Heathrow Cleaner Mitie Falls as Brexit Slowdown Hits Profitsby
Finance director replaced as Mitie plans other job cuts
Client deferrals and investment-plan delays behind warning
Mitie Plc plunged as much as 17 percent as the maintenance company issued its third profit warning since September and replaced its finance director after a slowdown in business that followed the U.K.’s vote to leave the European Union.
The Bristol, England-based company, which cleans London’s Heathrow airport, said full-year operating profit through the end of March would be 60 million pounds to 70 million pounds ($74 million to $86 million), before a one-time 10 million-pound cost. That compares with Bloomberg analyst estimates of 89 million pounds.
Suzanne Baxter will step down as group finance director and will be replaced by former Balfour Beatty Plc finance director Sandip Mahajan, Mitie said in a statement. Other management changes will be made, Chief Executive Officer Phil Bentley said on a call, without detailing them.
“Cleaning has its challenges,” he said. “There’s a whole range of issues there that we need to get a grip on.”
In addition to the problems at the cleaning division, other Mitie operations were hit by “client deferrals and investment-plan delays,” the company added, even as Heathrow passenger numbers rose last year. The company plans to reduce its staff, Bentley said, without specifying numbers.
Mitie is one of several British outsourcing companies that have suffered from tougher business conditions since the Brexit vote in June. Capita Plc, which operates London’s congestion charging system, reported that it was cutting 2,000 jobs in December.
Mitie said it would undertake a balance-sheet review and had identified an additional 14 million pounds of one-time charges in the year. Another 12 million pounds of lost profit was accounted for by problems in the cleaning, engineering and property-management divisions, as well as “optimistic forecasts.” Among other things, the company expected poor weather to lead to an increase in treating slippery roads that didn’t materialize, Bentley said.
Mitie was down 7 percent at 191.6 pence at 11:26 a.m. in London. Full-year results will be announced May 24.