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20/09/2017
Mitie Considers Sale Of Property Management Division
Mitie is considering selling its Property Management business as part of a company cost-cutting programme.
In trading update today, 20 September, the company said it has instructed Evercore Partners International LLP to explore a potential sale of the business "having received expressions of interest from third parties".
The sale is being considered as part of the company's 'Helix' programme, which aims to cut group operating costs by £40m a year by 2020.
In addition, Mitie revealed around 480 jobs will be cut by the end of the current financial year as part of a "simplification of the spans and layers of management within our Engineering and Cleaning divisions".
A Group-wide IT transformation programme is also underway to "simplify the Group's IT architecture and centralise monitoring, system controls and maintenance, all with greater 3rd party automation".
As a result, Mitie said costs associated with the Helix programme are now "greater than previously anticipated".
"This is due to the acceleration of our IT transformation activities, dual occupation costs as we consolidate our London operations from three buildings into one, and costs related to a work-flow management re-design exercise," the Group said.
"Estimated implementation costs which will be incurred in the current financial year currently stand at £24m (of which c. £21m will be cash) against the previous estimate of £15m."
Peter Dickinson, Acting Chief Executive Officer of Mitie, said overall the company is making "steady progress" with its transformation.
"Top line growth in the first 6 months has been encouraging, our dedicated focus on putting customers at the heart of our business and identifying cost savings is beginning to deliver and we are investing at pace in talent, capabilities and systems," he said.
"Transforming a large, diverse business such as Mitie is neither linear nor without challenges, but the programme remains on track. I expect to see the positive impact of our endeavours as we move into the second half of the year."
(LM)
In trading update today, 20 September, the company said it has instructed Evercore Partners International LLP to explore a potential sale of the business "having received expressions of interest from third parties".
The sale is being considered as part of the company's 'Helix' programme, which aims to cut group operating costs by £40m a year by 2020.
In addition, Mitie revealed around 480 jobs will be cut by the end of the current financial year as part of a "simplification of the spans and layers of management within our Engineering and Cleaning divisions".
A Group-wide IT transformation programme is also underway to "simplify the Group's IT architecture and centralise monitoring, system controls and maintenance, all with greater 3rd party automation".
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As a result, Mitie said costs associated with the Helix programme are now "greater than previously anticipated".
"This is due to the acceleration of our IT transformation activities, dual occupation costs as we consolidate our London operations from three buildings into one, and costs related to a work-flow management re-design exercise," the Group said.
"Estimated implementation costs which will be incurred in the current financial year currently stand at £24m (of which c. £21m will be cash) against the previous estimate of £15m."
Peter Dickinson, Acting Chief Executive Officer of Mitie, said overall the company is making "steady progress" with its transformation.
"Top line growth in the first 6 months has been encouraging, our dedicated focus on putting customers at the heart of our business and identifying cost savings is beginning to deliver and we are investing at pace in talent, capabilities and systems," he said.
"Transforming a large, diverse business such as Mitie is neither linear nor without challenges, but the programme remains on track. I expect to see the positive impact of our endeavours as we move into the second half of the year."
(LM)
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