Mitie

Last updated

Mitie Group PLC
Company type Public
IndustryFacilities Management
Founded1987
Headquarters London, United Kingdom
Key people
Derek Mapp, Chairman
Phil Bentley, CEO
RevenueIncrease2.svg £4,055.1 million (2023) [1]
Decrease2.svg £162.1 million (2023) [1]
Increase2.svg £91.1 million (2023) [1]
Number of employees
64,000 (2024) [2]
Website www.mitie.com/

Mitie Group PLC (pronounced "mighty") is a British strategic outsourcing and energy services company. It provides infrastructure consultancy, facilities management, property management, energy and healthcare services. It has a head office at The Shard in London and more than 200 smaller offices throughout the United Kingdom and Ireland. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

Contents

History

Foundation and early activities

Mitie was founded by David Telling and Ian Stewart as MESL in 1987. [3] One year later, the company was listed on the London Stock Exchange for the first time. [3] It merged with Highgate & Job in 1989, after which it was renamed the Mitie Group. [4]

Throughout the 2000s, the company pursued a strategy of growth through the acquisitions of various other businesses. In March 2006, it acquired Initial Security, a leading security business. [5] During 2007, Mitie acquired Robert Prettie & Co. Ltd in exchange for £32.7m and incorporated the specialist plumbing, heating and mechanical services business into their Property Services division. [6] In 2008, Mitie continued its strategy through the acquisition of Catering Partnership [7] and DW Tilley; the latter purchase allowed Mitie to expand its roofing services nationwide. [8] During 2009, Mitie completed the acquisition of Dalkia Facilities Management in exchange for £130m, [9] which bolstered its Technical Facilities Management capability; it also expanded into social housing through the purchase of Environmental Property Services (EPS) for £38.5m. [10] During 2010, Mitie acquired the integrated facilities management business of Dalkia in Ireland. [11]

2010s

Mitie made its first acquisition in the health and social care sector in October 2012, when it spent £111 million on the homecare firm Enara. [12] In April 2013, Mitie's chief executive, Ruby McGregor-Smith, was made non-executive director to the board of the Department for Culture, Media and Sport. [13] During February 2014, Mitie introduced its new visual identity. [14]

Between 2013 and 2015, cleaning staff employed by Mitie at various high-profile locations, including the Royal Opera House, the Houses of Parliament, the law firm Clifford Chance, First Great Western train services, and various NHS hospitals, held demonstrations against low pay. [15] [16] [17]

In February 2014, Mitie announced an eight-year contract with the Home Office, making it the largest provider of immigration removal centres in the United Kingdom. [18] [19] Almost two years later, Mitie came under fire for its management of the immigration centres after the prison inspectorate stated that the facilities were "dirty", "rundown" and "insanitary". [20] [21] Mitie has continued to be involved in the sector. [22] [23] [24]

The firm secured a cleaning contract with Royal Cornwall Hospitals NHS Trust during June 2014 valued at £90m over seven years. Sick pay cost £1.2m in its first eight months, compared with £280,000 for the NHS in the previous financial year; UNISON blamed the rise on staff stress, which it claimed had been caused by mistakes on pay. [25] Such difficulties were not typical to Mitie's other NHS cleaning contracts, [26] although there has been some criticism over their higher cost than other providers. [27]

In November 2014, Mitie acknowledged that its homecare business was less profitable than had been anticipated and that it was struggling to recruit and retain sufficient numbers of care workers. [28] During July 2015, East Sussex County Council reportedly ended a £2 million contract with Mitie to provide home care over allegedly poor standards of care provided. [29] [30]

During 2016, shares in Mitie fell to a four-year low after the company warned that an expected boom in outsourced services was not happening. Throughout both 2015 and 2016, it was reported that Mitie was one of the most shorted stocks in the FTSE 250. [31] [32] McGregor-Smith announced in November 2016 that the company was withdrawing from the healthcare business (providing home care for the elderly) in response to spending cuts and rising employment costs that had made the sector unviable. [33] [34]

In November 2017, the Financial Reporting Council (FRC) announced an investigation into the financial statements for the year ended 31 March 2016. This led to the disclosure in the Annual Report for 2017 that there had been errors in the impairment testing of healthcare goodwill and that, if certain judgements had instead been treated as errors, the amount of the prior year adjustment disclosed in the 2016 results would have increased by £44.0 million. This disclosure had addressed the FRC's concerns. [35] [36]

During December 2017, following a string of three profit warnings in the space of four months, [37] [38] McGregor-Smith stepped down from her role with the outsourcing group; she was replaced by former managing director of British Gas and current Chief Executive Phil Bentley. [39]

2020s

In June 2020, Mitie announced it was to buy Interserve's 40,000-strong facilities management business in a cash and shares deal worth £271m, later revised downwards to £190m. The deal, following its ratification by Mitie's shareholders, [40] was completed on 1 December 2020. [41] The Interserve acquisition increased the company's exposure to public sector work from one-third to half of its overall business activities. [42]

During the COVID-19 pandemic, Mitie added a wide range of services, including running Covid testing sites, cleaning offices and major transport services, and providing security for new quarantine hotels. [43] [44] The firm continued to work with Government departments such as the National Health Service, Department for Work and Pensions, the Ministry of Defence, and education providers. [45] During 2021, the firm was publicly criticised over the management of several locations, including a Covid-19 testing site it ran under contract in Inverness and facilities at Russells Hall Hospital in Dudley, after several workers contracted the virus. [46] [47] In 2024, Mitie also resisted paying a COVID-related bonus to its private nursing staff that public NHS employees were given, although it relented in the fact of industrial action. [48] [49]

In July 2023, Mitie was awarded a four-year £280 million contract with the national railway infrastructure owner Network Rail; the arrangement brought together four prior contracts and involved the delivery of a fully integrated facilities management service for the entire Network Rail estate, spanning 800 sites across the UK, including train stations, offices, rail operating centres, and other locations. [50] That same year, it acquired four separate security-related businesses, Biservicus Group, GBE Converge Group, R H Irving and Linx International Group. [51] [52] [53]

During April 2024, Mitie's share value reached a five-year high after better than expected results were achieved. [54] [55]

Operations

A Mitie maintenance van Mitie bus stop maintenance van.JPG
A Mitie maintenance van

Mitie stands for Management Incentive Through Investment Equity. Mitie's business model was originally about taking 51% equity stakes in startup businesses that fell into its broad fields of activity. The management of the new business typically invested the remaining capital, and if targets were met it was able to sell the balance of the business to Mitie after a fixed period for a sum based on the profits achieved (an earn out). Payment was made in a mixture of cash and Mitie shares. The managers usually remained with Mitie after the earnout. [56]

Mitie is now split into: Facilities Management, Property Management, Energy Solutions and Healthcare. [57]

Controversy

In February 2022, The Sunday Mirror revealed a Mitie WhatsApp group relating to immigration management paid by the Home Office that exchanged racist and offensive messages amongst colleagues since March 2020. [58]

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References

  1. 1 2 3 "Annual Report and Accounts 2023" (PDF). Mitie. Retrieved 13 February 2024.
  2. ↑ "About us". Mitie. Retrieved 13 February 2024.
  3. 1 2 MITIE: History [ permanent dead link ]
  4. ↑ Telling, David (21 March 2001). "The High and MITIE". The Independent. Archived from the original on 26 November 2010.
  5. ↑ "UK Business Park - B2B Sales Leads & Company News". ukbusinesspark.co.uk. Archived from the original on 3 March 2014. Retrieved 31 March 2015.
  6. ↑ "Mitie Group buys Robert Prettie & Co for 8.6-32.7 mln stg plus debt". AFX News. 2 April 2007. Retrieved 20 June 2018.
  7. ↑ "Mitie confident despite softer economy". Construction News. Retrieved 31 March 2015.
  8. ↑ journallive Administrator (2 July 2008). "Small/mid-size Company Deal of the Year". journallive. Retrieved 31 March 2015.
  9. ↑ "MITIE to buy UK arm of Dalkia for £130 mln, to raise £40 mln via placing". Proactiveinvestors UK. Retrieved 31 March 2015.
  10. ↑ Bill, Tom (20 November 2009). "Mitie buys Environmental Property Services for £38.5m". Building. Retrieved 31 March 2015.
  11. ↑ "Mitie acquires Irish FM businesses from Dalkia". fm-world.co.uk. Retrieved 31 March 2015.
  12. ↑ Maidment, Neil (9 October 2012). "Mitie moves into home care with Enara buy". Reuters. Retrieved 31 March 2015.
  13. ↑ "New non-executive directors appointed to the DCMS board". gov.uk. Retrieved 18 September 2015.
  14. ↑ "Mitie unveils a new brand logo". fm-world.co.uk. Retrieved 31 March 2015.
  15. ↑ "Ruby McGregor-Smith, Mitie CEO: Outsourcing's prickly peer". Financial Times. Retrieved 9 April 2016.
  16. ↑ Gover, Dominic. "Migrant Cleaners Protest Against Conditions at Top Law Firm Clifford Chance". International Business Times UK. Retrieved 9 April 2016.
  17. ↑ "Morning Star :: Mitie cleaners occupy First Great Western HQ - The Peoples Daily" . Retrieved 9 April 2016.
  18. ↑ "Mitie awarded £180m contract with the Home Office" . Retrieved 9 April 2016.
  19. ↑ "ERCO SURRENDER FLAGSHIP DETENTION CENTRE TO MITIEBY CORPORATE WATCH". corporatewatch.org. 12 February 2014.
  20. ↑ "Mitie criticised for 'insanitary' immigration centre". Financial Times. Retrieved 9 April 2016.
  21. ↑ Miller, Phil (3 September 2014). "Investigating Mitie, the market leader in UK immigration detention". opendemocracy.net.
  22. ↑ McIntyre, Niamh (10 October 2018). "Private contractors paid millions to run UK detention centres". The Guardian.
  23. ↑ "MITIE DETENTION PROFITEERS: 2023 COMPANY PROFILE". corporatewatch.org. 12 January 2023.
  24. ↑ Bychawski, Adam (18 November 2022). "Contractor where staff traded racist messages banks millions in profit". opendemocracy.net.
  25. ↑ "Sick pay costs rise for Cornwall NHS hospitals private cleaners Mitie". BBC News. 24 June 2015. Retrieved 25 June 2015.
  26. ↑ "Mitie retains major contract with Hinchingbrooke Healthcare NHS Trust". thecleanzine.com. 1 December 2016.
  27. ↑ "Trusts paying triple the cost following NHS clinical waste scandal". 3 December 2018.
  28. ↑ "NHS trust financing woes expected to boost private sector openings". Financial Times. 24 November 2014. Retrieved 25 November 2014.
  29. ↑ "Revealed: The care contract ripped up over institutional abuse of elderly". theargus.co.uk. 15 July 2015.
  30. ↑ Lea, Robert (22 November 2016). "Mitie taken to the cleaners after homecare fiasco". The Times.
  31. ↑ "Analyst twists the knife as Mitie feels heat on pay". The Times. Retrieved 9 April 2016.
  32. ↑ "'Prickly peer' Baroness McGregor-Smith smoothes over Mitie's problems". The Times. Retrieved 9 April 2016.
  33. ↑ "Mitie withdraws from healthcare as it issues second profit warning". Guardian. 21 November 2016. Retrieved 15 December 2016.
  34. ↑ "Mitie sells home healthcare business for £2". BBC News. 1 March 2017.
  35. ↑ "FRC announcements in connection with Mitie Group plc's 2016 annual report and accounts". Financial Reporting Council. 20 November 2017.
  36. ↑ Sweet, Pat (16 July 2020). "FRC ends part of Mitie investigation". accountancydaily.co.
  37. ↑ McGregor-Smith, Ruby (21 November 2016). "Mitie issues second profit warning amid £100m loss". scottishconstructionnow.com.
  38. ↑ "Mitie hit by third profit warning in 4 months". Financial Times. Retrieved 13 May 2020.
  39. ↑ "Ruby McGregor-Smith quits as boss of Mitie". Financial Times. Retrieved 13 May 2020.
  40. ↑ Morby, Aaron (25 June 2020). "Mitie to buy Interserve FM business for £271m". Construction Enquirer. Retrieved 25 June 2020.
  41. ↑ "Mitie seals Interserve deal". i-fm.net. 1 December 2020. Retrieved 1 December 2020.
  42. ↑ Slingo, Jemma (18 May 2023). "Why Mitie deserves a second chance". investorschronicle.co.uk.
  43. ↑ "Covid contracts help Mitie revenues double to £930m". The Times . ISSN   0140-0460 . Retrieved 2 December 2021.
  44. ↑ Thomas, Rhys (8 September 2021). "Mitie: Frontline Heroes in the COVID-19 Response". procurementmag.com.
  45. ↑ Graham, August (24 September 2021). "Mitie ups guidance as it counts benefit from Covid contracts" . The Independent. Archived from the original on 15 May 2022. Retrieved 2 December 2021.
  46. ↑ "Mitie workers claim 'failures' led to Covid 19 outbreak". theferret.scot. Retrieved 13 March 2021.
  47. ↑ Paduano, Michele (6 May 2021). "Mitie broke Covid-19 safety laws at Russells Hall Hospital". BBC News.
  48. ↑ "Mitie boss must pay healthcare workers what they are owed or strikes will continue, say UNISON and Unite". unitetheunion.org. 29 February 2024.
  49. ↑ "Dudley NHS staff gain Mitie victory". unison.org.uk. 25 March 2024.
  50. ↑ "Mitie secures new five-year contract with the Government Property Agency". 4 July 2023.
  51. ↑ Keighley, Tom (2 May 2023). "Facilities management giant Mitie swoops for North East security specialist R H Irving Industrials".
  52. ↑ "Mitie Spain Expands Security Capabilities with Acquisition". fmindustry.com. 8 September 2023.
  53. ↑ "Mitie acquires GBE Converge Group, one of the UK's largest independent Fire & Security businesses". londonstockexchange.com. 2 November 2023.
  54. ↑ "Mitie Group shares hit five-year high after latest results top forecasts". sharesmagazine.co.uk. 15 April 2024.
  55. ↑ Butler, Ben (6 June 2024). "Mitie Group eyes "accelerated growth" amid strong year". insidermedia.com.
  56. ↑ "Mighty job ahead for new boss at MITIE". timesonline.co.uk. Retrieved 31 March 2015.
  57. ↑ "At A Glance - Mitie". mitie.com. Retrieved 31 March 2015.
  58. ↑ "Home Office probes immigration contractor Mitie over racist text claims". BBC News. 20 February 2022. Retrieved 20 February 2022.
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