MITIE Lifts Dividend by 10% to Yield 3.7%


LONDON -- The shares of MITIE lost 2.2% of their value during London trade today despite the outsourcing firm's announcement that annual revenue grew 8% to £2 billion. MITIE, whose name stands for "Management Incentive Through Investment Equity," also delivered a 5% increase in profit before tax to £111 million.

In light of these positive results, MITIE hiked its final dividend by 10%, bringing the total dividend to 10.3 pence per share. This company has increased its dividend each consecutive year for over two decades.

However, MITIE's headline profit was hit by one-off financing and restructuring costs totaling £40 million. These costs related to the company's £110 million acquisition of Enara Group and write-offs in MITIE's mechanical and electrical-engineering divisions. The company's net debt expanded by £85 million to £192 million.

Chief executive Ruby McGregor-Smith said:

While the economic environment remains challenging, we have reshaped the business to focus on long-term facilities management opportunities, as well as higher margin health care provision and energy consulting, all of which will support our growth aspirations. We expect outsourcing opportunities will continue to grow, with a trend toward more clients seeking to access integrated services. We are positioned to build further on our long track record of sustainable profitable growth.

With a market cap of £1 billion, MITIE is valued at 12 times its latest earnings. After lifting its dividend today, MITIE offers a trailing yield of 3.7%. Of course, whether that valuation, today's results, and the prospects for the outsourcing industry combine to make MITIE a buy is something only you can decide.

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