Mitie misses cue as Brexit and tighter purse strings trigger profit warningComments Off on Mitie misses cue as Brexit and tighter purse strings trigger profit warning
UK outsourcer Mitie was mopping up today after a Brexit-induced cut in spending by corporate customers and an overhaul of pay laws drove it head-first into a profit warning.
Mitie, led by Tory peer Baroness Ruby McGregor-Smith, said operating profit for the half-year would be “very significantly” lower, sending the shares crashing nearly 25%.
The FTSE 250 group makes most of its money from facilities management services to big companies like Tesco.
Baroness McGregor-Smith said some of its customers were pulling back from forking out for one-offs such as catering and fix-and-repair jobs as they tighten the purse strings because of uncertainty over Brexit.
“We see this as quite an unusual year,” McGregor-Smith said. “The short-term environment is challenging.”
The company’s span of offerings, from healthcare to property management, is also facing challenges from the introduction of the living wage and auto-enrolment pensions.
The apprentice levy, a payroll tax due next year, will lead to a £6 million cost burden for the group.
McGregor-Smith is spending £10 million to overhaul senior management layers, with savings of £15 million in the second six months of the financial year.