Mitie Group plc (MTO.L) | Investment Case

1. Company Snapshot

1.a. Company Description

Mitie Group plc, together with its subsidiaries, provides strategic outsourcing services in the United Kingdom and internationally.The company operates in eight segments: Business Services, Technical Services, Central Government & Defense (CG&D), Communities, Care & Custody, Landscapes, Waste, and Spain.The company provides security services, such as manned guarding and technology-backed monitoring solutions, fire and security systems installations, vetting and front-of-house services; and general, specialist, and technical cleaning services in offices, buildings, transport and logistics hubs, and high-security environments.

It is also involved in the provision of technology-backed engineering; maintenance, repair, and mechanical and electrical project activities; energy, carbon, and water management services; air conditioning and disinfection solutions; telecoms and energy services; and remote asset monitoring, and digital and connected workplace solutions.In addition, the company provides facilities management services across central government and defense contracts; decarbonization solutions; and engineering services.Further, it offers integrated facilities management services to devolved public sector customers, which focuses on community environments in healthcare, schools and universities, emergency services, and local authorities; portering services; public services in immigration, criminal justice, and healthcare; horticultural and winter landscaping services; and waste elimination, reduction, recycling, and treatment solutions.

Mitie Group plc was incorporated in 1936 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on MTO

Mitie Group plc's recent performance is driven by its strong fundamentals, with an estimated fair value of UK£2.65, potentially 81% above its current share price. The company's business services segment is poised to prosper with rising demand and growing technology adoption. Additionally, Mitie Group is considered undervalued, trading up to 31.5% below intrinsic value estimates, making it an attractive consideration for investors seeking undervalued assets in a fluctuating market environment.

1.c. Company Highlights

Last Price	161
Change Percentage	-0.62%
Open	160
Previous Close	162
Market Cap ( Millions)	2056
Volume	8136666
Year High	168
Year Low	105.6
M A 50	155.39
M A 200	142.05

FCF Yield	9.59%
Dividend Yield	2.67%
ROE	24.99%
Debt / Equity	91.40%
Net Debt / EBIDTA	67.96%
Price To Book	4.81
Price Earnings Ratio	19.47
Price To FCF	10.42
Price To sales	0.4
EV / EBITDA	7.7

2. Mitie's H1 FY '26 Results: Strong Revenue Growth and Margin Resilience

Mitie reported a 10.4% increase in revenue to GBP 2.7 billion for the six months ended September 30, 2025, driven by 6.4% organic growth. Operating profit rose by 7.6% to GBP 108.8 million, while EPS grew by 5.6% to 5.7p. The company's margins remained resilient at just over 4% despite inflationary headwinds and national insurance increases. Free cash inflow was GBP 51.9 million, with average daily net debt of GBP 332 million. The actual EPS came in at 5.3p, slightly below estimates of 5.74p.

Publication Date: Nov -29

                                    📋 Highlights
                                    Revenue Growth:
                                                10.4% increase in H1 FY26 to GBP 2.7 billion, with organic growth at 6.4%.
Operating Profit:
                                                GBP 108.8 million, up 7.6% YoY, maintaining margins above 4% despite inflation and national insurance costs.
Order Book Expansion:
                                                31% YoY growth to GBP 16.5 billion TCV, with GBP 2 billion in BAFO (Bid Accepted for Offer) as a leading indicator.
Marlowe Acquisition Impact:
                                                Positioning as leader in GBP 7.6 billion facilities compliance market, with integrated capabilities in fire, security, and water services.
AI & Strategic Efficiency:
                                                AI initiatives (Mozaic360, task mining) driving service efficiencies and cost reductions, supporting margin expansion and client value delivery.

                                

Business Segment Performance

Mitie's Business Services division saw revenue grow by 15.1% to GBP 1.4 billion, driven by strong performances in Security, Hygiene, and Spain. The Technical Services division grew by 5.4% to GBP 1.3 billion, with Engineering, Defense, and HLG&E driving the growth. As Phillip Bentley noted, "We're fishing where the fish are," with the company's strategic focus on growth areas such as compliance regulations and investments in water infrastructure.

Order Book and Pipeline Growth

Mitie's order book grew by 31% year-on-year to GBP 16.5 billion, with a pipeline of GBP 6.9 billion in the projects division, up 130% year-on-year. The company's tender win rate is in the low to mid-60s, with a pipeline conversion rate of about 27%. This growth is expected to drive revenue in the coming periods.

Valuation Metrics

Mitie's current valuation metrics indicate a P/E Ratio of 19.2, P/B Ratio of 4.74, and EV/EBITDA of 7.62. The Dividend Yield is 2.71%, with a Free Cash Flow Yield of 9.71%. With analysts estimating revenue growth of 10.1% next year, the stock appears to be reasonably valued. The ROE is 24.99%, indicating strong profitability.

Outlook and Conclusion

Mitie is confident in achieving its full-year profit target of at least GBP 260 million, with revenue growth expected to continue in double digits in the second half. The company's strategic focus on growth areas, combined with its resilient margins and strong cash generation, positions it well for future growth. As the company continues to execute its strategy, investors will be watching for further progress in the coming quarters. The growth prospects and current valuation suggest that the stock is attractively priced for long-term investors.

3. NewsRoom

How Recent Developments Are Reshaping The Mitie Group Investment Story

Nov -28

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MITIE Group PLC (MITFF) (Half Year 2026) Earnings Call Highlights: Record Contract Wins and ...

Nov -20

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Why Analysts See a Changing Story for Mitie as Growth Prospects and Risks Evolve

Nov -13

Source:

3 UK Stocks Estimated To Be Trading At Discounts Of Up To 49.2%

Nov -12

Source:

Bullish Mitie Group Insiders Loaded Up On UK£3.06m Of Stock

Oct -29

Source:

FTSE 100 nudges higher but weak data dents pound

Oct -14

Source:

UK Market Insights Into 3 Stocks That May Be Trading Below Estimated Value

Oct -13

Source:

3 UK Stocks Trading Up To 31.5% Below Intrinsic Value Estimates

Oct -08

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.35%)

6. Segments

Business Services

Expected Growth: 7.5%

Mitie Group plc's Business Services segment growth of 7.5% is driven by increasing demand for outsourced facilities management, expansion into new markets, and strategic contract wins. Additionally, investments in technology and innovation have improved operational efficiency, enabling the company to offer competitive pricing and enhanced services to clients.

Technical Services

Expected Growth: 7.8%

Mitie Group plc's Technical Services segment growth of 7.8% is driven by increasing demand for energy-efficient solutions, rising adoption of IoT and automation technologies, and growing need for predictive maintenance in the UK's industrial and commercial sectors. Additionally, the company's strategic acquisitions and investments in digital capabilities have enhanced its service offerings, contributing to the segment's growth.

Central Government and Defence

Expected Growth: 6.5%

Central Government and Defence segment of Mitie Group plc is driven by increasing demand for outsourced services, strategic partnerships, and investments in technology and innovation. The 6.5% growth is attributed to the UK government's focus on cost savings, efficiency, and modernization, as well as Mitie's expertise in delivering critical infrastructure and defence services.

Communities

Expected Growth: 7.2%

Mitie Group plc's Communities segment growth of 7.2% is driven by increasing demand for integrated facilities management services, strategic contract wins, and expansion into new markets. Additionally, investments in technology and innovation, such as energy-efficient solutions, have enhanced operational efficiency and improved customer satisfaction, contributing to the segment's growth.

Care & Custody

Expected Growth: 7.0%

Mitie's Care & Custody segment growth of 7.0% is driven by increasing demand for outsourced services in the UK's justice system, expansion of existing contracts, and new business wins. Additionally, the company's investments in technology and process efficiencies have improved operational performance, enabling it to deliver high-quality services at competitive prices, thereby driving growth.

Spain

Expected Growth: 8.5%

Spain's 8.5% growth for Mitie Group plc is driven by increasing demand for facilities management services, particularly in the healthcare and education sectors. The country's economic recovery, infrastructure development, and growing focus on sustainability also contribute to this growth. Additionally, Mitie's strategic partnerships and investments in technology, such as energy-efficient solutions, enhance its competitive edge in the Spanish market.

Waste

Expected Growth: 7.0%

Mitie Group plc's 7.0% growth in Waste segment is driven by increasing demand for sustainable waste management solutions, government initiatives promoting recycling and landfill reduction, and strategic contract wins with major UK retailers. Additionally, the company's investment in technology and process efficiencies has improved operational margins, contributing to the segment's growth.

Landscape

Expected Growth: 7.8%

Mitie Group plc's 7.8% growth is driven by increasing demand for outsourced facilities management services, particularly in the UK healthcare and education sectors. Additionally, the company's strategic acquisitions and investments in technology, such as energy management and IoT solutions, have expanded its service offerings and improved operational efficiency.

7. Detailed Products

Facilities Management

Mitie provides facilities management services, including maintenance, repairs, and operations of buildings and facilities.

Technical Services

Mitie offers technical services, including electrical, mechanical, and HVAC maintenance and installation.

Business Services

Mitie provides business services, including document management, print and mail services, and customer service outsourcing.

Energy and Sustainability

Mitie offers energy and sustainability services, including energy audits, energy management, and sustainability consulting.

Security Services

Mitie provides security services, including manned guarding, event security, and security consulting.

Care and Support

Mitie offers care and support services, including home care, live-in care, and supported living services.

Waste Management

Mitie provides waste management services, including waste collection, recycling, and disposal.

8. Mitie Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Mitie Group plc operates in a industry with moderate threat of substitutes. The company's services are specialized and not easily substitutable, but there are some alternatives available.

Bargaining Power Of Customers

Mitie Group plc has a diverse customer base, which reduces the bargaining power of individual customers. The company's services are also critical to its customers' operations, making it difficult for them to negotiate prices.

Bargaining Power Of Suppliers

Mitie Group plc has a moderate bargaining power of suppliers. The company relies on a few large suppliers for some of its inputs, but it also has some flexibility to switch suppliers if needed.

Threat Of New Entrants

Mitie Group plc operates in an industry with high barriers to entry, including regulatory hurdles and the need for specialized expertise. This makes it difficult for new entrants to join the market.

Intensity Of Rivalry

Mitie Group plc operates in a highly competitive industry with many established players. The company needs to continuously innovate and improve its services to maintain its market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	30.90%
Debt Cost	5.50%
Equity Weight	69.10%
Equity Cost	10.43%
WACC	8.91%
Leverage	44.72%

11. Quality Control: Mitie Group plc passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Keystone Law

A-Score: 6.8/10

Value: 2.2

Growth: 7.2

Quality: 7.4

Yield: 7.5

Momentum: 9.0

Volatility: 7.3

1-Year Total Return ->

GLEvents

A-Score: 5.5/10

Value: 5.5

Growth: 4.7

Quality: 4.6

Yield: 3.8

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

Coor

A-Score: 5.3/10

Value: 5.0

Growth: 4.0

Quality: 3.2

Yield: 8.1

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

Johnson Service Group

A-Score: 5.3/10

Value: 6.0

Growth: 6.9

Quality: 5.8

Yield: 3.1

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

Mitie

A-Score: 5.2/10

Value: 5.6

Growth: 5.4

Quality: 4.7

Yield: 4.4

Momentum: 6.5

Volatility: 4.7

1-Year Total Return ->

Applus Services

A-Score: 4.5/10

Value: 5.2

Growth: 7.2

Quality: 1.9

Yield: 1.9

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.74%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.91%

Mitie Group plc - GB0004657408

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MTO

1.c. Company Highlights

Lower Growth

Stable Momentum

Medium Volatility

Average Growth

Average Quality

Earnings Beats

Fairly Valued

Average Yield

Less Volatile

Earnings Miss

Revenues Beats

Strong Momentum

Revenues Miss

2. Mitie's H1 FY '26 Results: Strong Revenue Growth and Margin Resilience

Business Segment Performance

Order Book and Pipeline Growth

Valuation Metrics

Outlook and Conclusion

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.35%)

6. Segments

Business Services

Expected Growth: 7.5%

Technical Services

Expected Growth: 7.8%

Central Government and Defence

Expected Growth: 6.5%

Communities

Expected Growth: 7.2%

Care & Custody

Expected Growth: 7.0%

Spain

Expected Growth: 8.5%

Waste

Expected Growth: 7.0%

Landscape

Expected Growth: 7.8%

7. Detailed Products

Facilities Management

Technical Services

Business Services

Energy and Sustainability

Security Services

Care and Support

Waste Management

8. Mitie Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Mitie Group plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

12.e Scoring ^Insights

12.f DCF ^BETA