Outsourcer Mitie said the wipe-out of rivals like Carillion and Interserve should deliver more contract wins in future despite triggering fears about the industry
Shares fell 8% on Thursday to 137.7p in a sign of the nervousness gripping investors over the outsourcing sector.
Mitie’s operating profit guidance for the current year of between £84 million to £87 million was slightly below City estimates of £89 million but still higher than last year’s £83 million.
Chief executive Phil Bentley said the end of Carillion and administration of Interserve had hurt confidence in outsourcers but thinning out the playing field of rivals will benefit Mitie.
Mitie provides everything from cleaning services to office administration and was recently added to a list of approved contractors who can bid for government work.
“On balance we’re going to pick up some work from these frameworks which we were never on before, particularly when Carillion and Interserve are not there anymore,” he said.
“You think let’s hang in there and see what comes out when we shake the trees. In the long run consolidation has got to be a good thing. To quote Boris Johnson, if the ball came out the back of the scrum we’d pick it up and run with it.”
The City has been burned by the outsourcing sector, with banks and shareholders taking losses after last January’s liquidation of Carillion. Interserve has also been taken over by lenders.
Bentley did not comment on speculation that Mitie could bid for Interserve’s facilities management divison but was positive about the future.
“We’re out the woods. We know what we’re doing. We’re on top of it. Clients are liking the work we’re doing,” he added.
