MITIE Group PLC MTO Half Yearly Report

  MITIE Group PLC (MTO) - Half Yearly Report

RNS Number : 3827R
MITIE Group PLC
19 November 2012




MITIE Group PLC

The strategic outsourcing company

Half-yearly financial report for the six months ended 30 September 2012

Strong organic growth and a strategic acquisition in healthcare

                                                2012  2011 Growth
                                                  £m    £m      %
Revenue                                      1,026.6 971.7    5.6
Operating profit before other items*            52.9  51.6    2.5
Profit before tax and other items*              48.8  47.9    1.9
Profit before tax                               37.7  43.3 (12.9)
                                                2012  2011 Growth
                                                   p     p      %
Basic earnings per share before other items*    10.5  10.4    1.0
Basic earnings per share                         8.0   9.4 (14.9)
Dividend per share                               4.6   4.4    4.5

*Other items comprised the amortisation of acquisition related intangible
assets of £4.3m (2011: £4.6m), other acquisition related costs of £2.0m (2011:
£nil) and restructuring costs of £4.8m (2011: £nil) incurred during the six
months ended 30 September 2012

Strong financial performance

· Strong revenue growth of 5.6% to £1,026.6m, of which 4.3% is organic

· Operating profit before other items up 2.5% to £52.9m

· Operating profit margin before other items at 5.2% (2011: 5.3%)

· Excellent conversion of EBITDA to cash of 83.1% on a rolling 12-month
basis, above stated long-term target KPI of 80%

· Interim dividend up 4.5% to 4.6p (2011: 4.4p)

· Low leverage with net debt at period end of £132.9m (2011: £119.3m) or
1.0x EBITDA on a rolling 12-month basis

Continuing to deliver on our integrated facilities management strategy

· Successfully mobilised major contracts including our five year, £775m
contract with Lloyds Banking Group

· Awarded significant new contracts with BSkyB for £100m over five years
and Golding Homes for £70-120m over ten years

Strategic acquisition of Enara in the healthcare market on 9 October 2012

· £8bn home care market has excellent organic growth opportunities and is
an ideal entry point into the wider healthcare market

· Home care is a natural fit for MITIE's skill set and values

Significant order book and sales pipeline

· Excellent progress in organic order book development - up 4.7% or
£0.4bn to £9.0bn (March 2012: £8.6bn)

· Strong pipeline of potential bid activity which currently stands at
£10.5bn (March 2012: £11.2bn)

· 98% of 2012/13 budgeted revenue secured at 30 September 2012 (prior
year: 97%), 72% of 2013/14 forecast revenue secured (prior year: 68%)

Significant future opportunities

· Market leading integrated facilities management capabilities will drive
further growth with existing client base

· Energy proposition supports every key energy issue faced by our clients
- security of supply, renewable energy, reduction of carbon emissions, and
value through lower costs

· Focus on providing better quality services, more innovation and more
efficiency differentiates us in the marketplace

· Robust balance sheet and strong financial position will support growth

Ruby McGregor-Smith CBE, Chief Executive of MITIE Group PLC, commented:

"This has been a positive start to the year for MITIE. We have won and
retained key contracts and expanded our healthcare offering via the purchase
of Enara. We are particularly pleased to have successfully mobilised and
started our largest ever contract, with Lloyds Banking Group.

"We have made this progress in the face of a tough economic climate and a
difficult macroeconomic outlook, with continuing challenges within our more
cyclical markets. However, we remain positive about the range of outsourcing
and energy services opportunities across our key markets and continue to see a
growing order book as well as a strong pipeline of sales opportunities. We
expect total revenue growth to be higher in the second half as a result of
both the organic revenue contribution from new and expanded contracts
including Lloyds Banking Group, and the acquisition of Enara.

"We are confident that we will continue to build on our long track record of
sustainable, profitable growth."

For further information, contact:

Erica Lockhart, Head of Investor Relations and External Affairs
T: +44 (0) 20 3123 8179  M: +44 (0) 7979 784488

John Telling, Group Corporate Affairs Director
T: +44 (0) 20 3123 8673 M: +44 (0) 7979 701006



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MITIE will be presenting its interim results for the period ended 30 September
2012 at 09.30 on Monday 19 November 2012. A live webcast of the presentation
will be available online at www.mitie.com/investors at 09.30. The recorded
webcast of the presentation and a copy of the accompanying slides will also be
available on our website.



High resolution images are available for the media to download free of charge
from http://www.flickr.com/photos/mitie_group_plc/sets/72157629754653074/

Chief Executive's update

MITIE has made significant progress in the first six months of the year, with
strong organic growth and new contracts. We have successfully mobilised our
largest ever contract with Lloyds Banking Group and made a strategic
acquisition in healthcare with the acquisition of Enara.

At a time when many of the world's economies are still facing very challenging
conditions, we are delighted to report that at MITIE we are continuing to
maintain good forward momentum.

For the six months to 30 September 2012, revenue increased by 5.6% to
£1,026.6m (2011: £971.7m), of which 4.3% was organic. Operating profit before
other items rose by 2.5% to £52.9m (2011: £51.6m). The operating profit margin
was 5.2% (2011: 5.3%). Our basic earnings per share before other items
increased by 1.0% to 10.5p per share (2011: 10.4p per share).

In the first half of the year our teams have secured new work and retained
existing contracts, adding to our order book, which increased by £0.4bn or
4.7% to £9.0bn (March 2012: £8.6bn). Our sales pipeline currently stands at
£10.5bn (March 2012: £11.2bn). Looking ahead, the revenue visibility is again
excellent, with 98% of budgeted revenue for 2012/13 secured (prior year: 97%),
and 72% of forecast revenue for 2013/14 secured (prior year: 68%).

We are therefore pleased to announce that the Board has proposed a half year
dividend of 4.6p per share, an increase of 4.5% on last year's interim
dividend (2011: 4.4p per share).

Over the past year we have successfully mobilised a number of large,
integrated outsourcing contracts. We are experienced and very good at
mobilising contracts, and nowhere has that been better illustrated than in the
five year, £775m partnership to deliver integrated facilities management
services for Lloyds Banking Group (LBG).

This transformational contract commenced on schedule on 1 August and it will
see us improve efficiency and reduce costs for LBG, with over 7,000 MITIE
people working at over 3,000 locations. We first started working with LBG 15
years ago, and it is hugely rewarding to witness a client relationship grow
into a long-term, successful partnership. The successful mobilisation of such
a significant contract shows the distance we have travelled as a company. We
are now able to win and successfully deliver contracts many times larger than
would have been possible even just a few years ago.

As the group grows larger we are increasing our focus on higher margin
services that provide long-term, sustainable revenue streams. The ongoing
uncertainties in both the UK and global economies continue to affect some of
our services which are exposed to more cyclical markets. We have reviewed the
parts of our portfolio which are affected by the difficult economic conditions
and external market pressures, and have concluded that delivering large,
one-off mechanical and electrical engineering installation projects directly
does not help us deliver our strategy or meet the performance targets of the
group. We have already reduced our activities in this area within Property
Management, and intend to significantly reduce them further over the next two
to three years. We also reviewed and restructured the overhead cost base
within our Technical Facilities Management and Property Management divisions
during the period, and have incurred £4.8m of restructuring costs in relation
to these changes.

Post period end acquisition of Enara

While organic growth is a key part of our strategy, so too are acquisitions
and our purchase of Enara Group for £110.8m on 9 October marked our entry into
the home care sector for the first time. The fourth largest provider of home
care services in the UK, Enara gives us a scalable platform to compete in the
healthcare market, an area that offers exciting strategic opportunities and
very good prospects for organic growth. We see significant long-term
opportunities in the UK healthcare market and anticipate that some of the
current, highly fragmented markets will consolidate in the years to come.

The demographic and economic drivers of an ageing population, together with
ongoing cost pressures, are encouraging a shift away from hospitals and
residential care homes towards greater care in the community. Enara provides
high quality home care to people who require help and support due to illness,
disability or infirmity. It operates 57 branches in England and Wales and
provides around 120,000 hours of care per week, delivered by the 6,000 Enara
employees who we have now welcomed into MITIE. Enara's revenue and operating
profit before other items for the full year to 31 March 2013 are expected to
be £93m and £10.1m, respectively.

Our experience in developing and motivating large and diverse teams of people,
as well as our expertise in using technology and innovation to improve service
quality and efficiency, means that this sector is a natural fit with our
skills and values, and the acquisition signals a step-change in our service
proposition. Enara has its own experienced management team and will operate as
a separate dedicated Healthcare division within MITIE.

Public sector

In the public sector, we remain focused on the justice, health, local
authority and social housing markets.

We have seen a steady flow of public sector contract awards and retentions.
These include an expanded contract to provide integrated FM services to the
Scottish Government and its collaborative partners over five years, with a
total contract value of at least £30m, and a contract to provide technical FM
for the City of London Corporation for a five-year period, which has an
expected total value of £26m.In the social housing market, we were recently
awarded a ten-year contract with Golding Homes which is valued between £70m
and £120m over its life.

We note the decision made by the Ministry of Justice on 8 November, which
indicated a shift in its prison outsourcing strategy. Whilst we were not
awarded any work as part of the recent tender process, we are encouraged by
the Ministry's decision to retain core custodial services within the public
sector, and we anticipate that a market competition for facilities management
services across the prison estate will proceed early next year. This should
create significant opportunities going forward.

Private sector

The private sector continues to offer excellent opportunities to us. Our sales
pipeline remains buoyant and we have been awarded and retained work across a
range of markets and sectors, including a new £30m contract to provide front
of house services at RBS for five years, and a contract to provide integrated
FM services for British Sky Broadcasting Group (Sky).

The Sky contract is valued in excess of £100m over five years and involves a
MITIE team of approximately 700 people delivering services at two main
campuses in London and Scotland as well as 12 regional offices, two data
centres and over 80 internet exchange points. The services we are providing
include building fabric maintenance, engineering maintenance, energy
management, catering, security, cleaning, mail room and couriers, helpdesk,
switchboard, shuttle buses, grounds maintenance and internal landscaping.

Our catering and hospitality proposition has been boosted by the acquisition
of a 51% stake in one of the UK's leading independent events and leisure
catering companies. Creativevents provides services to a broad range of
clients in the exhibition, sporting, festival, culture and heritage sectors as
well as events and outdoor catering. It brings a strong combination of flair
and innovation that will further enhance our overall catering offering.

Energy services

Our extensive energy services capabilities continue to differentiate us in the
marketplace, as we help clients to manage their energy use, reduce costs and
lower carbon emissions. The energy offering we have developed increasingly
supports and complements our ability to win and deliver the large, integrated
facilities management contracts in our portfolio, including those with LBG and
Sky most recently.

Our strength is in identifying the key energy issues facing a client's
business - whether that's security of supply, increased regulation, rising
costs or carbon footprint - and then helping them embrace fresh thinking, such
as the great advantages now available through renewable energy.

During the first six months of the year, we continued to perform well on
existing energy services contracts, including several for clients working in
the NHS. The acquisition of Utilyx in January this year has added strength to
our energy services offering and supports our ambition to focus on new markets
and higher margin services. It has brought us a strategic energy consulting
capability and is already providing expertise to some of our largest clients.

International developments

With our clients, our aim is to provide the same high standards of service
abroad as we do in the UK and to help them benefit from our full support in
all their operations. We are well positioned to expand and grow our offering
in Europe and other regions as we move forward.

In June, we took another important step on the way to enhancing our European
services with the acquisition of the FM business of Dalkia Energy & Technical
Services AS in Norway, for £1.1m.

Wecontinueto have a longer term strategic aim to pursue international growth
opportunities. The outsourcing models in the UK are the most advanced in the
world and the skills and knowledge we have of integrated facilities management
is capable of being taken to many regions globally.



Financial performance

MITIE has delivered a strong financial performance in the first six months
with revenue growth of 5.6% to £1,026.6m (2011: £971.7m) and growth in
operating profit before other items of 2.5% to £52.9m (2011: £51.6m). Organic
growth in revenue was 4.3%. The group's operating profit margin before other
items was 5.2% (2011: 5.3%) and continues to be within our targetrange of
5.0%-6.0%. This is a very positive result ina difficult economic environment
which has demonstrated slow growth.

The operating profit for the period is stated before restructuring costs of
£4.8m, acquisition related integration costs of £0.2m and acquisition costs of
£1.8m. The restructuring costs reflect the reorganisation of the overhead
cost base in our Technical Facilities and Property Management divisions. Of
the £1.8m of acquisition costs incurred, £1.4m relates to the acquisition of
Enara on 9 October 2012 and the remaining £0.4m relates to the acquisition of
Creativevents and Dalkia Norway (2011: £nil).

We have delivered strong levels of cash conversion, with conversion of EBITDA
to operating cash at 83.1% (2011: 81.0%) on a rolling 12-month basis. Capital
expenditure continues to be held at low levels, representing 1.5% of revenue
(2011: 1.7%), and remains consistent with our target level of less than 2% of
revenue.

Net finance costs for the first six months of the year are £4.1m (2011:
£3.7m), with the increase reflecting the increased costs of finance of the
group following the refinancing of its banking facilities in 2011. Leverage at
the period end remained low with net debt at £132.9m (2011: £119.3m) which
represents 1.0x EBITDA on a rolling 12-month basis. Following the acquisition
of the Enara Group on 9 October 2012 we expect gearing to be maintained at
less than 2x EBITDA at 31 March 2013.

The effective rate of tax on profit before other items for the period ended 30
September 2012 is broadly in line with the UK rate of corporation tax of 24%
at 23.8% (2011: 24.0%).

Delivering value

We have continued to deliver value through earnings and dividend growth during
the first six months of the year with basic EPS before other items increasing
by 1.0% to 10.5p per share (2011: 10.4p per share). Basic EPS was 8.0p per
share (2011: 9.4p per share), a decrease of 14.9% largely due to £6.8m of
restructuring and acquisition related costs during the period (2011: £nil).

The half year dividend declared by the Board of 4.6p per share (2011: 4.4p per
share) is an increase of 4.5% on the prior year and maintains the group policy
of dividend growth in line with underlying earnings. Weexpect the full year
dividend to be consistent with this target.

Divisional commentary

Our four operating divisions are Facilities, Technical Facilities, Property
and Asset Management. Each division is structured to give clients the
flexibility to choose specialist single services, multi-services or integrated
facilities management.

In the first half of the year our teams have secured new work and retained
existing contracts which have added to our order book and means that 98% of
our budgeted revenue for the year is now secured.

The strong growth experienced in our Facilities Management division in
particular, reflects the continuation during the period of clients' demand for
outsourcing solutions that are better quality, more efficient and bring more
innovation to their organisations. Challenging conditions remain in certain of
our markets, which have negatively affected the growth profile achieved and
phasing of projects delivered in our Property and Asset Management divisions.

Following our acquisition of Enara in October, we will be creating a new
Healthcare division which will be shown in the full year results.

The financial performance highlights of each of our operating divisions for
the six months to 30 September 2012 are set out here:

Facilities Management

                                     2012  2011
                                       £m    £m     %
Revenue                             518.1 454.0  14.1
Operating profit before other items  35.3  27.2  29.8
Margin                               6.8%  6.0% 0.8pp

Our FM division is responsible for delivering the following specialist single
services, either individually or in multi-service, bundled contracts:
Security; Cleaning; Catering; Document management and reprographics; Reception
and front of house; Waste management; Environmental services; Landscaping;
Pest control; Disabled access consulting and auditing.

Technical Facilities Management

                                     2012  2011
                                      £m   £m   %
Revenue                             230.7 230.1 0.3
Operating profit before other items  11.6  11.6   -
Margin                               5.0%  5.0%   -

Our TFM division focuses on delivering integrated facilities management and a
range of technical and energy services: Energy management; Mechanical and
electrical engineering maintenance; National mobile services; Specialist
technical services; CarbonCare energy services; Lighting design, projects and
maintenance; Building management systems and controls.

Property Management

                                     2012  2011
                                      £m   £m       %
Revenue                             254.7 249.7     2.0
Operating profit before other items   7.9  11.4  (30.7)
Margin                               3.1%  4.6% (1.5pp)

Our PM division provides a full suite of project management and property
services: Property maintenance; Building refurbishment; Interior fit-out;
Insurance claims validation and repairs; Roofing; Plumbing and heating;
Mechanical and electrical engineering contracting; Plastering and dry-lining;
Painting and repairs; Fire protection; Residential and new house fit-out.

Asset Management

                                      2012 2011
                                        £m   £m      %
Revenue                               23.1 37.9 (39.1)
Operating profit before other items  (1.9)  1.4    n/a
Margin                              (8.2%) 3.7%    n/a

Our AM division deploys efficient technologies to develop secure and
sustainable decentralised energy infrastructure: Energy centre development;
Low carbon data centre development; Renewable energy generation; Energy
services company management; Community infrastructure; Energy performance
contracting.



Some great new and retained contracts

Some of the contracts we've retained or been awarded during the period:

Client                Contract                        Timeframe Total value
                                Private sector
BSkyB                 Awarded a new contract to       5 years   £100m
                      provide integrated facilities
                      management across Sky's UK
                      estate
Vauxhall              Expanded an existing contract   5 years   £20m
                      to provide technical facilities
                      management contract covering
                      Vauxhall's three major UK sites
RBS                   Awarded a new contract to       5 years   £30m
                      provide front of house services
Santander             Renewed a contract to provide   2 years   £6m
                      technical facilities management
                      at Santander's data centres
BNP Paribas           Awarded a contract to deliver   3 years   £5m
                      technical facilities management
                      for BNP Paribas' Real Estate
                      Advisory and Property
                      Management business in the UK
Co-operative Group    Added to our existing work with 3 years   £5m
Limited               the Co-op delivering nationwide
                      cleaning and environmental
                      services, with a contract to
                      provide a full catering service
                      including hospitality, the
                      staff restaurant and vending
                      machines
Clifford Chance LLP   Renewed a contract for cleaning 3 years   £4m
                      and environmental services
                                Public sector
Golding Homes Housing Awarded a repair and            10 years  £70m - £120m
Association           maintenance contract to support
                      the housing association's
                      upkeep of 6,000 properties
                      across Kent, delivering gas
                      maintenance, responsive
                      repairs, void reinstatements
                      and planned works
Scottish Government   Expanded a contract to provide  5 years   £30m
                      integrated facilities
                      management to the Government
                      and its collaborative partners
City of London        Awarded a technical facilities  5 years   £26m
Corporation           management contract which
                      covers 600 buildings and
                      structures across London sites
House of Commons      Awarded a contract to provide   2 years   £16m
                      mechanical and electrical
                      engineering installation
                      services
Southampton City      Social housing contract as part 3 years   £12m estimated
Council               of a housing refurbishment
                      project to deliver services
                      including asbestos management;
                      bathroom upgrades; boiler and
                      system replacements; disabled
                      adaptations; electrical testing
                      and inspection; kitchen
                      upgrades; and rewiring
Bristol City Council  Awarded a new contract to       3 years   ND
                      provide CCTV monitoring
                      operators, who monitor all
                      public space areas in Bristol's
                      housing estates via the
                      Council's control room
University Hospital   Awarded a new contract to       3 years   ND
Southampton NHS       deliver total security
Foundation Trust      management at the hospital,
                      including a bespoke security
                      awareness training programme
Clackmannanshire      Awarded a contract to install   3 years   £8m
District Council      new bathrooms in its social
                      housing estate

ND = Not Disclosed

Outlook

This has been a positive start to the year for MITIE. We have won and retained
key contracts and expanded our healthcare offering via the purchase of
Enara.We are particularly pleased to have successfully mobilised and started
our largest ever contract, with Lloyds Banking Group.

We have made this progress in the face of a tough economic climate and a
difficult macroeconomic outlook, with continuing challenges within our more
cyclical markets. However, we remain positive about the range of outsourcing
and energy services opportunities across our key markets and continue to see a
growing order book as well as a strong pipeline of sales opportunities. We
expect total revenue growth to be higher in the second half as a result of
both the organic revenue contribution from new and expanded contracts
including Lloyds Banking Group, and the acquisition of Enara.

We are confident that we will continue to build on our long track record of
sustainable, profitable growth. 



Key factors that could affect our business

MITIE's system of internal control is designed to support the group's pursuit
of achieving its objectives and strategies, and the identification and
management of risks that may impact the group and the environment in which it
operates. The assessment of risk is undertaken by every business segment,
which has a comprehensive risk register that feeds through to the group risk
register reviewed by our Board.

The principal risks and uncertainties have not changed significantly from
those detailed on pages 46 and 47 of our Annual Report and Accounts 2012. We
analyse our risk profile into four categories:

Strategic: Business development, competitive positioning, acquisitions,
contract performance and trading overseas

Financial: Market conditions, economic climate and counterparties

Operational: IT and finance systems, people, subcontractors and suppliers,
trade disruption, health, safety and environment

Regulatory: Insurance, material litigation and regulatory.



Statement of Directors' responsibilities

The Directors of MITIE Group PLC confirm that, to the best of their knowledge,
this condensed set of financial statements has been prepared in accordance
with IAS 34 as adopted by the European Union, and that the interim management
report includes a fair view of the information required by rules 4.2.7 and
4.2.8 of the Disclosure and Transparency Rules. The names and functions of the
Directors of MITIE Group PLC are as listed in the group's Annual Report for
2012 (available on the group's website and as described above: www.mitie.com).
In addition, Crawford Gillies was appointed as a Non-Executive Director of
MITIE Group PLC on 12 July 2012, full details of his appointment and
responsibilities can also be found on the group's website at www.mitie.com.



By order of the Board

Ruby McGregor-Smith CBE

Chief Executive

MITIE Group PLC

19 November 2012



Independent review report to MITIE Group PLC

For the six months to 30 September 2012



We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2012 which comprises the condensed consolidated income statement,
the condensed consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated statement of changes in
equity, the condensed consolidated statement of cash flows and related notes 1
to 13. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.

This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board. Our work has been undertaken so that
we might state to the company those matters we are required tostateto it in
an independent review report and for no other purpose. To the fullest extent
permitted by law, we do not acceptor assume responsibility to anyone other
than the company, for our review work, for this report, or for the conclusions
wehave formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible forpreparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.

Scope of review

We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2012 is not prepared,
in all material respects, in accordance with International Accounting Standard
34 as adopted by the European Union and the Disclosure andTransparency Rules
of the United Kingdom's Financial Services Authority.





Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom

19 November 2012



Condensed consolidated income statement

For the six months to 30 September 2012



                                  30 September 2012          30 September 2011
                                        (unaudited)                (unaudited)
                            Before                       Before
                             other                        other
                                     Other                       Other
                            items*  items*               items* items*
                                              Total                      Total
                     Notes      £m      £m       £m          £m     £m      £m
Continuing
operations
Revenue                  2 1,026.6       -  1,026.6       971.7      -   971.7
Cost of sales              (874.8)       -  (874.8)     (818.7)      - (818.7)
Gross profit                 151.8       -    151.8       153.0      -   153.0
Administrative                                          (101.4)  (4.6) (106.0)
expenses                    (98.9)  (11.1)  (110.0)
Operating profit         2    52.9  (11.1)     41.8        51.6  (4.6)    47.0
Investment revenue             0.4       -      0.4         0.2      -     0.2
Finance costs                (4.5)       -    (4.5)       (3.9)      -   (3.9)
Net finance costs            (4.1)       -    (4.1)       (3.7)      -   (3.7)
Profit before tax             48.8  (11.1)     37.7        47.9  (4.6)    43.3
Tax                      5  (11.6)     2.2    (9.4)      (11.5)    1.2  (10.3)
Profit for the                                             36.4  (3.4)    33.0
period                        37.2   (8.9)     28.3
Attributable to:
Equity holders of                                          36.3  (3.4)    32.9
the parent                    37.1   (8.9)     28.2
Non-controlling                                             0.1      -     0.1
interests                      0.1       -      0.1
                              37.2   (8.9)     28.3        36.4  (3.4)    33.0
Earnings per share
(EPS)
- basic                  6   10.5p  (2.5)p     8.0p       10.4p (1.0)p    9.4p
- diluted                6   10.2p  (2.4)p     7.8p       10.1p (0.9)p    9.2p
                                                         Year to 31 March 2012
                                                                     (audited)
                                                    Before
                                                     other
                                                              Other
                                                    items*   items*
                                                                         Total
                                         Notes          £m       £m         £m
Continuing operations
Revenue                                      2     2,002.5        -    2,002.5
Cost of sales                                    (1,686.4)        -  (1,686.4)
Gross profit                                         316.1        -      316.1
Administrative expenses                            (204.4)   (10.0)    (214.4)
Operating profit                             2       111.7   (10.0)      101.7
Investment revenue                                     0.4        -        0.4
Finance costs                                        (7.6)        -      (7.6)
Net finance costs                                    (7.2)        -      (7.2)
Profit before tax                                    104.5   (10.0)       94.5
Tax                                                 (24.9)      2.5     (22.4)
Profit for the year                                   79.6    (7.5)       72.1
Attributable to:
Equity holders of the parent                          79.4    (7.5)       71.9
Non-controlling interests                              0.2        -        0.2
                                                      79.6    (7.5)       72.1
Earnings per share (EPS)
- basic                                      6       22.6p   (2.1)p      20.5p
- diluted                                    6       22.0p   (2.1)p      19.9p

* Other items are analysed in Note 3.

Condensed consolidated statement of comprehensive income

For the six months to 30 September 2012



                                                                       Year to
                                                        30 September  31 March
                                                   2012         2011      2012
                                            (unaudited)  (unaudited) (audited)
                                                     £m           £m        £m
Profit for the period                              28.3         33.0      72.1
Other comprehensive income/(expense):
Actuarial losses on defined benefit pension                   (10.7)
schemes                                           (2.4)                 (16.3)
Exchange differences on translation of                           0.3
foreign operations                                (0.4)                  (0.5)
Gains/(losses) on a hedge of a net                             (0.3)
investment taken to equity                          0.3                    0.4
Cash flow hedges:
 (Losses)/gains arising during the period       (0.5)          0.8         -
 Reclassification adjustment for                             (1.0)
gains/(losses) included in profit and loss          0.3                  (0.1)
Tax credit on items taken directly to                            2.9
equity                                              0.5                    3.9
Other comprehensive expense for the period,                    (8.0)
net of tax                                        (2.2)                 (12.6)
Total comprehensive income for the                              25.0
financial period                                   26.1                   59.5
Attributable to:
Equity holders of the parent                       26.0         24.9      59.3
Non-controlling interests                           0.1          0.1       0.2





Condensed consolidated balance sheet

At 30 September 2012

                                                        30 September  31 March
                                                   2012         2011     2012
                                            (unaudited)  (unaudited) (audited)
                                      Notes          £m           £m        £m
Non-current assets
Goodwill                                          353.1        334.8     347.7
Other intangible assets                            63.6         61.1      65.8
Property, plant and equipment                      67.9         66.1      64.1
Interest in joint ventures and                                     -
associates                                          0.4                    0.4
Financing assets                                    8.2            -       9.1
Trade and other receivables                        20.9         12.2      22.6
Deferred tax assets                                 9.7          9.4       9.6
Total non-current assets                          523.8        483.6     519.3
Current assets
Inventories                                         6.9          5.3       5.7
Trade and other receivables                       536.0        479.2     507.1
Cash and cash equivalents                          60.0         90.8      60.8
Total current assets                              602.9        575.3     573.6
Total assets                                    1,126.7      1,058.9   1,092.9
Current liabilities
Trade and other payables                        (467.1)      (414.2)   (461.4)
Current tax liabilities                          (11.8)       (11.7)    (13.2)
Financing liabilities                             (5.5)        (2.9)     (5.4)
Provisions                                9       (0.5)        (0.9)     (1.2)
Total current liabilities                       (484.9)      (429.7)   (481.2)
Net current assets                                118.0        145.6      92.4
Non-current liabilities
Financing liabilities                           (188.6)      (206.9)   (163.0)
Provisions                                9      (11.3)        (7.2)     (4.4)
Retirement benefit obligation                    (19.2)       (12.5)    (17.3)
Deferred tax liabilities                          (9.4)       (13.0)    (10.7)
Total non-current liabilities                   (228.5)      (239.6)   (195.4)
Total liabilities                               (713.4)      (669.3)   (676.6)
Net assets                                        413.3        389.6     416.3

Equity
Share capital                            10         9.2          9.0       9.0
Share premium account                             103.4         85.3      92.5
Merger reserve                                     97.6         93.6      93.6
Share-based payments reserve                        2.1          4.8       5.2
Own shares reserve                               (20.8)       (18.6)    (18.3)
Other reserves                                      0.3          0.3       0.3
Hedging and translation reserve                   (0.9)        (0.6)     (0.6)
Retained earnings                                 219.2        213.1     230.4
Equity attributable to equity holders
of the parent                                     410.1        386.9     412.1


Non-controlling interests                           3.2          2.7       4.2
Total equity                                      413.3        389.6     416.3



Condensed consolidated statement of changes in equity

For the six months to 30 September 2012



                                          Share-                                       Attributable
                          Share            based     Own          Hedging and             to equity
                  Share premium  Merger payments  shares    Other translation Retained   holders of Non-controlling
                capital account reserve  reserve reserve reserves     reserve earnings   the parent       interests   Total
                     £m      £m      £m       £m      £m       £m          £m       £m           £m              £m      £m
At 31 March         8.9    80.6    85.1      7.5  (13.8)      0.2       (0.4)    223.8        391.9             6.1   398.0
2011
Total                 -       -       -        -       -        -       (0.2)     25.1         24.9             0.1    25.0
comprehensive
income
Shares issued       0.2     4.7     8.5        -       -        -           -        -         13.4               -    13.4
Dividends paid        -       -       -        -       -        -           -   (17.1)       (17.1)           (0.2)  (17.3)
Purchase of own       -       -       -        -   (7.4)        -           -        -        (7.4)               -   (7.4)
shares
Share buybacks    (0.1)       -       -        -       -      0.1           -    (9.1)        (9.1)               -   (9.1)
Share-based           -       -       -    (2.7)     2.6        -           -      1.1          1.0               -     1.0
payments
Acquisitions                                                                                              
and
othermovements                                                                                           
in
non-controlling       -       -       -        -       -        -           -   (10.7)       (10.7)           (3.3) (14.0)
interests
At 30 September     9.0    85.3    93.6      4.8  (18.6)      0.3       (0.6)    213.1        386.9             2.7   389.6
2011
Total
comprehensive
income                -       -       -        -       -        -           -     34.4         34.4             0.1    34.5
Shares issued         -     7.2       -        -       -        -           -        -          7.2               -     7.2
Dividends paid        -       -       -        -       -        -           -   (15.5)       (15.5)               -  (15.5)
Share buybacks        -       -       -        -       -        -           -    (3.3)        (3.3)               -   (3.3)
Share-based
payments              -       -       -      0.4     0.3        -           -      1.2          1.9               -     1.9
Tax on
share-based
payment
transactions          -       -       -        -       -        -           -      1.0          1.0               -     1.0
Acquisitions
and
othermovements
in
non-controlling
interests             -       -       -        -       -        -           -   (0.5)        (0.5)             1.4     0.9
At 31 March
2012                9.0    92.5    93.6      5.2  (18.3)      0.3       (0.6)    230.4        412.1             4.2   416.3
Total
comprehensive
income                -       -       -        -       -        -       (0.3)     26.3         26.0             0.1    26.1
Shares issued       0.2    10.9     4.0        -       -        -           -        -         15.1               -    15.1
Dividends paid        -       -       -        -       -        -           -   (18.3)       (18.3)           (0.1)  (18.4)
Purchase of own
shares                -       -       -        -   (6.5)        -           -        -        (6.5)               -   (6.5)
Share-based
payments              -       -       -    (3.1)     4.0        -           -      0.4          1.3               -     1.3
Tax on
share-based
payment
transactions          -       -       -        -       -        -           -      0.7          0.7               -     0.7
Acquisitions
and
othermovements
in
non-controlling
interests             -       -       -        -       -        -           -   (20.3)       (20.3)           (1.0)  (21.3)
Balance at
30 September
2012                9.2   103.4    97.6      2.1  (20.8)      0.3       (0.9)    219.2        410.1             3.2   413.3



Condensed consolidated statement of cash flows

For the six months to 30 September 2012



                                                                       Year to
                                                       30 September   31 March
                                                  2012         2011       2012
                                           (unaudited)  (unaudited) (audited)
                                                    £m           £m         £m
Operating profit                                  41.8         47.0      101.7
Adjustments for:
 Share-based payment expense                     1.6          1.0        2.9
 Defined benefit pension charge                  1.5          1.2        2.5
 Defined benefit pension contributions         (2.1)        (2.4)      (4.5)
 Acquisition related items                       1.8            -        0.9
 Depreciation of property, plant and                          9.2
equipment                                         10.3                    18.8
 Amortisation of intangible assets               6.1          5.7       11.1
 Loss on disposal of property, plant and                        -
equipment                                            -                     0.1
Operating cash flows before movements in                       61.7
working capital                                   61.0                   133.5
(Increase)/decrease in inventories               (1.1)          0.2      (0.1)
Increase in receivables                         (25.0)        (6.7)     (45.0)
(Decrease)/increase in payables                  (2.8)       (19.2)       25.6
Decrease in provisions                           (1.0)        (1.0)      (3.8)
Cash generated by operations                      31.1         35.0      110.2
Income taxes paid                               (12.4)       (12.4)     (24.4)
Facility arrangement fee paid                        -        (2.5)      (2.5)
Interest paid                                    (3.6)        (3.4)      (7.5)
Net cash inflow from operating activities         15.1         16.7       75.8
Investing activities
Interest received                                  0.1          0.1        0.4
Purchase of property, plant and equipment       (18.5)       (14.0)     (21.7)
Purchase of subsidiary undertakings, net                      (7.6)
of cash acquired                                 (6.1)                  (23.9)
Investment in joint ventures and                                  -
associates                                           -                   (0.4)
Investment in financing assets                     1.3            -      (8.4)
Purchase of other intangible assets              (2.1)        (2.2)      (7.7)
Disposals of property, plant and equipment         6.4          0.5        1.7
Net cash outflow from investing activities      (18.9)       (23.2)     (60.0)
Financing activities
Repayments of obligations under finance                       (1.8)
leases                                           (1.8)                   (3.1)
Proceeds on issue of share capital                 3.2          1.3        9.9
Bank loans raised/(repaid)                        26.6          1.4     (39.5)
Purchase of own shares                           (6.5)        (7.4)      (7.4)
Share buybacks                                       -        (9.1)     (12.4)
Equity dividends paid                           (18.3)       (17.1)     (32.6)
Non-controlling interest dividends paid          (0.1)        (0.2)      (0.2)
Net cash inflow/(outflow) from financing           3.1       (32.9)     (85.3)
Net decrease in cash and cash equivalents        (0.7)       (39.4)     (69.5)
Net cash and cash equivalents at beginning                    130.6
of the period                                     60.8                   130.6
Effect of foreign exchange rate changes          (0.1)        (0.4)      (0.3)
Net cash and cash equivalents at end of                        90.8
the period                                        60.0                    60.8
Net cash and cash equivalents comprise:
Cash at bank                                      60.0         90.8       60.8
                                                  60.0         90.8       60.8





                                                                       Year to
                                                        30 September 31 March
                                                   2012         2011     2012
Reconciliation of net cash flow to          (unaudited)  (unaudited) (audited)
movement in net debt                  Notes          £m           £m        £m
Net decrease in cash and cash
equivalents                                       (0.7)       (39.4)    (69.5)
Effect of foreign exchange rate
changes                                           (0.1)        (0.4)     (0.3)
(Increase)/decrease in bank loans                (25.7)        (1.4)      40.2
Non-cash movement in private
placement notes andassociatedhedges             (0.2)        (0.6)     (0.3)
Decrease/(increase) in finance leases               0.7        (1.0)     (0.5)
Increase in net debt during the
period                                           (26.0)       (42.8)    (30.4)
Opening net debt                                (106.9)       (76.5)    (76.5)
Closing net debt                          8     (132.9)      (119.3)   (106.9)







Notes to the condensed consolidated financial statements

For the six months to 30 September 2012



1. Basis of preparation

The condensed consolidated financial statements for the six months to 30
September 2012 have been prepared on the basis of the accounting policies set
out in the group's latest annual financial statements for the year ended 31
March 2012.

These accounting policies are drawn up in accordance with International
Accounting Standards (IAS) and International Financial ReportingStandards
(IFRS) as issued by the International Accounting Standards Board and as
adopted for use intheEuropean Union. Thecondensed financial statements for
the six months to 30 September 2012 have been prepared inaccordance with IAS
34 'Interim Financial Reporting' and with the Disclosure and Transparency
Rules of the Financial ServicesAuthority.

The condensed consolidated financial statements for the six months to 30
September 2012 have been reviewed by Deloitte LLP but have not been audited.
They do not include allthe information and disclosures required in the annual
financial statements, and therefore should be read in conjunction withthe
group's annualfinancial statements as at 31 March 2012.The condensed
consolidated financial statements for the six months to 30 September 2011 are
unaudited and have not been subject to review. The financial information
presented for the year ended 31 March 2012 does not represent full statutory
accounts within the meaning of Section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not qualified, did not
include reference to any matters to which the auditor drew attention by way of
emphasis without qualifying the report and did not contain a statement under
Section498 of the Companies Act 2006.

Significant accounting policies

The accounting policies and methods of computation adopted in the preparation
of the condensed consolidated financial statements are consistent with those
followed in the preparation of the group's annual financial statements for the
year ended 31March 2012.

Various amendments and interpretations are effective for the first time in the
current period but have had no impact on the results or financial position of
the group.

The Directors do not anticipate that the adoption of standards and
interpretations that have been issued but are not yet effective (and in some
cases have not yet been adopted by the EU) will have a material financial
impact on the group's financial statements in the period of initial
application except as follows:

- Amendments to IAS 19 'Employee Benefits' will impact the measurement of
various components representing movements in the defined benefit pension
obligation and associated disclosures, but not the group's total obligation.
It is likely that following the replacement of expected returns on plan assets
with a net finance cost in the income statement, the profit for the period
will be reduced and accordingly other comprehensive income increased. The
amendment has no cash impact and is effective for the group's accounting
period commencing 1 April 2013.

Going concern

The Directors have considered the Financial Reporting Council guidance on
going concern and the principal risks and uncertainties affecting the group.
The group benefits from a well diversified portfolio of service offerings and
has a broad, diverse customer base. The group currently operates well within
the financial covenants associated with its committed funding lines of £250m
which remain in place until 2015. Complementing this, the group has £100m of
US Private Placement debt which expires between December 2017 and December
2019. Since the period end, MITIE acquired Enara Group Limited ('Enara') for a
total consideration of £110.8m (see Note 13) and funded the acquisition by the
use of new bridge debt facilities of £150m provided by existing lenders to the
group, which will be refinanced into longer term debt facilities in due
course. The bridge debt facility expires on 8 April 2014.

After making enquiries, the Directors have a reasonable expectation that the
group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the group continues to adopt the going
concern basis in preparing the condensed consolidated financial statements.



2. Business and geographical segments

Business segments

The group manages its business on a service division basis. These divisions
are the basis on which the group reports its primary segmental information.

              Six months to 30 September 2012  Six months to 30 September 2011
                     Operating                         Operating
                        profit                            profit
                        before                            before

                         other         Profit              other        Profit
                        items*         before             items*        before
            Revenue            Margin     tax  Revenue           Margin    tax
                 £m         £m      %      £m       £m        £m      %     £m
Facilities                                       454.0      27.2    6.0   26.3
Management    518.1       35.3    6.8    31.6
Technical                                                                 
Facilities
                                                 230.1      11.6    5.0    5.6
Management    230.7       11.6    5.0     3.7
Property                                         249.7      11.4    4.6   10.2
Management    254.7        7.9    3.1     4.5
Asset                                             37.9       1.4    3.7    1.2
Management     23.1      (1.9)  (8.2)   (2.1)
Total       1,026.6       52.9    5.2    37.7    971.7      51.6    5.3   43.3



                                                   Year to 31 March 2012
                                             Operating
                                         profit before

                                          other items*            Profit
                                 Revenue               Margin before tax
                                     £m            £m      %         £m
Facilities Management              937.3          61.9    6.6       60.5
Technical Facilities Management    472.8          26.9    5.7       15.5
Property Management                524.3          20.2    3.9       16.0
Asset Management                    68.1           2.7    4.0        2.5
Total                            2,002.5         111.7    5.6       94.5

* Other items are analysed in Note 3.

The revenue analysis above is net of inter segment sales which are not
considered significant.

Geographical segments

             Six months to 30 September 2012   Six months to 30 September 2011
                    Operating                          Operating
                       profit                             profit
                       before                             before

                        other         Profit               other        Profit
                       items*         before              items*        before
           Revenue            Margin     tax  Revenue            Margin    tax
                £m         £m      %      £m       £m         £m      %     £m
United                                          953.5       51.0    5.3   42.8
Kingdom    1,000.2       52.2    5.2    37.0
Other                                            18.2        0.6    3.3    0.5
countries     26.4        0.7    2.7     0.7
Total      1,026.6       52.9    5.2    37.7    971.7       51.6    5.3   43.3



                                       Year to 31 March 2012
                                 Operating
                             profit before

                              other items*            Profit
                     Revenue               Margin before tax
                          £m            £m      %         £m
United Kingdom       1,953.8         109.9    5.6       93.1
Other countries         48.7           1.8    3.7        1.4
Total                2,002.5         111.7    5.6       94.5

* Other items are analysed in Note 3.



3. Other items

The group separately identified and disclosed restructuring and acquisition
related items (termed 'other items').

                                                                       Year to
                                           Six months to 30 September 31 March
                                                    2012         2011     2012
                                                      £m           £m       £m
Administrative expenses
Restructuring costs                                  4.8            -        -
Restructuring costs relating to the                                 -
integration of Creativevents                         0.2                     -
Acquisition costs                                    1.8            -      1.8
Deferred consideration not paid                        -            -    (0.9)
Amortisation of acquisition related                               4.6
intangibles                                          4.3                   9.1
Other items before tax                              11.1          4.6     10.0
Tax on other items                                 (2.2)        (1.2)    (2.5)
Other items net of tax                               8.9          3.4      7.5

                                 4. Dividends

The proposed interim dividend of 4.6p (2011: 4.4p) per share (not recognised
as a liability at 30 September 2012) will be paid on4 February 2013 to
shareholders on the register on 14 December 2012.

The dividend disclosed in the statement of cash flows represents the final
ordinary dividend of 5.2p (2011: 4.9p) per share asproposed in the 31 March
2012 financial statements and approved at the group's AGM (not recognised as a
liability at 31March 2012).

                                 5. Taxation

Income tax on profit before other items for the six months ended 30 September
2012 is based on an effective rate of 23.8% (2011:24.0%), which has been
calculated by reference to the projected charge for the full year. Income tax
on profit after other itemsisbased on an effective rate of 24.9% (2011:
23.8%).

                            6. Earnings per share

Basic and diluted earnings per share have been calculated in accordance with
IAS 33 'Earnings Per Share'.

The calculation of the basic and diluted EPS is based on the following data:

                                                                       Year to
                                           Six months to 30 September 31 March
                                                    2012         2011     2012
                                                      £m           £m       £m
Net profit attributable to equity holders
of the parent before other items^*                  37.1         36.3     79.4
Other items net of tax^*                           (8.9)        (3.4)    (7.5)
Net profit attributable to equity holders
of the parent                                       28.2         32.9     71.9



                                                                       Year to
                                           Six months to 30 September 31 March
                                                    2012         2011     2012
Number of shares                                 million      million  million
Weighted average number of Ordinary shares                      349.9
for the purpose of basic EPS                       354.6                 351.5
Effect of dilutive potential Ordinary                             8.2
shares: share options                                9.0                   9.0
Weighted average number of Ordinary shares                      358.1
for the purpose of diluted EPS                     363.6                 360.5



                                                                       Year to
                                           Six months to 30 September 31 March
                                                    2012         2011     2012
                                                       p            p        p
Basic earnings per share - before other
items*                                              10.5         10.4     22.6
Basic earnings per share                             8.0          9.4     20.5
Diluted earnings per share - before other
items*                                              10.2         10.1     22.0
Diluted earnings per share                           7.8          9.2     19.9

* Other items are analysed in Note 3.

The weighted average number of Ordinary shares in issue during the period
excludes those accounted for in the Own shares reserve which were purchased in
the market and held by the MITIE Group PLC Employee Benefit Trust to satisfy
options under the group's LTIP share option scheme. The Own shares reserve
represents the cost of 8.5m (2011: 7.9m) shares in MITIE Group PLC, with a
weighted average of 8.6m shares during the period (2011: 7.8m).

                        7. Acquisition of subsidiaries

  Current period acquisitions

Purchase of non-controlling interests

                                                   MITIE
                       MITIE Client      Pest           MITIE
                              Services   Control        Security
                                                (London)     Holdings
                                           Ltd       Ltd  Ltd Total
                                            £m        £m              £m    £m
Shares issued -
MITIE Group PLC                            2.3       1.7             7.9  11.9
Cash consideration                         0.2       0.4             0.8   1.4
Deferred contingent
consideration                                -         -             1.4   1.4
Total purchase
consideration                              2.5       2.1            10.1  14.7
Non-controlling
interests                                  0.6       0.4             0.1   1.1
Retained earnings                          1.9       1.7            10.0  13.6
Total recognised in
equity                                     2.5       2.1            10.1  14.7

The adoption of IAS 27 'Consolidated and Separate Financial Statements'
(revised 2008) in the year ended 31 March 2011 hasresulted in the difference
between the change in non-controlling interests and the consideration paid
being recognised inretained earnings. Prior to adoption of the revised
standard this amount was recognised in goodwill.

Purchase of Creativevents Limited

On 31 July 2012, MITIE acquired a 51% stake in one of the UK's leading
independent events and leisure catering companies, Creativevents Limited
('Creativevents'). The initial consideration payable is a maximum of £6.0m,
with £5.2m paid in cash on completion, and the remainder payable in cash
dependent on certain conditions. The earn-out of the remaining 49% stake will
bring total consideration payable to a maximum of £12.0m, which is dependent
on long-term performance. The transaction has been accounted for by the
acquisition method of accounting in accordance with IFRS 3 (2008). Below we
provide provisional information on the acquisition. Full information on the
acquisition of Creativevents will be disclosed in the group's annual financial
statements for the year ending 31 March 2013.

                                                        Provisional fair value
                                                                            £m
Net assets acquired (including Intangible assets
£1.9m)                                                                     0.1
Non-controlling interests                                                (0.1)
Goodwill                                                                   5.5
Total consideration                                                        5.5
Satisfied by
Cash                                                                       5.2
Deferred contingent consideration                                          0.3
Total consideration                                                        5.5
Net cash outflow arising on acquisition
Cash consideration                                                         5.2
Cash and cash equivalents acquired                                       (2.7)
Net cash outflow                                                           2.5

Earnout deferred consideration of £6.5m is also provided at the Directors'
best estimate of the likely future obligation, which in all likelihood will
become payable up to 2017 subject to certain profit targets being attained.
This is recognised via equity and is included within Provisions in Note 9.

Purchase of Dalkia FM in Norway

On 7 June 2012, MITIE acquiredthe facilities management (FM) business of
Dalkia Energy & Technical Services AS ('Dalkia FM') inNorway. MITIE has
acquired the FM contracts and the majority of the employees of DalkiaFM for a
total cash consideration ofNOK 10.0m (£1.1m).

  Prior period acquisitions

Purchase of Utilyx Holdings Limited

Final information on the acquisition of Utilyx Holdings Limited, which MITIE
acquired on 10 January 2012, will be disclosed in the group's annual financial
statements for the year ending 31 March 2013. There have been no material
changes to the fair values of net assets acquired since 31 March 2012.
Deferred contingent consideration of £1.0m, which was provided at 31 March
2012, was settled in cash during the period due to the attainment of certain
targets.

                           8. Analysis of net debt

                                                         30 September 31 March
                                                    2012         2011    2012
                                                      £m           £m       £m
Cash and cash equivalents                           60.0         90.8     60.8
Bank loans                                        (82.3)       (98.2)   (56.6)
Private placement notes                          (101.0)      (102.3)  (100.8)
Derivative financial instruments hedging private                  1.2
placement notes                                        -                     -
Net debt before loan notes and obligations under              (108.5)
finance leases                                   (123.3)                (96.6)
Loan notes                                         (1.6)        (1.6)    (1.6)
Obligations under finance leases                   (8.0)        (9.2)    (8.7)
Net debt                                         (132.9)      (119.3)  (106.9)

                                9. Provisions

                                           Deferred contingent Insurance
                                                 consideration  reserve Total
                                                            £m        £m    £m
At 1 April 2012                                            1.2       4.4   5.6
Amounts recognised in the income statement                   -       0.2   0.2
Deferred contingent consideration settled
during the period                                        (1.0)         - (1.0)
Utilised within the captive insurance
subsidiary                                                   -     (1.2) (1.2)
Amounts recognised through goodwill                        0.3         -   0.3
Amounts recognised through equity                          7.9         -   7.9
At 30 September 2012                                       8.4       3.4  11.8
Included in current liabilities                                            0.5
Included in non-current liabilities                                       11.3
                                                                          11.8



                                           Deferred contingent Insurance
                                                 consideration   reserve Total
                                                           £m        £m    £m
At 1 April 2011                                            4.5       8.2  12.7
Amounts recognised in the income statement                   -       0.2   0.2
Deferred contingent consideration settled                (3.8)         - (3.8)
during the period
Utilised within the captive insurance                        -     (1.2) (1.2)
subsidiary
Amounts recognised through goodwill                        0.2         -   0.2
At 30 September 2011                                       0.9       7.2   8.1
Included in current liabilities                                            0.9
Included in non-current liabilities                                        7.2
                                                                           8.1

During the period deferred contingent consideration of £1.0m in respect of the
acquisition in January 2012 of Utilyx Holdings Limited was settled in cash due
to the attainment of profit targets. The provision for insurance claims
represents amounts payable by MITIE Reinsurance Company Limited in respect of
outstanding claims incurred at the balance sheet dates. Theseamounts will
become payable as each year's claims aresettled.

                              10. Share capital

                                   Number
Ordinary shares of 2.5p           million    £m
Allotted and fully paid
At 1 April 2012                     361.9   9.0
Issued for acquisitions               4.4   0.1
Issued under share option schemes     1.5   0.1
At 30 September 2012                367.8   9.2
At 1 April 2011                     357.8   8.9
Issued for acquisitions               5.0   0.2
Issued under share option schemes     0.8     -
Share buybacks                      (4.1) (0.1)
At 30 September 2011                359.5   9.0

During the period 4.4m (2011: 5.0m) Ordinary shares of 2.5p were allotted in
respect of the acquisition of non-controlling interests ata mid-market price
of 267.6p (2011: 238.7p) giving rise to share premium of £7.9m (2011: £3.3m)
and a merger reserve of £4.0m (2011:£8.5m).

During the period 1.5m (2011: 0.8m) Ordinary shares of 2.5p were allotted in
respect of share option schemes at a price between 117p and 254p (2011: 117p
and 226p) giving rise to share premium of £3.0m (2011: £1.4m).

                          11. Contingent liabilities

The Company is party with other group companies to cross guarantees of each
other's bank loans, commitments and overdrafts of £391.0m (2011: £392.0m).

The Company and various of its subsidiaries are, from time to time, party to
legal proceedings and claims that are in the ordinary course of business. The
Directors do not anticipate that the outcome of these proceedings and claims,
either individually or in aggregate, will have a material adverse effect on
the group's financial position.

Deferred contingent consideration relating to acquisitions has been accrued at
the Directors' best estimate of the likely future obligation of £8.4m (2011:
£0.9m). This is the maximum amount payable subject to certain targets being
attained.

In addition, the group and its subsidiaries have provided guarantees and
indemnities in respect of performance, issued by financial institutions on its
behalf, amounting to £30.7m (2011: £38.7m) in the ordinary course of business.
These are not expected to result in any material financial loss.

                        12. Related party transactions

Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation andare not disclosed in this
Note.

No other material contract or arrangement has been entered into during the
period, nor existed at the end of the period, inwhich a Director had a
material interest.

Amounts paid to key management personnel are disclosed in the Directors'
remuneration report of our Annual Report.

                        13. Post balance sheet events

On 9 October 2012, MITIE acquired Enara Group Limited ('Enara') for a total
consideration of £110.8m on a cash and debt free basis. Enara is the fourth
largest provider of home care services in the UK and will give MITIE a
scalable platform to compete inthe growing outsourced health and social care
sector. Full information on the acquisition of Enara will be disclosed in the
group's annual financial statements for the year ending 31 March 2013.

The acquisition has been funded by the use of new bridge debt facilities of
£150m provided by existing lenders to the group, which will be refinanced into
longer term debt facilities in due course.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR FFDFWMFESESF -0- Nov/19/2012 07:00 GMT
 
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