Mitie shareholders saw their investments falling early this week as the outsourcing giant posted a profit forecast suggesting business would be flat.
In this instance it’s the social housing and cleaning arms that have hit the company’s fortunes. It has been turning itself around for some time, and in fairness all it’s said is that the current quarter’s profits will be slightly below those achieved this time last year (when the business earned £32,6m), nobody is talking about a loss.
However, shareholders weren’t amused and the price fell over 10% yesterday afternoon.
The chief executive, who took over last year after two profit warnings in 2016, maintains the underlying business is sound. Mitie’s profit will also have been affected by some high one-off costs associated with new contracts.
We’d have thought “new contracts” was a good thing and shareholders would be pleased. Our best guess is that the company will have to show some long-term consistency before it’s completely forgiven by the markets.