LONDON (ShareCast) - (ShareCast News) - Outsourcer Mitie was under the cosh on Wednesday as it said it will cut around 480 jobs as a result of its transformation programme and announced that it is considering selling its property management business.
In a pre-close update for the half year ended 30 September, the group said job cuts are likely as it simplifies "the spans and layers of management" within its engineering and cleaning divisions.

Meanwhile, as part of its wider strategic review, Mitie is continuing to consider the options for its property management business and has now instructed Evercore Partners International to explore a potential sale of the business, having received expressions of interest from third parties.

Still, the company said revenue is expected to come in at around £1.1bn, up 4% from the same period a year ago. Meanwhile, the order book is up 3% versus the end of March, at £6.7bn, including new contract awards with a multi-national grocery retailer, an e-commerce and cloud computing company, and a "major" homewares and household goods retailer.

This has been in part been offset by the loss of a top 20 contract which was not due for retendering until 2019, which will result in a one-off non-cash write-off of £6m.

In addition, Mitie said it continues to make progress with the implementation of its cost transformation programme, Project Helix, although it is set to cost more than initially estimated, mostly due to the acceleration of IT transformation activities. The company now expects costs of £24m for the current financial year versus a previous estimate of £15m.

Acting chief executive officer Peter Dickinson said: "Overall we are making steady progress in the transformation of Mitie. Top line growth in the first six months has been encouraging, our dedicated focus on putting customers at the heart of our business and identifying cost savings is beginning to deliver and we are investing at pace in talent, capabilities and systems.

"Transforming a large, diverse business such as Mitie is neither linear nor without challenges, but the programme remains on track. I expect to see the positive impact of our endeavours as we move into the second half of the year."

At 0840 BST, the shares were down 2.4% to 252.20p.

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