charge for the year 24.6 0.2 24.8 8.2 33.0
Disposals (82.9) (9.8) (92.7) (0.1) (92.8)
Impairments - - - 0.1 0.1
At 31 March 2024 76.9 1.2 78.1 49.5 127.6
Charge for the year 29.2 0.4 29.6 8.5 38.1
Disposals - (1.0) (1.0) (28.5) (29.5)
At 31 March 2025 106.1 0.6 106.7 29.5 136.2
Net book value
At 31 March 2025 217.6 0.7 218.3 48.4 266.7
At 31 March 2024 232.1 1.1 233.2 50.2 283.4
Note:
1. Additions includes cash payments of £7.6m (2024: £8.4m) and related
accruals of £1.3m (2024: £nil).
Customer contracts and relationships are amortised over their useful lives
based on the period of time over which they are anticipated to generate
benefits, with an average remaining useful life of eight years (2024: eight
years). Other acquisition-related intangibles include brands and acquired
software and technology which are amortised over their useful lives, with an
average remaining useful life of three years.
Following a review of the carrying amount of intangible assets, no impairments
have been recorded in the year ended 31 March 2025 (2024: £0.1m).
10. Trade and other receivables
2025 2024
£m
£m
Trade receivables 538.3 411.5
Accrued income 339.3 302.7
Prepayments 59.5 50.5
Other receivables 51.3 31.4
Total 988.4 796.1
Included in current assets 967.9 775.1
Included in non-current assets 20.5 21.0
Total 988.4 796.1
Trade receivables at 31 March 2025 represent 30 days credit on sales (2024: 25
days).
Management considers that the carrying amount of trade and other receivables
approximates their fair value.
11. Trade and other payables
2025 2024
£m
£m
Trade payables 205.0 171.6
Other taxes and social security 202.1 156.1
Other payables 70.5 42.9
Accruals 557.2 534.5
Total 1,034.8 905.1
Included in current liabilities 1,012.6 892.4
Included in non-current liabilities 22.2 12.7
Total 1,034.8 905.1
Trade payables at 31 March 2025 represent 25 days credit on trade purchases
(2024: 22 days).
Management considers that the carrying amount of trade and other payables
approximates their fair value.
12. Provisions
Contract- specific costs Insurance reserve Pension Dilapidations Restructuring Other Total
£m
£m
£m
£m
£m
£m
£m
At 1 April 2024 49.2 27.2 21.7 8.2 2.4 4.5 113.2
Additional provisions 11.6 11.3 - 3.2 0.5 0.6 27.2
Released to the consolidated income statement (6.7) (0.8) - (1.2) - (0.4) (9.1)
Arising on business combinations 0.1 1.3 - 0.4 - - 1.8
Transferred to other payables - - (21.7) - - - (21.7)
Utilised (11.2) (11.7) - (0.2) (2.6) (1.6) (27.3)
At 31 March 2025 43.0 27.3 - 10.4 0.3 3.1 84.1
Included in current liabilities 23.3 9.7 - 1.3 0.3 2.8 37.4
Included in non-current liabilities 19.7 17.6 - 9.1 - 0.3 46.7
Total 43.0 27.3 - 10.4 0.3 3.1 84.1
Contract-specific costs
Contract-specific costs provisions of £43.0m (2024: £49.2m) comprise onerous
contract provisions of £10.0m (2024: £8.8m) and other contract-specific
provisions of £33.0m (2024: £40.4m).
Onerous contracts are mainly in respect of certain long-term Private Finance
Initiative contracts. Due to the long-term nature of these contracts, it is
expected that these provisions will be utilised over a weighted average period
of 11 years. The Group recognised additional provisions of £4.7m (of which
£0.1m arose on business combinations), released £0.7m and utilised £2.8m in
the year with respect to onerous contract provisions.
Contract-specific provisions have been recognised primarily to cover remedial
and rectification costs required to meet clients' contract terms, and include
a £10.8m (2024: £10.9m) provision relating to a liability risk on a certain
contract which is subject to dispute (see Note 2), £5.3m (2024: £6.3m) for
rectification works on a certain contract and a £4.7m (2024: £3.8m)
provision relating to a commercial settlement dispute for 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 eight years. The remaining
provisions relate to other potential commercial claims and rectification work
for other contracts. The Group recognised additional provisions of £7.0m,
released £6.0m and utilised £8.4m in the year with respect to other
contract-specific costs provisions.
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 consolidated statement of financial position date using
advice from third-party actuarial experts. The provision is expected to be
utilised over five years.
The insurance reserve of £27.3m is presented gross of an insurer
reimbursement asset of £4.2m (2024: £4.9m), which represents the amount the
Group is virtually certain to recover for claims under its insurance policies.
Of this other receivable, £2.7m (2024: £3.2m) is presented as non-current.
Pension
The pension provision balance at 31 March 2024 comprised £21.7m for Section
75 employer debt liabilities of Robert Prettie & Co Limited and Mitie FM
Limited as a result of their participation in the Plumbing & Mechanical
Services (UK) Industry Pension Scheme (the Plumbing Scheme), a funded
multi-employer defined benefit scheme. During the period, a settlement
agreement was reached with the trustees of the Plumbing Scheme. As a result of
this, the amount of £21.7m has been transferred from provisions to other
payables, and a further charge of £2.8m has been recognised as Other items in
respect of Mitie Property Services (UK) Limited's participation in the
Plumbing Scheme. These amounts are expected to be paid over a period of three
years.
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 in the next 10 years.
Restructuring
The restructuring provision as at 31 March 2025 is related to redundancies as
part of the Group's Target Operating Model programme. The amount is expected
to be utilised within the next year.
13. Deferred tax
The following are the major deferred tax assets and liabilities recognised by
the Group and movements thereon:
Assets/(liabilities) Losses Accelerated capital allowances Retirement benefit liabilities Intangible assets acquired Share options Short-term timing differences Total(1)
£m
£m
£m
£m
£m
£m
£m
At 1 April 2023 39.6 9.6 0.5 (50.7) 12.0 9.4 20.4
Arising on business combinations 1.1 - - (13.7) - - (12.6)
(Charge)/credit to condensed consolidated income statement (9.9) (2.0) 0.7 6.2 1.2 0.5 (3.3)
Credit to equity and other comprehensive income - - - - 3.4 - 3.4
At 31 March 2024 30.8 7.6 1.2 (58.2) 16.6 9.9 7.9
Arising on business combinations 0.1 (0.1) - (3.7) - - (3.7)
(Charge)/credit to condensed consolidated income statement (16.8) (4.6) (1.3) 7.3 (0.4) (0.8) (16.6)
Charge to equity and other comprehensive income - - (3.4) - (2.1) - (5.5)
At 31 March 2025 14.1 2.9 (3.5) (54.6) 14.1 9.1 (17.9)
Note:
1. Deferred tax liabilities of £58.1m are offset against
deferred tax assets of £40.2m (2024: Deferred tax assets of £66.1m were
offset against deferred tax liabilities of £58.2m) as they relate to income
taxes levied by the same tax authority, and the Group has the right to and
intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets have been recognised in respect of all temporary
differences where it is probable that these assets will be recovered.
The majority of the Group's deferred tax assets and liabilities are expected
to be recovered over more than one year.
The Group has unutilised income tax losses of £88.7m (2024: £151.4m) that
are available for offset against future profits. A deferred tax asset has been
recognised in respect of £56.5m (2024: £123.2m) 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. See
Note 1 for more information on these forecasts and the methodology applied.
No deferred tax asset has been recognised in respect of losses of £17.0m
(2024: £13.0m), and disallowed interest under UK corporate interest
restriction rules of £15.2m (2024: £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
consolidated statement of financial position date.
14. Cash and cash equivalents
2025 2024
£m
£m
Cash and cash equivalents 180.4 244.9
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.
As at 31 March 2025, included within cash and cash equivalents is £4.3m
(2024: £4.2m) which is subject to constraints on the Group's ability to
utilise these balances. These constraints relate to cash held through a joint
operation, where cash is not available for use by the Group.
15. Financing liabilities
2025 2024
£m
£m
Private placement notes 180.0 150.0
Lease liabilities (Note 16) 197.5 174.0
Loan arrangement fees (2.4) (2.5)
Total 375.1 321.5
Included in current liabilities 52.2 73.8
Included in non-current liabilities 322.9 247.7
Total 375.1 321.5
In September 2023, the Group increased its revolving credit facility (RCF)
from £150m to £250m, and the maturity date was extended by one year from
October 2026 to October 2027, with an option to extend for a further one-year
period. This extension was exercised in October 2024 such that the facility
now matures in October 2028. All other terms remain unchanged and the facility
was undrawn at the time of the modification. During the year ended 31 March
2025, the RCF was utilised for short-term borrowings, with the average
borrowing amounting to £22.6m over an average period of 10 days. Amounts
drawn down during the year accumulated to £812m (2024: £8m) with equal
amounts repaid (2024: £8m). There were no amounts outstanding at 31 March
2025 (2024: £nil).
In December 2022, the Group issued £120.0m of new US private placement (USPP)
notes, under a delayed funding agreement to avoid any overlap with the
£121.6m (being the repayment amount after taking account of the
cross-currency interest rate swaps) of notes that matured in the same month.
These notes 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.£270m at 31 March 2025. In
December 2024, the Group issued £60m of new USPP 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%.
The RCF and the USPP 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 31 March 2025, with leverage of 0.04x
(2024: <0x) and interest cover of 38.7x (2024: 72.6x) 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.
At 31 March 2025, the Group had £250.0m (2024: £250.0m) of undrawn committed
borrowing facilities available, in respect of which all conditions precedent
had been met.
The weighted average interest rates paid during the year were as follows:
2025 2024
%
%
Bank loans 6.7 4.9
Private placement notes 3.4 3.2
Private placement notes
The USPP notes issued by the Group are unsecured and rank pari passu with
other senior unsecured indebtedness of the Group. The amount, maturity and
interest terms of these USPP notes as at 31 March 2025 are shown below.
Tranche Maturity date Amount Interest terms
8 year 16 December 2030 £40.0m £ fixed at 2.84%
7 year 22 December 2031 £60.0m £ fixed at 5.71%
10 year 16 December 2032 £40.0m £ fixed at 2.97%
12 year 16 December 2034 £40.0m £ fixed at 3.00%
16. Leases
Right-of-use assets Properties Plant and vehicles Total
£m
£m
£m
At 1 April 2023 37.9 85.9 123.8
Additions 2.0 76.1 78.1
Arising on business combinations 2.6 2.6 5.2
Modifications to lease terms and disposals 0.1 (3.8) (3.7)
Depreciation (7.4) (30.3) (37.7)
Effect of movement in exchange rates - (0.2) (0.2)
At 31 March 2024 35.2 130.3 165.5
Additions 5.7 72.0 77.7
Arising on business combinations 0.6 0.7 1.3
Modifications to lease terms and disposals 1.3 2.2 3.5
Depreciation (8.1) (47.3) (55.4)
Effect of movement in exchange rates - (0.2) (0.2)
At 31 March 2025 34.7 157.7 192.4
Lease liabilities 2025 2024
£m
£m
At 1 April 174.0 129.4
Additions 77.1 80.2
Arising on business combinations 1.2 5.1
Modifications to lease terms and disposals 1.5 0.3
Interest expense related to lease liabilities 8.7 5.6
Repayment of lease liabilities (including interest) (64.8) (46.6)
Effect of movement in exchange rates (0.2) -
At 31 March 197.5 174.0
Included in current financing liabilities 52.8 44.4
Included in non-current financing liabilities 144.7 129.6
Total 197.5 174.0
Maturity analysis - contractual undiscounted cash flows 2025 2024
£m
£m
Less than one year 62.4 50.8
One to five years 145.6 124.1
More than five years 13.4 16.6
Total undiscounted lease liabilities 221.4 191.5
Amounts recognised in the condensed consolidated income statement 2025 2024
£m
£m
Depreciation of right-of-use assets (55.4) (37.7)
Short-term lease expense (0.6) (0.4)
Operating profit impact (56.0) (38.1)
Interest on lease liabilities (8.7) (5.6)
Profit before tax impact (64.7) (43.7)
Amounts recognised in the condensed consolidated statement of cash flows 2025 2024
£m
£m
Capital element of lease rental payments (financing cash flow) 56.1 41.0
Interest payments (operating cash flow) 8.7 5.6
Total cash outflow for capitalised leases 64.8 46.6
As set out in the Task Force on Climate-related Financial Disclosures, the
Group is in the process of transitioning to electric vehicles in response to
climate change. While the fleet utilising fossil fuels is expected to be
phased out, existing vehicle leases are generally held for the full lease
term. There is therefore no significant impact on the useful economic life of
the current leased vehicles as a result of climate change commitments.
17. Analysis of net debt
2025 2024
£m
£m
Cash and cash equivalents (Note 14) 180.4 244.9
Adjusted for: restricted cash (Note 14) (4.3) (4.2)
Bank loans (Note 15) - -
Private placement notes (Note 15) (180.0) (150.0)
Loan arrangement fees (Note 15) 2.4 2.5
Net (debt)/cash before lease obligations (1.5) 93.2
Lease liabilities (Note 16) (197.5) (174.0)
Net debt (199.0) (80.8)
Reconciliation of net cash flow to movements in net debt 2025 2024
£m
£m
Net decrease in cash and cash equivalents (64.2) (2.9)
(Increase)/decrease in restricted cash (0.1) 2.2
Net decrease in unrestricted cash and cash equivalents (64.3) (0.7)
Cash drivers
Proceeds from new private placement notes (60.0) -
Private placement notes repaid 30.0 -
Repayment of bank loans 0.4 8.4
Payment of arrangement fees 0.6 1.2
Capital element of lease rentals 56.1 41.0
Non-cash drivers
Non-cash movement associated with bank loans (0.6) (0.4)
Non-cash movement associated with private placement notes (0.1) (0.1)
Non-cash movement in lease liabilities (79.6) (85.6)
Effect of foreign exchange rate changes (0.3) (0.5)
Increase in net debt during the year (117.8) (36.7)
Opening net debt (80.8) (44.1)
Debt acquired as part of business combinations (0.4) -
Closing net debt (199.0) (80.8)
18. Acquisitions
Current year acquisitions
Argus Fire
On 24 October 2024, the Group completed the acquisition of the entire issued
share capital of Slademain Limited and its subsidiary Argus Fire Protection
Company Limited (together Argus Fire) for a consideration of £44.2m, which
comprises an initial cash consideration of £44.0m and £0.2m contingent on
the settlement of certain receivables and payables. Argus Fire is a UK
engineering-led fire systems business with over 40 years of experience which
will enhance the Group's scale and self-delivered offering in this market, and
has been integrated into the Group's Business Services division. Goodwill on
the acquisition of Argus Fire represents the premium associated with the
operations of Argus Fire which are considered to strengthen the Group's UK
fire & security market offering by complementing existing solutions and
providing cross-selling opportunities.
Visegurity
On 7 October 2024, the Group completed the acquisition of the entire issued
share capital of Visegurity Express S.L., JP Silcom Servicios S.L. and Silcom
Auxiliares S.L. (together Visegurity) for a consideration of €8.9m (£7.5m),
which comprises an initial cash consideration of £7.0m, and £0.5m contingent
on no additional pre-acquisition liabilities being identified which will be
paid across four years. Visegurity is based in Barcelona and has over 20 years
of experience in security services, employing 600 individuals and with a
strong reputation in both public and private sectors representing a strategic
expansion of the Group's security capabilities in Spain, and has been
integrated into the Group's Business Services division.
Amounts up to a maximum of €2.0m (£1.7m) payable to the former owners of
the business have been accounted for as remuneration for post-acquisition
employment services because a condition of receiving payment is the former
owners' continued employment within the Mitie Group. These amounts are payable
based on two performance periods for the years ending 31 October 2025 and 31
October 2026 up to a maximum of €2.0m in total. These payments are accrued,
where relevant conditions are met, over the period that the related employment
services are received up until the point at which the consideration becomes
payable. Goodwill on the acquisition of Visegurity represents the premium
associated with the operations and workforce of Visegurity which are
considered to expand and complement the growing suite of services offered by
the Group in Spain and enhance cross-selling opportunities to an enlarged
blue-chip, customer base.
ESM Power
On 1 August 2024, the Group completed the acquisition of the entire issued
share capital of Woodford Investments Limited and its subsidiary ESM Power
Limited (together ESM Power) for a consideration of £6.4m, which comprises an
initial cash consideration of £6.3m, and £0.1m contingent on the outcome of
a completion accounts process. ESM Power is a leading electrical engineering
business specialising in power & grid connections which will enhance the
Group's high voltage connections expertise, and has been integrated into the
Group's Technical Services division.
Amounts up to a maximum of £3.0m payable to the former owners of the business
have been accounted for as remuneration for post-acquisition employment
services because a condition of receiving payment is the former owners'
continued employment within the Mitie Group. These amounts are payable based
on two performance periods for the years ending 31 March 2025 and 31 March
2026 up to a maximum of £3.0m in total. These payments are accrued, where
relevant conditions are met, over the period that the related employment
services are received up until the point at which the consideration becomes
payable. Goodwill on the acquisition of ESM Power represents the premium
associated with taking over the operations which are considered to strengthen
the Group's high voltage connections expertise.
Revenue and operating profit from acquisitions
The acquired entities contributed the following amounts of revenue and
operating profit before Other items to the Group's results during the year
ended 31 March 2025:
Argus Fire ESM Power
£m
Visegurity £m Total
£m £m
Revenue 20.9 9.0 29.8 59.7
Operating profit before Other items 1.0 0.7 2.5 4.2
Based on estimates made of the full year impact if all acquisitions had been
completed on 1 April 2024, Group revenue for the year would have increased by
approximately £50.8m and operating profit before Other items would have
increased by £3.2m, resulting in total Group revenue of £5,133.4m and total
Group operating profit before Other items of £237.3m.
Fair value of assets and liabilities
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. The provisional purchase
price allocation is as follows:
Argus Fire ESM Power
£m
Visegurity £m Total
£m £m
Customer relationships and contracts 9.7 3.7 1.3 14.7
Brand 0.2 - - 0.2
Property, plant and equipment 1.0 0.1 0.5 1.6
Right-of-use assets 0.7 0.5 0.1 1.3
Trade and other receivables 15.2 3.4 8.7 27.3
Current tax asset 0.1 - - 0.1
Cash and cash equivalents 7.8 0.5 1.4 9.7
Trade and other payables (11.8) (1.9) (5.0) (18.7)
Bank loans - (0.4) - (0.4)
Deferred income - (0.1) (4.7) (4.8)
Provisions (1.6) - (0.2) (1.8)
Lease liabilities (0.7) (0.4) (0.1) (1.2)
Deferred tax liabilities (2.5) (0.9) (0.3) (3.7)
Net identifiable assets acquired 18.1 4.5 1.7 24.3
Goodwill 26.1 3.0 4.7 33.8
Total cash consideration 44.2 7.5 6.4 58.1
Initial cash consideration 44.0 7.0 6.3 57.3
Contingent consideration 0.2 0.5 0.1 0.8
Total consideration 44.2 7.5 6.4 58.1
Prior year acquisitions
On 1 November 2023 and 9 October 2023, the Group completed the acquisitions of
GBE Converge Group Ltd (GBE) and Cliniwaste Holdings Limited (Cliniwaste)
respectively. The accounting for these acquisitions was disclosed as
provisional within the Group's results for the year ended 31 March 2024.The
Group has used the 12-month measurement period from the date of acquisition,
in accordance with IFRS 3 - Business Combinations, to finalise the fair value
measurement relating to the completion accounts process.
During the year ended 31 March 2025, the fair value of consideration and
corresponding goodwill for GBE was increased by £1.5m following the outcome
of the completion accounts process and the fair value of the acquired net
assets decreased by £0.5m due to a fair value adjustment. This led to a
corresponding increase in goodwill of £2.0m. The increase in consideration
was cash settled during the period.
In addition, the fair value of the acquired net assets for Cliniwaste
decreased by £0.3m due to a fair value adjustment, which led to a
corresponding increase in goodwill of £0.3m.
Cash flows on acquisitions
2025 2024
£m
£m
Cash consideration(1) 58.8 87.6
Less: cash balance acquired (9.7) (53.6)
Net outflow of cash - investing activities 49.1 34.0
Note:
1. Cash consideration of £58.8m comprises £57.3m initial
cash consideration for current year acquisitions in addition to £1.5m in
relation to the prior year acquisition of GBE.
19. Retirement benefit schemes
The Group operates a number of pension arrangements for employees:
• Defined contribution schemes for the majority of its employees
• Defined benefit schemes which include the Mitie Group plc Pension Scheme, the
Landmarc Pension Scheme and other smaller schemes
Defined contribution schemes
A defined contribution scheme is a pension scheme under which the Group pays
contributions to an independently administered fund; such contributions are
based upon a fixed percentage of employees' pay. The Group has no legal or
constructive obligations to pay further contributions to the fund once these
contributions have been paid. Members' benefits are determined by the amount
of contributions paid, together with investment returns earned on the
contributions arising from the performance of each individual's chosen
investments and the type of pension the member chooses to take at retirement.
As a result, actuarial risk (that pension will be lower than expected) and
investment risk (that the assets invested in do not perform in line with
expectations) are borne by the employee.
The Group's contributions are recognised as an employee benefit expense when
they are due.
The Group operates four separate schemes: a stakeholder defined contribution
plan, which is closed to new members; a self-invested personal pension plan,
which is closed to new members; and two Group personal pension (GPP) plans.
Employer contributions are payable to each on a matched basis requiring
employee contributions to be paid. Employees have the option to pay their
share via a salary sacrifice arrangement. The scheme used to satisfy
auto-enrolment compliance is a master trust, The People's Pension.
During the year, the Group made a total contribution to the defined
contribution schemes of £26.8m (2024: £18.1m) and contributions to the
auto-enrolment scheme of £24.7m (2024: £22.1m), which are included in the
consolidated income statement charge. The Group expects to make contributions
of a similar amount in the year ending 31 March 2026.
Defined benefit schemes
Mitie Group plc Pension Scheme (the Group scheme)
The Group scheme comprises two segregated sections: Part A (the Group section)
and Part B (the Interserve section). The assets and liabilities of the two
sections are ring-fenced.
The Group section provides benefits to members in the form of a guaranteed
level of pension payable for life. The level of benefits provided depends on
members' length of service and their final pensionable pay.
The Group section was closed to new members in 2006, with new employees able
to join one of the defined contribution schemes.
The Interserve section was formed in the year ended 31 March 2023 when the
assets and liabilities were transferred from the Interserve Scheme Part C,
which in turn had been formed to take Interserve members out of the Interserve
Group Pension Scheme as part of the arrangements for Mitie's acquisition of
Interserve in 2020.
The Group scheme is operated under the UK regulatory framework. Benefits are
paid to members from the trust-administered fund, where the Trustee is
responsible for ensuring that the scheme is sufficiently funded to meet
current and future benefit payments. Plan assets are held in trust and are
governed by pension legislation. If investment experience is worse than
expected or the actuarial assessment of the scheme's liabilities increases,
the Group's financial obligations to the scheme rise.
The nature of the relationship between the Group and the Trustee is also
governed by regulations and practice. The Trustee must agree a funding plan
with the sponsoring company such that any funding shortfall is expected to be
met by additional contributions and investment outperformance. In order to
assess the level of contributions required, triennial valuations are carried
out, with the scheme's obligations measured using prudent assumptions (which
are determined by the Trustee with advice from the scheme actuary). The most
recent triennial valuation was carried out as at 31 March 2023, which
indicated an actuarial deficit of £19.4m, an improvement of £72.7m since the
last valuation. During the year, Mitie paid £8.4m of deficit repair
contributions and the Group has agreed to pay further deficit repair
contributions of £6.4m in FY26 and a smaller contribution, as required, in
FY27 in order to eliminate the funding shortfall.
The Trustee's other duties include managing the investment of the scheme's
assets, administration of plan benefits and exercising of discretionary
powers. The Group works closely with the Trustee to manage the scheme.
The Group has an unconditional right to refund of surplus assuming the gradual
settlement over time until all members have left the section. Accordingly,
there is no restriction on the surplus.
The Landmarc Pension Scheme (the Landmarc scheme)
The Group obtained control of Landmarc Support Services Limited (Landmarc) on
16 November 2023. Landmarc is the employing company for the Landmarc scheme,
which commenced on 1 July 2003, at which time approximately 1,000 employees
became members of the scheme. From that date the majority of new employees
were provided with defined contribution benefits under a separate arrangement,
with membership of the Landmarc scheme for certain new employees only
available at the discretion of the employing company. On 1 July 2021 the last
remaining active members ceased accrual and the scheme closed to future
accrual.
In December 2022 the Trustee of the scheme entered into a qualifying insurance
buy-in to secure the remaining uninsured benefits of the scheme.
The membership data used for the formal actuarial valuation as at 31 December
2020 has been rolled forward and used to calculate results under IAS 19 -
Employee Benefits by an independent qualified actuary. As required by IAS 19,
the value of the defined benefit liabilities has been measured using the
projected unit method.
The Group has an unconditional right to refund of surplus assuming the gradual
settlement over time until all members have left the scheme. Accordingly,
there is no restriction on the surplus on the Group's consolidated statement
of financial position (or additional minimum liability to be recognised).
Other defined benefit schemes
Grouped together under Other schemes are a number of schemes to which the
Group makes contributions under Admitted Body status to clients' (generally
local government or government entities) defined benefit schemes in respect of
certain employees who transferred to the Group under Transfer of Undertakings
(Protection of Employment) Regulations 2006 (TUPE), as well as three smaller
schemes that the Group acquired on the acquisition of Interserve. The
valuations of the Other schemes are updated by an actuary at each consolidated
statement of financial position date.
For the Admitted Body schemes, which are largely sections of the Local
Government Pension Scheme, the Group will only participate for a finite period
up to the end of the relevant contract. The Group is required to pay regular
contributions, as decided by the relevant scheme actuaries and detailed in
each scheme's Contributions Certificate, which are calculated every three
years as part of a triennial valuation. In a number of cases, contributions
payable by the employer are capped and any excess is recovered from the entity
that the employees transferred from. In addition, in certain cases, at the end
of the contract the Group will be required to pay any deficit (as determined
by the scheme actuary) that is assessed for its notional section of the
scheme.
The Group made contributions to the Other schemes of £0.1m in the year (2024:
£0.4m). The Group expects to make contributions of a similar amount in the
year ending 31 March 2026.
Multi-employer schemes
As a result of acquisition activity and staff transfers following contract
wins, the Group participates in three multi-employer pension schemes. The
total contributions to these schemes for the financial year ending 31 March
2026 are anticipated to be £0.1m. The Group's share of the assets and
liabilities in respect of these schemes is minimal.
The Group previously participated in the Plumbing & Mechanical Services
(UK) Industry Pension Scheme (the Plumbing Scheme), a funded multi-employer
defined benefit scheme. The Plumbing Scheme was founded in 1975 and to date
has had over 4,000 employers. The Group has received a Section 75 employer
debt notice in respect of the participation of Robert Prettie & Co Limited
in the Plumbing Scheme. As a result of the Interserve acquisition, the Group
increased its participation in the Plumbing Scheme and the Group has received
a Section 75 employer debt notice in respect of the participation of Mitie FM
Limited.
Provisions of £21.7m were held at 31 March 2024 for Section 75 employer debts
in respect of the participation of Robert Prettie & Co Limited and Mitie
FM Limited in the Plumbing Scheme. During the year, a settlement agreement was
reached with the trustees of the Plumbing Scheme. As a result of this, the
amount of £21.7m has been transferred from provisions to other payables, and
a further charge of £2.8m has been recognised as Other items in respect of
Mitie Property Services (UK) Limited's participation in the Plumbing Scheme.
See Note 12.
Accounting assumptions
The assumptions used in calculating the accounting costs and obligations of
the Group's defined benefit pension schemes, as detailed below, are set after
consultation with independent, professionally qualified actuaries.
The discount rate used to determine the present value of the obligations is
set by reference to market yields on high-quality corporate bonds. The
assumptions for price inflation are set by reference to the difference between
yields on longer-term conventional government bonds and index-linked bonds.
The assumptions for increases in pensionable pay take into account expected
salary inflation, the cap at CPI, and how often the cap is likely to be
exceeded.
The assumptions for life expectancy have been set with reference to the
actuarial tables used in the latest funding valuations.
The Group is aware of a case involving Virgin Media and NTL Pension Trustee II
Limited (and others). On 16 June 2023 the High Court issued a ruling in
respect of this case, which was subsequently upheld by the Court of Appeal in
August 2024, and could potentially lead to additional liabilities for pension
schemes in the UK which were contracted out on a salary-related basis, and
made amendments between April 1997 and April 2016.
Reasonable preliminary due diligence has concluded that the defined benefit
obligation values disclosed in the Annual Report and Accounts 2025 do not
require adjustment for the impact of this case, however, further investigation
is ongoing. A material impact is considered unlikely. No amendments for this
matter have been included in the IAS 19 actuarial valuation as the impact, if
any, cannot be reliably assessed.
Principal accounting assumptions at consolidated statement of financial
position date
Group section Interserve section Landmarc scheme Other schemes
2025 2024 2025 2024 2025 2024 2025 2024
%
%
%
%
%
%
%
%
Key assumptions used for IAS 19 valuation:
Discount rate 5.79 4.84 5.82 4.80 5.70 4.80 5.82 4.80
Expected rate of pensionable pay increases 2.57 2.63 2.70 2.80 2.60 3.30 3.39 2.80
Retail price inflation 3.18 3.26 3.15 3.20 3.20 3.30 3.15 3.20
Consumer price inflation 2.57 2.63 2.70 2.80 2.60 2.70 2.70 2.80
Future pension increases 2.57 2.63 2.70 2.80 3.10 3.30 2.82 3.20
Group section Interserve section Landmarc scheme
2025 2024 2025 2024 2025 2024
Years
Years
Years
Years
Years
Years
Post-retirement life expectancy:
Current pensioners at 65 - male 87.1 87.1 84.7 85.7 85.0 84.9
Current pensioners at 65 - female 88.7 88.6 87.0 88.3 88.6 88.6
Future pensioners at 65 - male 88.1 88.1 85.7 86.6 86.2 86.1
Future pensioners at 65 - female 89.9 89.1 88.2 89.4 89.7 89.7
Life expectancy for the Other schemes is that used by the relevant scheme
actuary.
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 assumption Increase/ Increase/
(decrease)
(decrease)
in obligations
in obligations
%
£m
Increase in discount rate 0.25% (3.1) (7.9)
Increase in retail price inflation(1) 0.25% 2.2 5.5
Increase in consumer price inflation (excluding pay) 0.25% 1.0 2.5
Increase in life expectancy 1 year 3.2 8.2
Note:
1. Including other inflation-linked assumptions (consumer price
inflation, pension increases and salary growth).
Some of the above changes in assumptions may have an impact on the value of
the scheme's investment holdings. For example, the Group scheme holds a
proportion of its assets in UK corporate bonds. A fall in the discount rate as
a result of lower UK corporate bond yields would lead to an increase in the
value of these assets, mitigating the increase in the defined benefit
obligation to some extent. The duration, or average term to payment for the
benefits due, weighted by liability, is around 14 years for the Group and
Interserve sections, and 11 years for the Landmarc scheme.
Amounts recognised in condensed consolidated financial statements
Amounts recognised in the condensed consolidated income statement are as
follows:
2025 2024
Group section Interserve section Landmarc scheme Other schemes Total Group section Interserve section Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Current service cost (0.1) (0.3) - (0.7) (1.1) (0.1) (0.5) - (0.9) (1.5)
Past service cost (including curtailments/settlements) (1,2) - - (1.1) (5.3) (6.4) - - - (0.3) (0.3)
Total administrative expense(1) (1.0) (0.2) (0.5) (0.2) (1.9) (1.1) - (0.1) (0.1) (1.3)
Amounts recognised in operating profit (1.1) (0.5) (1.6) (6.2) (9.4) (1.2) (0.5) (0.1) (1.3) (3.1)
Net interest income/(cost) 0.2 0.1 0.1 (0.1) 0.3 0.3 0.2 0.1 (0.1) 0.5
Amounts recognised in profit before tax (0.9) (0.4) (1.5) (6.3) (9.1) (0.9) (0.3) - (1.4) (2.6)
Notes:
1. During the year ended 31 March 2025, an agreement to amend
the Landmarc scheme rules to increase certain cash benefits which members
receive on retirement was completed. The Group incurred a £1.1m past service
cost charge and administrative expenses of £0.2m in relation to the amendment
of the Landmarc scheme rules, which have been recognised in the consolidated
income statement as Other items. See Note 4.
2. During the year ended 31 March 2025, the Group formally
exited certain Local Government Pension Schemes (LGPS), resulting in a £5.3m
contract settlement charge, which was recognised within Other items. See Note
4.
Amounts recognised in the consolidated statement of comprehensive income are
as follows:
2025 2024
Group section Interserve section Landmarc scheme Other schemes Total Group section Interserve section Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Actuarial gains/(losses) arising due to changes in financial assumptions 22.8 2.9 4.3 6.6 36.6 2.2 0.2 (3.0) 2.6 2.0
Actuarial gains/(losses) arising from liability experience 0.9 1.8 (0.1) (0.2) 2.4 (8.0) - 0.4 0.5 (7.1)
Actuarial (losses)/gains due to changes in demographic assumptions (0.1) 0.1 - 0.5 0.5 (0.5) 0.3 0.6 - 0.4
Movement in asset ceiling, excluding interest(1) - - - (2.4) (2.4) - - - (6.0) (6.0)
Return on scheme assets, excluding interest income (19.0) (2.3) (3.8) 1.7 (23.4) (7.9) (1.7) 2.2 4.0 (3.4)
Return on reimbursement asset(2) - - - - - - - - (0.1) (0.1)
Amounts recognised in other comprehensive income/(expense) 4.6 2.5 0.4 6.2 13.7 (14.2) (1.2) 0.2 1.0 (14.2)
Notes:
1. The £2.4m net charge for the year ended 31 March 2025
includes a £5.3m credit with respect to the reversal of gross surplus
associated with the exit of certain LGPS schemes.
2. The reimbursement asset of £0.9m at 31 March 2025 (2024:
£0.9m) is recorded within other receivables.
The amounts included in the consolidated statement of financial position are
as follows:
2025 2024
Group section Interserve section Landmarc scheme Other schemes Total Group section Interserve section Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Fair value of scheme assets 165.3 22.7 36.7 69.1 293.8 174.8 24.4 41.1 80.0 320.3
Present value of defined benefit obligations (154.7) (18.9) (34.8) (43.8) (252.2) (177.4) (23.2) (38.1) (58.1) (296.8)
Surplus/(deficit) without restriction 10.6 3.8 1.9 25.3 41.6 (2.6) 1.2 3.0 21.9 23.5
Asset ceiling - - - (27.7) (27.7) - - - (24.3) (24.3)
Net pension asset/(liability) 10.6 3.8 1.9 (2.4) 13.9 (2.6) 1.2 3.0 (2.4) (0.8)
All figures above are shown before deferred tax. The total of schemes in a
surplus position is £16.3m (2024: £4.2m).
Movements in the present value of defined benefit obligations were as follows:
2025 2024
Group section Interserve section Landmarc scheme Other schemes Total Group section Interserve section Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 April 177.4 23.2 38.1 58.1 296.8 169.6 22.5 - 62.2 254.3
Arising on business combination - - - - - - - 36.3 - 36.3
Current service cost 0.1 0.3 - 0.7 1.1 0.1 0.5 - 0.9 1.5
Interest cost 8.4 1.1 1.8 2.4 13.7 7.9 1.1 0.7 2.7 12.4
Contributions from scheme members - 0.1 - 0.1 0.2 - 0.1 - 0.2 0.3
Actuarial (gains)/losses arising due to changes in financial assumptions (22.8) (2.9) (4.3) (6.6) (36.6) (2.2) (0.2) 3.0 (2.6) (2.0)
Actuarial (gains)/losses arising from experience (0.9) (1.8) 0.1 0.2 (2.4) 8.0 - (0.4) (0.5) 7.1
Actuarial losses/(gains) due to changes in demographic assumptions 0.1 (0.1) - (0.5) (0.5) 0.5 (0.3) (0.6) - (0.4)
Benefits paid (7.6) (1.0) (2.0) (1.4) (12.0) (6.5) (0.5) (0.9) (1.4) (9.3)
Past service cost - - 1.1 - 1.1 - - - (1.4) (1.4)
Contract transfer - - - - - - - - (2.0) (2.0)
Contract settlement - - - (9.2) (9.2) - - - - -
At 31 March 154.7 18.9 34.8 43.8 252.2 177.4 23.2 38.1 58.1 296.8
The defined benefit obligations analysed by participant status is as
follows:
2025 2024
Group section Interserve section Landmarc scheme Group Interserve section Landmarc scheme
£m
£m
£m
£m
£m
section
£m
Active 1.1 8.5 - 1.8 20.3 -
Deferred 72.3 2.9 6.9 102.9 1.7 12.2
Pensioners 81.3 7.5 27.9 72.7 1.2 25.9
At 31 March 154.7 18.9 34.8 177.4 23.2 38.1
Movements in the fair value of scheme assets were as follows:
2025 2024
Group section Interserve section Landmarc scheme Other schemes Total Group section Interserve section Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 April 174.8 24.4 41.1 80.0 320.3 170.3 24.2 - 77.2 271.7
Arising on acquisition - - - - - - - 39.1 - 39.1
Interest income 8.6 1.2 1.9 3.3 15.0 8.2 1.3 0.8 3.4 13.7
Actuarial (losses)/gains on assets (19.0) (2.3) (3.8) 1.7 (23.4) (7.9) (1.7) 2.2 4.0 (3.4)
Contributions from the sponsoring companies(1) 9.5 0.5 - 0.1 10.1 11.8 1.0 - 0.4 13.2
Contributions from scheme members - 0.1 - 0.1 0.2 - 0.1 - 0.2 0.3
Expenses paid (1.0) (0.2) (0.5) (0.2) (1.9) (1.1) - (0.1) (0.1) (1.3)
Benefits paid (7.6) (1.0) (2.0) (1.4) (12.0) (6.5) (0.5) (0.9) (1.4) (9.3)
Past service cost - - - - - - - - (1.7) (1.7)
Contract transfer - - - - - - - - (2.0) (2.0)
Contract settlement - - - (14.5) (14.5) - - - - -
At 31 March 165.3 22.7 36.7 69.1 293.8 174.8 24.4 41.1 80.0 320.3
Note:
1. Group section contributions of £9.5m (2024: £11.8m) is inclusive of
£8.4m deficit repair contributions (2024: £10.6m).
Movements in the asset ceiling were as follows:
2025 2024
£m
£m
At 1 April 24.3 17.5
Interest cost on asset ceiling 1.0 0.8
Change in asset ceiling excluding interest 2.4 6.0
At 31 March 27.7 24.3
Fair values of the assets held by the schemes were as follows:
2025 2024
Group section Interserve section Landmarc scheme Other schemes Total Group section Interserve section Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Equities 22.4 - - 35.1 57.5 28.3 - - 42.8 71.1
Government bonds 72.4 8.5 - 3.2 84.1 70.7 10.6 - 4.0 85.3
Corporate bonds 55.8 5.8 - 13.7 75.3 53.0 6.0 - 14.1 73.1
Property 2.3 - - 11.2 13.5 2.3 - - 11.8 14.1
Diversified growth fund 7.4 8.4 - 0.9 16.7 8.6 7.8 - 1.5 17.9
Cash 3.8 - 2.5 4.1 10.4 11.2 - 1.9 4.7 17.8
Insurance policies - - 34.2 0.9 35.1 - - 39.2 1.1 40.3
Commodities 1.2 - - - 1.2 0.7 - - - 0.7
Total fair value of assets 165.3 22.7 36.7 69.1 293.8 174.8 24.4 41.1 80.0 320.3
The investment portfolios are diversified, investing in a wide range of
assets, in order to provide reasonable assurance that no single asset or type
of asset could have a materially adverse impact on the total portfolio. To
reduce volatility, certain assets are held in a matching portfolio, which
largely consists of government and corporate bonds, designed to mirror
movements in corresponding liabilities.
The property assets represent quoted property investments.
Risks and risk management
The Group scheme, in common with the majority of UK plans, has a number of
risks. These areas of risk and the ways in which the Group has sought to
manage them, with respect to the Group scheme, are set out in the table below.
The risks are considered from both a funding perspective, which drives the
cash commitments of the Group, and from an accounting perspective, i.e. the
extent to which such risks affect the amounts recorded in the Group's
condensed consolidated financial statements:
Risk Description
Asset volatility The funding liabilities are calculated using a discount rate set with
reference to government bond yields, with allowance for additional return to
be generated from the investment portfolio. The defined benefit obligation for
accounting is calculated using a discount rate set with reference to corporate
bond yields. The Group scheme holds 22% of its assets in equities and other
return-seeking assets (principally diversified growth funds (DGFs) and
property). The returns on such assets tend to be volatile and are not
correlated to government bonds. This means that the funding level has the
potential to be volatile in the short term, potentially resulting in
short-term cash requirements, or alternative security offers, which are
acceptable to the Trustee, and an increase in the net defined benefit
liability recorded on the Group's consolidated statement of financial
position. Equities and DGFs are considered to offer the best returns over the
long term with an acceptable level of risk and hence the scheme holds a
significant proportion of these types of assets. However, the scheme's assets
are well-diversified by investing in a range of asset classes, including
property, government bonds and corporate bonds. The Group scheme holds 8% of
its assets in DGFs which seek to maintain high levels of return while
achieving lower volatility than direct equity funds. The allocation to
return-seeking assets is monitored to ensure it remains appropriate, given the
scheme's long-term objectives. The investment in bonds is discussed further
below.
Changes in bond yields Falling bond yields tend to increase the funding and accounting obligations.
However, the investment in corporate and government bonds offers a degree of
matching, i.e. the movement in assets arising from changes in bond yields
partially matches the movement in the funding or accounting obligations. In
this way, the exposure to movements in bond yields is reduced.
Inflation risk The majority of the Group scheme's benefit obligations are linked to
inflation. Higher inflation will lead to higher liabilities (although caps on
the level of inflationary increases are in place to protect the plan against
extreme inflation). The majority of the Group scheme's assets are either
unaffected by inflation (fixed interest bonds) or loosely correlated with
inflation (equities), meaning that an increase in inflation will also increase
the deficit.
Life expectancy The majority of the Group scheme's obligations are to provide a pension for
the life of the member, so increases in life expectancy will result in an
increase in the obligations.
Areas of risk management
Although investment decisions in the Group scheme are the responsibility of
the Trustee, the Group takes an active interest to ensure that pension plan
risks are managed effectively. The Group and Trustee have agreed a long-term
strategy for reducing investment risk where appropriate.
Certain benefits payable on death before retirement are insured.
20. Events after the reporting period
There have been no material events since the condensed statement of financial
position date that require adjustment or disclosure.
Appendix - Alternative Performance Measures
The Group presents various Alternative Performance Measures (APMs) as
management believes that these are useful for users of the condensed
consolidated 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 condensed consolidated financial statements. During the year, the APM in
relation to performance excluding Covid-related contracts has been removed as
is not applicable for the year ended 31 March 2025 or the comparative year.
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 for users of the condensed consolidated
financial statements to obtain a proper understanding of the financial
information and the underlying performance of the business.
These Other items include acquisition- and disposal-related costs such as
amortisation of acquisition-related intangible assets and charges with respect
to employment-linked earnouts, impairment of goodwill, gain or loss on
business disposals, as well as cost of restructuring programmes, charges
arising on exit of pension schemes and other exceptional items.
Further details of these Other items are provided in Note 4.
Operating profit 2025 2024
£m
£m
Operating profit from continuing operations Statutory measures 161.6 165.7
Adjust for: restructure costs Note 4 16.6 20.4
Adjust for: acquisition- and disposal-related costs Note 4 43.1 38.3
Adjust for: other exceptional items Note 4 12.8 3.7
Adjust for: fair value gain on Landmarc acquisition Note 4 - (17.9)
Operating profit before Other items Performance measures 234.1 210.2
Reconciliations are provided below to show how the Group's segmental reported
results are adjusted to exclude Other items.
Operating profit/(loss) 2025 2024 (restated(1))
Adjust for: Other items (Note 4) Performance measures Reported Adjust for: Performance measures
£m
£m
results
Other items
£m
Reported results
£m
(Note 4)
£m
£m
Segment
Business Services 154.6 8.4 163.0 146.5 3.3 149.8
Technical Services 68.0 11.0 79.0 82.6 (7.7) 74.9
Communities 43.8 3.7 47.5 34.8 1.3 36.1
Corporate Centre (104.8) 49.4 (55.4) (98.2) 47.6 (50.6)
Total Group 161.6 72.5 234.1 165.7 44.5 210.2
Note:
1. The comparatives for the year ended 31 March 2024 have been restated
for the change in composition of reportable segments (See Note 3).
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 2025 2024
pence
pence
Statutory basic earnings per share Statutory measures 8.2 9.8
Adjust for: Other items per share 4.5 2.5
Basic earnings per share before Other items Performance measures 12.7 12.3
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 constraints on
the Group's ability to utilise these balances, has been excluded from the net
debt measure.
Total financial obligations (TFO) are defined as the Group's net debt and the
net retirement benefit assets/liabilities. TFO represents all debt-like
financing items the Group has made use of at the year end.
A reconciliation from reported figures is presented below:
Net debt 2025 2024
£m
£m
Cash and cash equivalents Statutory measures 180.4 244.9
Adjusted for: restricted cash Note 14 (4.3) (4.2)
Financing liabilities Note 15 (375.1) (321.5)
Net debt Performance measures (199.0) (80.8)
Net retirement benefit assets/(liabilities) Note 19 13.9 (0.8)
TFO Performance measures (185.1) (81.6)
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. This measure showed average daily net debt
of £264.0m for the year ended 31 March 2025, compared with £160.7m for the
year ended 31 March 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 2025 2024
£m
£m
Net cash generated from operating activities Statutory measures 220.0 197.7
Add: net (increase)/decrease in restricted cash Note 14 (0.1) 2.2
Interest received 3.0 3.6
Dividends received from joint ventures and associates - 8.4
Employment-linked earnouts(1) 7.0 0.7
Purchase of property, plant and equipment (24.0) (11.5)
Purchase of other intangible assets Note 9 (7.6) (8.4)
Disposal of property, plant and equipment 0.6 0.2
Lease incentives received - 5.7
Capital element of lease rentals paid Note 16 (56.1) (41.0)
Free cash inflow Performance measures 142.8 157.6
Note:
1. During the year ended 31 March 2025, payments totalling £7.0m (2024:
£0.7m) 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. The costs related to performance-based employment-linked
earnouts are charged to the consolidated income statement and classified as
Other items (see Note 4).
Earnings before interest, tax, depreciation and amortisation
Earnings from continuing operations before interest, tax, depreciation and
amortisation (EBITDA) is a measure of the Group's profitability. EBITDA is
measured as profit/(loss) before tax from continuing operations excluding the
impact of net finance costs, Other items, depreciation of property, plant and
equipment, amortisation and impairment of non-current assets and amortisation
of contract assets. Other companies may define EBITDA on a different basis.
EBITDA 2025 2024
£m
£m
Profit before tax Statutory measures 145.4 156.3
Add: net finance costs 16.2 9.4
Operating profit 161.6 165.7
Add: Other items Note 4 72.5 44.5
Operating profit before Other items 234.1 210.2
Add:
Depreciation of property, plant and equipment 67.9 48.2
Amortisation of non-current assets(1) Note 9 8.5 8.2
Amortisation of contract assets 0.4 1.4
Impairment of non-current assets - 0.1
EBITDA Performance measures 310.9 268.1
Note:
1. Excludes amounts classified in the condensed consolidated income
statement as Other items. See Note 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.
2025 2024
£m
£m
Net assets Statutory measures 428.0 473.7
Add:
Non-current liabilities 445.2 327.6
Current provisions Note 12 37.4 66.5
Current private placement notes Note 15 - 30.0
Deduct:
Non-current deferred tax assets Note 13 - (7.9)
Cash and cash equivalents Note 14 (180.4) (244.9)
Invested capital Performance measures 730.2 645.0
Operating profit before Other items 234.1 210.2
Tax(1) (55.5) (39.7)
Operating profit before Other items after tax 178.6 170.5
ROIC % Performance measures 24.5% 26.4%
Notes:
1. Tax charge has been calculated at the effective tax rate for the year
on pre-tax profits before Other items for continuing operations of 23.7%
(2024: 18.9%).
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