Though Mitie insists that it can keep margins at between 5 per cent and 6 per cent, some in the market don’t believe it.
The company faces several challenges, not least the poor prices it is getting for providing healthcare for local authorities, which tipped that side of the business into a loss in the year to the end of March.
Mitie is blaming cuts in central government spending. There has been an increase in council tax of up to 2 per cent to fund increasing social care costs, but much of this will be absorbed by the national living wage. It has cut back on the number of branches from which it operates and the business will be returned to profitability in due course,