REG - MITIE Group PLC - Full year results for the year ended 31 March 2026
Today 07:00
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RNS Number : 9101G MITIE Group PLC 04 June 2026
4 June 2026
Mitie Group plc
Full year results for the 12 months to 31 March 2026 (FY26)
Double digit growth in revenue, operating profit and free cash flow
Record order book and bidding pipeline
Confidence in delivering FY25-FY27 Strategic Plan; foundations in place for
FY28+
£100m of share buybacks in FY27 (including £40m current programme)
FY26 highlights
· Revenue up 10.5% to £5,619m (FY25: £5,083m), including 5.3% organic growth
primarily driven by new contract wins and scope increases, pricing and
projects upsell, alongside a 5.2% contribution from acquisitions
· Operating profit before Other items(1) up 13% to £264m (FY25: £234m)
· Operating profit margin before Other items(1) of 4.7% (FY25: 4.6%), despite
headwinds of higher National Insurance Contributions, contract losses and
other one-off costs; H2 FY26 margin 5.3% (H2 FY25: 5.0%)
· Contract wins of £6.3bn TCV(2) including renewals/extensions (FY25: £7.5bn)
· Record total order book(2) up 6% to £16.3bn (FY25: £15.4bn), reflecting
book-to-bill ratio of 1.1x
· Record pipeline up 34% to £31.7bn (FY25: £23.7bn), of which >70% is due
to be awarded in next 18 months
· Basic EPS before Other items(1) up 7% to 13.6p (FY25: 12.7p), with the
benefits of higher operating profit and share buybacks offsetting higher net
finance costs and new share issuance to finance the Marlowe acquisition
· Operating profit of £151m (FY25: £162m) and basic EPS of 6.6p (FY25: 8.2p),
reflecting higher Other items
· Other items(1) of £113m (FY25: £73m) includes non-cash amortisation (£42m);
costs to deliver margin enhancement initiatives (£29m); as well as Marlowe
costs to achieve synergies and transaction costs (£22m)
· Good free cash flow(3) generation of £162m (FY25: £143m); cash from
operations of £290m (FY25: £249m)
· Strong balance sheet with leverage, including leases, of 1.2x EBITDA (FY25:
0.8x), within our 0.75-1.5x target range, based on average daily net debt of
£440m (FY25: £264m); covenant leverage of 0.8x
· DB pension scheme actuarial surplus estimated at c.£12m at end-FY26 (vs £73m
actuarial deficit in 2020); deficit repair contributions ceased and insurance
'buy-in' being progressed with scheme trustee
· Marlowe acquisition for c.£350m (cash and shares) delivered market leadership
in Facilities Compliance, with integration progressing well; initial cost
synergies of £7m in FY26 and early contract wins/revenue synergies
· Technology and data investments underpin launch of enterprise-wide programme
to re-imagine and optimise internal workflows and customer-facing solutions
through agentic AI
· Recommended final dividend of 3.1p per share; total dividend up 5% to 4.5p per
share (FY25: 4.3p)
· Share buyback programme for FY27 of £100m, including remaining c.£40m of
existing £100m programme launched in October 2025 (c.£60m of which was
completed in FY26)
· Entering FY27 with confidence in delivering our FY25-FY27 Strategic Plan and
continuing growth and margin expansion across our Facilities Management,
Transformation and Compliance businesses
12 months to 31 March 2026 12 months to 31 March 2025
Before Other items(1.3) Other items(1) Total Before Other items(1,3) Other items(1) Total
£m unless otherwise specified
Revenue 5,618.6 - 5,618.6 5,082.6 - 5,082.6
Operating profit 264.1 (112.7) 151.4 234.1 (72.5) 161.6
Operating profit margin 4.7% n/a 2.7% 4.6% n/a 3.2%
Profit before tax 236.4 (112.7) 123.7 217.9 (72.5) 145.4
Profit for the year 178.4 (88.1) 90.3 166.3 (57.9) 108.4
Basic earnings per share 13.6p 6.6p 12.7p 8.2p
Dividend per share 4.5p 4.3p
Cash generated from operations 290.4 248.7
Free cash inflow(3) 162.1 142.8
Average daily net debt (incl. leases)(3) 440.2 264.0
Closing net debt (incl. leases)(3) 450.2 199.0
Total order book(2) £16.3bn £15.4bn
Return on invested capital (ROIC)(3) 18.1% 24.5%
1. Other items are described in Note 3 to the condensed consolidated
financial statements.
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. 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 the Alternative Performance Measures
Appendix to the condensed consolidated financial statements.
Commenting on the year and the outlook, Phil Bentley, Chief Executive Officer,
said:
"FY26 has been another year of progress as we enter the final year of our
FY25-FY27 Strategic Plan, with double‑digit growth in revenue and operating
profit before Other items for the third consecutive year and good free cash
flow generation. We also further developed our leadership into
business-critical Facilities Compliance through the acquisition of Marlowe,
and the integration is progressing well.
"Looking ahead, we enter FY27 with good momentum, supported by a record order
book and bidding pipeline. Notwithstanding the potential for some incremental
cost inflation as a result of the conflict in the Middle East, our ongoing
margin enhancement initiatives, combined with the increasing mix of
higher-margin Facilities Transformation and Facilities Compliance work and
continued investment in data and AI, are expected to support margin
progression, while we continue to reinvest for growth. We are confident of
delivering our FY25-FY27 Strategic Plan.
"Mitie's long-term value creation potential and foundations for the next phase
of our strategy continue to be strengthened: capturing client 'share of
wallet' in Facilities Management through deeper relationships and investments
in sales & marketing; 'turbo-charging' Facilities Transformation through a
growing pipeline of capital projects; and accelerating growth in Facilities
Compliance with our existing clients, as we add Water & Environmental
services and target larger opportunities in Fire & Security. Building on
our leadership in technology, an enterprise-wide programme has been launched
to re-imagine and optimise both our internal workflows and customer-facing
solutions through agentic AI, positioning Mitie as a 'frontier' firm in the
industry. Together, these strategic imperatives are expected to sustain
above-market growth, expand margins and deliver attractive shareholder returns
well beyond FY27.
"After almost a decade as CEO, it remains my intention to retire from Mitie at
the end of the FY25-FY27 Strategic Plan, once a successor is in place - a
process that is well underway. I am proud of the progress we have made in
transforming Mitie into a world-class industry leader, positioned to deliver
the 'Future of High-Performing Places' for our customers. I thank every one of
our 84,000 Mitie colleagues for their dedication, professionalism and hard
work, without which none of this could have been achieved. We are building a
larger, more profitable and more cash generative business with a greater
capacity to invest in growth and deliver attractive returns to shareholders."
Analyst Presentation and Q&A
Phil Bentley (CEO) and Simon Kirkpatrick (CFO) will host a presentation and
Q&A session today (4 June 2026) at 9.30am at The Shard and via a webcast:
https://webcasts.umcdn.com/mit041
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 at
www.mitie.com/investors (http://www.mitie.com/investors) .
For further information
Kate Heseltine E: kate.heseltine@mitie.com (mailto:kate.heseltine@mitie.com)
Group IR and Corporate Finance Director
Claire Lovegrove 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
About Mitie: The Future of High Performing Places
Founded in 1987, Mitie employs 84,000 colleagues and is the leading
technology-led Facilities Management, Transformation and Compliance company in
the UK. We are a trusted partner to a diverse range of large 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 Facilities Management service lines of Engineering Maintenance
(hard services) and Security and Hygiene (soft services) we hold market
leadership positions. We deliver Facilities Transformation projects in higher
growth categories including buildings infrastructure, data centres,
decarbonisation technologies, fire & security capital projects and power
& grid connections, alongside Facilities Compliance capabilities in Fire
& Security and Water & Environmental services. 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 the CDP Climate and Supply
Chain 'A List', and we have received multiple industry awards recently
including Best Low Carbon Solution and Net Zero Carbon Strategy of the Year.
We have been recognised as a 'UK Top Employer' for the eighth consecutive
year, as well as being ranked 16(th) in the Top 100 Apprenticeship Employers
and tenth in the Inclusive Top 50 UK Employers list. We were recently awarded
a Royal Warrant by appointment to His Majesty King Charles for services to the
Royal Household. Find out more at www.mitie.com (http://www.mitie.com) .
Chief Executive's review
Overview
Mitie delivered a good financial performance and made further strategic
progress during the second year of our FY25-FY27 Strategic Plan, consolidating
our leading positions across our three key pillars of growth: Facilities
Management, Facilities Transformation and Facilities Compliance.
Revenue for the 12 months to 31 March 2026 (FY26) grew by 10.5% to £5,619m
(FY25: £5,083m), with organic growth of 5.3% - remaining well ahead of UK
Facilities Management market growth of c.2-3% p.a. This uplift in revenue,
combined with £25m of savings from our ongoing programmes of margin
enhancement initiatives, has more than offset material cost headwinds,
including from inflation, additional employer National Insurance Contributions
(NIC), unsuccessful contract renewals and other one-off costs.
As a result, operating profit before Other items grew by 13% to £264.1m
(FY25: £234.1m) and operating profit margin before Other items increased by
10bps to 4.7% (FY25: 4.6%). Basic earnings per share (EPS) before Other items
grew by 7% to 13.6p (FY25: 12.7p), despite an £11.5m increase in net finance
costs to £27.7m (FY25: £16.2m) primarily reflecting debt funding for the
Marlowe acquisition, which completed in August 2025, alongside wider capital
deployments.
Free cash flow generation grew by 13% to £162m (FY25: £143m) and was well
ahead of our guidance for 'at least £120m'. Growth reflected the increase in
operating profit before Other items alongside effective working capital
management, which in turn supported increased capital deployments.
We secured £6.3bn total contract value (TCV) of contract
wins/renewals/extensions, against a strong prior year comparative (FY25:
£7.5bn). We are entering FY27 with a record order book of £16.3bn (FY25:
£15.4bn) and pipeline of upcoming bidding opportunities of £31.7bn (FY25:
£23.7bn), both of which include Marlowe for the first time.
Based on the equivalent IFRS measures, operating profit reduced by 7% to
£151m (FY25: £162m) and basic EPS reduced by 20% to 6.6p (FY25: 8.2p). These
reductions reflect a £40m increase in non-recurring 'Other items' to £113m
(FY25: £73m), primarily due to the one-off transaction costs, integration
costs, and non-cash amortisation related to the Marlowe acquisition. Further
details are set out in the Finance review.
FY25-FY27 Strategic Plan
Our Strategic Plan set out to extend Mitie's Facilities Management market
leadership into Facilities Transformation projects and, following the Marlowe
acquisition, into business-critical Facilities Compliance. Together, these
three pillars of growth create a compelling, end-to-end customer proposition
that shifts our sales mix towards higher-margin adjacencies while meeting our
customers' evolving needs.
We are differentiated by our scale, exceptional colleagues and sustained
investment in technology and AI, enabling us to aggregate workflow and
workforce data, improve efficiency, and deliver high-value insights to public
and private sector customers on the performance of their built environment.
Demand is underpinned by significant macro trends: tightening regulation of
the built environment; increased investment in building modernisation;
renewable energy; data centre investment; power & grid connections; and
now, water services.
At our Capital Markets Event in October 2023, where we launched our Strategic
Plan, we set ambitious financial targets, inclusive of M&A, to accelerate
growth and deliver superior returns to shareholders:
· High single-digit compound annual revenue growth
· Operating margin of at least 5% by FY27
· Basic EPS growth above that of revenue growth, despite higher
corporation tax rates
· Annual free cash flow of £150m by FY27
Our ambitious targets are underpinned by a proactive capital deployment
policy, leverage of 0.75-1.5x (average daily net debt/EBITDA, including
leases) and a return on invested capital above 20%.
Delivering our key pillars of growth through our divisions
We deliver Facilities Management, Facilities Transformation and Facilities
Compliance through two business divisions - Business Services and Technical
Services - each with specialist capabilities and specific sector focus. FY26
performance across both divisions is set out in the Operating review.
Business Services is the UK's largest provider of Security and Hygiene
services, and generated revenue of £2,985m in FY26, up 18% compared to FY25
(£2,538m). Within this, Facilities Management represented 75% of divisional
revenue, with Facilities Transformation (projects) contributing 11% and
Facilities Compliance 14%. The latter includes both Marlowe and Mitie's
capabilities in Fire & Security (excluding capital projects) and Water
& Environmental services.
Technical Services is the UK's largest provider of Engineering Maintenance and
engineering projects, including across Defence and Healthcare, Local
Government & Education. The division generated revenue of £2,634m in
FY26, up 3% compared to FY25 (£2,545m), with Facilities Management and
Facilities Transformation (projects) contributing 59% and 41% of divisional
revenue, respectively.
Accelerating growth
Our Strategic Plan is delivering accelerated growth across all three key
pillars:
1) Facilities Management - key account growth and scope increases;
2) Facilities Transformation - projects upsell and infill acquisitions; and
3) Facilities Compliance - growth in Fire & Security and Water &
Environmental services, following the acquisition of Marlowe (combined with
Mitie's existing capabilities)
In FY26, organic growth through key accounts and scope increases alongside
projects upsell contributed 5.3% to revenue growth, inclusive of contract
pricing of 3%. Acquisitions completed since 1 April 2024 contributed a further
5.2% of inorganic growth, resulting in total revenue growth of 10.5% to
£5,619m.
Across our three key pillars, Facilities Management revenue grew by 4% to
£3,797m (FY25: £3,649m), Facilities Transformation revenue grew by 13% to
£1,401m (FY25: £1,238m) and Facilities Compliance revenue grew by 115% to
£421m (FY25: £196m).
Pillar 1: Facilities Management - sustained good level of contract awards
Facilities Management revenue increased by 4% to £3,797m (FY25: £3,649m)
across our two divisions. Over the medium-term, we see significant
opportunities to increase 'share of wallet' in Facilities Management by
c.£1.5bn, through the addition of service lines to our existing strategic
client accounts. We currently deliver Integrated Facilities Management (IFM)
to only c.40% of our largest contracts.
During FY26, we secured £6.3bn TCV of contract wins and extensions/renewals,
the majority of which relates to FM, reflecting recent investments in our
sales and marketing teams. This compares to a record prior year comparative
(FY25: £7.5bn TCV), which had included the £1bn Department for Work and
Pensions award for Security services, the £0.4bn HMP Millsike prison contract
and the renewal of our largest private sector contract.
New wins of £3.4bn TCV (FY25: £5.0bn) included Hygiene services for
Transport for London; Security services for Asda; bundled and IFM services for
Aviva, Imperial College London and Staffordshire Police; Immigration &
Justice services for Scottish Prison Services and the Home Office; and
Landscaping for Landsec. We also extended our UK relationships with Primark
and an international e-commerce business to provide Hygiene services in Spain.
Renewals/extensions of £2.9bn TCV (FY25: £2.5bn) included Security services
for Associated British Ports, Cooperative Group, Real Estate Management Ltd
and one of the UK's largest supermarket chains; IFM for GSK; Landscaping for
JLL; and Immigration & Justice services for the Home Office.
Mitie's renewal rate rebounded to 84% (FY25: 59%), closer to our longer-term
average of c.90% and reflecting the good commercial momentum in the
business.
Pillar 2: Facilities Transformation (projects) - Strong growth underpinned by
favourable macro trends
Facilities Transformation revenue increased by 13% to £1,401m (FY25:
£1,238m) across our two divisions. We continue to see strong demand for
projects across our customers' estates, driven by the need to upgrade the
built environment, with c.80% of work delivered to existing Facilities
Management customers.
Project complexity has increased significantly over the past two years, with
the average order value having doubled to c.£300k. Although each project is
bespoke (running for 1-3 months), many form part of a larger upgrade programme
aligned to the long‑term investment priorities of our customers. Over the
medium term, we see the potential to 'turbo-charge' projects growth and build
a c.£2bn business.
Ageing estates, the need to modernise buildings, the introduction of digital
technologies (Building Management/Energy Management Systems) and investment in
data centres remain key drivers of growth. Customers are increasingly seeking
integrated solutions that create intelligent, efficient and compliant
buildings. This includes lifecycle upgrades, systems integration, and the
deployment of smart technologies that enhance asset performance and reduce
operating costs.
Regulatory changes also continue to underpin demand, for example in Fire &
Security capital projects (and compliance services), where new
responsibilities on building owners and managers are driving investment, and
in energy efficiency, where minimum standards are expected to require all let
commercial buildings to reach EPC B by 2030. The British Property Federation
estimates that over 80% of UK commercial stock currently falls below this
threshold.
Decarbonisation is a further catalyst, with customers investing in
low‑carbon renewable technologies such as air and ground source heat pumps,
solar photovoltaic panels, electric vehicle charging infrastructure and
battery storage, alongside upgrades to power & grid connections, to meet
Net Zero commitments and reduce the impact of rising energy costs.
The UK continues to be one of Europe's largest and fastest‑growing data
centre markets, fuelled by hyperscaler and colocation demand as the use of AI
expands rapidly. We have built leading capabilities in the design, delivery
and maintenance of mechanical & electrical, cooling, and fire &
security systems across these critical environments. Beyond the UK, we are
also supporting customers such as Google, Microsoft and Equinix in
high‑growth European locations, including the Nordics, where we strengthened
our regional capability through two infill Fire & Security acquisitions at
the end of March.
Across our Defence contracts, we continue to deliver a broad range of project
work aligned to the UK Government's commitment to modernise and decarbonise
the defence estate. Lifecycle projects also remain a key growth driver across
Healthcare, Local Government & Education, where public sector
organisations are investing to improve estate resilience, energy performance
and compliance.
In our telecoms infrastructure business, the management actions taken over the
past two years have delivered a meaningful turnaround, with the business
returning to break even in FY26, compared with an £11m loss in FY25. Revenue
reduced by 35% to £37m (FY25: £57m) as we continued to exit unprofitable
frameworks. Looking ahead, we expect to see a return to modest growth and
profitability in the business.
Pillar 3: Facilities Compliance - Marlowe initial revenue and cost synergies
delivered
On 4 August 2025, we completed the acquisition of Testing, Inspection and
Certification specialist, Marlowe, for c.£350m, comprising 290p in cash
(£228m) and 1.1 Mitie shares (86.6m new shares) per Marlowe share. The
acquisition contributed £208m of revenue in the first eight months of
ownership - the primary driver of 115% growth in Facilities Compliance revenue
to £421m (FY25: £196m) within Business Services.
Marlowe has outstanding and highly complementary Fire & Security and Water
& Environmental capabilities in the fast growing £7.6bn UK 'Facilities
Compliance' market, which reflects the increasing requirements for
business-critical assurance arising from more stringent regulations for fire
and building safety, water usage and discharge. The combination of Mitie and
Marlowe's compliance businesses, with c.£0.5bn of annualised revenue, makes
us the leader in this highly fragmented market, with the potential to become a
c.£1.5bn business in the medium term.
The Marlowe integration programme continues to progress well, and as a result,
we delivered initial cost synergies of £7m in FY26 (included within our
expectation for at least £30m by FY28). These synergies have come from the
consolidation of Marlowe's Alarm Receiving Centre (ARC) operations into
Mitie's ARC in Northern Ireland; the exit from 15 Marlowe properties; and the
streamlining of certain back-office operations, including payroll and
procurement, as we move onto Mitie's systems and ways of working.
These initial synergies give us good momentum into FY27, with ongoing
workstreams including the optimisation of field force deployments onto a
single platform; consolidation of further roles and responsibilities;
continued property rationalisations; and the migration of Marlowe onto Mitie's
cyber-secure and AI-enabled core systems.
We have established specialist sales capabilities and are making good progress
cross selling Marlowe's regulatory-driven services to Mitie customers. Awards
in Total Managed Water included a £128m, 10-year contract to provide AWE with
water network management services and projects work. We see further project
opportunities through our heat pump/extraction capabilities, as demonstrated
by the recent award of a combined water and air source heat pump project at
our University College London Hospital customer. In Total Fire & Security,
wins at our existing clients, including JLL, Rolls Royce and Vodafone, were
achieved. Additionally, Mitie compliance works contracted to third parties
continue to be transitioned to Marlowe.
Record total order book and bidding pipeline
Our total order book increased by 6% to a record £16.3bn (end FY25:
£15.4bn), net of £5.6bn of revenue that was delivered in the year, and our
bidding pipeline increased by 34% to a record £31.7bn (end FY25: £23.7bn).
Both the order book and pipeline now include Marlowe within Facilities
Compliance and are split across our three key pillars, as below:
£bn Total order book Bidding pipeline
Key pillar: FY26 FY25 Change FY26 FY25 Change
Facilities Management 13.0 12.4 5% 24.1 18.3 32%
Facilities Transformation 2.8 2.8 - 6.8 4.8 42%
Facilities Compliance 0.5 0.2 150% 0.8 0.6 33%
Total 16.3 15.4 6% 31.7 23.7 34%
We have high near-term revenue visibility, with over 60% of the total order
book due to be recognised in the next 1-3 years. Our typical Facilities
Management contract length is 3-5 years in the private sector and up to 5-10
years in the public sector, while Facilities Transformation project work tends
to be shorter-term in nature. Facilities Compliance contracts via Marlowe are
typically 'evergreen' (i.e. automatically renew). Although we experienced some
modest revenue dis-synergies, as expected, in the first few months of
ownership as competitors moved work away, we have seen good growth momentum
through the early cross-sell of services to Mitie's large blue-chip customer
base, such as the recent 10-year AWE award.
Across the bidding pipeline, significant sectors include Immigration &
Justice, Defence and Healthcare, Local Government & Education in the
public sector, alongside Retail, Critical National Infrastructure (including
data centres), Manufacturing, Transport & Aviation and Financial Services
in the private sector. Over 70% of the pipeline is due to be awarded in the
next 18 months.
Operating margin progression
Progression in the operating profit margin before Other items continues to be
driven by the increasing contribution from higher growth, higher‑margin
Facilities Transformation and Facilities Compliance work (including Marlowe
cost synergies), alongside our ongoing programme of margin enhancement
initiatives - many of which are being accelerated through the deployment of AI
- together with operational leverage. These tailwinds are expected to more
than offset inflationary pressures and contract pricing dynamics in a
competitive market.
In FY26, the operating profit margin before Other items increased by 10bps to
4.7% (FY25: 4.6%), demonstrating the resilience of the business in the face of
material headwinds. The most significant of these was a c.£50m increase in
employer NICs, which we mitigated through a combination of contractual and
commercial recoveries from customers and margin enhancement initiatives.
In total, we delivered £25m of cost savings through our margin enhancement
initiative programmes. Key workstreams included the application of technology
and AI to streamline workflows and optimise resource deployment (see
'technology' section below); our 'Mitie First' initiative to increase
self‑delivery and reduce reliance on third‑party contractors; partnering
with strategic client accounts to define and implement best‑practice service
delivery models; the continued delivery of efficiencies across back office
functions; and the consolidation of core systems and processes across the
Group. We also completed the rollout of Coupa, our procurement digital
supplier platform.
Early investments in the Strategic Plan across sales & marketing, contract
re‑bids and training and incentives for our 'in‑contract' teams continue
to deliver clear benefits, including high‑quality wins and renewals, and a
record pipeline of bidding opportunities to support strong revenue growth over
the medium-term. We also continue to invest in technology, including the
development of our Intelligent360 solutions and the enablement of AI across
our core systems, which will further enhance productivity and service quality
over time.
Sustainable free cash flow generation
We are targeting sustainable free cash flow generation of c.£150m per annum
in FY27. This, combined with our strong balance sheet and low leverage,
underpins our proactive approach to deploying capital and delivering
shareholder returns.
In FY26, the Group generated £290m of cash from operations (FY25: £249m),
leading to a free cash inflow of £162m (FY25: £143m), well ahead of our
guidance for 'at least £120m'. The increase in free cash flow year-on-year
reflects the increase in profitability and ongoing working capital process
improvements, offsetting the increased working capital required to support our
growing projects business, longer payment terms on certain contracts
(particularly in the retail sector) and a one-off negative impact to working
capital of £8m arising from the Procurement Act 2023. This came into effect
in February 2025 and requires mandatory 30-day payment terms for all
subcontractors and suppliers on government framework contracts.
Proactive and growing capital deployments
Our capital deployment policy is focused on the best use of capital to deliver
superior returns to shareholders and drive long-term growth in the business,
while maintaining a strong balance sheet, with leverage of between 0.75-1.5x
(average daily net debt/EBITDA).
In FY26, we completed the acquisition of Marlowe for c.£350m, comprising 290p
in cash (£228m) and 1.1 Mitie shares (86.6m new Mitie shares issued) per
Marlowe share. As part of this acquisition, we incurred transaction costs of
£7m. We also spent £15m on four infill acquisitions to add capability
alongside £13m on performance-linked earnouts relating to infill acquisitions
in prior years. We will continue to pursue strategic infill M&A, although
this is likely to be modest in scale over the remainder of the Strategic Plan
as we focus on delivering the benefits of the Marlowe acquisition to build our
Facilities Compliance platform.
We prioritise a progressive dividend at a payout ratio of between 30-40%, and
paid dividends of £55m during the year relating to the FY25 final dividend
and FY26 interim dividend. The Board is recommending an FY26 final dividend of
3.1p per share, which, when added to the 1.4p interim dividend paid, takes the
total dividend for FY26 to 4.5p per share. This is a 5% increase on the prior
year (FY25: 4.3p) and represents a payout ratio of 33% (FY25: 34%). The final
dividend will be paid on 27 August 2026, following approval at the 2026 AGM.
We have committed to purchase all shares required to fulfil colleague
incentive schemes to prevent shareholder dilution and acquired 21m shares into
our Employee Benefit Trust and Share Incentive Plan at a cost of £29m.
We will continue to return surplus funds to shareholders via share buybacks to
maintain leverage within our target range. In October 2025, we launched a new
£100m share buyback programme to be completed over c.12 months. During FY26,
we purchased 38m shares (£63m) at an average price of c.166p. This includes
2m shares (£3m) purchased under a previous programme, which was paused to
accommodate the Marlowe acquisition. We retained 5m shares in treasury to
fulfil our 2022 Save As You Earn scheme (which vested in February 2026), and
cancelled all shares purchased in excess of this.
Our intention is to commence a new £60m share buyback programme on completion
of the remaining c.£40m 'tranche' of the current £100m programme, which will
end no later than 30 September 2026. As such, we expect to spend £100m on
share buybacks in total during FY27 (c.£40m current programme plus £60m new
programme).
Strong balance sheet and low leverage
Closing net debt at 31 March 2026 increased by £251m to £450m (FY25:
£199m), inclusive of £196m of lease obligations (FY25: £198m). The increase
reflects proactive capital deployments of £414m, primarily relating to
Marlowe (£228m), share buybacks (£63m) and dividends to shareholders
(£55m), partially offset by good free cashflow generation, alongside a £2m
decrease in lease obligations.
Average daily net debt in FY26 was £440m (FY25: £264m) and our average daily
net debt/EBITDA leverage was 1.2x (FY25: 0.8x), within our 0.75-1.5x target
leverage range. Excluding lease obligations, our leverage based on average
daily net debt was 0.8x (FY25: 0.3x). Our covenant leverage (excluding leases
and based on closing net debt) was also 0.8x.
The Group's main defined benefit pension scheme funding position continued to
improve through a combination of deficit repair contributions and better
investment returns. The latest quarterly funding update at 31 March 2026 from
the scheme actuary showed an actuarial surplus of c.£12m, a material
improvement compared to the £19m deficit reported in the last triennial
valuation in 2023 (which had reduced from £73m in 2020). As a result, during
the year we agreed with the scheme trustee to cease deficit repair
contributions ahead of schedule, saving £4.8m. We are now working with the
trustee to purchase a 'buy-in' policy with an insurer to cover scheme
liabilities, a common approach adopted by well-funded schemes to de-risk the
balance sheet of the company.
Advancing our technology leadership
Our technology leadership combines deep operational expertise with advanced
data, digital and AI capabilities to deliver intelligent, outcome-focused
solutions. By re-imagining and optimising core operational and customer
processes, we are improving productivity, resilience and insight across
increasingly complex customer estates, while enhancing our scalable digital
platforms that support long-term growth.
Our Intelligent Solutions are integrated through Mozaic360, our unified data
and AI insight platform for real-time visibility into service, asset and
environmental performance. Mozaic360 was launched in FY26 and already supports
more than 140 strategic customers, with the roll-out continuing in FY27.
Intelligent Engineering Maintenance provides condition-based monitoring and
predictive maintenance across more than 700 connected sites, improving asset
availability and reducing unplanned downtime. Intelligent Security uses
advanced analytics to enable risk-based deployment across more than 8,200
customer sites, primarily in retail, while Intelligent Hygiene uses building
data and sensors to deliver demand-led, sustainable services across more than
400 sites. Our Intelligent Energy Products support over 400 customers in
managing 17TWh of energy, representing c.3-4% of the UK's non-domestic energy
market.
Customer engagement and service delivery are increasingly supported by our
digital command and engagement layer at our Technical Services Operations
Centre and Intelligence Security Operations Centre. Aria, our customer mobile
app, automates c.40% of service requests with its embedded AI assistant, ESME.
Internally, AI-driven automation is a gaining momentum. Through the SkanAI
task mining platform, deployed across over 5,000 machines, 3.5m hours of
operational tasks and process insights were generated in assisting Intelligent
Process Automation (IPA). We are deploying AI agents and software robots
across operational and back-office processes, supporting service desk
operations, workflow automation and decision support. 155 'bots' are currently
live or in development, reducing manual workflows and enabling faster response
times and the creation of digital twins for key processes.
Our core enterprise platforms continue to evolve. We upgraded our Defence,
Government and Commercial IBM Maximo systems to MAS 9.1, enabling AI-driven
asset insights and integrated workflows across our FM service lines. We also
completed the rollout of Coupa across the Group, embedding greater
transparency and AI-enabled insights across procurement and spend management.
We operate a robust AI governance framework and continue to invest in
digital/AI capability across our workforce. We have equipped thousands of
colleagues with Microsoft Copilot tools, supported by structured learning
programmes and have established 172 AI apprenticeships delivered in
partnership with Corndel, Imperial College London and Microsoft.
Process reimagination and optimisation - positioning Mitie as a 'frontier'
firm
The significant investments we have made in technology and data over almost a
decade provide a strong platform for an enterprise-wide programme, developed
with best-in-class partners across AI, engineering and transformation, to
re-imagine and optimise both our internal workflows and our customer-facing
solutions through agentic AI.
The programme builds on the foundations established through our IPA
workstream, and will create an agile, AI-enabled ecosystem that will redefine
traditional ways of working and position Mitie as a 'frontier' firm in the
sector. This will in turn ensure that we are at the forefront of operational,
product and market opportunities and support further margin expansion.
Over the next two years we will prioritise high-impact, end-to-end 'domains'
(i.e. process groupings), covering more than 75% of Mitie's cost base, with a
particular focus on Engineering Field Force; Hire-to-Retire; Hygiene Delivery;
and Security Monitoring and Delivery. Each domain is supported by a central
Transformation Office, AI Centre of Excellence and our integrated technology
platform.
The programme is designed to create value across every aspect of our business.
For Mitie, this is expected to drive material improvements in both efficiency
and effectiveness - creating a cost to serve advantage, enhancing
decision-making through automation and real-time data, and enabling
repeatable, scalable deployment at contract level via 'clean room'
architecture. For our customers, it will support a more consistent, proactive
and insight-led experience as Mitie evolves further into higher-value segments
and advisory services which leverage our proprietary operational insight and
improve retention and contract quality.
We expect higher upfront one-off programme costs (c.£20-25m in FY27), which
will be reported within Other items, with the benefits building progressively
as domains are deployed and scaled, supporting continued investments to grow
the business. We will provide further updates on the phasing of delivery as we
progress into FY27 and beyond.
ESG and social value leadership
Mitie is recognised as an environmental, social and governance (ESG) and
social value leader among global industry peers, with these principles
embedded in how we operate. Our strong credentials - including CDP Climate and
Supply Chain A List status and an MSCI ESG AA rating - also enable us to
support customers in achieving their own sustainability and Net Zero goals.
At the end of 2025, we completed Phase 1 of our Plan Zero strategy, delivering
material reductions in Scope 1 and 2 greenhouse gas emissions while
significantly scaling the business from c.£2bn to £5.6bn. When adjusting for
growth over the five-year period of Plan Zero, emissions reduced by c.90% on a
market-based reporting basis, demonstrating a clear decoupling of emissions
from growth and the achievement of effective Net Zero. We continue to work
towards the stricter science-based definition of Net Zero and have established
a new baseline for Plan Zero 2.0, targeting Net Zero across all emissions by
2035.
In July 2025 we launched Plan Thrive, our social value framework aligned to
our purpose: Better Places; Thriving Communities. Plan Thrive embeds social
value across our operations, with commitments to uplift one million lives and
enable 1,000 places to prosper. Mitie continues to deliver meaningful impact
through the Mitie Foundation, apprenticeships, inclusive recruitment, learning
and development, and responsible supply chain practices.
We remain focused on attracting and developing talent, offering strong career
pathways and industry‑leading benefits. During the year, c.1,800 colleagues
participated in more than 120 technical, professional and leadership
programmes.
Outlook
FY26 has been another year of progress as we enter the final year of our
FY25-FY27 Strategic Plan, with double‑digit growth in revenue and operating
profit before Other items for the third consecutive year and good free cash
flow generation. We also further developed our leadership into
business-critical Facilities Compliance through the acquisition of Marlowe,
and the integration is progressing well.
Looking ahead, we enter FY27 with good momentum, supported by a record order
book and bidding pipeline. Notwithstanding the potential for some incremental
cost inflation as a result of the conflict in the Middle East, our ongoing
margin enhancement initiatives, combined with the increasing mix of
higher-margin Facilities Transformation and Facilities Compliance work and
continued investment in data and AI, are expected to support margin
progression, while we continue to reinvest for growth. We are confident of
delivering our FY25-FY27 Strategic Plan.
Mitie's long-term value creation potential and foundations for the next phase
of our strategy continue to be strengthened: capturing client 'share of
wallet' in Facilities Management through deeper relationships and investments
in sales & marketing; 'turbo-charging' Facilities Transformation through a
growing pipeline of capital projects; and accelerating growth in Facilities
Compliance with our existing clients, as we add Water & Environmental
services and target larger opportunities in Fire & Security. Building on
our leadership in technology, an enterprise-wide programme has been launched
to re-imagine and optimise both our internal workflows and customer-facing
solutions through agentic AI, positioning Mitie as a 'frontier' firm in the
industry. Together, these strategic imperatives are expected to sustain
above-market growth, expand margins and deliver attractive shareholder returns
well beyond FY27.
After almost a decade as CEO, it remains my intention to retire from Mitie at
the end of the FY25-FY27 Strategic Plan, once a successor is in place - a
process that is well underway. I am proud of the progress we have made in
transforming Mitie into a world-class industry leader, positioned to deliver
the 'Future of High-Performing Places' for our customers. I thank every one of
our 84,000 Mitie colleagues for their dedication, professionalism and hard
work, without which none of this could have been achieved. We are building a
larger, more profitable and more cash generative business with a greater
capacity to invest in growth and deliver attractive returns to shareholders.
Operating review
We continue to simplify our organisational structure to reduce management
overheads. The changes implemented from the start of FY26 primarily consist of
splitting our Communities division into Business Services for Care &
Custody (renamed Immigration & Justice) and into Technical Services for
Healthcare, Local Government & Education. In Business Services, Landscapes
has been combined with Hygiene (formerly reported separately within the
division).
Having acquired Marlowe during the year, a new Facilities Compliance
sub-division has been created within Business Services, comprising both Mitie
and Marlowe's compliance activities in Fire & Security and Water &
Environmental Services (including Waste, which was formerly reported
separately within the division).
The above changes are reflected in the restated FY25 comparatives in the
tables for Business Services and Technical Services below. Divisional
operating profit before Other items is reported after absorbing direct
overheads, as well as a share of Group services (IT, Finance and HR).
Business Services
Business Services is the UK's leading provider of technology-led Security and
Hygiene services across c.2,500 public and private sector contracts, including
expertise in Central Government and Immigration & Justice. Following the
acquisition of Marlowe, it is also the leading provider of Facilities
Compliance services. Mitie's Spanish business, which largely comprises Hygiene
and Security services, is reported within the division.
Business Services, £m FY26 FY25 Change
(restated)
Revenue 2,985 2,538 18%
Security 1,077 990 9%
Hygiene & Landscapes 564 510 11%
Facilities Compliance (incl. Marlowe) 421 196 115%
Central Government 377 384 (2)%
Immigration & Justice 319 291 10%
Spain 227 167 36%
Operating profit before Other items 187.1 180.4 4%
Operating profit margin before Other items 6.3% 7.1% (0.8)ppt
Total order book £7.5bn £6.2bn 21%
Revenue split by growth pillar, £m FY26 FY25 Change
Facilities Management(1) 2,248 2,056 9%
Facilities Transformation(2) 316 286 10%
Facilities Compliance(3) 421 196 115%
Total divisional revenue 2,985 2,538 18%
(1) Facilities Management is delivered across Security, Hygiene &
Landscapes, Central Government, Immigration & Justice and Spain
(2) Facilities Transformation projects are delivered across Security and
Central Government
(3) Facilities Compliance comprises both Mitie and Marlowe's compliance
activities (including Mitie's Waste business)
Performance highlights
· Revenue grew 18% to £3.0bn, reflecting net wins, pricing, projects and
acquisitions, more than offsetting the one-off benefit from 'surge response'
security work in the prior year and scope reductions in Escorting Services
· Operating profit before Other items grew 4% to £187.1m reflecting revenue
growth, margin enhancement initiatives and acquisitions, more than offsetting
headwinds from inflation/NIC and the loss of one high-margin public sector
contract, as well as one-off prior year benefits from 'surge response'
security work and a legal settlement
· £4.1bn TCV of wins and extensions/renewals resulted in a 21% increase in the
total order book to £7.5bn (FY25: £6.2bn), net of £3.0bn of revenue
produced in the year
· Facilities Compliance grew significantly through the acquisition of Marlowe,
complementing existing Fire & Security capabilities and adding new Water
& Environmental capabilities
Operational performance
Business Services delivered good growth in FY26, with the division benefiting
from net wins in the current and prior year, projects and pricing, alongside
contributions from the acquisition of Marlowe in the current year (which added
£208m of revenue), and Argus Fire and Grupo Visegurity in the prior year.
This more than offset the one-off benefit in the prior year from the provision
of 'surge response' security work (which had added £59m of revenue) as well
as a reduction in scope on the Escorting Services contract in Immigration
& Justice. The Security, Hygiene & Landscapes and Immigration &
Justice subdivisions all performed well.
Across our three key growth pillars, Facilities Management and Facilities
Transformation showed good momentum, in particular from fire & security
capital projects via GBE Converge, RHI and Argus Fire (reported within the
Security subdivision) and smaller works on FM contracts. The significant
growth in Facilities Compliance largely reflects the Marlowe acquisition.
The 0.8ppt reduction in the operating profit margin before Other items
reflects the one-off benefits in the prior year from 'surge response' security
work, which was higher-margin, and a favourable legal settlement, as well as
the loss of a higher margin Central Government contract in September 2025.
This was replaced by a similarly sized 7+3-year Security contract for the same
organisation, albeit at a much lower margin in its first year, and with lower
volumes of (higher-margin) projects. The impact of inflation and higher
employer NICs were recovered or mitigated through margin enhancement
initiatives.
More efficient workforce deployment and improving frontline productivity was
underpinned by technology. Procurement savings have been achieved through the
consolidation of spend across our preferred supplier list and robust materials
cost control, while AI-enabled solutions have unlocked savings across both
back-office and frontline operations, including supply chain management.
Together, these programmes have mitigated cost pressures, strengthened
operational key performance indicators and reinforced service quality.
Business Services secured £4.1bn TCV of wins and extensions/renewals across
key sectors, including retail, transport & aviation, financial services
and in the public sector. The largest wins included a five-year contract to
provide Hygiene services for Transport for London, Landsec's Liverpool ONE
complex and Walgreens Boots Alliance; Security services across Asda's national
estate of 1,100 stores (having provided Security across their Logistics Estate
since 2019); prisoner escorting for Scottish Prison Services; IFM for Aviva;
and water network management compliance services for AWE. Notable
extensions/renewals included the provision of Security services to one of the
UK's largest supermarket chains and Co-operative Group, as well as contracts
for the Home Office, GSK and JLL.
Within the subdivisions, Security delivered good growth against a strong prior
year comparative, which had benefited from 'surge response' security work. In
addition to net wins, pricing and the acquisition of Argus Fire in the prior
year, fire & security capital projects growth was also strong. GBE
Converge was the largest contributor, primarily delivering data centre
projects to global customers in the UK and fast-growing European locations
such as the Nordics, where we added further capability through two infill
acquisitions (El-Team Vest and ABC Elektro) in March.
Data centre works included the delivery of a range of fire & security
solutions in data centres for Iron Mountain in Slough, Ark in Middlesex (as
part of a new relationship with Microsoft as an approved security integrator),
and Google in Norway. Work also commenced to install the information
communications technology (ICT) cabling and infrastructure package at a new
NTT data centre in Amsterdam, where Microsoft is the customer, and end-to-end
security and ICT solutions across five further phases of Digital Realty's
Digital Park in Frankfurt.
Additionally, Argus Fire completed the mechanical fire protection installation
at the Print & Ink Buildings in London for Landsec while RHI delivered
civil works for National Grid at the Didcot national storage facility and
civil, structural and engineering works on 10 substations across the National
Grid Electricity Transmission estate, as well as essential earthing solutions
for SSE and Scottish Power substations.
Hygiene and Landscapes benefited from prior and current year wins, with
notable contracts including Community Health Partnerships, Pladis Global and
Walgreens Boots Alliance, while in Central Government the loss of a major
contract in the prior year resulted in a modest reduction in growth. In
Immigration & Justice, HMP Millsike, the UK's first all-electric prison,
became operational in April 2025. Following a period of mobilisation, it is
expected to reach full capacity to house and rehabilitate c.1,500 Category C
inmates in H1 FY27. The sub-division delivered double-digit growth, despite a
reduction in scope on the Escorting Services contract.
In August 2025, Mitie further developed its leadership into the fast-growing
Facilities Compliance market through the acquisition of Testing, Inspection
and Certification specialist, Marlowe. Combined with Mitie's existing fire
& security capabilities, the acquisition has created unique 'Total Fire
& Security', offering both active and passive fire solutions while
enhancing our security systems offering.
In addition, Marlowe's Water & Environmental services, combined with
Mitie's Waste business, and water retail license (one of only 19 in the UK)
has created a 'Total Managed Water' proposition in a fast-growing market.
Demand for water services is underpinned by the step change in UK water
infrastructure investment under Asset Management Period (AMP) 8 (2025-2030;
£104bn), with further sector investment expected in AMP 9 (2030-2035),
alongside tightening regulations and customer sustainability and resilience
targets for large water users such as in manufacturing, transport, healthcare
and data centres.
Since acquisition in August 2025, the Marlowe integration programme has
started well, with early cost synergies of £7m (and at least £30m by FY28,
consistent with previous guidance) resulting in operating profit before Other
items for Marlowe of £16.5m in the period.
The strong performance in Mitie Spain reflected new contract wins (including
AENA in the Canary Islands and Autonomous University of Madrid), scope
increases and the contribution from Grupo Visegurity (acquired in the prior
year). Mitie Spain leveraged existing Group relationships with Primark and an
e-commerce business in the UK to provide Hygiene services in Spain. It also
expanded its security offering through the acquisition of the customer
portfolio of SPM for up to £4.3m (of which £2.6m was paid in the year),
doubling Security revenue in Spain to c.£40m.
Technical Services
Technical Services is the UK's leading provider of engineering Facilities
Management services for buildings and critical assets across c.300 contracts,
including for the Ministry of Defence (MoD) and in Healthcare, Local
Government & Education. The division also delivers Facilities
Transformation projects in high-growth areas including buildings
infrastructure, decarbonisation technologies, data centres and power &
grid connections.
Technical Services, £m FY26 FY25 Change
(restated)
Revenue 2,634 2,545 3%
Engineering 1,414 1,395 1%
Defence 606 556 9%
Healthcare, Local Government & Education(1) 614 594 3%
Operating profit before Other items 135.9 109.1 25%
Operating profit margin before Other items 5.2% 4.3% 0.9ppt
Total order book £8.7bn £9.2bn (5)%
Revenue split by growth pillar, £m FY26 FY25 Change
Facilities Management(1) 1,549 1,593 (3)%
Facilities Transformation(1) 1,085 952 14%
Total divisional revenue 2,634 2,545 3%
(1) Facilities Management and Facilities Transformation are delivered across
Engineering, Defence and Healthcare, Local Government & Education
Performance highlights
· Revenue grew 3% to £2.6bn, reflecting new wins, projects and lifecycle works,
partially offset by one notable public sector contract that was lost in the
prior year
· Operating profit before Other items grew by 25% to £135.9m, reflecting
revenue growth, margin enhancement initiatives and the turnaround of the
telecoms infrastructure business, partially offset by additional losses on one
loss-making contract which we have now handed back
· Contract wins and extensions/renewals of £2.2bn TCV did not offset £2.6bn of
revenue produced in the year, resulting in a 5.4% reduction in the total order
book to £8.7bn (FY25: £9.2bn)
· Acquisition of Forest Group added capability in commercial refrigeration
engineering maintenance
· New divisional Managing Director appointed, bringing significant industry
experience and a clear agenda for technology-led growth, aligned to Mitie's
Strategic Plan
Operational performance
Technical Services revenue growth was modest, with project wins in the current
and prior year, acquisitions (ESM Power and Forest Group) and lifecycle works
being partially offset by a weaker Facilities Management performance due to
the loss of one notable public sector contract that was not successfully
renewed at the end of FY25. Defence was the fastest growing subdivision in
Technical Services, with growth coming largely from an increase in projects
work across several large contracts.
Across our key growth pillars, Facilities Transformation performance was
driven by data centre capital projects delivered by JCA Engineering and good
momentum in Defence and Healthcare, Local Government & Education. The
reduction in Facilities Management revenue reflected the contract loss noted
above, and lower volumes on the Landmarc contract in Defence.
However, the 25% increase in operating profit before Other items to £135.9m,
and 90bps improvement in the operating profit margin before Other items to
5.2% (FY25: 4.3%), largely reflected margin enhancement initiatives and
management actions to address challenges in our telecoms infrastructure
business, which more than offset the impact of inflation and employer NICs,
alongside additional losses of £4.7m for one loss-making maintenance contract
which ended in May 2026. The telecoms infrastructure business returned to
break even in FY26 (compared to a loss of c.£11m in FY25). Telecoms revenue
reduced by 35% to £37m (FY25: £57m), reflecting the planned exit from
unprofitable frameworks.
Divisional margin enhancement initiatives focused on streamlining account
structures, increasing self-delivery, introducing service 'bots' and reducing
divisional overheads. Several further AI service 'bots' are also being
implemented to simplify and standardise processes and unlock further
efficiency gains.
The division secured £2.2bn TCV of wins and extensions/renewals. Notable new
contract awards during the period included IFM for Aviva, engineering
maintenance plus energy consulting for Staffordshire Police and Transport for
London, and project work for Willmott Dixon. Notable extensions and renewals
included GSK, JLL, Manchester Airport Group, the Home Office and Defence
Infrastructure Organisation (RAF Mildenhall).
Within the sub-divisions, growth in Engineering was primarily driven by
projects, in particular in data centres. The division completed the mechanical
& electrical design and construction of the first of two new data centres
for Ark at Longcross Park in Surrey and the second of four planned data
centres at the Kao Data campus in Harlow. The third data centre for Kao Data
is now under construction and is expected to complete in early 2027. It will
deliver twice the capacity of its predecessors, with its design adapted to
meet the rapidly evolving demands of AI workloads.
More widely, within power & grid projects, G2 Energy started construction
on a £72m contract to design and build the 360MW Staythorpe battery energy
storage system, one of the largest in Europe. Connection to the National Grid
is expected in 2027 and, once complete, the system will store enough energy to
power 95,000 homes for a day, strengthening UK energy resilience and
supporting the transition to Net Zero. It was also awarded a contract for a
200MW system for Revera UK Operation at Windyhill in Glasgow.
Mitie has been a trusted partner to the UK Armed Forces for over 30 years,
with Defence contracts accounting for c.11% (£606m) of Group revenue. To
support a new era of modern, sustainable infrastructure, both domestically and
in overseas military locations, we continue to deliver a range of projects
work. This included refurbishment works on a critical airfield at RAF Mount
Pleasant in the Falkland Islands, the installation and commissioning of a new
bulk fuel facility at RAF Akrotiri in Cyprus, and new traditional and modular
accommodation alongside kitchen refurbishment works at multiple locations. The
good momentum in projects more than offset the reduction in volumes on the
Landmarc contract.
In Healthcare, Local Government & Education, the one historically
challenging PFI contract acquired with Interserve in 2020 delivered a small
profit for the first time (FY25: £0.6m loss), following a series of
management actions to improve productivity and reset pricing. Projects and
lifecycle work included a new £10m urgent treatment centre at the Cumberland
Infirmary in Carlisle; a new emergency department resuscitation building for
Dudley Hospital; solar photovoltaic installations at Alder Hey Hospital; and
design work for the full refurbishment of a mental health facility at Parkside
Lodge (Leeds and York Partnership NHS Foundation Trust), which commenced
shortly after the year end.
In November 2025, Mitie acquired Forest Group, a specialist engineering
business delivering commercial refrigeration maintenance services, for up to
£7m (comprising an initial payment of £4.2m and deferred payments of up to
£2.5m over three years, linked to performance). This enables Mitie to
self-deliver commercial refrigeration services, including to national high
street and food retailers, where Mitie already has a leading presence in
Security and Hygiene.
Finally, Sam White joined Mitie as Managing Director, Technical Services, in
December 2025. Sam has brought significant industry experience and a clear
agenda to accelerate technology-enabled service delivery, standardise
processes and drive best-in-class operational performance through sector-led
growth across the division. A number of changes to the Technical Services
leadership team have also been made, including to appoint a new Sales Director
and new Managing Directors of Healthcare and Critical Environments.
Corporate overheads
Corporate overheads represent the costs of running the Group and include costs
for central functions such as commercial sales and business development,
finance, marketing, legal and HR. Corporate overhead costs increased by 6% to
£58.9m (FY25: £55.4m), primarily reflecting inflation, higher employer NICs
and investments in sales and technology, partially offset by cost savings from
margin enhancement initiative programmes.
Finance review
Alternative Performance Measures
In addition to presenting statutory measures, the Group presents its results
before Other items. Management believes this is useful for users of the
financial statements, providing both a balanced view of the financial
statements, and relevant information on the Group's financial performance.
Accordingly, the Group separately reports the cost of restructuring
programmes, acquisition and disposal-related costs (including the amortisation
of acquisition-related intangible assets), gains or losses on business
disposals, and other exceptional items as 'Other items'.
Financial
performance
The reported income statement is set out below:
£m unless otherwise specified FY26 FY25
Revenue 5,618.6 5,082.6
Operating profit before Other items 264.1 234.1
Other items (112.7) (72.5)
Operating profit 151.4 161.6
Net finance costs (27.7) (16.2)
Profit before tax 123.7 145.4
Tax (33.4) (37.0)
Profit after tax 90.3 108.4
Less: Profit attributable to non-controlling interest (7.7) (7.0)
Profit attributable to owners of the parent 82.6 101.4
Basic earnings per share before Other items 13.6p 12.7p
Basic earnings per share 6.6p 8.2p
Revenue
Revenue for FY26 of £5,619m (FY25: £5,083m) has grown by 10.5% (£536m). Of
this growth, 5.3% (£271m) was organic, driven by growth in Core FM
(+1.0ppts), Projects (+2.5ppts), and pricing (+3.0ppts), offset by the
completion of 'surge response' security work in the prior year (-1.2ppts). The
remaining 5.2% (£265m) of growth was inorganic.
Organic Core FM growth (of £54m) includes revenue from new accounts such as
the Department for Work & Pensions (DWP) (security), HMP Millsike,
Metropolitan Police and Community Health Partnerships. This revenue growth is
partially offset by the loss of two public sector contracts - one relatively
low-margin contract in Technical Services (engineering), and one large,
higher-margin contract in Business Services (central government) - as well as
a reduction in scope on the Escorting Services contract in immigration &
justice, and lower volumes on the Landmarc contract in defence.
Organic Projects growth of £125m in the year was driven by good momentum in
the defence sector, and in healthcare, local government & education.
Engineering projects in the fast-growing data centre market have also been a
significant driver of growth, alongside decarbonisation work, such as the
battery energy storage system at Staythorpe, which is one of the largest in
Europe, and fire & security projects for customers in a range of sectors
including, in particular, data centres. This growth was partially offset by
planned exits from unprofitable frameworks as part of the turnaround of our
telecoms infrastructure business.
The impact of pricing on revenue in FY26 was £151m (FY25: £121m), which
related to both cost inflation (£114m) and the impact of the government's
increase to employer National Insurance Contributions (NICs) (£37m). The
gross increase in costs from these two inflationary drivers was £121m and
£49m respectively, meaning that the recovery rates were 94% and 76%.
The £265m of inorganic growth is primarily driven by the strategic
acquisition of Marlowe (£208m in FY26), alongside other smaller infill
acquisitions completed during the year (Forest Group and SPM), and the
full‑year contribution of prior‑year acquisitions (ESM Power, Argus Fire
and Grupo Visegurity).
Operating profit
Operating profit before Other items was £264.1m (FY25: £234.1m), an increase
of £30.0m compared to FY25 (+12.8%). This improvement was driven by organic
Core FM and Projects growth (£12.7m), savings from margin enhancement
initiatives (£25.1m), the turnaround of our telecoms infrastructure business
(£10.4m), the delivery of early cost synergies from Marlowe (£7.0m), and
inorganic growth (£12.2m). These factors were partially offset by the
completion of the 'surge response' security work (-£11.7m), investments made
to underpin our growth strategy (-£7.1m), and the unrecovered costs
associated with inflation and the changes to employer NICs (together -£18.6m)
referenced above.
The organic Core FM and Projects profit growth was driven by the revenue
growth outlined above, in particular from higher-margin projects works. This
growth was partially offset by the completion of the higher-margin public
sector (central government) contract referenced above (completed in September
2025). The revenue from this completed contract was replaced by a similarly
sized security contract for the same organisation, but at lower margins as a
result of mobilisation costs and a smaller element of projects delivery. Core
FM and Projects also includes an incremental £4.7m loss on one loss-making
maintenance contract, which ended in May 2026 and will not be renewed.
Of the incremental £25.1m of profit from margin enhancement initiatives, the
Target Operating Model programme contributed £20.0m through overhead
efficiencies, primarily through optimisation of the Group's organisational
structure and outsourcing of back office functions, as well as from
efficiencies on contracts and operations. Savings on contracts and operations
were achieved through focusing on the design and optimisation of our account
structures, and increasing the levels of 'self-delivery' to customers by
reducing our reliance on third-party contractors. The roll-out of Coupa (our
digital supplier platform) was completed during the year, which generated an
incremental £5.1m of savings.
The telecoms infrastructure business has been successfully turned around,
breaking even in FY26 compared to the loss of £10.7m in FY25, and as we
explain above, the Marlowe integration is progressing well, generating £7.0m
of cost synergies in FY26.
Marlowe profit (excluding cost synergies) of £9.5m was the key driver of the
£12.2m of inorganic profit growth, alongside £2.6m from the infill
acquisitions completed during the year (Forest Group and SPM) and in the prior
year (ESM Power, Argus Fire and Grupo Visegurity).
The investments of £7.1m have largely focused on enhancing our sales
capabilities and investing in technology to help to drive growth in the final
year of our strategic plan, and beyond.
Operating profit after Other items was £151.4m (FY25: £161.6m), with the
increase in operating profit from the factors outlined above being more than
offset by higher Other items costs of £112.7m (FY25: £72.5m), which are
explained below.
Other items
£m FY26 FY25
Target Operating Model (23.9) (14.4)
Process Re-Imagination & Optimisation (1.7) -
Digital supplier platform (1.3) (3.4)
Margin enhancement initiatives cash costs (26.9) (17.8)
Target Operating Model non-cash costs (1.6) (2.2)
Margin enhancement initiative costs (28.5) (20.0)
Marlowe acquisition transaction costs (7.4) -
Marlowe acquisition integration costs (14.8) -
Total Marlowe acquisition cash costs (22.2) -
Employment-linked earnout charges (6.3) (8.6)
Other acquisition-related costs (3.8) (4.9)
Acquisition-related cash costs (32.3) (13.5)
Marlowe acquisition integration non-cash costs (1.1) -
Amortisation of acquisition-related intangible assets (41.5) (29.6)
Acquisition-related costs (74.9) (43.1)
Pension-related cash costs (0.1) (3.0)
Pension-related non-cash costs (9.2) (6.4)
Pension-related costs (9.3) (9.4)
Total Other items (112.7) (72.5)
of which cash Other items (59.3) (34.3)
Cash Other items of £59.3m in FY26 comprised the costs of delivering the
Group's margin enhancement initiatives of £26.9m (FY25: £17.8m),
acquisition-related costs of £32.3m (FY25: £13.5m), and pension-related
costs of £0.1m (FY25: £3.0m). Cash Other items were £25.0m higher than FY25
(£34.3m), due to the Marlowe acquisition, which added £22.2m.
The margin enhancement initiative cash costs of £26.9m (FY25: £17.8m)
include the Process Re-Imagination & Optimisation programme, which was
launched in FY26 to redefine ways of working, leveraging technology and
Artificial Intelligence (AI) to support enhanced customer service and further
margin expansion. This will be a major 'step change' for the business,
requiring significant investment, including programme costs of c.£20-25m in
FY27. The increase in Target Operating Model programme costs in FY26 was
driven by £7.0m of costs associated with the Intelligent Process Automation
workstream, which has leveraged the Skan AI task mining platform to build
process insights and establish the foundation for the Process Re-Imagination
& Optimisation programme.
The roll-out of our digital supplier platform (Coupa) was completed in FY26,
and therefore no further Other item costs will be incurred. Margin enhancement
initiative costs include the implementation teams, related redundancy costs,
professional fees and dual running costs incurred to decommission systems.
Acquisition-related cash costs included transaction costs of £7.4m incurred
to complete the Marlowe acquisition (FY25: £nil), and integration costs of
£14.8m (FY25: £nil) to support the activities required to deliver the
identified synergy savings over the next two years. Integration costs include
integration team costs, redundancy expenses, and property exit costs. In
addition, employment‑linked earnout charges of £6.3m were incurred in FY26
(FY25: £8.6m), which are cash in nature and will be payable to former owners
of acquired businesses if post-acquisition performance targets are achieved
and employment conditions are satisfied.
Other acquisition-related cash costs of £3.8m (FY25: £4.9m) primarily
comprise transaction costs relating to infill acquisitions of £1.7m (FY25:
£3.6m) and integration costs associated with the prior year acquisition of
Argus Fire of £0.7m (FY25: £nil).
Non-cash Other items of £53.4m (FY25: £38.2m) primarily relate to £41.5m
(FY25: £29.6m) of amortisation of acquisition-related intangible assets, with
the increased charge resulting from the acquisition of Marlowe during FY26.
The remaining non-cash costs comprise pension-related costs of £9.2m (FY25:
£6.4m), which are further explained in Note 3 to the condensed consolidated
financial statements, Target Operating Model costs of £1.6m (FY25: £2.2m)
related to the impairment of right-of-use assets of £1.3m (FY25: £nil) and
to the write-off of software that became redundant of £0.3m (FY25: £2.2m),
and Marlowe acquisition integration costs of £1.1m (FY25: £nil) related to
the accelerated amortisation of intangible assets and impairment of
right-of-use assets relating to certain Marlowe properties.
Net finance costs
Net finance costs increased to £27.7m in FY26 (FY25: £16.2m), primarily
driven by debt financing associated with the Marlowe acquisition, which is
explained below in the Liquidity and covenants section. The interest charge on
leases increased by £1.5m, mainly due to the additional lease liabilities
acquired with Marlowe during the year, and higher rates of interest.
Tax
The tax charge for the year was £33.4m (FY25: £37.0m), comprising a tax
charge on profit before Other items of £58.0m (FY25: £51.6m) and a tax
credit for Other items of £24.6m (FY25: £14.6m).
The effective tax rate (ETR) on profit before Other items of 24.5% (FY25:
23.7%) is slightly lower than the UK statutory rate of 25%, primarily due to
the impact of lower tax rates on overseas profits.
After Other items, the tax charge for the period equated to an ETR of 27.0%
(FY25: 25.4%), which is higher than the standard corporation tax rate of 25%
due to certain Other items costs, primarily related to acquisitions, not being
deductible for tax purposes.
Mitie is a significant contributor of revenues to the UK Exchequer, paying
£1.3bn of taxes in the year (FY25: £1.1bn). Of this total, £286m (FY25:
£201m) relates to taxes borne by Mitie (principally UK corporation tax and
employer NICs) and £999m (FY25: £902m) relates to taxes collected by Mitie
on behalf of the UK Exchequer (principally VAT, income tax under
Pay-As-You-Earn (PAYE) and employee NICs).
The Group paid corporation tax of £18.1m in the year (FY25: £11.0m), of
which £12.5m (FY25: £6.4m) was paid in the UK, and £5.6m (FY25: £4.6m)
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.
Earnings per share
Basic earnings per share before Other items increased by 7.1% to 13.6p (FY25:
12.7p). This improvement was a result of the increase in operating profit
before Other items in the year (+1.8p), partially offset by an increase in net
finance charges (-0.7p) and an increase in the ETR (-0.2p).
The impact of the dilution related to the shares issued associated with the
acquisition of Marlowe (-0.6p) has been fully offset by the reduction in the
weighted average number of shares from the share buyback programme (+0.6p).
Basic earnings per share reduced to 6.6p (FY25: 8.2p), with the improvement
from the factors outlined above being more than offset by the increase in
Other items (explained above), mainly relating to the Marlowe acquisition.
Return on invested capital (ROIC)
£m unless otherwise specified FY26 FY25
Operating profit before Other items 264.1 234.1
Tax(1) (64.7) (55.5)
Operating profit before Other items after tax 199.4 178.6
Invested capital 1,100.1 730.2
ROIC % 18.1% 24.5%
(1) Tax charge has been calculated on operating profit before Other items
using the ETR for the year of 24.5% (FY25: 23.7%)
ROIC for FY26 decreased by 6.4ppts to 18.1% (FY25: 24.5%), primarily driven by
the temporary impact of the Marlowe acquisition (-9.0ppt), which added £414m
of invested capital. The increase to invested capital is higher than the
consideration paid/net assets acquired of £351.5m due to the requirement to
exclude certain liabilities - including deferred tax related to the acquired
intangible assets - from invested capital. 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. ROIC is expected to improve significantly in FY27, once a full
12 months of profit is included for Marlowe, and as further planned synergy
savings are realised.
Balance sheet
£m FY26 FY25
Goodwill and intangible assets 1,019.0 664.5
Property, plant and equipment 262.7 246.9
Working capital balances (175.9) (202.9)
Provisions (89.9) (84.1)
Net debt (450.2) (199.0)
Net retirement benefit assets 15.4 13.9
Deferred tax liabilities (51.0) (17.9)
Other net assets 2.4 6.6
Net assets 532.5 428.0
As at 31 March 2026 the Group's reported net assets were £532.5m, an increase
of £104.5m since 31 March 2025. This increase is primarily driven by the
acquisition of Marlowe, including £223.8m of provisional goodwill and
£146.5m of acquired intangible assets, partially offset by the increase in
net debt related to the cash consideration for the acquisition of £228.2m.
The net £123.3m increase in net assets from the Marlowe acquisition resulted
from the shares issued as part of the total consideration (86.6m shares at
£1.42).
The other elements of the overall increase in net debt of £251.2m are
explained further below (in the Cash flow and net debt section).
Goodwill and intangible assets
As noted above, the increase of £354.5m is primarily driven by £223.8m of
provisional goodwill and £146.5m of acquired intangible assets related to the
Marlowe acquisition that was completed during the year. The remaining movement
is driven by the amortisation of intangible assets (-£51.2m), partially
offset by the goodwill and intangible assets arising from other current and
prior year acquisitions (£24.8m), software acquired with Marlowe (£2.9m),
and the capitalisation of software development costs (£7.7m).
Property, plant and equipment
The increase of £15.8m is primarily due to the increase in owned property,
plant and equipment assets, reflecting mobilisation investments on new
contracts, plus £8.8m of owned assets arising from in-year acquisitions,
primarily related to the Marlowe acquisition. Our property and vehicle fleet
lease portfolio has remained broadly unchanged, as increases from additions
(£38.1m, primarily related to the continued transition of our leased fleet to
electric vehicles) and right-of-use assets acquired during the year (£27.2m,
primarily related to the Marlowe acquisition) were largely offset by
depreciation (-£67.9m).
Provisions
At 31 March 2026, provisions totalled £89.9m (FY25: £84.1m), which largely
comprised contract-specific costs of £26.5m (FY25: £33.0m), insurance
reserve of £30.4m (FY25: £27.3m) and dilapidation provisions of £16.3m
(FY25: £10.4m). The net increase in provisions during the year of £5.8m
included the acquisition of Marlowe, which added £11.3m, primarily related to
insurance reserves and dilapidation provisions. The reduction in
contract-specific provisions was a result of commercial settlements with
customers that led to utilisation of the related provisions. See Note 10 to
the condensed consolidated financial statements for further details on
provisions.
Retirement benefit schemes
At 31 March 2026, the Group's net retirement benefit assets on an IAS 19 basis
were £15.4m (FY25: £13.9m net assets). The net improvement of £1.5m was
driven by favourable movements in financial assumptions, which resulted in an
increase in the surplus on the main Group scheme to £18.2m (FY25: £14.4m
surplus).
The scheme actuary provides quarterly funding updates on the main Group
scheme. During FY26, the funding position had materially improved, through a
combination of deficit repair contributions and investment returns, to an
actuarial surplus (compared to a deficit of £19.4m in the 2023 triennial
valuation). As a result, after paying £3.2m of deficit repair contributions
in H1 FY26, further deficit repair contributions have ceased and the Group is
now working with the trustee to purchase a 'buy-in' policy with an insurer to
cover scheme liabilities.
As previously reported, the Group reached a settlement agreement with the
trustees of the multi-employer defined benefit Plumbing & Mechanical
Services (UK) Industry Pension Scheme relating to certain Section 75
liabilities. The settlement extinguishes any future liabilities relating to
this scheme. The total £24.5m liability is being settled over a three-year
period in equal monthly payments (which commenced in H2 FY25), of which
£11.9m remained at 31 March 2026.
In January 2026, the Group completed the buyout of the Landmarc scheme and
received a £1.6m refund relating to the scheme surplus. The scheme is now in
the process of being wound up, and there were no associated assets or
liabilities on the Group's balance sheet at 31 March 2026.
Deferred tax
The net deferred tax liability was £51.0m at 31 March 2026, which increased
by £33.1m compared with the liability at 31 March 2025, primarily as a result
of net deferred tax liabilities related to the intangible assets acquired with
Marlowe, and the utilisation of tax losses which reduced deferred tax assets.
Cash flow and net debt
£m FY26 FY25
Operating profit before Other items 264.1 234.1
Add back: depreciation, amortisation and impairment 95.9 76.8
Earnings before interest, tax, depreciation and amortisation (EBITDA) 360.0 310.9
Other items (59.3) (34.3)
Other operating movements 24.0 9.0
Operating cash flows before movements in working capital 324.7 285.6
Working capital movements(1) (35.7) (37.0)
Capex, capital element of lease payments and other (85.6) (80.1)
Net interest payments (23.2) (14.7)
Tax payments (18.1) (11.0)
Free cash inflow 162.1 142.8
Share buybacks(2) (58.6) (100.0)
Purchase of own shares into trusts (29.1) (14.6)
Acquisitions(3) (264.6) (57.3)
Dividends paid (61.9) (64.6)
Lease liabilities and other 0.9 (24.5)
Increase in net debt during the period (251.2) (118.2)
Closing net (debt) (450.2) (199.0)
Average daily net (debt) (440.2) (264.0)
Leverage(4) (average daily net debt/EBITDA) 1.2x 0.8x
(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 Save-As-You-Earn (SAYE) schemes of £4.3m in FY26 (FY25: £4.7m)
(3 ) Acquisitions includes acquisition costs and employment-linked earnout
payments, the related charges for which are reported within Other items
(4 ) Leverage uses post-IFRS 16 net debt
Operating cash flows before movements in working capital improved by £39.1m
to £324.7m (FY25: £285.6m), driven by the good trading performance reflected
in the increased EBITDA. Cash Other items are higher in FY26 due to the
Marlowe acquisition, as explained above. Other operating movements were
£24.0m for FY26 (FY25: £9.0m), primarily related to the add back of non-cash
share-based payment charges of £22.9m (FY25: £15.5m).
The Group generated a free cash inflow of £162.1m for FY26, with the strong
trading performance partially offset by cash outflows from working capital
movements, together with capex, lease payments, interest and tax payments.
The cash outflow from working capital in FY26 of £35.7m was similar to the
prior year (FY25: £37.0m), related to investments required to support our
growing projects business, together with longer payment terms on certain
contracts (particularly in the retail sector) and the one-off negative impact
of £8.0m arising from the Procurement Act 2023 that came into effect in
February 2025, requiring faster payments to all subcontractors and suppliers
on Government Framework Contracts. These headwinds were partially offset by
the ongoing working capital process improvements.
Capex, capital element of lease payments and other increased by £5.5m
compared to FY25. Capex increased by £8.4m in FY26, primarily related to the
mobilisation of the DWP security contract. Capital lease repayments increased
by £11.4m, due to the continued transition of our leased fleet to electric
vehicles, as well as the expansion of the fleet through acquisitions
(including Marlowe) and new contracts, both in the UK and overseas. This was
partly offset by the reclassification of certain Other items cash payments
that are not reported within free cash flow, and are instead reported within
Acquisitions (below free cash flow), comprising employment-linked earnout
payments and acquisition transaction costs. These reclassified payments
increased by £14.3m in FY26, primarily related to the Marlowe acquisition.
Net interest payments increased by £8.5m due to the higher levels of net debt
associated with the acquisition of Marlowe, and our share buyback programme.
Tax payments increased by £7.1m, driven by a combination of higher taxable
profit in FY26 and tax refunds in FY25.
Net debt movements associated with acquisitions totalled £264.6m, largely
relating to the strategic acquisition of Marlowe, which included net cash
consideration of £219.4m (after offsetting net cash acquired of £8.8m) and
debt acquired of £35.3m (including lease liabilities). Acquisitions also
included employment-linked earnout payments of £13.0m related to prior period
acquisitions, payments related to acquisition costs of £8.3m, mainly for
Marlowe, and the net consideration of £14.9m for the acquisitions of SPM
(£2.6m), Forest Group (£4.2m), El-Team Vest (£7.6m) and ABC Elektro
(£0.5m).
During FY26, we purchased 38m shares for £62.9m through our share buyback
programme, comprising 36m shares (£60.0m) under our current programme (£100m
over 12 months), and 2m shares (£2.9m) under our previous programme, which
was paused to accommodate the Marlowe acquisition. Of these shares, we
retained 5m shares in treasury to fulfil our 2022 Save-As-You-Earn (SAYE)
scheme (which vested in February 2026), and cancelled all shares purchased in
excess of this. The £62.9m of purchases are presented net of the proceeds
received from the exercise of SAYE schemes of £4.3m in FY26 (FY25: £4.7m). A
further 21m shares (£29.1m) were purchased into employee trusts to satisfy
share incentive schemes.
Dividend payments of £61.9m in FY26 comprised the FY25 final dividend of
£36.6m, the FY26 interim dividend of £18.1m, together with dividends paid to
the Landmarc minority shareholder of £7.2m. The recommended final FY26
dividend of 3.1p will result in a 5% increase in the total dividend per share
to 4.5p for FY26 (FY25: 4.3p), representing a payout ratio of 33% (FY25: 34%).
The net movement in lease liabilities and other for FY26 was a relatively
small decrease of £0.9m (FY25: net increase of £24.5m), with the net impact
of new leases of £38.1m (FY25: £78.6m) and lease liabilities acquired in the
year (£27.2m), mainly with Marlowe, largely offset by capital lease
repayments (£67.5m). Given the significant progress we have made in previous
years on the transition of our leased fleet to electric vehicles (including
£79.6m of new leases in FY25), the impact has reduced in FY26 now that the
core fleet has largely been converted.
Net debt
Average daily net debt of £440.2m for FY26 was £176.2m higher than in FY25
(£264.0m), contributing to a leverage ratio (average daily net debt/EBITDA)
of 1.2x for FY26, within our target range of 0.75x-1.5x (FY25: 0.8x).
Closing net debt at 31 March 2026 of £450.2m was £251.2m higher than at 31
March 2025 (£199.0m).
As noted above, the increase in net debt during FY26 was driven by capital
deployment actions totalling £414.2m, including the strategic acquisition of
Marlowe, partially offset by the free cash inflow generated during the year of
£162.1m.
Liquidity and covenants
As at 31 March 2026, the Group had £610m of committed funding arrangements,
comprising £360m of US Private Placement (USPP) notes with maturities ranging
from 2028 to 2034 at a weighted average interest rate of 4.65%, and a £250m
Revolving Credit Facility (RCF) maturing in October 2028.
A short-term bridge facility of £240m was put in place in June 2025, and
fully drawn, to facilitate the acquisition of Marlowe in August 2025. On 13
October 2025, £60m of this facility was repaid from Mitie's existing balance
sheet capacity, and the balance was refinanced by the issuance of £180m of
USPP notes on 12 November 2025. The new USPP notes have maturities of between
three and seven years, and a weighted average interest rate fixed at 5.44%.
On 18 July 2025, Morningstar DBRS confirmed that Mitie's BBB investment grade
credit rating remains unchanged.
Mitie's two key covenant ratios are leverage (ratio of consolidated total net
borrowings to adjusted consolidated EBITDA) and interest cover (ratio of
consolidated EBITDA to consolidated net finance costs), with a maximum of 3.0x
and minimum of 4.0x respectively. Covenant ratios are measured on a post-IFRS
16 basis with appropriate adjustments for leases, being primarily the
exclusion of lease liabilities from net debt and the inclusion of a charge
equivalent to lease payments against EBITDA. At 31 March 2026, the Group was
operating well within these ratios at 0.82x covenant leverage and 17.8x
interest cover. A reconciliation of the calculations is set out in the table
below:
FY26 FY25
£m
Operating profit before Other items 264.1 234.1
Add: depreciation, amortisation and impairment 95.9 76.8
Headline EBITDA 360.0 310.9
Add: covenant adjustments(1) 24.6 23.8
Leases adjustment(2) (78.1) (64.1)
Consolidated EBITDA (a) 306.5 270.6
Full-year effect of acquisitions and disposals 8.0 3.5
Adjusted consolidated EBITDA (b) 314.5 274.1
Net finance costs 27.7 16.2
Less: covenant adjustments (0.3) (0.5)
Leases adjustment(3) (10.2) (8.7)
Consolidated net finance costs (c) 17.2 7.0
Interest cover (ratio of (a) to (c)) 17.8x 38.7x
Net debt 450.2 199.0
Covenant adjustment(4) - 5.7
Impact of hedge accounting and upfront fees 2.1 2.4
Leases adjustment(5) (195.5) (197.5)
Consolidated total net debt (d) 256.8 9.6
Covenant leverage (ratio of (d) to (b)) 0.82x 0.04x
(1) Covenant adjustments to EBITDA relate to share-based payments charges, and
pension administration expenses and past service costs
(2) Leases adjustment for EBITDA relates to depreciation charge for leased
assets and interest charge for lease liabilities (i.e. application of a charge
equivalent to lease payments)
(3) Leases adjustment for net finance costs relates to interest charge for
lease liabilities (i.e. removal of interest on lease liabilities)
(4) Covenant adjustment for net debt relates to cash held in a bank in Cyprus
(5) Leases adjustment for net cash relates to lease liabilities (i.e. removal
of lease liabilities)
Condensed consolidated income statement
For the year ended 31 March 2026
Notes 2026 2025
Before Other items Other items(1) Total Before Other items Other items(1) Total
£m
£m
£m
£m
£m £m
Revenue 2 5,618.6 - 5,618.6 5,082.6 - 5,082.6
Cost of sales (4,962.3) - (4,962.3) (4,512.9) - (4,512.9)
Gross profit 656.3 - 656.3 569.7 - 569.7
Administrative expenses (393.5) (112.7) (506.2) (341.4) (72.5) (413.9)
Other income 1.7 - 1.7 5.9 - 5.9
Share of loss of joint ventures and associates (0.4) - (0.4) (0.1) - (0.1)
Operating profit/(loss)(2) 2 264.1 (112.7) 151.4 234.1 (72.5) 161.6
Finance income 3.3 - 3.3 3.3 - 3.3
Finance costs (31.0) - (31.0) (19.5) - (19.5)
Net finance costs (27.7) - (27.7) (16.2) - (16.2)
Profit/(loss) before tax 236.4 (112.7) 123.7 217.9 (72.5) 145.4
Tax 4 (58.0) 24.6 (33.4) (51.6) 14.6 (37.0)
Profit/(loss) after tax 178.4 (88.1) 90.3 166.3 (57.9) 108.4
Attributable to:
Equity holders of the parent 169.2 (86.6) 82.6 157.6 (56.2) 101.4
Non-controlling interests 9.2 (1.5) 7.7 8.7 (1.7) 7.0
Profit/(loss) for the year 178.4 (88.1) 90.3 166.3 (57.9) 108.4
Earnings per share (EPS) attributable to owners of the parent
Basic 6 13.6p 6.6p 12.7p 8.2p
Diluted 6 12.6p 6.1p 11.8p 7.6p
Notes:
1. Other items are as described in Note 3.
2. Including net reversal of impairment losses on trade receivables, accrued
income and other receivables of £0.5m (2025: net impairment loss of £1.0m).
Condensed consolidated statement of comprehensive income
For the year ended 31 March 2026
Notes 2026 2025
£m
£m
Profit for the year 90.3 108.4
Items that will not be reclassified to profit or loss in subsequent years
Remeasurement of net retirement benefit assets/liabilities 16 9.0 13.7
Tax charge relating to items that will not be reclassified to profit or loss 4 (2.2) (4.6)
in subsequent years
6.8 9.1
Items that may be reclassified to profit or loss in subsequent years
Exchange differences on translation of foreign operations 1.1 (0.7)
1.1 (0.7)
Other comprehensive income for the year 7.9 8.4
Total comprehensive income for the year 98.2 116.8
Attributable to:
Equity holders of the parent 90.4 109.6
Non-controlling interests 7.8 7.2
Total comprehensive income for the year 98.2 116.8
Condensed consolidated statement of financial position
As at 31 March 2026
Notes 2026 2025
£m
£m
Non-current assets
Goodwill 7 642.5 397.8
Other intangible assets 376.5 266.7
Property, plant and equipment 262.7 246.9
Interests in associates 0.5 1.6
Trade and other receivables 8 19.7 20.5
Contract assets 3.7 1.9
Retirement benefit assets 16 18.2 16.3
Total non-current assets 1,323.8 951.7
Current assets
Inventories 26.7 14.9
Trade and other receivables 8 1,082.2 967.9
Contract assets 1.1 0.7
Current tax receivable 1.6 4.1
Cash and cash equivalents 11 108.9 180.4
Total current assets 1,220.5 1,168.0
Total assets 2,544.3 2,119.7
Current liabilities
Trade and other payables 9 (1,128.8) (1,012.6)
Deferred income (138.6) (140.9)
Current tax payable (5.4) (3.4)
Financing liabilities 12 (62.5) (52.2)
Provisions 10 (36.9) (37.4)
Total current liabilities (1,372.2) (1,246.5)
Net current liabilities (151.7) (78.5)
Non-current liabilities
Trade and other payables 9 (10.7) (22.2)
Deferred income (31.2) (33.1)
Financing liabilities 12 (490.9) (322.9)
Provisions 10 (53.0) (46.7)
Retirement benefit liabilities 16 (2.8) (2.4)
Deferred tax liabilities (51.0) (17.9)
Total non-current liabilities (639.6) (445.2)
Total liabilities (2,011.8) (1,691.7)
Net assets 532.5 428.0
2026 2025
£m
£m
Equity
Share capital 32.7 31.3
Share premium 132.0 132.0
Merger reserve 278.1 157.0
Own shares reserve (71.4) (65.1)
Share-based payments reserve 50.6 40.4
Capital redemption reserve 6.1 5.3
Translation reserve (1.7) (2.8)
Retained profits 87.9 112.3
Equity attributable to owners of the parent 514.3 410.4
Non-controlling interests 18.2 17.6
Total equity 532.5 428.0
Condensed consolidated statement of changes in equity
For the year ended 31 March 2026
Share capital Share premium Merger reserve Own shares reserve Share-based payments reserve Capital redemption reserve Translation reserve Retained profits Equity attributable to owners of parent Non-controlling interests Total
£m
£m
£m
£m
£m
£m
£m
equity
£m £m £m
£m
At 1 April 2024 33.3 132.0 157.0 (69.8) 42.1 3.3 (2.1) 157.4 453.2 20.5 473.7
Profit for the 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
At 1 April 2025 31.3 132.0 157.0 (65.1) 40.4 5.3 (2.8) 112.3 410.4 17.6 428.0
Profit for the year - - - - - - - 82.6 82.6 7.7 90.3
Other comprehensive income - - - - - - 1.1 6.7 7.8 0.1 7.9
Total comprehensive income - - - - - - 1.1 89.3 90.4 7.8 98.2
Transactions with owners
Dividends paid - - - - - - - (54.7) (54.7) - (54.7)
Issue of shares(3) 2.2 - 121.1 - - - - - 123.3 - 123.3
Purchase of own shares(1) - - - (29.1) - - - - (29.1) - (29.1)
Share buybacks(2) (0.8) - - (7.7) - 0.8 - (55.2) (62.9) - (62.9)
Share-based payments - - - 30.5 10.2 - - (15.1) 25.6 - 25.6
Tax on share-based payments - - - - - - - 11.3 11.3 - 11.3
Non-controlling interest dividends - - - - - - - - - (7.2) (7.2)
Total transactions with owners 1.4 - 121.1 (6.3) 10.2 0.8 - (113.7) 13.5 (7.2) 6.3
At 31 March 2026 32.7 132.0 278.1 (71.4) 50.6 6.1 (1.7) 87.9 514.3 18.2 532.5
Notes:
1. The Employee Benefit Trust acquired 20.3m (2025: 11.7m) ordinary shares
through market purchases for a consideration together with associated fees and
stamp duty of £27.5m (2025: £13.2m) and the Share Incentive Plan Trust
acquired 1.1m (2025: 1.1m) shares for a consideration of £1.6m (2025:
£1.4m).
2. The share buybacks resulted in the purchase of 37.9m ordinary shares
(2025: 89.0m), of which 32.9m ordinary shares (2025: 78.9m) were purchased for
£55.2m (2025: £92.5m) and were subsequently cancelled. The remaining 5.0m
ordinary shares (2025: 10.1m) were bought into treasury for a total
consideration of £7.7m (2025: £12.2m).
3. As part of the consideration for the acquisition of Marlowe Limited
(formerly Marlowe plc), 86.6m shares were issued with a premium of £121.1m
arising (see Note 15). These share issues qualified for merger relief under
Section 612 of the Companies Act 2006, such that the premium was credited to
the merger reserve, as it was not required to be credited to the share premium
account.
Condensed consolidated statement of cash flows
For the year ended 31 March 2026
Notes 2026 2025
£m
£m
Operating profit before Other items 2 264.1 234.1
Other items 3 (112.7) (72.5)
Operating profit 151.4 161.6
Adjustments for:
Share-based payments expense 22.9 15.5
Defined benefit pension expense 16 12.0 9.4
Defined benefit pension contributions 16 (4.7) (10.1)
Pension settlement(1) 16 1.6 -
Depreciation of property, plant and equipment 85.8 67.9
Amortisation of other intangible assets 51.2 38.1
Share of loss of joint ventures and associates 0.4 0.1
Amortisation of contract assets 0.9 0.4
Impairment of right-of-use assets 13 1.9 -
Loss on disposal of other intangible assets 0.3 2.4
Loss on disposal of property, plant and equipment 0.8 0.3
Loss on disposal of shares in interests in associates 0.2 -
Operating cash flows before movements in working capital 324.7 285.6
Increase in inventories (0.4) (0.2)
Increase in receivables (42.5) (168.9)
Increase in contract assets (3.1) (1.5)
(Decrease)/increase in deferred income (8.5) 61.9
Increase in payables 32.3 82.5
Decrease in provisions (12.1) (10.7)
Cash generated from operations 290.4 248.7
Income taxes paid (18.1) (11.0)
Interest paid (25.7) (17.7)
Net cash generated from operating activities 246.6 220.0
Investing activities
Acquisition of businesses, net of cash acquired(2) 15 (234.3) (49.1)
Investment in associates and joint ventures - (0.8)
Interest received 2.5 3.0
Purchase of property, plant and equipment (33.4) (24.0)
Purchase of other intangible assets (6.7) (7.6)
Disposal of property, plant and equipment 0.6 0.6
Disposal of intangible assets 0.1 -
Net cash used in investing activities (271.2) (77.9)
Notes:
1. In January 2026, the Group completed the buy-out of the Landmarc
pension scheme with an authorised insurance company and the Group received a
£1.6m refund relating to the scheme surplus. See Note 16.
2. Acquisition of businesses is net of cash acquired of £12.4m (2025:
£9.7m). See Note 15.
Notes 2026 2025
£m
£m
Financing activities
Purchase of own shares (29.1) (14.6)
Shares bought back (62.9) (104.7)
Capital element of lease rentals 13 (67.5) (56.1)
Proceeds from new private placement notes 12 180.0 60.0
Repayment of private placement notes 12 - (30.0)
Proceeds from bridge loan facility 12 240.0 -
Repayment of bridge loan facility and other bank loans 12 (249.0) (0.4)
Payment of arrangement fees (1.1) (0.6)
Proceeds received on settlement of share-based payment transactions 4.3 4.7
Equity dividends paid 5 (54.7) (54.5)
Dividends paid to non-controlling interest (7.2) (10.1)
Net cash used in financing activities (47.2) (206.3)
Net decrease in cash and cash equivalents (71.8) (64.2)
Net cash and cash equivalents at beginning of the year 180.4 244.9
Effect of foreign exchange rate changes 0.3 (0.3)
Net cash and cash equivalents at end of the year 11 108.9 180.4
Notes to the condensed consolidated financial statements
For the year ended 31 March 2026
1. Basis of preparation
(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 2026 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 2026 and 31 March 2025 have
been reported on by the independent auditor.
The independent auditor's reports for the years ended 31 March 2026 and 31
March 2025 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
2026 and 31 March 2025 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 2025 have been filed with the Registrar and the statutory accounts for
the year ended 31 March 2026 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
2026 have been prepared on a going concern basis. In adopting the going
concern basis, the 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 2026 were a
£250m revolving credit facility maturing in October 2028, which was undrawn
as at 31 March 2026, and £360m 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.
Of the Group's USPP notes, £120m were issued in December 2022, allocated
equally across 8, 10 and 12‑year maturities, with an average coupon of
2.94%. In October 2024, the Group entered into a three‑year uncommitted
shelf facility with initial capacity of approximately £320m, which was
increased to approximately £360m in March 2026. As at 31 March 2026,
undrawn capacity under the facility was approximately £120m, available for
drawdown until October 2027.
In December 2024, the Group issued £60m of new USPP notes under the shelf
facility, replacing an existing £30m note that matured in the same month.
These notes have a seven‑year maturity and carry a coupon rate of 5.71%.
To facilitate the acquisition of Marlowe, the Group secured a £240m bridge
facility during the year ended 31 March 2026. The facility was scheduled to
mature in June 2026, with an option to extend to June 2027. In October 2025,
£60m of the facility was repaid, with the remaining £180m refinanced through
a drawdown under the Group's US Private Placement shelf facility on 12
November 2025. The new USPP notes have maturities ranging from three to seven
years and carry a weighted average fixed interest rate of 5.44%.
Mitie currently operates within the terms of its agreements with its lenders,
with consolidated net debt (i.e. net debt adjusted for covenant purposes,
primarily by the exclusion of lease liabilities) of £256.8m as at 31 March
2026. 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 28% in the year ending 31 March 2027 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 amendment became effective during the year ended 31 March 2026
and has not had a material impact on the Group:
• Amendments to International Accounting Standard (IAS) 21 - The Effects of
Changes in Foreign Exchange Rates - Lack of Exchangeability
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 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
• IFRS 20 - Regulatory Assets and Regulatory Liabilities
(b) 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.
Profit before Other items
Other items are items of financial performance which management believes
should be separately identified on the face of the condensed consolidated
income statement to assist in understanding the underlying financial
performance achieved by the Group. 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 £88.1m were charged (2025: £57.9m) to the condensed
consolidated income statement for the year ended 31 March 2026. A complete
analysis of the amounts included in Other items is detailed in Note 3.
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.
Measurement of defined benefit pension obligations
At 31 March 2026, net retirement benefit assets of £18.2m (2025: £16.3m) and
net retirement benefit liabilities of £2.8m (2025: £2.4m) were recognised.
The measurement of gross defined benefit obligations of £214.1m (2025:
£252.2m) requires judgement, and is dependent on material key assumptions,
including discount rates, inflation and life expectancy. See Note 16 for
further details and a sensitivity analysis for the key assumptions.
Other sources of estimation uncertainty
The below estimates are not considered to be a significant source of
estimation uncertainty as per the requirements of IAS 1 - Presentation of
Financial Statements (IAS 1) but represent areas of focus for management.
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 Private Finance Initiative contracts,
contain variable consideration where management assesses the extent to which
revenue is recognised. For certain contracts, 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 and there is estimation uncertainty involved in
determining the applicable revenue constraint.
Business combinations - purchase price allocation
When the Group completes a business combination, the identifiable assets and
liabilities acquired are recognised at their acquisition date fair values in
accordance with IFRS 3 - Business Combinations. The determination of these
fair values involves selection and application of appropriate valuation
techniques and assumptions, which results in estimation uncertainty.
During the year ended 31 March 2026, the Group completed the acquisition of
Marlowe plc, representing a transaction that was material to the Group.
Total consideration of £351.5m resulted in provisional goodwill of £223.8m,
after recognising provisional fair values of identifiable net assets acquired
of £127.7m (see Note 15). The most significant fair value adjustments
related to the recognition and measurement of intangible assets for customer
relationships and contracts, with a provisional fair value of £143.0m
recognised together with a corresponding provisional deferred tax liability of
£35.8m.
The fair value of customer relationships and contracts was determined using
the multi‑period excess earnings method, applying an appropriate discount
rate to forecast post‑tax cash flows. In applying this valuation technique,
management was required to exercise judgement in estimating the inputs for the
model including customer attrition rates, revenue growth, earnings before
interest, tax, depreciation and amortisation (EBITDA) margins (including the
expected impact of market participant synergies) and the discount rate.
Of the inputs in the model, significant estimation uncertainty was noted on
customer attrition rates used in determining the valuation of customer
contracts and relationships. A reasonably possible increase of two percentage
points in the assumed attrition rate would result in a decrease in the
provisional fair value of these intangible assets of approximately £19.3m,
with a corresponding increase in goodwill of £14.5m (net of deferred tax). A
reasonably possible decrease of two percentage points would increase the fair
value of customer contracts and relationships by approximately £24.0m, with a
corresponding reduction in goodwill of £18.0m (net of deferred tax). The
sensitivity could lead to material movements in the valuation of customer
relationships and contracts; however, this is considered a longer‑term
uncertainty and is not expected to result in a material change within the 12
months following 31 March 2026.
Contract-specific cost provisions
The Group is, 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. Estimation is required in
determining the probable outflow in respect to contract-specific costs, for
which the Group recognised provisions at 31 March 2026 of £26.5m (2025:
£33.0m), see Note 10.
Within this total, £10.8m (2025: £10.8m) 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. The actual exposure to the Group may differ from the amount
provided at 31 March 2026 due to the multiple variables associated with the
particular issues involved in the dispute. The value of the provision
represents management's best estimate at the reporting date. 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.
Onerous contract provisions
The recognition of onerous contract provisions is based on assumptions that
are subject to longer-term uncertainties. Onerous contract provisions
totalling £12.1m have been recognised at 31 March 2026 (2025: £10.0m), see
Note 10.
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.
2. Business segment information
The Group's operating segments are established on the basis of those
components of the Group that are evaluated regularly by the Chief Operating
Decision Maker in deciding how to allocate resources and in assessing
performance. The Group has determined the Chief Operating Decision Maker to be
its Board of Directors.
The Group manages its business on a service division basis. During the year,
the Group reorganised its Communities division, where the Healthcare, Local
Government & Education business was transferred into the Technical
Services division, and the Immigration & Justice business was transferred
into the Business Services division. The Compliance business, which was
previously reported within the Technical Services division, has also
transferred to the Business Services division. The comparatives for the year
ended 31 March 2025 have been restated for the change in the composition of
reportable segments.
As a result of the reorganisation, Communities is not considered to be an
operating segment for the year ended 31 March 2026, and the Group therefore
has two reportable segments (2025: three segments). The change in operating
segments reflects how the Chief Operating Decision Maker evaluates the
divisions and their performance and decides on resource allocation. The
comparatives for the year ended 31 March 2025 have been restated for the
change in the composition of reportable segments.
Revenue, operating profit before Other items and operating profit margin
before Other items are the primary measures of performance that are reported
to and reviewed by the Board. Segment assets and liabilities have not been
disclosed as they are not reviewed by the Board.
No single customer accounted for more than 10% of external revenue in the year
ended 31 March 2026 or in the comparative year. The UK Government is not
considered to be a single customer.
Condensed consolidated income statement information
2026 2025 (restated)(1)
Revenue Operating profit/(loss) before Operating margin before Other items(2) Revenue Operating profit/(loss) before Operating margin before Other items(2)
£m
Other items(2)
%
£m
Other items(2)
%
£m
£m
Business Services 2,985.1 187.1 6.3 2,538.0 180.4 7.1
Technical Services 2,633.5 135.9 5.2 2,544.6 109.1 4.3
Corporate Centre - (58.9) - - (55.4) -
Total Group 5,618.6 264.1 4.7 5,082.6 234.1 4.6
Notes:
1. The comparatives for the year ended 31 March 2025 have been restated for
the change in the composition of reportable segments.
2. Other items are as described in Note 3.
A reconciliation of segment operating profit before Other items to total
profit before tax is provided below:
2026 2025
£m
£m
Operating profit before Other items(1) 264.1 234.1
Other items(1) (112.7) (72.5)
Net finance costs (27.7) (16.2)
Profit before tax 123.7 145.4
Note:
1. Other items are as described in Note 3.
Geographical segments
Revenue, operating profit before Other items and operating margin before Other
items from external customers by geographical segment are shown below:
2026 2025
Revenue Operating Operating margin before Other items(1) Revenue Operating Operating margin before Other items(1)
£m
profit before
%
£m
profit before Other items(1)
%
Other items(1)
£m
£m
United Kingdom 5,271.4 241.3 4.6 4,826.1 219.3 4.5
Spain 226.7 14.1 6.2 167.2 9.7 5.8
Ireland 62.5 3.3 5.3 60.1 2.8 4.7
Other countries(2) 58.0 5.4 9.3 29.2 2.3 7.9
Total 5,618.6 264.1 4.7 5,082.6 234.1 4.6
Notes:
1. Other items are as described in Note 3.
2. No other individual countries are considered material in the context of the
Group's overall revenue to be separately presented.
The carrying amount of non-current assets, excluding financial instruments,
retirement benefits, and interest in associates, by geographical segment is
shown below:
2026 2025
£m
£m
United Kingdom 1,245.3 879.0
Spain 29.0 24.0
Ireland 10.4 10.2
Other countries 0.7 0.1
Total 1,285.4 913.3
Supplementary information
2026 2025 (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 12.6 1.0 0.9 7.3 0.1 0.4
Technical Services 4.2 0.3 - 4.1 0.3 -
Corporate Centre 69.0 49.9 - 56.5 37.7 -
Total 85.8 51.2 0.9 67.9 38.1 0.4
Note:
1. The comparatives for the year ended 31 March 2025 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.
2026 2025 (restated)(1)
Sector(2) Sector(2)
Government Non-government Total Government Non-government Total
£m
£m
£m
£m
£m
£m
Business Services 1,259.2 1,725.9 2,985.1 1,202.5 1,335.5 2,538.0
Technical Services 1,535.4 1,098.1 2,633.5 1,441.7 1,102.9 2,544.6
Total revenue 2,794.6 2,824.0 5,618.6 2,644.2 2,438.4 5,082.6
Notes:
1. The comparatives for the year ended 31 March 2025 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.
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 work contracted with customers and excludes the impact of anticipated
variable works and projects.
2026 2025 (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 2,222.7 5,271.6 7,494.3 1,387.3 5,840.1 7,227.4
Technical Services 1,460.7 4,101.3 5,562.0 983.4 3,690.9 4,674.3
Total Group 3,683.4 9,372.9 13,056.3 2,370.7 9,531.0 11,901.7
Note:
1. The comparatives for the year ended 31 March 2025 have been restated for
the change in the composition of reportable segments.
3. Other items
Other items are items of financial performance which management believes
should be separately identified on the face of the condensed consolidated
income statement to assist in understanding the underlying financial
performance achieved by the Group.
The Group separately reports acquisition and disposal costs within Other
items. These include the amortisation of acquisition‑related intangible
assets, integration costs, employment‑linked earnout charges, and gains or
losses on business disposals. 'Other items' also include cost of
restructuring programmes, impairments of goodwill and acquired intangible
assets, charges arising on the exit of pension schemes and other exceptional
items, together with the associated tax effects.
2026 2025
£m
£m
Restructuring costs (27.2) (16.6)
Acquisition and disposal costs (74.9) (43.1)
Other exceptional items (10.6) (12.8)
Total Other items before tax (112.7) (72.5)
Tax charge on Other items 24.6 14.6
Total Other items after tax (88.1) (57.9)
Restructuring 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.
The costs are analysed below:
2026 2025
£m
£m
Target Operating Model(1) (25.5) (16.6)
Process Re-imagination & Optimisation(2) (1.7) -
Restructuring costs (27.2) (16.6)
Tax 6.8 4.1
Restructuring costs net of tax (20.4) (12.5)
Notes:
1. The Target Operating Model (TOM) transformation programme includes the
further outsourcing of back-office functions, process optimisation and system
consolidation and optimising the organisation structure. Since its launch in
the year ended 31 March 2022, cumulative costs of £70.7m have been recognised
within the condensed consolidated income statement and classified as Other
items, of which £66.9m were cash costs. The programme is expected to complete
by 31 March 2027.
2. During the year ended 31 March 2026, the Group launched the Process
Re‑imagination & Optimisation programme, to redefine ways of working,
leveraging technology and AI to support enhanced customer service and further
margin expansion. This will be a major 'step change' for the business,
requiring significant investment, including estimated programme costs of
c.£20-25m in the year ending 31 March 2027.
The costs associated with the Group restructuring programmes include £9.3m
(2025: £3.7m) of external consultancy costs, fixed-term staff costs of £6.2m
(2025: £5.5m) to manage and implement changes, redundancy costs of £5.3m
(2025: £4.7m), impairment of right-of-use assets of £1.3m (2025: £nil),
other property exit costs of £2.1m (2025: £nil), dual-run licence costs in
relation to decommissioned operating systems of £2.7m (2025: £0.5m) and loss
on disposal of software of £0.3m (2025: £2.2m).
Acquisition and disposal costs
2026 2025
£m
£m
Amortisation of acquisition-related intangible assets (41.5) (29.6)
Integration costs(1) (16.6) (0.7)
Transaction costs(2) (9.1) (3.6)
Employment-linked earnout charges(3) (6.3) (8.6)
Other acquisition-related costs (1.4) (0.6)
Acquisition and disposal costs (74.9) (43.1)
Tax 15.1 7.6
Acquisition and disposal costs net of tax (59.8) (35.5)
Notes:
1. Comprises costs in relation to professional fees of £6.9m (2025: £0.7m),
fixed-term staff costs of £4.7m (2025: £nil), redundancy costs of £3.0m
(2025: £nil), impairment of right-of-use assets of £0.6m (2025:£nil), other
property exit costs of £0.9m (2025: £nil), and £0.5m (2025: £nil) of
accelerated amortisation in relation to software that is in the process of
being replaced due to integration activities.
2. Relates to professional fees.
3. Comprises earnout amounts payable to former owners of acquired businesses
under the terms of the sale and purchase agreements 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.
Other exceptional items
2026 2025
£m
£m
Pension-related costs(1) (9.3) (9.4)
Digital supplier platform(2) (1.3) (3.4)
Other exceptional items (10.6) (12.8)
Tax 2.7 2.9
Other exceptional items net of tax (7.9) (9.9)
Notes:
1. Comprises a £7.9m contract settlement charge to reverse the gross surplus
on three Local Government Pension Schemes (2025: £5.3m), where 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. In addition,
one-off past service costs of £1.3m were recognised due to changes in certain
pension scheme rules (2025: £1.1m), together with £0.6m of administrative
expenses relating to the Landmarc pension scheme buyout (2025: £0.2m). The
costs were partially offset by a £0.5m release of an accrual following the
final settlement agreement with the trustees of the Plumbing Scheme in respect
of the Section 75 debt, relating to the previously disposed Social Housing
business (2025: £2.8m charge). See Note 16.
2. 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 costs comprise fixed-term staff costs of £1.3m (2025:
£2.3m), and during the year ended 31 March 2025, third-party implementation
costs of £1.1m were also incurred. The roll-out of the digital supplier
platform was completed in the year ended 31 March 2026, and cumulative cash
costs of £16.2m were recognised within the condensed consolidated income
statement and classified as Other items since its launch in 2022.
4. Tax
Total Group 2026 2025
£m
£m
Current tax 34.6 20.4
Deferred tax (1.2) 16.6
Tax charge for the year 33.4 37.0
Corporation tax is calculated at 25% (2025: 25%) of the estimated taxable
profit for the year. A reconciliation of the tax charge to the elements of
profit before tax per the condensed consolidated income statement is as
follows:
Total Group 2026 2025
Before Other items(1) Total Before Other items(1) Total
Other items
£m
£m
Other items
£m
£m
£m
£m
Profit/(loss) before tax 236.4 (112.7) 123.7 217.9 (72.5) 145.4
Tax at UK rate of 25% (2025: 25%) 59.1 (28.2) 30.9 54.5 (18.1) 36.4
Reconciling tax charges for:
Non-deductible items 1.2 3.6 4.8 0.5 3.5 4.0
Credit for losses not previously recognised (0.3) - (0.3) - - -
Overseas tax rates (1.0) - (1.0) (1.0) - (1.0)
Adjustments in respect of prior years (1.0) - (1.0) (2.4) - (2.4)
Tax charge/(credit) for the year 58.0 (24.6) 33.4 51.6 (14.6) 37.0
Effective tax rate for the year 24.5% 21.8% 27.0% 23.7% 20.1% 25.4%
Note:
1. Other items are as described in Note 3.
The tax charge during the year ended 31 March 2026, consists of charges with
respect to current tax of £34.6m, and credits with respect to deferred tax of
£1.2m. The effective tax rate for the Group of 27.0% is higher than the UK
headline rate of 25.0% primarily due to non-deductible items.
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.
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 £1.1m credit for current tax (2025: £1.2m charge) and a
£3.3m charge for deferred tax (2025: £3.4m) relating to remeasurements of
retirement benefit liabilities has been recognised within the condensed
consolidated statement of comprehensive income; and (ii) a £7.4m credit for
current tax (2025: £4.7m) and a £3.9m credit for deferred tax (2025: £2.1m
charge) relating to share options have been recognised directly within equity.
Impact of Pillar Two legislation
Pillar Two legislation has either been enacted or substantively enacted in
jurisdictions in which the Group operates, and has been effective for the
Group since 1 April 2025. 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 therefore close to 15%. A charge of £0.2m (2025: £0.2m) 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).
5. Dividends
2026 2026 2025 2025
Pence
£m
Pence
£m
per share
per share
Amounts recognised as distributions in the year:
Final dividend for the prior year 3.0 36.6 3.0 38.5
Interim dividend for the current year 1.4 18.1 1.3 16.0
4.4 54.7 4.3 54.5
Proposed final dividend for the year ended 31 March 3.1 39.5 3.0 36.7
Dividends are recognised as distributions in the year in which they are
declared. Subject to approval at the Annual General Meeting on 21 July 2026,
the final dividend for the year ended 31 March 2026 will be paid on 27 August
2026 to shareholders on the register on 17 July 2026. The ordinary shares will
be quoted ex-dividend on 16 July 2026.
6. Earnings per share
The calculation of the basic and diluted earnings per share (EPS) is based on
the following data:
2026 2025
£m £m
Net profit before Other items attributable to owners of the parent 169.2 157.6
Other items net of tax attributable to owners of the parent(1) (86.6) (56.2)
Net profit attributable to owners of the parent 82.6 101.4
Note:
1. Other items are as described in Note 3.
Number of shares 2026 2025
million
million
Weighted average number of ordinary shares for the purpose of basic EPS(1) 1,245.6 1,237.7
Effect of dilutive potential ordinary shares(2) 102.1 101.5
Weighted average number of ordinary shares for the purpose of diluted EPS(1,2) 1,347.7 1,339.2
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.
2026 2025
Pence
Pence
per share
per share
Basic earnings before Other items(1) 13.6 12.7
Basic earnings 6.6 8.2
Diluted earnings before Other items(1) 12.6 11.8
Diluted earnings 6.1 7.6
Note:
1. Other items are as described in Note 3.
7. Goodwill
£m
Cost
At 1 April 2024 394.2
Arising on business combinations 36.1
At 31 March 2025 430.3
Arising on business combinations (Note 15) 244.7
At 31 March 2026 675.0
Accumulated impairment losses
At 1 April 2024, 31 March 2025 and 31 March 2026 32.5
Net book value
At 31 March 2026 642.5
At 31 March 2025 397.8
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 2026, and
the determination of CGUs has been updated accordingly to meet the criteria
included in IAS 36 - Impairment of Assets. Business Services, Technical
Services and Spain have been determined to be the relevant CGUs for the year
ended 31 March 2026. The information presented for the year ended 31 March
2025 has been re-presented to reflect these changes, and, as a result, the
£81.0m of goodwill previously allocated to the Communities 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:
2026 2025
Pre-tax discount rate Goodwill
%
(restated)(1)
Goodwill
£m
£m
Business Services 10.9 423.2 188.3
Technical Services 10.9 211.5 204.3
Spain 11.6 7.8 5.2
Total 642.5 397.8
Note:
1. The 2025 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 2025 and under the previous organisational structure, the goodwill
was allocated as follows:
2025
Goodwill
(as presented)
Pre-tax discount rate
£m
%
Business Services 9.5 167.5
Technical Services 9.5 144.1
Communities 9.5 81.0
Spain 10.2 5.2
Total 397.8
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 ended 31 March 2027 and the Group's strategic
plan to 31 March 2031. 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% (2025:
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 7.7% as at the time of the Group's annual impairment review (2025: 7.1%).
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.
8. Trade and other receivables
2026 2025
£m
£m
Trade receivables 585.8 538.3
Accrued income 394.3 339.3
Prepayments 75.9 59.5
Other receivables 45.9 51.3
Total 1,101.9 988.4
Included in current assets 1,082.2 967.9
Included in non-current assets 19.7 20.5
Total 1,101.9 988.4
Management considers that the carrying amount of trade and other receivables
approximates their fair value.
9. Trade and other payables
2026 2025
£m
£m
Trade payables 282.1 205.0
Other taxes and social security 217.6 202.1
Accruals 566.9 557.2
Other payables 72.9 70.5
Total 1,139.5 1,034.8
Included in current liabilities 1,128.8 1,012.6
Included in non-current liabilities 10.7 22.2
Total 1,139.5 1,034.8
Management considers that the carrying amount of trade and other payables
approximates their fair value.
10. Provisions
Contract specific costs Onerous contracts Insurance reserve Dilapidations Other Total
£m
£m
£m
£m
£m
£m
At 1 April 2025 33.0 10.0 27.3 10.4 3.4 84.1
Additional provisions 4.8 13.0 13.3 0.6 2.2 33.9
Released to the condensed consolidated income statement (1.3) (2.9) - (0.4) (0.2) (4.8)
Arising on business combinations(1) - 4.2 4.1 6.3 0.9 15.5
Utilised (10.0) (12.2) (14.3) (0.6) (1.7) (38.8)
At 31 March 2026 26.5 12.1 30.4 16.3 4.6 89.9
Included in current liabilities 11.7 7.2 10.7 3.8 3.5 36.9
Included in non-current liabilities 14.8 4.9 19.7 12.5 1.1 53.0
Total 26.5 12.1 30.4 16.3 4.6 89.9
Note:
1. Onerous contract provisions arising on business combinations relate to the
prior year acquisition of ESM Power Limited. The insurance reserve,
dilapidations provisions and other provisions arising on business combinations
relate to the acquisition of Marlowe and Forest Group. See Note 15
Contract-specific costs
Contract-specific costs provisions have been recognised primarily to cover
remedial and rectification costs required to meet clients' contract terms, and
include a £10.8m (2025: £10.8m) provision relating to a liability risk on a
certain contract which is subject to dispute (see Note 1), and £3.8m (2025:
£5.3m) for rectification works on a certain contract. The value of these
provisions reflects the single most likely outcome and is expected to be
utilised over a maximum period of seven years. In the year ended 31 March
2026, a settlement has been reached on a certain contract resulting in a
provision utilisation of £4.7m (2025: Contract-specific provision £4.7m),
with a further £3.5m utilised on rectification works on another contract. The
remaining provisions relate to other potential commercial claims and
rectification work for other contracts.
Onerous contracts
Onerous contracts include provisions for certain long-term Private Finance
Initiative, and other contracts. Due to the long-term nature of Private
Finance Initiative contracts, it is expected that these provisions will be
utilised over a weighted average period of six years. During the year ended 31
March 2026, an onerous contract provision held for a certain contract was
increased by £10.1m, where the contract has ended following the year end and
will not be renewed.
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 condensed 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 £30.4m is presented gross of an insurer
reimbursement asset of £3.4m (2025: £4.2m), which represents the amount the
Group is virtually certain to recover for claims under its insurance policies.
Of this other receivable, £2.2m (2025: £2.7m) is presented as non-current.
Dilapidations
The provision for dilapidations relates to the legal obligation for leased
properties to be returned to the landlord in the contracted condition at the
end of the lease period. This cost would include repairs of any damage and
wear and tear and is expected to be utilised in the next nine years as
properties are exited.
11. Cash and cash equivalents
2026 2025
£m
£m
Cash and cash equivalents 108.9 180.4
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The Group operates
cash-pooling arrangements with certain banks for cash management purposes.
There were no gross overdraft balances at 31 March 2026 (2025: no gross
overdrafts).
As at 31 March 2026, included within cash and cash equivalents is £5.7m
(2025: £4.3m) 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.
12. Financing liabilities
2026 2025
£m
£m
Private placement notes 360.0 180.0
Lease liabilities (Note 13) 195.5 197.5
Loan arrangement fees (2.1) (2.4)
Total 553.4 375.1
Included in current liabilities 62.5 52.2
Included in non-current liabilities 490.9 322.9
Total 553.4 375.1
US Private Placement (USPP) notes
Previously, in December 2022, the Group issued £120m of USPP notes, which are
split equally between 8, 10 and 12 year maturities, and were issued with an
average interest rate of 2.94%.
Subsequently, in October 2024, the Group additionally entered into a
three-year uncommitted USPP shelf facility with initial capacity of
approximately £320m, which was increased to approximately £360m in March
2026. At 31 March 2026, undrawn capacity under the facility was approximately
£120m (31 March 2025: £260m at constant currency to 31 March 2026),
available for drawdown until October 2027.
In December 2024, the Group issued £60m of new USPP notes under the shelf
facility, replacing an existing £30m note that matured in the same month.
These notes have a seven‑year maturity and carry an interest rate of 5.71%.
To facilitate the acquisition of Marlowe, the Group secured a £240m bridge
facility during the year ended 31 March 2026. The facility was scheduled to
mature in June 2026, with an option to extend to June 2027. In October 2025,
£60m of the facility was repaid, with the remaining £180m refinanced through
a drawdown under the Group's USPP shelf facility on 12 November 2025. The new
USPP notes have maturities ranging from three to seven years and carry a
weighted average fixed interest rate of 5.44%.
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 2026 are shown below.
Tranche Maturity date Amount Interest terms
3 year 12 November 2028 £50.0m £ fixed at 5.27%
5 year 12 November 2030 £65.0m £ fixed at 5.38%
8 year 16 December 2030 £40.0m £ fixed at 2.84%
7 year 22 December 2031 £60.0m £ fixed at 5.71%
7 year 12 November 2032 £65.0m £ fixed at 5.63%
10 year 16 December 2032 £40.0m £ fixed at 2.97%
12 year 16 December 2034 £40.0m £ fixed at 3.00%
Revolving Credit Facility (RCF)
The Group has an RCF of £250m with a maturity date of October 2028. During
the year ended 31 March 2026, the RCF was utilised for short-term borrowings,
with the average borrowing amounting to £22.5m (2025: £22.6m) over an
average period of 13 days (2025: 10 days). Amounts drawn down during the year
accumulated to £810m (2025: £812m) with equal amounts repaid in 2026 and
2025. There were no amounts outstanding at 31 March 2026 (2025: no amounts
outstanding).
At the acquisition date, Marlowe had an outstanding balance on its revolving
credit facility of £9.0m which was subsequently repaid by the Group.
Following the repayment the facility was closed.
As at 31 March 2026, the Group had available £250m (2025: £250m) of undrawn
committed borrowing facilities in respect of the RCF to which all conditions
precedent had been met.
Compliance with covenants
The RCF, bridge facility, and USPP notes are unsecured but have financial and
non-financial covenants and obligations commonly associated with these
arrangements. The two key financial covenant ratios are leverage and interest
cover, measured biannually on a rolling 12-month basis at 31 March and 30
September as follows:
• Leverage - ratio of 'consolidated total net borrowings' to 'adjusted
consolidated EBITDA') shall not exceed 3.0x
• Interest cover - ratio of 'consolidated EBITDA' to 'consolidated net finance
costs', shall not be lower than 4.0x
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 2026, with leverage of 0.82x (2025: 0.04x) and interest cover of
17.8x (2025: 38.7x), and therefore all amounts are classified in line with
repayment dates.
On 18 July 2025, Morningstar DBRS confirmed that Mitie's BBB investment grade
credit rating remains unchanged.
The weighted average interest rates paid during the year were as follows:
2026 2025
%
%
Bank loans 5.7 6.7
Private placement notes 4.3 3.4
13. Leases
Right-of-use assets Properties Plant and vehicles Total
£m
£m
£m
At 1 April 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
Additions 4.9 30.1 35.0
Arising on business combinations (Note 15) 6.4 20.8 27.2
Modifications to lease terms and disposals 0.3 2.8 3.1
Impairments (1.9) - (1.9)
Depreciation (10.1) (57.8) (67.9)
Effect of movement in exchange rates - 0.4 0.4
At 31 March 2026 34.3 154.0 188.3
Lease liabilities 2026 2025
£m
£m
At 1 April 197.5 174.0
Additions 34.6 77.1
Arising on business combinations 27.2 1.2
Modifications to lease terms and disposals 3.2 1.5
Interest expense related to lease liabilities 10.2 8.7
Repayment of lease liabilities (including interest) (77.7) (64.8)
Effect of movement in exchange rates 0.5 (0.2)
At 31 March 195.5 197.5
Included in current financing liabilities 63.1 52.8
Included in non-current financing liabilities 132.4 144.7
Total 195.5 197.5
Maturity analysis - contractual undiscounted cash flows 2026 2025
£m
£m
Less than one year 70.7 62.4
One to five years 136.9 145.6
More than five years 7.6 13.4
Total undiscounted lease liabilities 215.2 221.4
Amounts recognised in the condensed consolidated income statement 2026 2025
£m
£m
Depreciation of right-of-use assets (67.9) (55.4)
Short-term lease expense (1.2) (0.6)
Operating profit impact (69.1) (56.0)
Interest on lease liabilities (10.2) (8.7)
Profit before tax impact (79.3) (64.7)
Amounts recognised in the condensed consolidated statement of cash flows 2026 2025
£m
£m
Capital element of lease rental payments (financing cash flow) 67.5 56.1
Interest payments (operating cash flow) 10.2 8.7
Total cash outflow for capitalised leases 77.7 64.8
14. Analysis of net debt
2026 2025
£m
£m
Cash and cash equivalents (Note 11) 108.9 180.4
Adjusted for: restricted cash (Note 11) (5.7) (4.3)
Private placement notes (Note 12) (360.0) (180.0)
Loan arrangement fees (Note 12) 2.1 2.4
Net debt before lease obligations (254.7) (1.5)
Lease liabilities (Note 13) (195.5) (197.5)
Net debt (450.2) (199.0)
Reconciliation of net cash flow to movements in net debt 2026 2025
£m
£m
Net decrease in cash and cash equivalents (71.8) (64.2)
Increase in restricted cash (1.4) (0.1)
Net decrease in unrestricted cash and cash equivalents (73.2) (64.3)
Cash drivers
Proceeds from new private placement notes (180.0) (60.0)
Private placement notes repaid - 30.0
Proceeds from bridge loan facility (240.0) -
Repayment of bridge loan facility and other bank loans 249.0 0.4
Payment of arrangement fees 1.1 0.6
Capital element of lease rentals 67.5 56.1
Non-cash drivers
Non-cash movement associated with bank loans (1.3) (0.6)
Non-cash movement associated with private placement notes (0.1) (0.1)
Non-cash movement in lease liabilities (38.3) (79.6)
Effect of foreign exchange rate changes 0.3 (0.3)
Debt acquired as part of business combinations (36.2) (0.4)
Increase in net debt during the year (251.2) (118.2)
Opening net debt (199.0) (80.8)
Closing net debt (450.2) (199.0)
15. Acquisitions
Current year acquisitions
Marlowe Limited, formerly Marlowe plc (Marlowe)
On 4 August 2025, the Group completed the acquisition of the entire issued
share capital of Marlowe for a total transaction consideration of £351.5m.
This comprised a cash payment of £228.2m, and the issuance of 86.6 million
ordinary shares valued at £123.3m. Marlowe is a leading provider of Testing,
Inspection & Certification (TIC) services in the UK and has been
integrated into the Group's Business Services division. The acquisition of
Marlowe will enhance Mitie's existing TIC business, allowing it to become a
leading Facilities Compliance provider across each of the key subsectors of
TIC.
The goodwill is attributable to the operations and workforce of Marlowe and
the Group-specific synergies, including cross-selling and operational
efficiencies expected to be achieved from integrating Marlowe into the Group's
existing TIC business.
Seguridad Profesional Mediterranea and Serveis Puntuals i Manteniment
(together, SPM)
On 30 September 2025, the Group acquired the trade and assets of SPM for total
cash consideration of £4.3m, of which £1.7m is deferred at 31 March 2026 and
payable over three years. SPM is based in Barcelona and provides security
services, specialising in surveillance and ancillary services. The acquisition
expands the Group's security capabilities in Spain and SPM has been integrated
into the Group's Business Services division.
Goodwill arising on the acquisition represents the value attributed to the
acquired, mobilised workforce and the anticipated enhancement of the Group's
service offering in the Spanish market.
Forest Group Holdings Limited and its subsidiaries, Forest U.K. Limited and GB
Refrigeration Limited (together, Forest Group)
On 19 November 2025, the Group acquired 100% of the issued share capital of
Forest Group for a cash consideration of £5.0m. Forest Group is a UK‑based,
engineering‑led refrigeration services business. The acquisition strengthens
the Group's self‑delivery capabilities within the retail sector and Forest
Group has been integrated into the Group's Technical Services division.
Amounts of up to £2.5m payable to the former owners of Forest Group have been
accounted for as remuneration for post‑acquisition employment services, as
entitlement to these payments is conditional upon the continued employment of
the former owners within the Group. The amounts are payable based on
performance over three periods ending 31 March 2026, 31 March 2027 and 31
March 2028, subject to an aggregate maximum of £2.5m. Where relevant
conditions are met, these amounts are recognised as an expense over the period
in which the related services are received, up to the point at which the
payments become payable.
Goodwill arising on the acquisition reflects the expected benefits from the
acquired operations and workforce, which are anticipated to enhance the
Group's self‑delivery and capabilities within the retail sector.
El‑Team Vest A/S (ETV)
On 31 March 2026, the Group acquired 100% of the issued share capital of ETV,
for a total transaction consideration of £12.7m, of which £2.3m is deferred
and payable over the following three years contingent on post-acquisition
performance. ETV is a Danish electrical contracting and installation business.
The acquisition enhances the Group's self‑delivery capabilities in fire,
security and electrical works within one of Europe's fastest‑growing data
centre markets and will be integrated into the Group's Business Services
division.
Amounts of up to £2.0m payable to the former owner of ETV have been accounted
for as remuneration for post‑acquisition employment services, as entitlement
to these payments is conditional upon the continued employment of the former
owners within the Group. The amounts are payable based on the sellers'
continued employment over three periods ending 31 December 2026, 31 December
2027 and 31 December 2028. Where relevant conditions are met, these amounts
are recognised as an expense over the period in which the related services are
received, up to the point at which the payments become payable.
Goodwill arising on the acquisition represents the expected future benefits
from the acquired operations and workforce, which are anticipated to enhance
and support the Group's self‑delivery capabilities and its fire, security
and electrical offerings across the Nordic regions.
ABC Elektro AS (ABC)
On 31 March 2026, the Group acquired 100% of the issued share capital of ABC,
for a total cash consideration of £0.6m, of which £0.1m is payable on
finalisation of the completion accounts process. ABC is a Norwegian electrical
installation business. The acquisition enhances the Group's self‑delivery
capabilities in fire, security and electrical works within the Nordic region
and will be integrated into the Group's Business Services division.
Amounts of up to £0.4m payable to the former owners of ABC have been
accounted for as remuneration for post‑acquisition employment services, as
entitlement to these payments is conditional upon the continued employment of
the former owners within the Group. The amounts are payable based on the
sellers' continued employment over two periods ending 31 December 2027 and 31
December 2028. Where relevant conditions are met, these amounts are recognised
as an expense over the period in which the related services are received, up
to the point at which the payments become payable.
Goodwill arising on the acquisition represents the expected future benefits
from the acquired operations and workforce, which are anticipated to enhance
the Group's fire, security and electrical offerings across the Nordic
regions.
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 2026:
Marlowe SPM Forest Group
£m £m £m Total(1)
£m
Revenue 207.9 4.5 2.4 214.8
Operating profit before Other items 16.5 0.3 0.1 16.9
Note:
1. As ETV and ABC were acquired on 31 March 2026, these acquisitions did not
contribute to revenue or operating profit before Other items for the year
ended 31 March 2026.
Based on estimates made of the full-year impact if all acquisitions had been
completed on 1 April 2025, revenue for the year would have increased by
approximately £131.5m, and operating profit before Other items would have
increased by £9.3m, resulting in total revenue of £5,750.1m and total Group
operating profit before Other items of £273.4m. Profit after tax would have
increased by approximately £5.3m, resulting in total Group profit after tax
of £95.6m.
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 acquisitions are provisional. The purchase price
allocation, including the valuation of identifiable intangible assets arising
on acquisition, will be finalised within 12 months of the acquisition date.
The provisional purchase price allocation is as follows:
Marlowe SPM Forest Group ETV ABC Total
£m
£m
£m
£m
£m
£m
Customer relationships and contracts 143.0 2.3 1.6 - - 146.9
Brand 3.5 - - - - 3.5
Other intangible assets 2.9 - - - - 2.9
Property, plant and equipment (owned) 8.7 - 0.1 - - 8.8
Right-of-use assets 26.3 - 0.3 0.6 - 27.2
Trade and other receivables 68.1 - 1.3 1.3 0.2 70.9
Inventories 10.8 - 0.3 0.1 0.2 11.4
Cash and cash equivalents 8.8 - 0.8 2.8 - 12.4
Current tax asset/(liabilities) 2.8 - (0.2) - - 2.6
Trade and other payables (62.5) - (1.1) (1.0) (0.3) (64.9)
Deferred Income (4.2) - - - - (4.2)
Lease liabilities (26.3) - (0.3) (0.6) - (27.2)
Financing liabilities (9.0) - - - - (9.0)
Provisions (11.2) - (0.1) - - (11.3)
Deferred tax liabilities (34.0) (0.6) (0.5) (0.3) - (35.4)
Net identifiable assets acquired 127.7 1.7 2.2 2.9 0.1 134.6
Goodwill 223.8 2.6 2.8 9.8 0.5 239.5
Total consideration 351.5 4.3 5.0 12.7 0.6 374.1
Cash consideration 228.2 2.6 5.0 10.4 0.5 246.7
Shares consideration(1) 123.3 - - - - 123.3
Deferred consideration - 1.7 - - - 1.7
Contingent consideration - - - 2.3 0.1 2.4
Total consideration 351.5 4.3 5.0 12.7 0.6 374.1
Note:
1. The share-based consideration consisted of 86.6m ordinary shares issued,
valued at £1.424 per share based on the closing price on 4 August 2025.
Prior year acquisitions
On 1 August 2024, the Group completed the acquisition of Woodford Investments
Limited and its subsidiary ESM Power Limited (together ESM). Subsequently on
24 October 2024, Slademain Limited and its subsidiary Argus Fire Protection
Company Limited (together Argus) were also acquired by the Group.
The accounting for these acquisitions was disclosed as provisional within the
Group's Annual Report and Accounts 2025, as these acquired businesses were in
the 12-month measurement period as allowed by IFRS 3 Business Combinations.
During the year ended 31 March 2026, Management have finalised the acquisition
accounting for these businesses, and measurement period adjustments have been
recognised to reflect new information about conditions and circumstances that
existed at the acquisition date.
Following the measurement period adjustments, the fair value of acquired net
assets for ESM decreased by £4.4m. This reduction was due to an increase in
onerous contract provisions of £4.2m and deferred income of £1.7m related to
specific projects, and an increase in deferred tax assets of £0.5m and
current tax receivables of £1.0m resulting in a corresponding increase in
goodwill of £4.4m.
Additionally, the fair value of acquired net assets for Argus decreased by
£0.8m due to derecognition of certain reimbursement assets of £1.1m, and an
increase in current tax receivables of £0.3m, resulting in a corresponding
increase in goodwill of £0.8m.
As these adjustments to acquisition accounting are not material for the Group,
goodwill values have been adjusted in the current year rather than
re-presenting goodwill as at 31 March 2025.
Cash flows on acquisitions
2026 2025
£m
£m
Cash consideration 246.7 58.8
Less: cash balance acquired (12.4) (9.7)
Net outflow of cash - investing activities 234.3 49.1
During the year ended 31 March 2026, payments totalling £13.0m (2025: £7.0m)
have been made to the former owners of certain acquired businesses with
respect to employment-linked earnouts which are included within net cash
generated from operating activities.
16. 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 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 £33.8m (2025: £26.8m) and contributions to the
auto-enrolment scheme of £28.5m (2025: £24.7m), which are included in the
condensed consolidated income statement charge. The Group expects to make
contributions of a similar amount in the year ending 31 March 2027.
Defined benefit schemes
Mitie Group plc Pension Scheme (the Group scheme)
The Group scheme comprises two segregated sections: the Group section (Group
Part A) and the Interserve section (Group Part B). The assets and liabilities
of the two sections are ring-fenced.
The Group Part A 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 Part A section was closed to new members in 2006, with new employees
able to join one of the defined contribution schemes.
The Group Part B 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, the Group paid £3.2m of deficit repair
contributions. The funding position has materially improved (through a
combination of deficit repair contributions and investment returns) to an
actuarial surplus and due to the improved funding position of the scheme, no
further deficit repair contributions are expected to be required in the year
ending 31 March 2027. We are working with the Trustee of the scheme to enter
into a qualifying insurance buy-in to secure the benefits of the scheme, which
had not completed as at 31 March 2026.
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)
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.
Separately, a decision was taken to proceed with a scheme buyout, and in
January 2026 the Group completed the buyout of the Landmarc scheme with an
authorised insurance company, receiving a £1.6m refund relating to the scheme
surplus. Under this arrangement, the scheme's assets and liabilities relating
to members' accrued benefits were transferred to the insurer, which has
assumed responsibility for the payment of future pension benefits in
accordance with the scheme rules.
As a result of the transaction, the Group has eliminated its exposure to
future funding, longevity, inflation and investment risks in respect of these
obligations.
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, 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 condensed 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. Any surplus positions are restricted as the Group does not have an
unconditional right to a refund.
The Group made contributions to the Other schemes of £0.3m in the year (2025:
£0.1m). The Group expects to make contributions of a similar amount in the
year ending 31 March 2027.
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 year ending 31 March 2027 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.
During the year ended 31 March 2025, a settlement agreement was reached with
the trustees of the Plumbing Scheme. As a result of this, the amount of
£21.7m was transferred from provisions to other payables, and a charge of
£2.8m was recognised as Other items in respect of Mitie Property Services
(UK) Limited's participation in the Plumbing Scheme. The costs were partially
offset by a £0.5m release of an accrual during the year ended 31 March 2026
following the final settlement agreement with the trustees of the Plumbing
Scheme in respect of the Section 75 debt.
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 consumer price inflation, 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.
Principal accounting assumptions at condensed consolidated statement of
financial position date
Group Part A Group Part B Landmarc scheme Other schemes
2026 2025 2026 2025 2026 2025 2026 2025
%
%
%
%
%
%
%
%
Key assumptions used for IAS 19 valuation:
Discount rate 6.12 5.79 6.16 5.82 - 5.70 6.17 5.82
Expected rate of pensionable pay increases 2.88 2.57 3.00 2.70 - 2.60 3.82 3.39
Retail price inflation 3.44 3.18 3.41 3.15 - 3.20 3.41 3.15
Consumer price inflation 2.88 2.57 3.00 2.70 - 2.60 3.00 2.70
Future pension increases 2.88 2.57 3.00 2.70 - 3.10 2.81 2.82
Group Part A Group Part B Landmarc scheme
2026 2025 2026 2025 2026 2025
Years
Years
Years
Years
Years
Years
Post-retirement life expectancy:
Current pensioners at 65 - male 87.5 87.1 85.0 84.7 - 85.0
Current pensioners at 65 - female 88.9 88.7 87.1 87.0 - 88.6
Future pensioners at 65 - male 88.6 88.1 86.1 85.7 - 86.2
Future pensioners at 65 - female 90.1 89.9 88.4 88.2 - 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 (Decrease)/increase (Decrease)/
in obligations
increase
%
in obligations
£m
Increase in discount rate 0.25% (3.2) (6.7)
Increase in retail price inflation(1) 0.25% 2.0 4.4
Increase in consumer price inflation (excluding pay) 0.25% 1.0 2.2
Increase in life expectancy 1 year 2.9 6.2
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 Part A
and B sections.
Amounts recognised in condensed consolidated financial statements
Amounts recognised in the condensed consolidated income statement are as
follows:
2026 2025
Group Part A Group Part B Landmarc scheme Other schemes Total Group Part A Group Part B Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Current service cost (0.1) (0.2) - (0.7) (1.0) (0.1) (0.3) - (0.7) (1.1)
Past service cost (including curtailments/settlements) (1,2) - (1.3) - (7.9) (9.2) - - (1.1) (5.3) (6.4)
Total administrative expense(3) (0.8) (0.2) (0.7) (0.1) (1.8) (1.0) (0.2) (0.5) (0.2) (1.9)
Amounts recognised in operating profit (0.9) (1.7) (0.7) (8.7) (12.0) (1.1) (0.5) (1.6) (6.2) (9.4)
Net interest income/(cost) 0.8 0.2 0.1 (0.1) 1.0 0.2 0.1 0.1 (0.1) 0.3
Amounts recognised in profit before tax (0.1) (1.5) (0.6) (8.8) (11.0) (0.9) (0.4) (1.5) (6.3) (9.1)
Notes:
1. During the year ended 31 March 2026, an agreement to amend the
Group Part B scheme rules to increase certain cash benefits which members
receive on retirement was completed. The Group incurred a £1.3m past service
cost charge in relation to the amendment of the Group Part B scheme rules,
which have been recognised in the condensed consolidated income statement as
Other items. See Note 3.
2. During the year ended 31 March 2026, the Group formally exited
certain Local Government Pension Schemes (LGPS), resulting in a £7.9m
contract settlement charge, which was recognised within Other items. See Note
3.
3. During the year ended 31 March 2026, the Group completed the buyout
of the Landmarc scheme. Administrative expenses of £0.6m were incurred as a
result of the buyout process, and these were recognised within Other items.
See Note 3.
Amounts recognised in the condensed consolidated statement of comprehensive
income are as follows:
2026 2025
Group Part A Group Part B Landmarc scheme Other schemes Total Group Part A Group Part B 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 3.8 0.3 (0.8) 0.2 3.5 22.8 2.9 4.3 6.6 36.6
Actuarial (losses)/gains arising from liability experience (1.3) - (0.3) (0.7) (2.3) 0.9 1.8 (0.1) (0.2) 2.4
Actuarial (losses)/gains due to changes in demographic assumptions (0.4) (0.1) - 0.2 (0.3) (0.1) 0.1 - 0.5 0.5
Movement in asset ceiling, excluding interest(1) - - - 0.1 0.1 - - - (2.4) (2.4)
Return on scheme assets, excluding interest income (1.2) (0.1) 1.4 7.9 8.0 (19.0) (2.3) (3.8) 1.7 (23.4)
Return on reimbursement asset(2) - - - - - - - - - -
Amounts recognised in other comprehensive income 0.9 0.1 0.3 7.7 9.0 4.6 2.5 0.4 6.2 13.7
Notes:
1. The £0.1m net credit (2025: £2.4m net charge) for the year ended
31 March 2026 includes a £7.9m credit (2025: £5.3m) 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 2026 (2025: £0.9m)
is recorded within other receivables.
The amounts included in the condensed consolidated statement of financial
position are as follows:
2026 2025
Group Part A Group Part B Landmarc scheme Other schemes Total Group Part A Group Part B Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Fair value of scheme assets 168.3 23.0 - 67.1 258.4 165.3 22.7 36.7 69.1 293.8
Present value of defined benefit obligations (152.8) (20.3) - (41.0) (214.1) (154.7) (18.9) (34.8) (43.8) (252.2)
Surplus without restriction 15.5 2.7 - 26.1 44.3 10.6 3.8 1.9 25.3 41.6
Asset ceiling - - - (28.9) (28.9) - - - (27.7) (27.7)
Net pension asset/(liability) 15.5 2.7 - (2.8) 15.4 10.6 3.8 1.9 (2.4) 13.9
All figures above are shown before deferred tax. The total of schemes in a
surplus position is £18.2m (2025: £16.3m).
Movements in the present value of defined benefit obligations were as follows:
2026 2025
Group Part A Group Part B Landmarc scheme Other schemes Total Group Part A Group Part B Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 April 154.7 18.9 34.8 43.8 252.2 177.4 23.2 38.1 58.1 296.8
Additional schemes entered into - - - 1.6 1.6 - - - - -
Current service cost 0.1 0.2 - 0.7 1.0 0.1 0.3 - 0.7 1.1
Interest cost 8.7 1.1 1.5 2.1 13.4 8.4 1.1 1.8 2.4 13.7
Contributions from scheme members - 0.1 - 0.1 0.2 - 0.1 - 0.1 0.2
Actuarial (gains)/losses arising due to changes in financial assumptions (3.8) (0.3) 0.8 (0.2) (3.5) (22.8) (2.9) (4.3) (6.6) (36.6)
Actuarial losses/(gains) arising from experience 1.3 - 0.3 0.7 2.3 (0.9) (1.8) 0.1 0.2 (2.4)
Actuarial losses/(gains) due to changes in demographic assumptions 0.4 0.1 - (0.2) 0.3 0.1 (0.1) - (0.5) (0.5)
Benefits paid (8.6) (1.1) (1.8) (1.5) (13.0) (7.6) (1.0) (2.0) (1.4) (12.0)
Past service cost - 1.3 - - 1.3 - - 1.1 - 1.1
Contract settlement - - (35.6) (6.1) (41.7) - - - (9.2) (9.2)
At 31 March 152.8 20.3 - 41.0 214.1 154.7 18.9 34.8 43.8 252.2
The defined benefit obligations analysed by participant status is as
follows:
2026 2025
Group Group Landmarc scheme Group Group Landmarc scheme
£m
£m
Part A Part B Part A Part B
£m
£m
£m
£m
Active 1.0 7.7 - 1.1 8.5 -
Deferred 67.4 3.0 - 72.3 2.9 6.9
Pensioners 84.4 9.6 - 81.3 7.5 27.9
At 31 March 152.8 20.3 - 154.7 18.9 34.8
Movements in the fair value of scheme assets were as follows:
2026 2025
Group Part A Group Part B Landmarc scheme Other schemes Total Group Group Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
Part A Part B
£m
£m
At 1 April 165.3 22.7 36.7 69.1 293.8 174.8 24.4 41.1 80.0 320.3
Additional schemes entered into - - - 2.0 2.0 - - - - -
Interest income 9.5 1.3 1.6 3.3 15.7 8.6 1.2 1.9 3.3 15.0
Actuarial (losses)/gains on assets (1.2) (0.1) 1.4 7.9 8.0 (19.0) (2.3) (3.8) 1.7 (23.4)
Contributions from the sponsoring companies(1) 4.1 0.3 - 0.3 4.7 9.5 0.5 - 0.1 10.1
Contributions from scheme members - 0.1 - 0.1 0.2 - 0.1 - 0.1 0.2
Expenses paid (0.8) (0.2) (0.7) (0.1) (1.8) (1.0) (0.2) (0.5) (0.2) (1.9)
Benefits paid (8.6) (1.1) (1.8) (1.5) (13.0) (7.6) (1.0) (2.0) (1.4) (12.0)
Exit credit paid on scheme buyout(2) - - (1.6) - (1.6) - - - - -
Contract settlement - - (35.6) (14.0) (49.6) - - - (14.5) (14.5)
At 31 March 168.3 23.0 - 67.1 258.4 165.3 22.7 36.7 69.1 293.8
Notes:
1. Group Part A section contributions of £4.1m (2025: £9.5m) is inclusive of
£3.2m deficit repair contributions (2025: £8.4m).
2. In January 2026, the Group completed the buyout of the Landmarc scheme with
an authorised insurance company and the Group received a £1.6m refund
relating to the scheme surplus.
2026 2025
£m
£m
At 1 April 27.7 24.3
Interest cost on asset ceiling 1.3 1.0
Change in asset ceiling excluding interest(1) (0.1) 2.4
At 31 March 28.9 27.7
Note:
1. The £0.1m net credit (2025: £2.4m net charge) for the year ended 31 March
2026 includes a £7.9m credit (2025: £5.3m) with respect to the reversal of
gross surplus associated with the exit of certain LGPS schemes.
Fair values of the assets held by the schemes were as follows:
2026 2025
Group Part A Group Part B Landmarc scheme Other schemes Total Group Group Landmarc scheme Other schemes Total
£m
£m
£m
£m
£m
£m
£m
£m
Part A Part B
£m
£m
Equities 16.2 - - 34.4 50.6 22.4 - - 35.1 57.5
Government bonds 84.4 7.0 - 3.3 94.7 72.4 8.5 - 3.2 84.1
Corporate bonds 58.1 5.5 - 11.3 74.9 55.8 5.8 - 13.7 75.3
Property - - - 11.7 11.7 2.3 - - 11.2 13.5
Diversified growth fund 6.4 8.4 - 0.8 15.6 7.4 8.4 - 0.9 16.7
Cash 3.1 2.1 - 4.7 9.9 3.8 - 2.5 4.1 10.4
Insurance policies - - - 0.9 0.9 - - 34.2 0.9 35.1
Derivative financial instruments (0.9) - - - (0.9) - - - - -
Commodities 1.0 - - - 1.0 1.2 - - - 1.2
Total fair value of assets 168.3 23.0 - 67.1 258.4 165.3 22.7 36.7 69.1 293.8
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 16% of its assets in equities and other
return-seeking assets, principally diversified growth funds (DGFs). 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 condensed 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.
17. Events after the reporting period
On 2 June 2026, the Board approved the initiation of a £100m share buyback
programme for the year ending 31 March 2027 (including the remaining c.£40m
tranche of existing £100m programme launched in October 2025).
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. 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.
The Group separately reports acquisition and disposal costs within Other
items. These include the amortisation of acquisition‑related intangible
assets, integration costs, employment‑linked earnout charges, and gains or
losses on business disposals. 'Other items' also include cost of restructuring
programmes, impairments of goodwill and acquired intangible assets, charges
arising on the exit of pension schemes and other exceptional items.
Further details of these Other items are provided in Note 3.
Operating profit 2026 2025
£m
£m
Operating profit Statutory measures 151.4 161.6
Adjust for:
Restructuring costs Note 3 27.2 16.6
Acquisition and disposal costs Note 3 74.9 43.1
Other exceptional items Note 3 10.6 12.8
Operating profit before Other items Performance measures 264.1 234.1
Reconciliations are provided below to show how the Group's segmental reported
results are adjusted to exclude Other items.
Operating profit/(loss) 2026 2025 (restated)(1)
Reported results Adjust for: Other items (Note 3) Performance measures Reported Adjust for: Performance measures
£m £m
£m
results
Other items
£m
£m
(Note 3)
£m
Segment
Business Services 172.1 15.0 187.1 171.8 8.6 180.4
Technical Services 114.2 21.7 135.9 94.6 14.5 109.1
Corporate Centre (134.9) 76.0 (58.9) (104.8) 49.4 (55.4)
Total Group 151.4 112.7 264.1 161.6 72.5 234.1
Note:
1. The comparatives for the year ended 31 March 2025 have been restated for
the change in composition of reportable segments (see Note 2).
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 2026 2025
pence
pence
Statutory basic earnings per share Statutory measures 6.6 8.2
Adjust for: Other items per share 7.0 4.5
Basic earnings per share before Other items Performance measures 13.6 12.7
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 2026 2025
£m
£m
Cash and cash equivalents Statutory measures 108.9 180.4
Adjust for: restricted cash Note 11 (5.7) (4.3)
Financing liabilities Note 12 (553.4) (375.1)
Net debt Performance measures (450.2) (199.0)
Net retirement benefit assets Note 16 15.4 13.9
TFO Performance measures (434.8) (185.1)
The Group uses an average net debt measure as this reflects its financing
requirements throughout the year. The Group calculates its average net debt
based on the daily closing figures. This measure showed average daily net debt
of £440.2m for the year ended 31 March 2026, compared with £264.0m for the
year ended 31 March 2025.
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 2026 2025
£m
£m
Net cash generated from operating activities Statutory measures 246.6 220.0
Add: net increase in restricted cash Note 11 (1.4) (0.1)
Interest received 2.5 3.0
Employment-linked earnouts(1) 13.0 7.0
Acquisition transaction costs(2) 8.3 -
Purchase of property, plant and equipment (33.4) (24.0)
Purchase of other intangible assets (6.7) (7.6)
Disposal of property, plant and equipment 0.6 0.6
Disposal of other intangible assets 0.1 -
Capital element of lease rentals paid Note 13 (67.5) (56.1)
Free cash inflow Performance measures 162.1 142.8
Notes:
1. During the year ended 31 March 2026, payments totalling £13.0m (2025:
£7.0m) 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 condensed consolidated income statement and
classified as Other items (see Note 3).
2. During the year ended 31 March 2026, acquisition transaction costs charged
to the income statement totalled £9.1m (see Note 3), of which £8.3m have
been settled in cash during the year. Free cash flow has been adjusted to
exclude the impact of acquisition transaction costs, reflecting the
significant transaction expenses incurred on the acquisition of Marlowe. The
comparative free cash flow for the year ended 31 March 2025 has not been
adjusted to reflect £3.6m of acquisition transaction costs, as the amount is
immaterial for a prior year re-presentation.
Earnings before interest, tax, depreciation and amortisation
Earnings before interest, tax, depreciation and amortisation (EBITDA) is a
measure of the Group's profitability. EBITDA is measured as profit/(loss)
before tax 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 2026 2025
£m
£m
Profit before tax Statutory measures 123.7 145.4
Add: net finance costs 27.7 16.2
Operating profit 151.4 161.6
Add: Other items Note 3 112.7 72.5
Operating profit before Other items 264.1 234.1
Add:
Depreciation of property, plant and equipment 85.8 67.9
Amortisation of non-current assets(1) 9.2 8.5
Amortisation of contract assets 0.9 0.4
EBITDA Performance measures 360.0 310.9
Note:
1. Excludes amounts classified in the condensed consolidated income statement
as Other items. See Note 3.
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.
2026 2025
£m
£m
Net assets Statutory measures 532.5 428.0
Add:
Non-current liabilities 639.6 445.2
Current provisions Note 10 36.9 37.4
Deduct:
Cash and cash equivalents Note 11 (108.9) (180.4)
Invested capital Performance measures 1,100.1 730.2
Operating profit before Other items 264.1 234.1
Tax(1) (64.7) (55.5)
Operating profit before Other items after tax 199.4 178.6
ROIC % Performance measures 18.1% 24.5%
Note:
1. Tax charge has been calculated at the effective tax rate for the year on
pre-tax profits before Other items of 24.5% (2025: 23.7%).
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