Mitie predicts outsourcing boom as cuts bite
Public sector contracts are about to boom due to the Coalition government's efforts to slash costs, according to outsourcing specialist Mitie Group.
Cuts: Civil servants are set to see their jobs transferred to outsourcing firms like Mitie
The firm predicted the government's efficiency drive would lead to a rise in outsourcing in its biggest markets. It is engaged in 'positive, constructive dialogue' with the Cabinet Office and other public sector bodies about gaining future business, it said.
Mitie's shares jumped 7.6p to 208.6p as it unveiled a 12% rise in first-half underlying profits to £47.5m. Revenues were up 15% at £918.7m.
The Bristol-based company said it is focusing 'additional resources and expertise' on areas such as justice, health, education and local government in a drive to benefit from the current wave of cost cutting in the public sector.
Mitie is well placed to help public sector clients in their drive for efficiency, and to manage the 'sensitive balance' between organisational change and providing jobs for people whose employment is transferred to it, the firm claimed.
The company has also secured work in the private sector after winning contracts with Rolls-Royce, Manchester Airport and the Royal Opera House, alongside a deal to provide facilities and energy management for Vodafone in the UK and Ireland
'Overall, market conditions in the medium term remain positive for outsourcing,' said chief executive Ruby McGregor-Smith.
Mitie - which stands for Management Incentive Through Investment Equity - has more than 56,000 full and part-time staff with several thousand employees holding equity stakes in the business.
The group offers services ranging from property management, cleaning, security and maintenance to advice on cutting carbon emissions. Last year, it generated around 55% of its revenues from private sector clients.
It bought Irish facilities management business Dalkia and increased its stake in Service Management International to 50% last year.
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