LSE:MTO

Stock Analysis Report

Executive Summary

Mitie Group plc, through its subsidiaries, provides strategic outsourcing services in the United Kingdom and internationally.

Rewards

Trading at 73.3% below its fair value

Earnings are forecast to grow 29.72% per year

Became profitable this year

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Unstable dividend track record

Highly volatile share price over past 3 months



Snowflake Analysis

Undervalued with reasonable growth potential.


Similar Companies

Share Price & News

How has Mitie Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MTO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.6%

MTO

-0.8%

GB Commercial Services

-2.2%

GB Market


1 Year Return

-49.8%

MTO

-21.6%

GB Commercial Services

-25.9%

GB Market

Return vs Industry: MTO underperformed the UK Commercial Services industry which returned -19.6% over the past year.

Return vs Market: MTO underperformed the UK Market which returned -25.2% over the past year.


Shareholder returns

MTOIndustryMarket
7 Day7.6%-0.8%-2.2%
30 Day-52.6%-31.3%-21.7%
90 Day-53.2%-35.1%-29.6%
1 Year-48.4%-49.8%-19.4%-21.6%-22.2%-25.9%
3 Year-66.5%-68.5%-20.0%-26.8%-16.1%-26.6%
5 Year-73.2%-76.8%-12.1%-24.9%-4.6%-26.2%

Price Volatility Vs. Market

How volatile is Mitie Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mitie Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MTO (£0.67) is trading below our estimate of fair value (£2.51)

Significantly Below Fair Value: MTO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MTO is good value based on its PE Ratio (7.5x) compared to the Commercial Services industry average (11.1x).

PE vs Market: MTO is good value based on its PE Ratio (7.5x) compared to the UK market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: MTO is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: MTO is overvalued based on its PB Ratio (6.2x) compared to the GB Commercial Services industry average (1.5x).


Next Steps

Future Growth

How is Mitie Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

29.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTO's forecast earnings growth (29.7% per year) is above the savings rate (0.5%).

Earnings vs Market: MTO's earnings (29.7% per year) are forecast to grow faster than the UK market (15.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MTO's revenue (1.3% per year) is forecast to grow slower than the UK market (2.4% per year).

High Growth Revenue: MTO's revenue (1.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MTO's Return on Equity is forecast to be very high in 3 years time (213%).


Next Steps

Past Performance

How has Mitie Group performed over the past 5 years?

-27.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MTO has a high level of non-cash earnings.

Growing Profit Margin: MTO became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: MTO's earnings have declined by -27.6% per year over the past 5 years.

Accelerating Growth: MTO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: MTO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Commercial Services industry (11.7%).


Return on Equity

High ROE: Whilst MTO's Return on Equity (82.95%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Mitie Group's financial position?


Financial Position Analysis

Short Term Liabilities: MTO's short term assets (£538.6M) do not cover its short term liabilities (£606.0M).

Long Term Liabilities: MTO's short term assets (£538.6M) exceed its long term liabilities (£403.0M).


Debt to Equity History and Analysis

Debt Level: MTO's debt to equity ratio (699.2%) is considered high.

Reducing Debt: MTO's debt to equity ratio has increased from 72.1% to 699.2% over the past 5 years.

Debt Coverage: MTO's debt is not well covered by operating cash flow (3.3%).

Interest Coverage: MTO's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

Inventory Level: MTO has a low level of unsold assets or inventory.

Debt Coverage by Assets: MTO's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Mitie Group's current dividend yield, its reliability and sustainability?

5.98%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MTO's dividend (5.98%) is higher than the bottom 25% of dividend payers in the UK market (2.68%).

High Dividend: MTO's dividend (5.98%) is low compared to the top 25% of dividend payers in the UK market (7.57%).


Stability and Growth of Payments

Stable Dividend: MTO's dividend payments have been volatile in the past 10 years.

Growing Dividend: MTO's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45%), MTO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MTO's dividends in 3 years are forecast to be well covered by earnings (24.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Phil Bentley (60yo)

3.33s

Tenure

UK£2,248,948

Compensation

Mr. Phillip Bentley, also known as Phil, has been the Chief Executive Officer of Mitie Group plc since December 12, 2016. Mr. Bentley served as the Chief Executive Officer and Executive Director of Cable & ...


CEO Compensation Analysis

Compensation vs Market: Phil's total compensation ($USD2.75M) is above average for companies of similar size in the UK market ($USD757.95K).

Compensation vs Earnings: Phil's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Phil Bentley
Group CEO & Executive Director3.33yrsUK£2.25m0.56% £1.4m
Andrew Peeler
Group CFO & Director0.25yrno datano data
David Cooper
Chief Information Officer2.83yrsno datano data
Anna Gavrilova
Head of Investor Relationsno datano datano data
Peter Dickinson
Chief of Staff & General Counsel3.08yrsno datano data
Chris Copeland
Chief Marketing & Strategy Officer2.42yrsno datano data
Alison Saunders
Managing Directorno datano datano data
Jason Towse
Managing Director of Soft Servicesno datano datano data
Tim Howell
Managing Director of Landscapes Business7.25yrsno datano data
James Gilding
Managing Director for Total Document Management Business5.92yrsno datano data

3.1yrs

Average Tenure

Experienced Management: MTO's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Phil Bentley
Group CEO & Executive Director3.33yrsUK£2.25m0.56% £1.4m
Andrew Peeler
Group CFO & Director0.25yrno datano data
Roger Yates
Senior Independent Director1.75yrsUK£59.00k0.014% £33.5k
Derek Mapp
Non-Executive Chairman2.75yrsUK£225.00k0.039% £93.7k
Jennifer Duvalier
Independent Non-Executive Director2.75yrsUK£57.00k0.0051% £12.4k
Mary Reilly
Independent Non-Executive Director2.58yrsUK£57.00k0.0032% £7.8k
Nivedita Bhagat
Independent Non-Executive Director2.83yrsUK£52.00kno data
Philippa Couttie
Independent Non-Executive Director2.42yrsUK£52.00kno data

2.7yrs

Average Tenure

64yo

Average Age

Experienced Board: MTO's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MTO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Mitie Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mitie Group plc
  • Ticker: MTO
  • Exchange: LSE
  • Founded: 1987
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: UK£241.901m
  • Shares outstanding: 361.59m
  • Website: https://www.mitie.com

Number of Employees


Location

  • Mitie Group plc
  • The Shard
  • Level 12
  • London
  • Greater London
  • SE1 9SG
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MITF.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDSep 1994
MTOLSE (London Stock Exchange)YesOrdinary SharesGBGBPSep 1994
MZ4DB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 1994
MTOLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPSep 1994
MITF.YOTCPK (Pink Sheets LLC)UNSPONSORED ADSUSUSDMay 2011

Biography

Mitie Group plc, through its subsidiaries, provides strategic outsourcing services in the United Kingdom and internationally. It offers engineering services, such as technical and building maintenance services, as well as offers specialist services, such as heating, cooling, lighting, water treatment, and building controls; and security services and products, including security management, front of house, document management, employee vetting, and procius. The company also provides professional services, connected workspace, international, sustainability, waste management, risk management, and occupier Services; and cleaning and environmental services, such as commercial and technical cleaning, as well as specialist services, including and landscaping and healthcare services. In addition, it offers care and custody services, such as detention and escorting services, and forensic medical examiner and custody support services, as well as manages immigration removal centers; and indoor and outdoor event catering services. Mitie Group plc was founded in 1987 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 21:02
End of Day Share Price2020/04/03 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.