TIDMMTO
RNS Number : 8135D
MITIE Group PLC
28 June 2019
Mitie Group plc
28 June 2019
LEI number: 213800MTCLTKEHWZMJ03
Mitie Group plc (the 'Company') - Annual Financial Report
Following the release on 6 June 2019 of the Company's final
results for the year ended 31 March 2019 (the 'Final Results
Announcement'), the Company announces that it has published its
Annual Report and Accounts for 2019 (the 'Annual Report and
Accounts').
The Company's 2019 Annual General Meeting will be held at
Linklaters LLP, One Silk Street, London EC2Y 8HQ on 30 July 2019 at
11:30am.
Copies of the Annual Report and Accounts and the Notice of the
Annual General Meeting for 2019 (the 'AGM Notice') are available to
view on the Company's website: www.mitie.com. Hard copies have been
mailed to those shareholders who have elected to continue to
receive paper communications.
Copies of the Annual Report and Accounts, the AGM Notice and the
form of proxy in relation to the AGM are being submitted to the
National Storage Mechanism and will shortly be available for
inspection at: www.hemscott.com/nsm.do.
The Final Results Announcement included a set of financial
statements and a review of the development and performance of the
Company. In compliance with Disclosure Guidance and Transparency
Rule (DTR) 6.3.5, the Company has extracted and set out below
certain information from the Annual Report and Accounts. This
information is included herein solely for the purpose of complying
with DTR 6.3.5 and the requirements it imposes on the Company as to
how to make public its annual financial reports. It should be read
in conjunction with the Company's Final Results Announcement issued
on 6 June 2019. Together these constitute the material required by
DTR 6.3.5 to be communicated to the media in unedited full text
through a Regulatory Information Service. This material is not a
substitute for reading the full Annual Report and Accounts. Page
numbers and cross-references in the extracted information below
refer to page numbers and cross-references in the Annual Report and
Accounts.
The information contained in this announcement and in the Final
Results Announcement does not constitute the Group's statutory
accounts but is derived from those accounts. The statutory accounts
for the year ended 31 March 2019 have been approved by the Board
and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
Principal risks and uncertainties
1. Political
Political and economic uncertainty in the UK may adversely
affect our customers' approach to outsourcing decisions and our
ability to plan and invest. The lack of clarity of the timing and
impact of Brexit adds further uncertainty.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- Cost: strengthen our balance sheet and maintain cost discipline
to remain competitive
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: Increased
As the vast majority of Mitie's client base is within the UK, we
are particularly exposed to uncertainties in the UK's political and
economic landscape. A major aspect of this uncertainty continues to
be the ongoing negotiations for the UK to leave the European Union
(Brexit). This may result in changes to the regulatory framework,
as well as restrictions in the supply of labour and materials.
Political and economic factors also influence the decisions
taken by both public and private sector clients on which activities
should be outsourced and the amount of discretionary spend
available for outsourcing activities. This may result in fewer
opportunities for Mitie and have a consequential negative impact on
our financial performance.
It is important that we are able to offer competitive,
innovative and high-quality solutions to clients, and demonstrate
the value we bring to them. We also need to ensure that we
carefully monitor and identify the most appropriate opportunities
in both the public and private sectors.
Controls and mitigating actions
-- Maintain blend of public and private sector clients
-- Appointment to the Crown Commercial Services Framework
-- Appointment of Chief Government & Strategy Officer and team
-- Regular reviews of sales opportunities by all business sales
leaders
-- Dedicated account managers to focus on integrated strategic
accounts
-- Focus on high-margin opportunities with growth potential
-- Drive for greater customer retention through improvements
in the value we deliver
-- Development of new and innovative service offerings
Future plans
-- Ensure the focus on strategic accounts generates growth
opportunities
-- Maintain dialogue with key public and private sector clients
to demonstrate the value we offer
-- Leverage the most appropriate opportunities through the
Crown Commercial Services Framework to increase public sector
contracts
2. Structural complexity
Mitie has historically operated using complex manual processes
and an organisational model with a high and misaligned cost base,
rather than leveraging its technology. If we do not address these
issues we will be unable to execute client contracts efficiently,
resulting in sub-optimal customer experiences and erosion of
sustained profitable growth.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- People: create a 'Great Place to Work' for our employees
-- Cost: strengthen our balance sheet and maintain cost discipline
to remain competitive
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: New risk
Mitie's business and organisational model has evolved with a
large number of unnecessary complexities, including multiple and
inconsistent processes, isolated IT systems, and unclear
organisational and reporting structures. These complexities have
required a disproportionately high cost base in order to maintain
them.
The business transformation project (Project Helix), and a
number of other improvement initiatives over the past two years,
have made substantial progress, but further work is required to
simplify and standardise these underlying processes and to ensure
that we are able to deliver acceptable margins and growth from our
business.
We are continuing to address internal costs by leveraging the
opportunities from outsourcing back-office functions, including in
Finance and IT. In addition, we are investing in IT systems
improvements across the business, notably in Engineering Services,
HR and Finance. We will also continue to simplify end-to-end
processes and the structure of the organisation.
Mitie is now embracing technology to deliver a digital
experience to both internal and external users. If we fail to do
this we could be unable to deliver profitable growth, our
opportunities to invest in new technology and offerings could be
limited and our bids could be uncompetitive.
Controls and mitigating actions
-- Successful delivery of Project Helix and other improvement
and simplification initiatives
-- IT, financial and operational systems improvements across
the business
-- Outsourcing of back-office functions in IT and Finance
-- Simplification of the business structure into divisions
-- Clarification of accountabilities and responsibilities,
particularly for strategic accounts
-- Focus on sourcing and procurement processes to simplify
supplier base and leverage cost opportunities
-- Use of digital technologies for customers and employees
Future plans
-- Successfully complete improvement projects for IT systems
in Engineering Services
-- A comprehensive review of end-to-end processes across the
business to improve efficiency and control, remove unnecessary
tasks and reduce costs. A Digital Transformation Officer
has already been appointed who is responsible for this initiative
-- Legal entity rationalisation
-- Finance modernisation programme
-- Commence a further transformational review to simplify the
business
3. Cyber
Failure of critical infrastructure, including through a
cyber-attack, could affect client delivery operations and cause
critical delays in internal processes.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- Cost: strengthen our balance sheet and maintain cost discipline
to remain competitive
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: Decreased
The reliability and effectiveness of our technology is vitally
important to ensure that we can meet our contract obligations,
deliver improvements in operational processes, generate meaningful
management information and help deliver value for our clients. In
many cases clients rely upon us to look after their critical data
and infrastructure.
We are continuing to invest in technology to simplify our
business, as well as improving resilience and security to protect
against systems failure or a cyber-attack. During the year we have
commenced an upgrade programme to ensure we meet the Government's
Cyber Essentials Plus requirements. This has involved a substantial
programme to upgrade and replace computers within the organisation.
We have also delivered a number of system improvements in the year
including People Hub, a standardised and integrated HR
solution.
We have also outsourced our routine IT operations to a partner
which will help improve efficiency and effectiveness and build in
greater resilience to failures. This also allows us to focus on
higher value technology developments for clients. We will continue
to invest in systems and technology to replace the legacy estate,
automate processes and ensure the smooth and efficient operation of
our business. It is also important to have effective business
continuity and disaster recovery plans, and this is another key
focus.
Controls and mitigating actions
-- Clear strategy to invest in technology improvements, both
in internal systems and client offering
-- Outsourcing of routine IT operations to partner organisation
to improve resilience and controls
-- Upgrades to legacy systems to reduce complexity and improve
management information
-- Rationalisation of ERP systems and infrastructure
-- Leveraging new technologies such as AI and big data
-- Maintenance and testing of effective disaster recovery plans
-- Improvements to cyber security controls across all systems
and infrastructure
-- Dedicated IS PMO to ensure all projects with an IS element
are managed effectively and risks are minimised
Future plans
-- Upgrade to the Engineering Services operational and financial
systems to improve security and efficiency
-- Look for opportunities to leverage the outsource partner's
development capabilities
4. Funding
Inability to maintain access to and renew suitable sources of
funding due to a perceived risk in both our business and the sector
as a whole, may impact our ability to maintain profitable business
performance.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- Cost: strengthen our balance sheet and maintain cost discipline
to remain competitive
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: Stayed the same
In order to be able to meet our financial commitments, we need
to have access to a number of affordable sources of finance. Our
core debt facilities include a revolving credit facility and
private placement loan notes. We need to have sufficient liquidity
to be able to pay suppliers and staff, whilst also investing in the
business and ensuring that we have enough options for profitable
growth.
In the past few years there has been significant concern about
the financial strength and viability of companies operating in our
sector. This has continued during the year with a number of
high-profile incidents occurring relating to our competitors. Any
actual or perceived weaknesses in our financial position could
restrict our access to finance or attract high interest rates.
We have been focused on maintaining strong financial discipline
in the management of our working capital and investment decisions
and on minimising our levels of debt. This has included working
with our back-office process outsource partner to improve processes
and efficiency.
Controls and mitigating actions
-- Regular forecasting of cash flow and net debt
-- Thorough focus on working capital cycles with a clear set
of KPIs
-- Maintenance of strong banking, debt and equity relationships
-- Strong focus on and monitoring of cash collection
-- Regular reviews of payment terms with customers and supply
chain
Future plans
-- Continue to work with a range of financial institutions
to ensure we can access affordable finance sources
-- Focus on working capital processes to reduce cycle times
and average net debt
-- Improve accrued income and billing processes
5. Legal
Failure to comply with applicable laws and regulations may lead
to fines, prosecution and damage to our reputation.
Impacts on:
-- People: create a 'Great Place to Work' for our employees
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: Stayed the same
Our business is subject to a wide range of laws and regulations.
Given the nature of our business, these include, amongst others,
health & safety, employment, anti-bribery and corruption and
statutory wage requirements.
Failure to comply with applicable laws and regulations could
result in prosecution and/or significant fines, and, from a
reputational perspective, could damage our relationships with
clients and our ability to win work. We may also face debarment
from public sector contracts.
We continue to ensure that we have effective governance and
oversight of our compliance with applicable laws and regulations
and continuously assess the impact of changes in relevant
legislation. It is also important that we provide appropriate
communications and training for our people to ensure that they are
aware of their obligations, and that regular monitoring of
compliance is undertaken.
Controls and mitigating actions
-- Regular monitoring of legal and regulatory changes by Group
Functions including Company Secretariat, Legal and Quality,
Health, Safety and Environment (QHSE)
-- Code of Conduct communicated to all employees
-- Group-wide policies updated for changes to laws and regulations
and maintained in the online Business Management System
(BMS)
-- Regular and thorough external regulatory audits
-- Training and awareness material communicated to employees
and monitoring of completion performed
-- Externally hosted whistleblowing service available
Future plans
-- Introduction of further mandatory training courses to relevant
employees via our Learning Hub
-- Ongoing review of BMS to update policies and procedures
6. Market share
A loss of market share through competitors improving their
offering and price, and potentially targeting some of our key
contracts, or from new entrants deploying new business models,
could have a significant impact on our revenue and profit.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: New risk
In the recent past, many companies in our sector have
experienced financial and operational difficulties, and as a result
there has been a strong focus on strategy, costs, investments and
business structure. For those organisations that have successfully
addressed their issues there may be opportunities to increase
market share through more competitive or innovative offerings,
which may impact our ability to retain current clients and win
future business.
Additionally, there is also the possibility of a new entrant
disrupting the market by deploying a new low-cost business model
for FM, potentially through a technology platform, which would
challenge the structure and approach of the existing organisations,
including Mitie. This could also potentially significantly erode
our market share and decrease new opportunities.
It is important that we continue to prioritise the
transformation of our business, particularly through improving
processes and simplifying business structure, focusing on
minimising costs and developing innovative solutions for clients,
such as the Connected Workspace. In this way, we will be able to
deliver genuine value for current and future clients.
Controls and mitigating actions
-- Continued focus on simplifying business processes and structure
-- Investment in new and innovative technologies - including
Connected Workspace
-- Focus on client relationships and Net Promoter Score
-- Regular reviews of sales opportunities arising
-- Replacing and upgrading operational and financial systems
-- Standard processes and tools for sales and CRM teams
Future plans
-- Deployment of strategic account managers for key contracts
-- Complete Project Forte launched to improve IT systems in
Engineering Services
7. Health, safety and environment
Failure to maintain appropriately high standards in health,
safety and environmental management may result in harm to
employees, client staff or members of the public, and consequential
fines and reputational damage.
Impacts on:
-- People: create a 'Great Place to Work' for our employees
-- Viability statement
Change in year: Stayed the same
As a company we are committed to maintaining the highest levels
of health, safety and environmental (HSE) standards. The services
we deliver could potentially present an increased risk of a health
and safety incident involving our employees, client staff or even
members of the public. Our activities also carry a risk of damage
to the environment. It is essential that we manage these risks in a
highly diligent and effective manner.
At all levels in the organisation, safety is our number one
priority and we ensure that all risks are properly assessed and
managed, our employees are trained, our expectations of how they
perform their work are clearly explained, and adherence to health
and safety standards is regularly monitored. If we do not manage
these risks appropriately, it could lead to harm to individuals and
damage to the environment, and consequently prosecution, fines and
significant damage to our reputation.
Controls and mitigating actions
-- A comprehensive QHSE strategy has been developed
-- Major cultural HSE programme, LiveSafe, launched in the
year, with clear rules and training for staff
-- Regular training and communication delivered throughout
the company, in accordance with LiveSafe principles
-- Certified H&S management systems to OHSAS 18001 and environmental
system to ISO14001
-- Deployment of an improved incident recording, monitoring
and reporting system
-- Regular HSE reviews conducted at divisional and Group level
-- Clear and standardised KPIs introduced to monitor progress
and improvements
-- Targeted QHSE procedural audit programme introduced
Future plans
-- Build on the principles of LiveSafe and ensure regular communication
and engagement with staff
-- Transition from OHSAS health and safety management system
to ISO45001
8. Incident at client site
A high-profile incident or accident occurring at an FM client
site, or a location operated by our Care & Custody business, as
a result of negligent staff actions, inconsistent vetting or
ineffective training and communications for staff, could have a
significant impact on our reputation and current and future
contracts.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- People: create a 'Great Place to Work' for our employees
-- Cost: strengthen our balance sheet and maintain cost discipline
to remain competitive
-- Viability statement
Change in year: New risk
We deliver services to clients at a number of important and
high-profile sites across the country. These include locations with
substantial historical and cultural significance and high level of
scrutiny by governmental bodies, media organisations and the
general public. If a major incident occurred at one of these sites,
whether through the negligent or deliberate act of Mitie employees,
it could attract a large amount of publicity and have a highly
negative impact on our reputation. It would also be likely to limit
our chances of winning future contracts and potentially retaining
current clients.
In order to make sure we manage this risk, it is important that
we have appropriate polices and processes in place, which clearly
set out the expectations of our employees. We also need to
communicate these effectively and deliver regular and relevant
training to employees. In addition, it is important that we ensure
our employees have been appropriately vetted to determine who is
eligible to work on particular contracts and sites, so that we are
able to meet the specific requirements of our clients.
It is also necessary to have effective business continuity plans
in place for our operations, so that we can continue to deliver a
high-quality service to clients in the event of a disruptive
incident. Should an incident occur, a comprehensive and tested
crisis response plan is essential to ensure that we would be able
to minimise the impact on our employees and clients, the public and
the environment.
Controls and mitigating actions
-- Custodial operations working within Standard Operations
Procedures (SOP), bespoke to each site for Care & Custody
business
-- Contingency plans are regularly tested and compliance to
SOPs regularly audited for Care & Custody sites
-- Health and safety strategy - LiveSafe programme launched
this year as part of the strategy
-- Certified H&S management systems to OHSAS 18001 and environmental
system to ISO14001
-- Comprehensive training plans on safety, security and risks
-- Regular updates to employees on new safety and operational
requirements
-- Internal and external compliance audits
-- Effective vetting programme tailored to the individual risks
of each client and site
-- Tested business continuity and crisis response plans
-- Standardised and comprehensive investigation process
Future plans
-- Review and further testing of business continuity and crisis
response plans
-- Transition from OHSAS health and safety management system
to IS045001
9. Data management
Ineffective processes and controls to manage our data and
customers' data may result in a major data breach leading to fines,
remediation costs and reputational damage.
Inability to maintain access to sources of funding due to
concerns over our financial strength could have a significant
impact on our performance and client relationships
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: Stayed the same
One of the most important assets we have is the data we hold,
which includes information concerning our business operations,
employees, clients, suppliers and others. This information is vital
to enable us to run our business efficiently and profitably. We
need to maintain adequate controls to mitigate risks associated
with loss or theft of data which would damage our reputation with
clients and potentially expose us to significant fines from
regulators.
In order to ensure confidential and sensitive data is processed,
transmitted and stored securely, we have implemented formal
technical and procedural controls. These controls are deployed
across our IT systems and are subject to regular review and
testing. Effective information security procedures help to prevent
or minimise the impact of any breaches of security.
We have an ongoing programme of work to ensure we are compliant
with the requirements of the General Data Protection Regulation
(GDPR).
Controls and mitigating actions
-- Centralised information security team in place
-- Information Security Management System (ISMS) in place and
certified to ISO/IEC27001:2013 for key information assets
-- IT security controls in place to proactively test, monitor,
identify and respond to cyber threats
-- Information security requirements established on all new
projects, including outsourcing of routine operations
-- Cyber essential accreditation
-- Cyber insurance policy
Future plans
-- Regular reviews of information management to ensure compliance
with GDPR
-- Expansion of dedicated data privacy team
-- Ensure seamless transition to IT outsource partner with
data standards maintained
-- Working towards achieving cyber essential plus accreditation
10. Employees
Inability to recruit, retain and reward suitably talented
employees, as well as failure to implement appropriate development
plans, simple consistent processes across the business and a One
Mitie approach, could negatively impact our operational and
financial performance.
Impacts on:
-- People: create a 'Great Place to Work' for our employees
-- Viability statement
Change in year: Decreased
It is important for the success of our business that we continue
to recruit, develop, motivate and retain talented individuals. If
we are unable to do so there would be an adverse impact on the
profitable and successful delivery of our contracts, and we would
be limited in our ability to win future opportunities and grow the
business.
We need to have the right level of experience and expertise
available and be able to develop a culture of high standards of
achievement, compliance to the Mitie values and good governance and
control. In order to achieve this, we also need to provide
development opportunities for our employees to enable them to reach
their full potential.
In addition, it is important that we maintain a stability and
consistency in our senior leadership team to provide high-quality
direction for the business and deliver our strategy.
An important element of the culture is ensuring that we have a
One Mitie way of operating and collaborate effectively across the
business. This will give greater consistency in processes and
controls and allow for seamless movement of staff across the
Group.
Controls and mitigating actions
-- Deployment of new HR resourcing system across the Group
-- Launch of online training and development hub, People Hub
-- Simplified approach and consistent process to both temporary
and permanent recruitment
-- Regular communications from leadership team - including
ELT country-wide roadshow
-- Specific plans developed to address results of employee
survey
-- Competitive remuneration, terms and conditions
-- Training and development programmes for senior leadership
-- Regular employee offers
-- Developed talent identification, management and development
plans
-- Succession plans are in place for critical roles, especially
for the senior leadership team
-- Clear performance management framework
Future plans
-- Further enhance online HR and training systems
-- Launch of new induction programme, mandatory for new starters
-- Salary benchmarking
-- New competency framework to be developed
11. Market sentiment
Negative sentiment towards the outsourcing sector could lead to
fewer opportunities, including reduced IFM volumes, and challenges
to our business model and profit growth.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- People: create a 'Great Place to Work' for our employees
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: New risk
In the past two years, the activities and results of a number of
companies operating in our sector have generated significant
negative publicity, which potentially affects Mitie's reputation
and raises concerns with current and future clients. This has
included the liquidation of Carillion and the administration of
Interserve. The viability of outsourced facilities management
companies to deliver operational performance to sufficiently high
standards, whilst also managing costs appropriately, has been the
subject of much scrutiny.
In particular, the opportunities for integrated facilities
management contracts may decrease in both the public and private
sector, as organisations look to spread the risk of these services
amongst a greater number of providers.
In order to address these concerns, it is important that we are
able to consistently deliver a high-quality and valued service on
our existing contracts and demonstrate this to potential new
clients. We need to ensure that we develop and maintain a business
model and offering which can successfully deliver profitable growth
and exploit new opportunities as they arise, whilst adapting to the
needs of the market.
Controls and mitigating actions
-- Inclusion and maintenance on Crown Commercial Service Framework
-- Dedicated management of strategic accounts
-- Regular financial performance reviews
-- Focus on improving Net Promoter Score
-- Strong relationships with financial institutions
-- Process and IT systems improvement programmes
-- Long-term contract portfolio and spread of client base
Future plans
-- Further improvement and transformation opportunities to
be explored
12. Contract losses
If we do not ensure that we produce bids for contracts which are
competitive, financially viable and have a balanced approach to
risk, and/or fail to deliver on our contract obligations, we may
damage our client relationships, which may lead to cancellation of
contracts resulting in financial losses.
Impacts on:
-- Customer: build market-leading positions in higher growth
segments and increase customer NPS
-- People: create a 'Great Place to Work' for our employees
-- Cost: strengthen our balance sheet and maintain cost discipline
to remain competitive
-- Technology: embed technology into the heart of our offering
-- Viability statement
Change in year: Stayed the same
In order to deliver consistent and profitable growth, it is
important that we continue to bid for and secure contracts at
acceptable margins. It is also essential that we successfully
mobilise and deliver our contracts. In order to achieve this, we
must monitor and control costs, deliver on the contract obligations
and meet client expectations.
We need to develop competitive bids, which provide a fair
balance of risk and reward that is properly reflected within the
contract terms and conditions. Our offering needs to be compelling
and innovative and provide a balance between cost and margin
pressure, which is a key feature of the sector in which we operate.
It is also important to make sure we have the skills and resources
available to execute on our contracts successfully.
Once we have mobilised the contracts, we need to monitor a
relevant set of Key Performance Indicators (KPIs) to ensure that we
are delivering on the obligations to which we have agreed and
communicating with clients to understand if they are satisfied with
our performance. It is also important to assess and agree any
variations to the contract services and terms and amend the KPIs
accordingly.
If we are unable to deliver the services as agreed in our
contracts, it could negatively impact our customer relationships
and reputation and lead to legal disputes and termination of
contracts. This could then lead to potentially failing to retain
existing clients and secure new contracts, with a detrimental
effect on our financial performance.
Controls and mitigating actions
-- Bid Committee approval for complex bids
-- Detailed contracting guidelines developed and rolled out
-- Clear delegated authorities register
-- New Sales and CRM teams in place
-- Use of specialist mobilisation teams for complex contracts
-- Strategic account management
-- Risk registers in place for large-scale contracts
-- KPI/SLA formal reviews with customers
-- Improved CRM capabilities with active relationship management
-- Focus on Net Promoter Score
-- Launch of Sales Academy to train sales teams
-- Appointment of Chief Government & Strategy Officer to coordinate
all interfaces with the Cabinet Office
Future plans
-- Post sales review of loss-making contracts to ensure we
identify and apply lessons learned for our future bids
Statement of Directors' responsibilities in respect of the
Annual Report, the remuneration report and the financial
statements
The following statement is extracted from page 88 of the Annual
Report and Accounts and is repeated here for the purposes of
Disclosure and Transparency Rule 6.3.5 to comply with Disclosure
and Transparency Rule 6.3. This statement relates solely to the
Annual Report and Accounts and is not connected to the extracted
information set out in this announcement or the Final Results
Announcement:
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and applicable law and have
elected to prepare the Company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law) including FRS 101
Reduced Disclosure Framework.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that these give a true and
fair view of the state of affairs of the Group and Company and of
their profit or loss for the period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- for the Group financial statements state whether they have
been prepared in accordance with IFRSs as adopted by the
European Union, subject to any material departures disclosed
and explained in the financial statements;
-- for the Parent Company financial statements, state whether
applicable UK Accounting Standards have been followed, subject
to any material departures disclosed and explained in the
Parent Company financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group or
Parent Company will continue in business;
-- prepare a Directors' report, a strategic report and Directors'
remuneration report which comply with the requirements of
the Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual
Report and Accounts, taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to assess the Group's position and performance,
business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4.1
The Directors confirm to the best of their knowledge:
-- the Group financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and Article 4 of the IAS
Regulation and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the
Group; and
-- the management report includes a fair review of the development
and performance of the business and the financial position
of the Group and the Parent Company, together with a description
of the principal risks and uncertainties that they face.
Related party transactions
The following extract from the Annual Report and Accounts refers
to related party transactions as set out in Note 34:
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this Note.
During the year, the Group derived GBP0.5m (2018: GBP0.8m) of
revenue from contracts with joint ventures and associated
undertakings and received GBPnil (2018: GBP0.6m) of dividends. At
31 March 2019 trade and other receivables from joint ventures and
associates of GBPnil (2018: GBP0.2m) were outstanding and loans to
joint ventures and associates of GBPnil (2018: GBPnil) were
included in financing assets.
Mitie Group plc has a related party relationship with the Mitie
Foundation, a charitable company. During the year, the Group made
donations and gifts in kind of GBP0.4m (2018: GBP0.3m) to the
Foundation.
No material contract or arrangement has been entered into during
the year, nor existed at the end of the year, in which a Director
had a material interest.
The Group's key management personnel include the Executive
Directors, Non-Executive Directors and the Executive Leadership
team. Details of the Directors' remuneration is included in Note 7.
The underlying remuneration for other key management personnel,
including the share-based payments
charge is GBP4.0m (2018: GBP4.4m).
The Company's preferred supplier for delivering apprenticeships
to its employees is Aspire Achieve Advance Limited (3aaa), a
company whose chairman is also Mitie Group plc's Non-Executive
Chairman. The Company pays into a government mandated
Apprenticeship Levy Fund, and 3aaa
withdraw from that fund to provide the apprenticeship training.
On 11 October 2018, the directors of 3aaa presented a petition to
the Court for the compulsory winding up of the company. This
petition was accepted by the Court and the Official Receiver was
appointed as liquidator on 24 October 2018. During the year ended
31 March 2019, 3aaa withdrew GBP0.6m (2018: GBP0.2m) from the fund
in respect of training provided or to be provided.
-Ends-
For further information, contact:
Claire Lovegrove
Head of Media Relations
T: +44 (0)20 3123 M: +44 (0)790 027 E: claire.lovegrove@mitie.com
8716 6400
Anna Gavrilova
Head of Investor Relations
T: +44 (0)20 3123 M: +44 (0)738 443 E: anna.gavrilova@mitie.com
8675 9112
Peter Dickinson
General Counsel and Company Secretary
T: +44 (0) 203 123 M: +44 (0)776 821 E: peter.dickinson@mitie.com
8157 5013
Notes for editors
About Mitie Group
Founded in 1987, Mitie is the UK's leading facilities management
and professional services company. It offers a range of specialist
services, including Engineering Services, Security, Professional
Services, Cleaning and Environmental Services, Care and Custody,
and Catering.
Mitie employs 52,500 people across the country, looking after a
large, diverse, blue-chip customer base, from banks and retailers,
to hospitals, schools and government offices. It takes care of its
customers' people and buildings, by delivering the basics
brilliantly and by deploying advanced technology. It is pioneering
the Connected Workspace, using smart analytics to provide valuable
insight and deliver efficiencies to create outstanding work
environments for customers.
Find out more at www.mitie.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSPGUQAQUPBURR
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