Mitie issues profit warning citing “significant economic pressures” in the wake of the EU referendum
Outsourcing group Mitie has warned that it expects both revenue and operating profit for the six months to 30 September to fall short of previous expectations – causing its shares to tumble by 26.77 per cent in early trading.
The stock dropped to 198.83p, down from a previous close price of 269p.
The FTSE 250 firm said that, while its "long term strategic positioning, order book and pipeline remain strong", in the short terms it is experiencing "the effects of significant economic pressures".
"These include lower UK growth rates, changes to labour legislation and further public sector budget constraints, and uncertainty both pre and post the EU referendum," Mitie said this morning.
"We have taken strong action to counter the impact of these pressures by making changes now to the way we operate and initiating cost efficiency programmes across the group. These positive changes will help to ensure the long term competitiveness of the group and its service offering."
Mitie said the recent economic uncertainty was causing clients to defer investment decisions, hitting growth in the first half, with revenue expected to be "modestly lower" and operating profit is expected to be "very significantly lower".
Today's warning will have been a shock to investors, after Mitie previously brushed off "unanticipated macroeconomic headwinds" to double profit last year.