Mitie Share Discussion Threads

[mazarin] 13/8/2013 18:00

Does anyone have suggestions as to why trading statement appears to have been so notably dismissed by the market? Would be it be that it lacked substance...?

[essentialinvestor] 04/6/2013 08:08

Is that allowing for the discontinued business?

[melody9999] 03/6/2013 19:47

well the margin did not fall 2012 / 2013. It was exactly the same to the nearest 0.1%. So IC must be crystal ball gazing.

[sleveen] 03/6/2013 18:29

terrible timing on the share buy back.

[essentialinvestor] 03/6/2013 18:10

The IC's point was wider than the price paid for the entry in to the care sector.

They highlighted what appears to be falling margins in the main business.

[moomintu] 03/6/2013 14:05

Nice big buys fail to move this north... mm trying to get impatient buyers to sell..

[melody9999] 31/5/2013 00:13

At this level a 4% divi looks very nice too.

[alter ego] 29/5/2013 17:44

The IC are not infallible and I've found their "sell" recs are sometimes premature. they had a sell on Capita a few months ago because they reckoned business was slowing but since then the shares have gone significantly higher. they also said sell Majestic Wine last year but the company is still trading well.

Enara gives MITIE a higher margin growth business and the brand has a good reputation which is key for such a sensitive service. It can't be easy to pick up such a sizeable player so I'm not surprised it wasn't cheap.

[moomintu] 29/5/2013 16:10

Few times now had large buy and little effect on price.... mopping up sell off b4 next leg up?

[thorpematt] 29/5/2013 13:58

Interesting. I know that a number of analysts took that view.

Perhaps I'm missing something but the way I see it for the first 5 1/2 months a profit of £5.7m at 13% (twice what the other profitable dvisions operate at) is a healthy start. With annual revenue close to £100m that's a pretty healthy ROI in my view; a pretty low P/S ratio; and on a P/E basis is better than the current business as it stood.

At the time I viewed the aquisition as mostly strategic, in so much as I thought it was a great entry point for MTO to get into a market with significant potential for growth. I was convinced MTO had paid a premiun for that reason. Now I'm convinced that they didn't over-pay on any fundamental basis in the first place.

On a tangible asset basis then perhaps you can make a case. But the homecare market is estimated at £8bn. Enara @ circa £100m is the 4th largest. Huge room for growth and the goodwill paid for that entry point is IMV a healthy investment so lomg as the integration works. Management has a good tracking record on this and time will tell, but so far so good.

[alter ego] 27/5/2013 16:29

Yes, but they reckon a prospective PE of 11 is overpriced. Sounds more like they are trying to justify their claim that MTO overpaid for Enara.

[essentialinvestor] 26/5/2013 11:25

The IC has really laid in to this following the recent results.

[sleveen] 22/5/2013 12:14

unexpected write offs?

[moomintu] 22/5/2013 10:49

Wtf. Good results no??

[birdsedgeuk] 17/5/2013 23:21

See that the site www.traderdiary.co.uk is running out of funds. Ive donated as its a decent site with no bs.

[mazarin] 09/5/2013 17:50

Its about time we had a bit of positive news: 'MITIE awarded £3 million security contract with Essar Oil' for details see:

[melodrama] 01/5/2013 10:09

BBY and Carillion's recent announcements have knocked the sector a bit, so maybe the recent decrease in MTO is just that, it was rising on nice vols until a few days ago, no holding, just watching. Barring a Birmingahm City Council upset i would say MTO in a better position in Support Services than those with construction arms like BBY and Carillion.

[volsung] 30/4/2013 13:56

These are a nice short now right?

[melody9999] 05/4/2013 22:03

3 comments:

1 the use of the word 'variation' in the article is confusing. A variation to a contract is a legitimate way in which a contract can be changed, with the agreement of both parties. This can be a change of scope or price.

2 It would seem incredible that the council would not identify such a material price differential (as is their belief) for 7 years. What have they been doing?

3 I see Mitie's response as thoroughly professional as expected from a business I hold in high regard.

In the short term the share price may drift whilst this is being resolved, but tis may present a buying opportunity.

[m.t.glass] 03/4/2013 15:10

I agree with you both. Far more likely to be the Council failing to fully understand the terms of the contract and reacting to perfectly legitimate invoicing which they hadn't properly anticipated. Nobody appears to have latched onto the BBC report and made a big issue of it.

[alter ego] 28/3/2013 12:27

I would agree based on the areas I have some experience of, that the Public Sector often has little sense of commercial reality having spent many years largely holding out a hand when more money is needed. The people concerned will learn in time how to live within a budget and to ensure money is well spent but they have some way to go yet IMO.

MTO strikes me as a reputable organisation so I would be surprised if there was anything out of order here. There are many other companies that would be more than happy to exploit the naivety of the client though.

[thorpematt] 28/3/2013 10:56

Sadly many very good public sector, experienced staff have been lost and not replaced in recent years. Any good ones which remain are usually under-paid and over-worked. Ultimately it's part of the reason it gets out-sourced now and it will continue IMO. In a straight-race I'd bet on the private PLC audit trail and accuracy, versus that of the city council anyday.

Trouble is many of these councils are now so intrenched in the financial aspects that the purchase of M and E stuff is undertaken by people who have little understanding of the contacts themselves and even less understanding in what's involved in a practicle sense.

Rarely do PMCs whole life costs ever come out at the base level and even more so when those setting the specifications have little understanding of where to set the scopes.


As MTO have said their audit trail is robust, all invoces matched with a pre-purchase order. Mainteance work creates remedial & variation orders and I suspect this is where the 25% comes from.

P.S I noticed recently that MTO introduced a new procedure for the way invoices are raised with sub-contractors. i.e. They raise it for you after you submit an agreed valuation. Kind of the reverse of the PO raising from the client. It's a bit odd TBH but again no arguments I think is the objective here.

[m.t.glass] 28/3/2013 08:21

Birmingham City Council believes it has overpaid one of its major contractors.

An internal document states accountants think outsourcing firm MITIE may have been charging as much as 25% more than allowed in its contract.

It said that "significant issues have been identified" in relation to some of their maintenance agreements.

There had been a difference of 27% for the current contract and 23% for the previous one which covered between 2006 and 2011, the report said.


Full story at


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


This story is featured on BBC tv broadcasts this morning. Even if it turns out that Mitie have done nothing wrong, it will presumably prompt every other council to review past payments to see if the same situation exists - and might bring postponement of any imminent contract awards.

[mazarin] 21/3/2013 15:53

If that proves to be the reason for today's dip, its a bit of a late reaction, is it not?