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Mitie has cash to buy up firms

Facilities, property and engineering services specialist Mitie is eyeing potential targets after announcing it has the cash flow to make acquisitions.

The firm boosted profits in the previous financial year by acquiring plumbing and heating company Robert Prettie and said in its interim management statement released at the end of July that further purchases could be made.

The statement said: “Mitie continues to benefit from a strong balance sheet with low gearing and has seen no significant change in its financial position in the period since 1 April 2008.

“Our strong cash flow continues to give us significant financial flexibility to take advantage of any acquisition opportunities that may arise.”

The company also said it had secured a record 83 per cent of the current year’s budgeted revenue – a rise of two per cent on the same time last year. It also confirmed the forward order book “remains strong”.

Mitie said it was being helped by a continuing drive for companies and local authorities to outsource services to save costs.

The company said: “MITIE has had a good start to the year, building on our excellent performance in 2007/8 and is trading in line with management’s expectations.

“Trading conditions in our markets remain favourable.

 “We continue to see opportunities to grow as our customers look to outsource more services to achieve economies of scale and to drive efficiency across their estates.

“We have secured new work in all areas of our business and have continued to see clients add extra MITIE services or increase the geographic scale of contracts to take advantage of the operational efficiencies that can be made through larger contracts.”

Contracts secured during the period include a contract with Suffolk County Council to improve more than 730 managed buildings as part of a £6million, four-year redecoration and repairs contract, a four-year and a £17.5m Decent Homes contract with a not-for-profit housing association which manages 5,600 local council properties.

It has also formed a strategic partnership with EDF Energy to undertake the installation of renewable technologies in the household market - potentially covering five million customers.