Mitie profits meet forecasts

By Rhys Jones

LONDON (Reuters) - Cleaning and maintenance company Mitie Group (MTO.L) met market expectations with a 21 percent rise in annual profit on Monday as more companies cut costs through outsourcing, but its shares fell on margin fears.

The Bristol-based company, which cleans the Houses of Parliament and the Tower of London, said it won a range of new contracts in the financial services sector over the year including HBOS HBOS.L and Barclays (BARC.L).

Mitie said pretax profit for the year ended March 31 increased to 70.6 million pounds on revenue 14.5 percent higher at 1.4 billion and compared with a Reuters Estimates forecast for pretax profit of 68-71.2 million pounds.

But its shares fell 3.3 percent to 230-3/4 pence by 11.26 a.m. on margin worries, according to traders at KBC Peel Hunt and Evolution.

"They have some juicy contracts coming up and the market seems to be worried that they won't make strong margins on them," said one KBC trader.

The company, which also supplies attendants to the Tate Britain art gallery, said its property services division benefited from a number of contract wins to boost revenue by 32.8 percent to 285 million pounds.

In facilities services, sales grew by 12 percent to 820.4 million after a year of consolidation and the addition of Cable & Wireless (CW.L) to its client base, the company said.

Mitie said it was upbeat about 2008, expecting more companies to outsource maintenance and combine the services they outsource from it as they try to save money in the face of tough economic conditions.