Outsourcing giant Mitie has cheered "steady progress" in its turnaround, with annual earnings set to rise despite a sharp drop in its order book.
Mitie, a major service provider for the Scottish Government, said it is expecting underlying operating profit to rise to between £84 million and £87 million, up from £83.2 million in 2017-18.
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But in a full-year trading update, it warned that, while its order book held broadly flat in the second half, it is estimated to have fallen by around 10% over the full year.
This comes after it revealed last November that it suffered a £255 million drop in its order book over the first half.
Mitie has provided facilities management for the Scottish Government since 2010, with 150 staff in the main offices and others including Science & Advice for Scottish Agricultural, fisheries, and the Marine Laboratory in Aberdeen. It also measures, manages and reduces greenhouse gas emissions, water use and waste by the Scottish Government.
Mitie is in the second year of an overhaul under chief executive Phil Bentley after a string of profit warnings amid a torrid time for outsourcing firms following the collapse of Carillion in January last year.
Mitie is simplifying its corporate structure, outsourcing and automating some back office functions, merging its London offices into one, and investing to increase its technology capabilities.
Bentley said: "The second year of our transformation has seen steady progress in Mitie.
"This is against a backdrop of undoubted challenges for the outsourcing sector, and some short-term economic uncertainty impacting clients' capital programmes and willingness to enter into longer-term integrated contract commitments."
He added that the group was focusing on adding value and services to top clients, which is helping it grow retained business in the face of a softening order book.
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Mitie is expecting to report revenue growth of 7% to 8% in 2018-19, with underlying growth of 4%.
It also confirmed that its turnaround programme is expected to deliver benefits of around £45 million in the financial year just gone and £50 million by the end of 2019-20.
