Mitie Group plc
Annual Report
and Accounts 2025
The Future
of High Performing
Places
We are Mitie
A trusted partner to a diverse range of blue-chip customers across the
public and private sectors, working with them to transform their built
estates and the lived experience for their colleagues and customers, as
well as providing data-driven insights to inform better decision-making.
In each of our core service lines of Engineering Maintenance, Security and
Hygiene we hold market leadership positions.
We upsell projects capabilities in higher-growth categories, including
buildings infrastructure and compliance, decarbonisation, fire & security
Strategic report
2
We are Mitie
3
Our performance highlights
4
Our business at a glance
8
Chairman’s statement
10
Macro trends
12
Our core capabilities
20
Our investment case
21
Our Three-Year Plan (FY25 – FY27)
22
Chief Executive’s review
28
Key performance indicators
32
Our business model
34
Stakeholder engagement
39
s172 statement
42
Operating review
45
Finance review
50
Sustainability statement
76
Principal risks and uncertainties
88
Non-financial and sustainability
information statement
89
Viability statement
Governance
91
Chairman’s introduction to governance
and the Board
92
Board of Directors
95
Board leadership and Company purpose
97
Division of responsibilities
99
Board activities: stakeholder engagement
100
Strategy and the Boardroom
102
Culture at Mitie
106
Board effectiveness and evaluation
108
Nomination Committee report
113
Audit Committee report
121
Environmental, Social & Governance (ESG)
Committee report
124
Directors’ remuneration report
138 Directors’ report
141
Statement of Directors’ responsibilities
Financial statements
143
Independent auditor’s report to the
members of Mitie Group plc
150
Consolidated income statement
151
Consolidated statement of
comprehensive income
152
Consolidated statement of financial position
154
Consolidated statement of changes in equity
155
Consolidated statement of cash flows
157
Notes to the consolidated financial
statements
207
Company statement of financial position
208
Company statement of changes in equity
209
Notes to the Company financial statements
213
Appendix – Alternative Performance
Measures (APMs)
216 Shareholder information
Contents
Our purpose: ‘Better Places; Thriving Communities
’
We believe better places lead to thriving communities. When people have better places, it’s easier for
them to connect and collaborate, to feel safe and secure, and to belong. It drives us to make every place
we touch safer, cleaner and more secure and sustainable.
3
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
We have made strong strategic, operational and financial progress in the
foundation year of our Facilities Transformation Three-Year Plan (FY25 – FY27).
Revenue (£m)
including share of JVs and associates
Dividend per share (p)
Operating profit before
Other items
1,2
(£m)
Free cash flow (£m)
Basic earnings per share
before Other items
1
(p)
ROIC (%)
Operating profit
2
(£m)
Basic earnings per share (p)
Employee engagement
63
%
N/A
4
FY24: 63%
Net Promoter Score
+
63
+3pt
FY24: +60
Employee turnover
12
%
-1ppt
FY24: 13%
Carbon emissions
3
270,419
-7%
FY24: 290,207
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
£
5,091
m
4.3
p
£
234
m
£
143
m
12.7
p
24.5
%
£
162
m
8.2
p
1. Other items are as described in Note 4 to the consolidated financial statements.
2. Operating profit includes share of profit after tax from joint ventures (JVs) and associates.
3. Scope 1, 2 and 3 global carbon emissions (tonnes CO
2
e), net of 4,066 carbon credits.
4. The most recent MyVoice survey took place in April 2024 (relating to FY24). See page 70.
Alternative Performance Measures (APMs)
The Group’s performance measures continue to include some measures which are
not defined or specified under International Financial Reporting Standards (IFRS).
A reconciliation of the APMs to the equivalent IFRS measures is provided in the
Appendix – Alternative Performance Measures on pages 213 to 215.
Key performance indicators (KPIs)
Pages 28 to 31.
Non-financial
Financial
FY25
FY24
FY23
FY22
FY21
5,091
4,511
4,055
3,997
2,529
FY25
FY24
FY23
FY22
FY21
4.3
4.0
2.9
1.8
0
FY25
FY24
FY23
FY22
FY21
234
210
162
167
59
FY25
FY24
FY23
FY22
FY21
143
158
66
147
(25)
FY25
FY24
FY23
FY22
FY21
162
166
117
72
4
FY25
FY24
FY23
FY22
FY21
8.2
9.8
6.8
2.2
(1.3)
FY25
FY24
FY23
FY22
FY21
12.7
12.3
9.5
9.2
3.1
FY25
FY24
FY23
FY22
FY21
24.5
26.4
25.4
29.9
8.2
OUR PERFORMANCE HIGHLIGHTS
Total pipeline
£
23.7
bn
27% growth year-on-year
Customer type
Revenue, including share of
joint ventures and associates
%
Government
Non-government
%
52
48
Total order book £15.4bn
Including share of joint
ventures and associates
£bn
1 year
3.2
1–2 years
2.5
>2 years
9.7
4
Mitie Group plc
Annual Report and Accounts 2025
OUR BUSINESS AT A GLANCE
The Future of High Performing Places
Optimising
asset performance
and maximising
productivity
Transforming
estates, workplaces
and customer
experience
Creating
healthier and more
sustainable spaces
Protecting
people, property
and assets
Accelerating
the path to
Net Zero
We are transforming places to meet
our customers’ evolving needs through
our technology, innovation and a passion
for excellence – creating zero-carbon,
technology-enabled places that are safe,
connected, comfortable, responsive
and resilient.
5
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Our core capabilities
Our divisions
See Operating review on pages 42 to 44
A. Business Services
44%
B. Technical Services
39%
C. Communities
17%
Intelligent Engineering
Maintenance
We help customers to optimise the
performance and productivity of
their assets through an extensive
suite of engineering services that
enable predictive maintenance
and remote monitoring. We
have the UK’s largest team of
trained engineers, implementing
solutions to ensure that buildings
comply with regulations, and
infrastructure and systems remain
fully operational.
Intelligent
Projects
We bring together technology
and expertise from across the
Group to offer an unrivalled
breadth and depth of self-delivery
capability to consult, design and
deliver projects that transform our
customers’ estates, workplaces
and experiences, and accelerate
their path to Net Zero. We
continue to build our capabilities
both organically and through
infill acquisitions.
Intelligent
Security
We protect our customers’
property and assets and keep
people safe. Our delivery is
underpinned by leading risk and
threat intelligence, technology and
a team of fully vetted, highly trained
security professionals at our two
Intelligence Security Operations
Centres (ISOCs), working together
with our front-of-house colleagues
to enable Safer Communities for
our colleagues, customers and
the public.
Intelligent
Hygiene
We create healthier and more
sustainable spaces for our
customers, using technologies such
as sensors, spill detect computer
vision, and our Merlin Connect
operating platform to deliver
demand-led cleaning solutions.
This provides customers with
assurance over cleanliness
and drives efficiency and
productivity gains.
See page 12
See page 14
See page 16
See page 18
Our core capabilities are differentiated by our technology and colleagues.
Our core capabilities are delivered
through three divisions: Business Services
(including Central Government, Spain,
Waste and Landscapes); Technical Services
(including Defence); and Communities
(including Care & Custody).
A
B
C
* Revenue including share of JVs and associates.
£
5.1
bn
revenue*
6
Mitie Group plc
Annual Report and Accounts 2025
OUR BUSINESS AT A GLANCE
continued
Our customers
We have a loyal and diverse blue-chip
customer base across a broad range of
sectors, including those showcased below.
Retail, logistics and shopping centres
Transport & aviation
Corporate and professional services
7
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Manufacturing
Critical environments (including healthcare and life sciences)
Public sector
8
Mitie Group plc
Annual Report and Accounts 2025
CHAIRMAN’S STATEMENT
A heartfelt farewell
Dear Mitie Shareholder
In this foundation year of our Facilities Transformation Three-Year Plan (FY25 – FY27),
I am pleased to report that your company has made further strategic, operational and
financial progress.
This will be my final letter as your Chairman, before stepping down at the July 2025
Annual General Meeting (AGM). Reflecting on Mitie’s remarkable journey over my eight-
year tenure, one constant has been our unwavering commitment to understanding the
increasingly sophisticated needs of our customers and their built environments, amid an
evolving regulatory landscape and a shift in societal expectations.
In response, we have advanced our technology and data-rich offering to create smarter,
safer, cleaner and greener places, which are not only fit for today but will endure the rapid
changes anticipated over the years ahead.
Looking back to the start of my tenure in 2017, shortly after Phil Bentley was appointed as
CEO, your company was in a very different place. The first few years focused on improving
customer service and employee engagement, divesting businesses that could not achieve a
Mitie standard of excellence and market leadership, and strengthening the balance sheet.
These were the foundations on which we have built scale and operational leverage, including
through the acquisition of Interserve FM, enabling us to accelerate growth, improve margins
and generate sustainable free cash flow.
Our colleagues have been instrumental, not only in transforming Mitie, but in transforming
our customers’ estates. Their passion is evident in Mitie’s world-class Net Promoter Score
(NPS) – what our customers think of us – and in our sustained high levels of colleague
engagement. I extend my sincerest thanks and admiration to each of our 76,000 colleagues
for their dedication, determination and commitment to exceptional performance.
In FY25, revenue and operating profit before Other items reached a record £5,091m
(FY24: £4,511m) and £234m (FY24: £210m), respectively, resulting in an operating margin of
4.6% (FY24: 4.7%). Earnings per share before Other items increased by 3% to 12.7p (FY24:
12.3p), and we delivered a free cash flow of £143m (FY24: £158m). These results continue
to build on our strong track record and make a meaningful contribution to the delivery of
our ambitious Three-Year Plan targets.
When I pass the baton on to my successor, Christopher Rogers, I know that I am handing
on a company brimming with immense talent and a bright future. I have no doubt that
Christopher and my fellow Board members will continue to both support and challenge the
executive leadership team to drive growth and returns, while ensuring that we maximise
our positive impact on the environment and the communities we serve.
Environmental, Social and Governance (ESG)
ESG matters are integral to Mitie, and we continue to be recognised for our leadership in
these areas. We remain on track to achieve our ambitious Net Zero targets, which will
see us become carbon neutral for our operations by the end of 2025. We are ranked in
the CDP’s Climate A List, alongside holding ‘Platinum’ status in the Sustainable Facilities
Management Index and a ‘Negligible’ risk rating from Sustainalytics. To attract and retain
talent, we offer industry-leading benefits to all colleagues. We are consistently recognised
as a Top Employer, and one of the most diverse.
Through its innovative, technology and data-rich approach,
your company has transcended traditional industry
practices to create better places for our customers and
thriving communities. I am immensely proud to have been
a part of this journey over the past eight years and extend
my gratitude to every one of our colleagues for their
contribution to our successes.
Derek Mapp
Chairman
9
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Stakeholder engagement
The Board is committed to understanding the needs of our stakeholders and acting on their
feedback, and we do so through an extensive programme of engagement. Board members
conduct a range of listening sessions throughout the year with our colleagues, many of
whom work on the front line, to hear their views and ensure open lines of communication.
We also attend equality, diversity and inclusion (ED&I) events run by our diversity networks
across Mitie.
It was my pleasure to hear the views of shareholders during my annual Chairman’s
governance roadshow at the start of the year, and to accompany Jennifer Duvalier, Chair
of the Remuneration Committee, in an extensive shareholder consultation on our new
Directors’ Remuneration Policy, which received over 80% support at the July 2024 AGM.
Board composition and changes
Mitie’s Board is diverse in skills, experience and background – qualities that are essential for
promoting robust governance and oversight. At 31 March 2025, 40% of Board positions
were held by women and 20% were ethnically diverse.
We adopt a proactive approach to succession planning, both at Board level and across the
executive leadership team. In March 2025, we were delighted to welcome Christopher
Rogers to the Board as the Chair Elect. Christopher brings extensive Board experience
across a range of sectors and is a highly respected finance leader with a wealth of
experience gained during his executive career. He will take over as Chairman when
I step down and leave the Board at our July 2025 AGM, and I wish him every success in
his new role.
Mary Reilly will be succeeded by Penny James as Chair of the Audit Committee when
she steps down from the role following the completion of the FY25 Annual Report and
Accounts. I would like to extend my thanks to Mary for her expertise and leadership in
guiding our financial oversight and ensuring the integrity of our reporting processes over
the past eight years.
Shareholder returns
Our capital allocation policy prioritises strategic M&A at returns materially above our
weighted average cost of capital; a progressive dividend policy with a 30–40% payout
ratio; and the purchase of all shares to fulfil employee incentive schemes. Surplus funds
are returned to shareholders via share buyback programmes to remain within our target
leverage range of 0.75x – 1.5x.
In this context, the Board is recommending a final dividend of 3.0p per share. When added
to the 1.3p interim dividend paid in respect of the first six months of the year, this brings the
total dividend for FY25 to 4.3p per share. This represents an 8% increase on the prior year
(FY24: 4.0p) and a payout ratio of 34% (FY24: 33%). The final dividend will be paid on
4 August 2025, following approval at the July 2025 AGM.
During FY25, we completed our largest share buyback programme of £100m. In total,
we have returned £179m to shareholders through buybacks, share purchases for incentive
schemes and dividends in the year, and have invested £48m in strategic acquisitions.
Our strong free cash flow generation and low leverage continue to support proactive
capital deployments, including a new £125m share buyback programme for FY26.
Closing remarks
As I conclude my tenure as Chairman, I reflect on Mitie’s remarkable journey. Your business
has transformed to become the industry leader, not only by market share, but also through
its investments in technology and innovation, and focus on its sustainability and social value.
I extend my deepest gratitude to my fellow Board members, our shareholders, customers,
colleagues and partners for their ongoing support and commitment. It has been an immense
privilege to be part of this journey, and I am confident that the foundations we have laid will
lead to outstanding outcomes.
Derek Mapp
Chairman
Further reading
Facilities Transformation
see page 21
Stakeholder engagement
see pages 34 to 38
Financial performance
see pages 45 to 49
Sustainability statement
see pages 50 to 75
Governance report
see pages 90 to 141
Directors’ remuneration report
see pages 124 to 137
Message from
Christopher Rogers
On behalf of the Board and all Mitie
colleagues, I would like to thank Derek
Mapp for his extraordinary contribution
as Chairman. During his tenure, Mitie has
emerged as the UK’s largest technology-
led Facilities Transformation business.
It is an honour to succeed Derek in this
role. I am delighted to be joining the
Board of a truly world-class company
with a highly experienced management
team, and I look forward to working with
them to continue to grow the business
and create value.
Mitie’s clear vision and commitment to
its purpose is evident, and I have been
deeply impressed by the dedication and
expertise of our colleagues as I continue
my visits around the business.
Engagement has always been the highest
priority for our Board, and I fully intend to
embrace these important opportunities
to hear the views of our stakeholders.
I hope to meet many of you, our
shareholders, at the July AGM.
Read more about Christopher’s
background and experience on page 92
10
Mitie Group plc
Annual Report and Accounts 2025
Engineering Maintenance
Security
Hygiene
Projects
Waste
Care & Custody
MACRO TRENDS
Underpinning our growth
Our service lines and sectors have attractive growth prospects that are underpinned by
positive macro trends, ranging from decarbonisation and the modernisation of the built
environment to changes in the regulatory landscape and public sector areas of investment.
Decarbonising and modernising
the built environment
As the UK progresses towards its Net Zero goals, more stringent
requirements are being introduced for commercial buildings to
meet specific Energy Performance Certificate ratings. Currently,
c.80% of commercial buildings across the country do not meet the
Minimum Energy Efficiency Standards (MEES) required by 2030.
Simultaneously, we continue to see an increasing proportion of
capital budgets being allocated to the redesign of workspaces,
as organisations embrace hybrid working and focus on amenities,
collaborative spaces, technology enablement, wellness and
sustainability to attract and retain talent.
Repurposing the electricity grid
The UK’s energy requirements are becoming increasingly reliant on
renewable sources, requiring substantial investment to modernise
and upgrade Grid infrastructure and build sufficient storage
capacity. To meet these needs, National Grid is investing up to
£60bn in its infrastructure network by 2030. There is also a market
opportunity for Independent Connection Providers (ICPs) across
the voltage spectrum, to fulfil the demand for private network
solutions and growth in data centre, battery and renewable
energy developments.
Link to business areas:
Link to business areas:
£
1.4
trn
estimated cost of achieving
Net Zero in the UK by 2050
£
60
bn
National Grid upgrade
programme
Accelerating data centre investment
Data centres are now classified as Critical National Infrastructure
by the UK Government due to their crucial role in the digital
economy and developments in Artificial Intelligence (AI). This step
aims to promote the continued investment in UK data centre
capacity by the major cloud service providers and is further
supported by the UK Government’s AI Opportunities Action Plan,
launched in January 2025, to position the country as a global leader
in this field. As such, investment in UK data centres is expected
to increase from £8.5bn in 2024 to £12.7bn in 2032 (Expert
Market Research).
£
12.7
bn
UK data centre
investments
Private sector as first line of defence
The Terrorism (Protection of Premises) Act 2025, also known as
Martyn’s Law, received royal assent in April 2025 and will place
the protection of public safety with those responsible for certain
buildings and events. Mitie has played a meaningful role in shaping
this legislation and is proactively engaging with customers to
implement security best practice in response to what is perceived
to be the most significant piece of legislation to impact the industry
in decades. Simultaneously, the outsourcing of security services to
the private sector by the UK Government is expected to continue,
and contribute to 3.0% annual growth in the £8.6bn security
market (Frost & Sullivan/independent research).
£
8.6
bn
UK security market
Business areas
Link to business areas:
Link to business areas:
11
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Increasing Defence spending
In February 2025, the UK Government outlined plans to increase
defence spending to 2.5% of GDP from April 2027, with an
ambition to reach 3% in the next parliament, and has widened
the definition to recognise the work of security and intelligence
agencies. This increase is aimed at building a modern and resilient
UK Armed Forces and accelerating the adoption of cutting-edge
capabilities in response to the rapidly evolving threat landscape.
The Ministry of Defence has c.130,000 built assets in the UK
and overseas, of which around a third of the estate requires
modernisation, while the wider estate must adapt to meet the
sector’s decarbonisation agenda.
£
60
bn
estimated UK defence spend
for 2025/26
Prison capacity shortage
At the end of 2024, c.85,000 individuals were held in the UK’s adult
prison estate, significantly exceeding the capacity the system is
designed to accommodate. The Ministry of Justice’s 10-year Prison
Capacity Strategy outlines plans to build an additional 14,000 prison
places by 2031, and it expects to invest c.£10bn to meet this target,
through a combination of new prisons, new houseblocks, rapid
deployment cells and the refurbishment of existing facilities.
£
10
bn
government investment to
increase prison capacity
Evolving response to immigration
According to the Home Office, approximately 108,000 people
applied for asylum in 2024 and approximately 35,000 arrived in
the UK by crossing the English Channel in small boats (+25% yoy).
With the continued high numbers of people arriving in the UK,
immigration will remain a political priority requiring significant
investment and support from the private sector. In March 2025,
the UK Government announced £30m of funding directed to
high-impact operations from the Border Security Command to
tackle supply chains in small boats, illicit finances and anti-trafficking.
35,000
small boat arrivals in 2024
(+25% yoy)
Rising business crime
Rates of theft, fraud and cybercrime continue to accelerate as a
result of high living costs, among other factors. The retail sector
has been particularly affected by this, alongside acts of violence
and abuse towards shop floor colleagues, with the number of
theft incidents rising by 25% to 20m in 2024, according to the
British Retail Consortium. In response, retailers spent £1.8bn on
crime prevention measures (+50% yoy) and the total cost of retail
crime rose to £4.2bn, of which £2.2bn was a direct result of theft.
Mitie has led the way in creating Pegasus, part of a new specialist
police unit funded by retailers, to provide a national response to
organised crime.
£
4.2
bn
annual cost of retail
crime
Link to business areas:
Link to business areas:
Link to business areas:
Link to business areas:
12
Mitie Group plc
Annual Report and Accounts 2025
Intelligent Engineering Maintenance
OUR CORE CAPABILITIES
Market size
£
9.8
bn
Our position
#
1
in UK
The largest provider of
technology-led engineering
maintenance services
Mitie market share
19
%
Projected market growth
4
% p.a.
What sets us apart
Scale and capability
We have the largest national mobile engineering workforce and
self-delivery engineering capability in the UK.
Technology
We create ‘intelligent buildings’ through sensor technology,
remote monitoring and predictive maintenance for connected
assets. This enables us to turn big data into insights, transforming
facilities, reducing asset downtime and saving energy and money
for our customers.
People
We are one of the UK’s largest employers of trained and multi-
skilled engineering professionals. We attract and retain the best
talent with expertise in all core asset classes and from across
multiple industries.
Key statistics
• 1,000+ locally based mobile engineers across the country
• 2.5m assets maintained for our customers
• 6.3m square feet of critical space maintained
• 1.75m planned maintenance visits per year
• 15% energy and maintenance savings achieved
FY25 revenue
£
1.9
bn
(includes Projects revenue, other than
Advisory, Design & Build)
UK engineering market
Mitie Engineering revenue
by division
Top three competitors
CBRE
OCS
JLL/Integral
Market data sources: Frost & Sullivan 2024
Optimising
asset performance
and maximising
productivity
Growth drivers
• Tighter building codes, environmental
regulations and health and safety
requirements
• Demand for predictive maintenance
and remote monitoring to reduce asset
downtime and increase productivity
• Requirements to extend asset
lifecycles through proactive and intelligent
maintenance
• Increased public infrastructure investments
to narrow regional differences and meet
climate targets
• Net Zero ambitions to reduce waste,
energy usage and carbon emissions
Mitie
Competitors
A
B
C
A. Technical Services
76%
B. Business Services
13%
C. Communities
11%
13
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Delivering transformative,
data-driven engineering solutions
We leverage innovative technologies to deliver transformative, data-driven engineering solutions
that evolve with the needs of our customers.
Intelligent Process Automation (IPA)
Intelligent Process Automation (IPA) is a key pillar
of our AI strategy. For example, during the year,
we implemented an autonomous AI email agent for
our engineering helpdesk to automate the process
of raising service requests and responding to status
updates. On receipt of an email from the customer,
this innovative solution is able to analyse text and
images to promptly diagnose the issue, raise the
service request, log it in Maximo and respond to
the customer, without human intervention.
The agent is live for eight customers and has
processed over 21,000 emails, raising over 5,500
service requests and saving over 900 hours of time
within the helpdesk team. It drives efficiencies and
enhances the customer experience by ensuring
prompt and accurate responses and improved first-
time fix rates. The AI email agent will be rolled out
to wider engineering helpdesk customers in FY26.
MiJobs mobile engineer app
We are transitioning our MiJobs mobile engineer app
to a new platform to enhance data accuracy from
connected assets and first-time fix rates. We have
also upgraded our Maximo systems to MAS 9.0,
enabling AI features in core engineering processes.
HARK
To enhance our predictive engineering capabilities,
we are migrating our Internet of Things (IoT) platform
to HARK, a cloud-based platform for collecting
and analysing real-time data using building sensor
technology and remote monitoring. This platform
enables our customers to improve their buildings’
energy efficiency and sustainability, extend asset
lifecycles, optimise space utilisation and improve
indoor air quality.
Mozaic 360
We have integrated our ‘intelligent’ solutions
into Mozaic360 – a unified platform that enables
customers to monitor service, asset and environment
performance, manage their contracts and conduct
benchmarking analysis efficiently across all services
delivered by Mitie.
14
Mitie Group plc
Annual Report and Accounts 2025
Intelligent Projects
OUR CORE CAPABILITIES
£
1.2
bn
Bringing together our
capabilities across
the Group, we are a
leading UK projects
business, serving both
public and private
sector customers
Our position
What sets us apart
Full asset lifecycle approach
We offer an unrivalled range of projects across all asset classes
through the full cycle of consult, design, deliver and maintain.
We solve big picture challenges for our customers, from
decarbonisation strategies to workplace programmes and
building technology solutions.
Technology and innovation
Our Projects Centre of Excellence drives innovation and
improves productivity. It oversees operational standards and
manages our Projects technology platform which includes
design technologies, building information modelling, project
management tools and building sensor technologies.
Scale
We leverage our national scale and leadership in the UK to
upsell projects work as we continue to grow our capabilities
organically and through infill M&A.
Operational highlights
• Projects Centre of Excellence
• 2,200 highly skilled project managers
• 300+ consulting professionals
• 5,000+ projects delivered annually
• c.80% of revenue from core Mitie customers
• c.£250k typical project value
• 1–3 months typical length of project
FY25 revenue
Transforming
estates, workplaces
and customer
experience
Accelerating
the path to
Net Zero
Market size
£
12
bn
Investment needed
for UK to achieve
Net Zero by 2050
£
1.4
trn
Market size
£
3
bn
Buildings infrastructure
Decarbonisation
technologies
Fire & security
NG Bailey
TClarke
Dalkia
Briggs & Forrester
Morrisons
Growth drivers
• Decarbonisation of real estate portfolios
to meet regulatory requirements and
Net Zero ambitions
• Investment in workplaces to make them
more user-centric and ‘commute-worthy’,
and improve productivity
• Capital deployment into asset lifecycle
upgrades to improve performance
• Accelerated growth in sectors such as
data centres, healthcare and logistics
• Significant upgrades to National Grid
networks and investment in battery and
renewable energy solutions
• Continued roll-out of 5G mobile
telecoms networks
Mitie revenue
(£m)
1,000
800
600
400
200
0
FY
22
FY
23
FY
24
FY
25
Mitie revenue
(£m)
200
150
100
50
0
FY
22
FY
23
FY
24
FY
25
Mitie revenue
(£m)
120
100
80
60
40
20
0
FY
22
FY
23
FY
24
FY
25
16%
CAGR
31%
CAGR
100%
CAGR
Representative
competitors
Market data sources: ONS, OBR, independent research commissioned by Mitie
15
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
1
5
2
6
3
7
4
8
G2 Energy/ESM Power
• Power connections
• Battery storage
• Private networks
Rock Power
Connections
• EV infrastructure
Custom Solar
• Solar PV
JCA
• Principal contractor
• Design and build
• MEP fitout
RHI Industrials
• Physical security
• Fencing
• Hostile vehicle
mitigation
• Gates and barriers
• Earthing systems
• CCTV
GBE Converge/
Argus Fire
• Fire & security
• Fire protection
and suppression
• Electronic security
• ICT networking
Mitie Telecoms
• Telecoms infrastructure
Mitie
• IFM, including:
– Security guarding
and vetting
– Engineering
maintenance
– Hygiene services
– Landscaping
Enhancing our in-house capabilities through infill M&A:
Delivering full lifecycle projects
in critical environments
Mitie delivers a range of complex engineering projects, including in critical environments such as the
rapidly growing data centre sector. In this sector, we combine our in-house expertise with that of
our infill acquisitions to provide a full lifecycle suite of consult, design, deliver and maintain capabilities,
enabling the creation of sustainable data centres to power the AI revolution. During the year we have
worked with leading operators, including Ark Data Centres, Kao Data, Severfarm and Visa.
06
06
03
06
08
08
08
06
06
04
04
04
04
01
01
05
05
02
07
8
7
2
4
1
1
4
4
4
6
6
6
6
6
8
8
5
5
3
16
Mitie Group plc
Annual Report and Accounts 2025
Intelligent Security
OUR CORE CAPABILITIES
Market size
£
8.6
bn
£
1.1
bn
(includes Projects revenue)
#
1
in UK
Leading converged security
services provider
Mitie market share
13
%
Projected market growth
3
% p.a.
Our position
What sets us apart
Intelligence
Our team of dedicated analysts review large-scale data sets
from intelligence software platforms and open-source data feeds
to monitor crime and incident trends, enabling our customers to
make informed decisions and implement security measures.
Technology
Through our Intelligence Security Operations Centres (ISOCs),
we deliver sophisticated, technology-led solutions to support our
customers’ complex security needs and changing risk profiles.
Alongside our proprietary intelligence software, Merlin 24/7
Protect, technologies include AI video analytics and biometrics.
People
We attract the best people, including former police officers and
military and intelligence professionals, with a deep understanding
of operational intelligence and the expertise to win, retain and
transform large security contracts.
Key statistics
• 25,000 security professionals
• 200 intelligence analysts and assurance professionals
• Two ISOCs (Northampton and Craigavon)
• 18 dedicated customer centres within our ISOCs
• 73,000 fire & security systems maintained
• 18,000 CCTV and alarm systems monitored
• 120,000 lone workers protected by our systems
FY25 revenue
UK security market
Mitie Security revenue by type
Top three competitors
G4S
OCS
Securitas
A. Security services/SOCs
79%
B. Fire & security
17%
C. Emergency response
2%
D. Intelligence services
2%
Mitie
Competitors
A
B
CD
Note: Substantially all of Mitie’s Security
revenue is delivered through the Business
Services division.
Market data sources: Frost & Sullivan 2024, independent research commissioned by Mitie
Protecting
people, property
and assets
Growth drivers
• Shift towards a more holistic approach in
response to the evolving threat landscape
• Increasing business crime (e.g. theft, fraud
and antisocial behaviour)
• Advances in complex, integrated security
and building management systems with
networked solutions and remotely
managed services
• Demand for data analytics, automation and
AI-enabled systems and services
• New legislation including: the Fire Safety
Act 2021; Building Safety Act 2022;
Worker Protection Act 2023; Terrorism
(Protection of Premises) Act 2025
• Enabling Safer Communities to tackle
evolving societal changes impacting
community safety and security
17
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Enabling Safer Communities through
intelligence, technology and people
Society is changing. Crime and protests are on the rise, including increasing violence against women and
girls and greater risks to retail workers. There have been 15 domestic terror attacks in the UK (excluding
Northern Ireland-related terrorism) over the past eight years, yet less than a third of businesses currently
provide their staff with specialist training on how to respond in the event of a terrorist incident.
New legislation, such as the Worker Protection Act 2023 and the Terrorism (Protection of Premises)
Act 2025, increase the requirements for business owners and those responsible for buildings to protect
their people and the safety of the public.
At Mitie, we are uniquely positioned through our intelligence, technology and people to ensure that
customers have all the information they need to make informed decisions, comply with new legislation
and meet their duty of care obligations.
From the moment an incident is reported, for example, via our WalkSafe or Merlin 24/7 Protection
apps, it flows through our intelligence hub and dedicated customer Security Operations Centres (SOCs),
creating a more complete picture of the threat and risk landscape and enabling Safer Communities.
WalkSafe
As part of our commitment to enabling Safer
Communities, Mitie entered into a partnership with
WalkSafe, combining their award-winning technology
with our experience as the largest security provider in
the UK. The WalkSafe app provides journey-sharing
features and a national Safe Space map, showing
venues across the UK in partnership with local
authorities and businesses that offer safety facilities.
It also has optional tracking features available, enabling
trusted friends to follow a user’s journey in real time,
should they need it.
Terrorism (Protection of Premises)
Act 2025
Mitie has played a significant role in shaping this new
legislation and is proactively engaging with customers
to develop and implement security best practice and
ensure the ongoing protection of people, property
and assets. This includes providing a range of security
services to help organisations remain compliant,
such as performing full physical risk assessments to
identify vulnerabilities and implement risk-based
protective measures. We also encourage wider team
member participation in training sessions, including
scenario tests and live exercises, ensuring that they
are equipped to respond in the event of an incident.
18
Mitie Group plc
Annual Report and Accounts 2025
Intelligent Hygiene
OUR CORE CAPABILITIES
Market size
£
8.6
bn
£
0.7
bn
#
1
in UK
The largest UK provider of
hygiene services
Mitie market share
8
%
Projected market growth
2
% p.a.
Our position
What sets us apart
Research & development
At our Cleaning & Hygiene Centre of Excellence (CHCoE),
we develop technology-led solutions (e.g. disinfection systems
and antimicrobial surface protectants). We use this centre
to showcase our capabilities, experienced colleagues and
commitment to innovation.
Technology
We combine sensor technology, cleaning robots, spill detect
computer vision and our proprietary platform, Merlin Connect,
to deliver demand-led cleaning solutions, improve cleaning
quality, ensure compliance with regulations and increase
productivity for our customers.
Sustainability
We use eco-friendly cleaning products and our demand-led
solutions to reduce energy and water usage for our customers.
Operational highlights
• 20,000+ highly trained colleagues
• CHCoE in Birmingham
• 40 NHS trusts supported
• 20m sq ft of retail space cleaned every day
• 1,000+ cleaning robots
• UK’s largest robotic cleaning fleet at Heathrow Airport
FY25 revenue
UK cleaning & hygiene market
Mitie Hygiene revenue by division
Top three competitors
ISS
OCS
Sodexo
A. Business Services
71%
B. Communities
27%
C. Technical Services
2%
Market data sources: Frost & Sullivan 2024
Creating
healthier and more
sustainable spaces
Mitie
Competitors
A
B
C
Growth drivers
• Requirement for hygiene in critical
environments such as hospitals
• Improving the user experience through
healthier working environments
• Customer social goals, energy management
and carbon reporting requirements
• Demand for eco-friendly cleaning products
and greener estates
• Advances in robotics and sensor
technology optimising service delivery
• Data and advanced analytics creating
opportunities to deliver higher quality
hygiene services at lower cost
19
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Transforming practices with robotics
at Heathrow Airport
Mitie has pioneered the use of robotics in hygiene,
with over 1,000 robots (the largest fleet in the UK)
deployed nationwide across customer contracts.
Robotics are integral to modern, sustainable
hygiene solutions.
At Heathrow Airport, the largest airport in the UK
and one of the busiest in the world, maintaining
hygiene across its terminals is a priority, ensuring
safety and providing a better experience for
passengers.
In partnership with ICE, a distributor of advanced
robots, Mitie has developed an innovative solution
to overcome staffing shortages, reduce operational
inefficiencies and elevate the passenger experience.
This included the deployment of 32 state-of-the-art
robots, resulting in c.93,000 hours of labour and
c.£1.9m of costs mitigated annually.
AI-generated spill detect meets
robotic spill response
Mitie has collaborated with technical engineering
teams from two leading AI-enabled companies,
SeeChange and LionsBot, to develop a robotic spill
response system using AI-generated spill detection.
This innovative solution integrates with existing
CCTV systems to rapidly address spillages and
prevent accidents.
The innovative concept has been developed in our
CHCoE and is being trialled across a range of sectors,
including transport & aviation and in shopping centres.
Further research and development areas for demand-
led hygiene include sensor, footfall monitoring and
weather alert triggers.
Demand-led hygiene via
Merlin Connect
Our customers increasingly require demand-led and flexible hygiene services to maximise efficiency
and quality. Merlin Connect, our proprietary platform, analyses workplace and workflow data to match
service delivery with demand, eliminate downtime and benchmark our teams. Increasingly adopted
in critical environments such as operating theatres, server rooms and pharmaceutical laboratories,
the platform enables incident escalation, reactive task allocation, risk assessments, electronic cleaning
schedules, health and safety standard operating procedures and real-time visibility of service delivery.
We are deploying AI to complement Merlin Connect and make output decisions.
20
Mitie Group plc
Annual Report and Accounts 2025
OUR INVESTMENT CASE
Mitie is a high-quality compounder of growth
We are the market leader in Facilities Transformation with a proven track record of delivery,
operating in segments underpinned by attractive macro trends. We have a loyal and diverse
blue-chip customer base, long duration contracts and core capabilities differentiated by
technology, innovation and our colleagues.
Consistent track record of delivery
• Track record of delivering earnings growth, margin expansion and sustainable free cash flow generation
• Strong progress in foundation year of Facilities Transformation Three-Year Plan (FY25 – FY27)
• Ability to win/retain contracts, and improve contract profitability through efficiencies and projects upsell
• Successful acquiror, creating material value by delivering revenue and cost synergies
• Robust balance sheet and low leverage underpinning future growth and increasing shareholder returns
Scale and market leadership
• Market share of 14% (twice that of next peer)
• Market leadership in each of our core service lines of Engineering Maintenance, Security and Hygiene
• Unique offer of transformational projects alongside technology-led IFM services
• 3,000 diversified customers across a broad range of sectors
• Long-duration contracts with average length of four years and inflation protection on the majority
• 76,000 colleagues delivering outstanding service, as reflected in a record NPS of +63pts
Dynamic growth market
• Operating in Europe’s largest and most dynamic FM market, with the highest outsourcing and IFM rates
• Service lines and sectors with attractive growth prospects that are underpinned by positive macro trends
• Significant exposure to high-growth segments (e.g. data centres, defence, healthcare and life sciences)
• Record £24bn pipeline of bidding opportunities across key sectors (+27% yoy)
Technology investment
• Market-leading technologies are a key differentiator and create barriers to entry
• Deep capabilities to aggregate workflow and workforce data across our customers’ estates
• Capabilities enriched by Artificial Intelligence/Machine Learning (AI/ML) to increase operational efficiencies
• Considerable scale advantages and strategic partnerships with global technology companies
• Industry-leading cyber security credentials; ISO 27001:2022 certified for all divisions and applications
Best-in-class ESG credentials
• ‘AA’ rating from MSCI; CDP Climate A List; and ‘Negligible’ risk rating from Sustainalytics
• Ambitious 2025 Net Zero targets, validated by the Science Based Targets initiative (SBTi)
• One of the UK’s largest fleets of electric vehicles (EVs)
• Plan Thrive pledges, including to uplift one million lives, demonstrating the commitment to our purpose
• Top Employer for the seventh consecutive year, and one of the most diverse
105
%
Total shareholder
Return (FY22–FY25)
#
1
in UK Facilities
Management and
Transformation
£
30
bn
FM market (Frost &
Sullivan, 2024)
£
175
m
technology investment
since 2017
21
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
OUR THREE-YEAR PLAN (FY25 – FY27)
Facilities Transformation
Our Three-Year Plan is based on satisfying our customers’ evolving needs, delivering our
pillars of growth and meeting our ambitious financial targets.
Key pillars of growth
Progress towards our medium-term financial targets
FY25 performance
FY25 performance
FY27 target
FY27 target
+£
600
m
revenue
+£
600
m
revenue
+£
1.2
bn
revenue by FY27
£
208
m
revenue
£
372
m
revenue
Key account
growth and
scope increases
Projects
upsell
Infill M&A
ROIC 24.5%
Dividend +8% yoy
Capital deployments £237m
Average leverage 0.8x
ROIC >20%
Progressive dividend policy
Proactive capital deployment
Average leverage 0.75x–1.5x
See pages 22 to 27
See page 25
Strong financial performance
Proactive capital deployment
FY25 performance
FY25 performance
FY27 target
FY27 target
Revenue growth 13%
Op. profit margin 4.6%
FCF generation £143m
High single digit revenue growth
Op. profit margin >5%
FCF generation of c.£150m p.a.
• Higher-growth, higher-margin segments
• Enhance our existing capabilities
• Access to Mitie customers, systems and funding
• Maintain high-performing and entrepreneurial
culture
• Market-leading consult/design/deliver capabilities
• Access to large, diverse blue-chip customer base
• Projects Centre of Excellence
• Full asset lifecycle/upgrade approach
• High win/renewal rates and IFM penetration
• Inflation-linked revenues; strong order book
• Clear leadership positions in all core services
• Significant economies of scale
• Investments in technology leadership
22
Mitie Group plc
Annual Report and Accounts 2025
CHIEF EXECUTIVE'S REVIEW
Strong progress in Foundation Year
of Three-Year Plan
FY25 was a year of good financial and operational progress
for Mitie, as we embarked on our new Three-Year Plan for
Facilities Transformation. Our mission is clear – to transform
our customers’ estates and create smarter, safer, cleaner and
greener places that are not only fit for today but are ‘future-
proofed’ for the rapid changes that will come in the next few
years. We are the future of high-performing places.
Phil Bentley
Chief Executive Officer
Overview
In the foundation year of our Facilities Transformation Three-Year Plan
(FY25–FY27), Mitie delivered a good financial performance and made
further strategic and operational progress. Revenue (including share of
JVs and associates) for the 12 months ended 31 March 2025 (“FY25”)
grew by 13% to £5,091m (FY24: £4,511m), including organic growth of 9%
– significantly ahead of UK Facilities Management (FM) market growth of
c.3% p.a.
Operating profit before Other items grew by 11% to £234m (FY24:
£210m) and basic EPS before Other items grew by 3% to 12.7p (FY24:
12.3p) despite a 480bps increase in our effective tax rate to 23.7% (FY24:
18.9%) and a 72% increase in finance costs to £16.2m (FY24: £9.4m).
Operationally, we secured a record £7.5bn total contract value (TCV)
of contract wins/renewals/extensions, up 21% on a strong prior year
comparative (FY24: £6.2bn). This included a £1bn TCV new security
contract award for seven years (plus three-year extension option) from
the Department for Work and Pensions (DWP), commencing in October
2025. We are entering FY26 with a record order book of £15.4bn and a
£23.7bn pipeline of upcoming bidding opportunities.
This good sales performance reflects the benefits from £17m of strategic
investments in the business to develop our ‘Facilities Transformation’
service offering and drive growth through better sales/bidding capabilities.
Margin expansion is a key element of our strategy, and we delivered
£25m of savings from our ongoing programmes of margin enhancement
initiatives (MEIs).
The FY25 operating margin before Other items was 4.6% (FY24: 4.7%),
primarily reflecting strategic investments, the impact of inflation, and a loss
in the telecoms infrastructure business, which returned to breakeven in
Q4 following a series of actions taken to address the underperformance.
Looking ahead, we are confident in our ability to contractually recover or
mitigate through new MEIs the increase in employer’s National Insurance
Contributions, and we have a clear path to our >5% operating margin
target by FY27.
Based on the equivalent IFRS measures, Group revenue increased by
14% to £5,083m (FY24: £4,445m), operating profit decreased by 2%
to £162m (FY24: £166m) and basic EPS reduced by 16% to 8.2p (FY24:
9.8p). The reduction in operating profit and basic EPS reflects a £26m
increase in Other items after tax to £58m (FY24: £32m) due to a one-off
credit to Other items relating to the Landmarc consolidation in FY24, as
well as higher acquisition-related costs (predominantly from non-cash
amortisation) and pension-related costs in FY25. Further details are set
out in the Finance review.
Strong momentum in key account growth and scope increases...
Record new wins (£bn)
5.0
4.0
3.0
2.0
2.1
1.9
4.4
5.0
1.0
0
FY22
FY23
FY24
FY25
Record renewals (£bn)
2.5
2.0
1.5
1.0
1.7
2.4
1.8
2.5
0.5
0
FY22
FY23
FY24
FY25
Record total order book (£bn)
20
15
10
5
9.5
9.7
11.4
15.4
0
FY22
FY23
FY24
FY25
+17%
CAGR
+34%
CAGR
+14%
CAGR
23
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Facilities Transformation Three-Year Plan
(FY25 – FY27)
Our Three-Year Plan pivots the business from traditional Facilities
Management to technology-driven Facilities Transformation. Mitie is the
FM market leader in the UK, with deep capabilities to aggregate workflow
and workforce data to be a trusted partner to thousands of blue-chip
public and private sector organisations.
As such, we are well positioned to meet the evolving needs of our
customers and unlock the value that exists in each of their environments.
These needs are underpinned by attractive macro trends, including
meeting evolving legislative and regulatory compliance requirements,
alongside significant investments required in data centre capacity,
decarbonisation technologies, and power & grid connections in the UK.
We have set ambitious financial targets (based on Alternative Performance
Measures) to accelerate growth and enhance shareholder returns over
the Three-Year Plan period, underpinned by proactive capital deployment,
whilst maintaining leverage between 0.75-1.5x (post-IFRS 16 average net
debt/EBITDA):
• High single digit revenue growth (inclusive of the contribution from M&A)
• >5% operating margin by FY27
• £150m annual free cash flow by FY27
• Return on Invested Capital (ROIC) >20%
Accelerating growth
Our technology-led Facilities Transformation Three-Year Plan is expected
to deliver accelerated growth through the key pillars of: 1) key account
growth and scope increases; 2) projects upsell; and 3) infill M&A. We
are targeting high single digit revenue growth annually (inclusive of the
contribution from M&A).
In FY25, organic growth through key accounts and scope increases
alongside projects upsell contributed 9% to revenue growth, inclusive
of contract pricing of 3%. Infill M&A completed since 1 April 2023
contributed a further 4% of inorganic growth, resulting in total revenue
growth of 13% – well ahead of our target.
New contract wins and extensions/renewals increased by 21% to a record
£7.5bn TCV (FY24: £6.2bn), reflecting the investments we have made in
our sales and marketing teams.
Notable new wins of £5.0bn TCV (FY24: £4.4bn) included a £1bn TCV
seven year contract award from the DWP, with a three year extension
option, to deliver security services from October 2025, alongside a £400m
TCV 10-year contract from the Ministry of Justice to operate the UK’s
first all-electric ‘zero carbon’ prison (HMP Millsike), which opened in April
2025. Other notable awards included Aldi, Boots, The Coventry and Rugby
Hospital, Community Health Partnerships, Driver and Vehicle Licensing
Authority (DVLA), EY, Halfords, HM Revenue and Customs (HMRC), Lidl
and the Metropolitan Police Service.
Notable contract extensions/renewals of £2.5bn TCV (FY24: £1.8bn)
included Integrated Facilities Management (IFM) services for Lloyds Banking
Group (LBG) – our largest private sector customer, Heathrow Airport,
Vodafone, Thales and EON. Our market leading position in the retail
sector supported several extensions/renewals including the provision of
security services for M&S, engineering services for Primark and engineering
and hygiene services for an international e-commerce business.
We have a large, diversified portfolio of customers and contract renewals
therefore arise on a rolling basis. During the year, two notable public
sector contracts were not renewed, including one Central Government
engineering and hygiene contract that was lost on marginal scoring
judgements and will end in September 2025. The other smaller public
sector contract was lost on pricing and ended in March 2025.
Due to the above-average size of these contracts and their tenure,
Mitie’s renewal rate was 59% (FY24: 79%), with the two lost contracts
contributing a 29ppt impact. We expect our renewal rate to increase
significantly in FY26 given the strong commercial momentum in the
business, and a much-reduced number of contracts that are due to
be renewed.
Our total order book increased by 35% to a record £15.4bn (FY24:
£11.4bn), and our pipeline of new bidding opportunities increased by
27% to a record £23.7bn (FY24: £18.6bn) across a range of public and
private sectors, the largest of which include immigration & justice, central
government, defence, healthcare, critical national infrastructure, retail and
transport & aviation.
Pillar 1:
Record contract wins and
renewals/extensions delivered
...underpinned by a record £23.7bn pipeline of bidding opportunities (+27% yoy)
Improving social
outcomes
Better value
for taxpayers
Tackling theft
and violence
Keeping the
nation safe
Delivering
innovation and
Net Zero
Cleaner power
connections
A safer, more
resilient transport
system
Improved
outcomes
for patients
£6bn
£3bn
£3bn
£2bn
£2bn
£2bn
£1bn
£1bn
Immigration
& Justice
Central & Local
Government
Retail
Defence
Financial
Services/Offices
CNI & Data
Centres
Transport
& Aviation
Healthcare
24
Mitie Group plc
Annual Report and Accounts 2025
CHIEF EXECUTIVE'S REVIEW
continued
We continue to see demand from our customers for transformational
projects across their estates and have expanded our technical capabilities
through targeted acquisitions. As a result, Group projects revenue
(delivered across all three of our divisions) increased by 14% to £1.2bn
(FY24: £1.1bn), and our projects pipeline of opportunities, included within
the Group’s total pipeline, expanded to £4.8bn (FY24: £3.3bn).
Transforming the built environment, including lifecycle upgrades, remains
a key driver of growth, where we are integrating systems to create
‘intelligent buildings’, saving money for our customers and ensuring that
buildings meet evolving legislative and regulatory compliance requirements.
This includes new fire and security legislation, which places a greater
responsibility on building owners and managers to protect occupants,
and minimum energy efficiency standards for commercial buildings.
Decarbonisation technologies, such as solar, electric vehicle (EV) charging
and battery storage, alongside our expanded suite of power and grid
connections capabilities, are also increasingly being sought by our
customers, with £1.4trn of investment expected for the UK to achieve
Net Zero by 2050.
The UK is one of the largest data centre markets in Europe, and we are
expanding our delivery of mechanical & electrical, earthing, and fire &
security systems fit-outs in these buildings. We saw a pause in some data
centre projects during the year, as customers reassess the significant
increase in scale, power and cooling requirements arising from Artificial
Intelligence (AI). We are well placed to meet these changing demands,
and expect c.£13bn of UK data centre investment over the medium term
to be a key driver of our growth.
We also continue to deliver a range of projects work across wider
critical environments, including heating and lighting systems upgrades in
the healthcare sector and bespoke engineering projects in the defence
sector, and benefit from investment in the resilience and security of critical
national infrastructure across the UK.
Pillar 2:
Projects work underpinned by
attractive macro trends
Pillar 3:
Three strategic acquisitions
completed
Strong growth in transformational projects; revenue of £1.2bn (+14% yoy)
M&E, HVAC,
Building fabric
Fire & Security
Power & Grid
connections
Renewables,
Battery storage
Electric Vehicle
charging
Telecoms
infrastructure
c.80%
projects for existing
customers
£2.8bn
projects order book
(+40% YoY)
£250k
typical project size
(+65% YoY)
£4.8bn
projects pipeline
(+45% YoY)
Our telecoms infrastructure business has faced a challenging market,
characterised by poor contracting terms with major network operators
and delays in the completion of projects, resulting in a loss of £11m in
FY25. Following a series of actions which included renegotiating or exiting
from certain unprofitable frameworks and the appointment of a new
management team, the business returned to breakeven during the final
quarter of the year. Revenue reduced by 19% to £57m in FY25 (FY24:
£70m) and is expected to reduce again by a similar percentage in FY26,
as we hand back unprofitable work.
When we set out our Three-Year Plan in October 2023, we guided to
c.£75m p.a. spend on infill M&A, to deepen our capabilities in the high-
growth, high-margin areas of buildings infrastructure and compliance,
decarbonisation, power & grid connections and fire & security. We
continue to evaluate strategic M&A opportunities in the pipeline.
During FY25, we completed three strategic acquisitions for a combined
consideration of £48m (excluding employment-linked earnouts). The
largest of these was Argus Fire, one of the UK’s leading fire systems
businesses, for £36m in October 2024. This enhances our scale and self-
delivered offering in the £3bn UK fire & security market where Mitie is
a top three operator and complements the prior year acquisitions of
GBE Converge and RHI Industrials.
We also acquired ESM Power, a leading high-voltage electrical engineering
business, for £5m in July 2024. In combination with our Rock Power
Connections and G2 Energy businesses, we have built a full suite of services
in the growing power & grid connections market, which continues to
benefit from significant capital investment in energy networks for the
UK to achieve Net Zero.
In Spain, we acquired Grupo Visegurity, a leading national security business,
for £7m in October 2024. This, alongside the acquisition of Biservicus in
September 2023, supports the strategic expansion of our security services
capabilities in the attractive c.£13bn Spanish FM market.
DWP upgrade of critical security
infrastructure
Battersea Power Station fire suppression
systems
Eden Project 140kWp roof-mounted solar
PV system on plant & education facility
Longcross Park data centre design, delivery
and commissioning of MEP infrastructure
25
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Operating margin progression
We have a clear path to an operating profit margin before Other items
of at least 5% by FY27. This will be achieved through our ongoing
programme of margin enhancement initiatives (MEIs) and improved
operational leverage, alongside the contribution from M&A and projects
works. We expect these management actions to more than offset the
continued impact of inflation and contract pricing dynamics in a highly
competitive environment, in addition to the increase in employers’
National Insurance Contributions in FY26.
In FY25, the operating profit margin before Other items was 4.6%
(FY24: 4.7%), reflecting strategic investments to drive growth and margin
expansion (£17m), headwinds from inflation (£7m), a loss in our telecoms
infrastructure business (£11m) and the completion of higher margin
contracts. Offsetting these factors, the operating margin benefited
from a good trading performance and the delivery of £25m of savings
through MEIs.
We expanded the scope of our MEIs from overhead efficiencies to
operations and in-contract opportunities during the year. Workstreams
included increasing self-delivery to customers in areas such as fire, water
and asbestos compliance in Defence and reducing our reliance on third-
party contractors; working with key accounts to define a best practice
account model; using technology and AI to increase productivity and
deploy resources more efficiently; the continued outsourcing of certain
finance functions; and the continued consolidation of Mitie’s core systems
and processes.
Investments in the foundation year of our Plan are delivering tangible
results, including record contract wins and renewals/extensions.
We have invested in our sales and marketing teams to develop sector-
and customer-driven strategies, while enhancing our customer
relationship management functionality and business development skillset.
We have put more resource into contract re-bids, and improved training
and incentive structures for ‘in contract’ teams to drive growth over the
contract life. We are continuing to invest in technology by developing our
‘intelligent’ solutions and enabling AI in our core systems (see Technology
leadership section).
Sustainable free cash flow generation
£
We are targeting sustainable free cash flow generation of c.£150m
per annum by FY27. This, combined with our robust balance sheet and
low leverage, underpins our proactive approach to deploying capital and
delivering shareholder returns.
We expect increased profitability, working capital process improvements
and disciplined capex to offset the increased working capital required
to support our growing projects business, longer payment terms being
demanded by some customers (particularly in retail), and a one-off impact
to working capital expected in FY26 arising from the Procurement Act
2023. This Act came into effect in February 2025 and requires mandatory
30-day payment terms for all subcontractors and suppliers on Government
Framework Contracts (of which over 70% of Mitie’s are already aligned).
In FY25, the Group generated £249m of cash from operations (FY24:
£228m), leading to a free cash inflow of £143m (FY24: £158m), well
ahead of our guidance for ‘at least £100m’. The reduction in free cash
flow year-on-year reflects a one-off benefit to working capital of c.£25m
in the prior year relating to working capital process improvements,
including the consolidation of activities into the shared service centre and
implementation of the Coupa digital supplier platform. We continued to
implement new process improvements in FY25, offsetting longer payment
terms on several new or renewed contracts in the retail sector.
Proactive and growing capital deployment
Our capital deployments are determined by the best use of capital to
deliver attractive returns to shareholders and drive growth in the business,
while maintaining a strong financial position, and leverage within our
0.75-1.5x target range (post-IFRS 16 average net debt / EBITDA).
In this context, the Board’s policy prioritises strategic M&A at returns
materially above our weighted average cost of capital; a progressive
dividend policy (30-40% payout ratio); and the purchase of all shares to
fulfil employee incentive schemes (c.15m shares p.a.). Surplus funds are
returned to shareholders via share buybacks to remain within our target
leverage range.
The Board is recommending a final dividend of 3.0p per share, which, when
added to the 1.3p interim dividend paid, takes the total dividend for FY25
to 4.3p per share. This is an 8% increase on the prior year (FY24: 4.0p) and
represents a payout ratio of 34% (FY24: 33%). The final dividend will be
paid on 4 August 2025, following approval at the 2025 AGM.
Free cash flow generation, robust balance sheet and low leverage supports proactive capital deployments
Our capital deployment policy
(FY25 – FY27)
FY25 deployments
+106%
CAGR
Dividends
No dilution
Buybacks
Progressive dividends
(30% – 40% payout)
4.3p dividend (+8% yoy):
34% payout ratio
13m shares purchased for
£15m into EBT/SIP
£48m invested in
three acquisitions
£100m buyback
programme completed
No shareholder dilution
Infill M&A
Return surplus funds
via buybacks
Shareholder returns (£m)
200
150
100
50
0
FY22
FY23
FY24
FY25
26
Mitie Group plc
Annual Report and Accounts 2025
CHIEF EXECUTIVE'S REVIEW
continued
During FY25, we invested £48m in strategic acquisitions, purchased
13m shares at a cost of £15m to fulfil employee incentive schemes and
completed our largest share buyback programme to date of £100m.
Within this programme we purchased 89m shares, of which 79m were
cancelled and 10m were held in treasury to fulfil Mitie’s 2021 Save As You
Earn (SAYE) scheme.
With a strong balance sheet, and leverage at the lower end of our targeted
range, we launched a new £125m share buyback programme for FY26 on
16 April 2025, which will bring the cumulative total undertaken since FY23
to £325m.
Within the FY26 programme we will hold c.6m shares in treasury to fulfil
the 2022 SAYE scheme (vesting in February 2026), and cancel all other
shares purchased in excess of this within the programme. To date, we
have purchased 2m shares at an average price of 140p. The Board will
keep this share buyback programme under review, considering the timing
of value-creating acquisitions, and in order to maintain leverage within our
target range.
Strong balance sheet and low leverage
Post-IFRS 16 closing net debt at 31 March 2025 increased by £118m to
£199m (FY24: £81m), reflecting proactive capital deployments across
dividends, share buybacks, share purchases for incentive schemes and
M&A totalling £237m, alongside a £24m increase in lease obligations as
we continue to transition our fleet to electric vehicles (EVs), partially offset
by good free cashflow generation of £143m.
Post-IFRS 16 average daily net debt in FY25 was £264m (FY24: £161m)
and leverage was 0.8x average net debt / EBITDA (FY24: 0.6x) – at the
lower end of our 0.75x to 1.5x target leverage range. Covenant leverage
was zero.
Technology leadership
Our strength lies in a combination of exceptional colleagues and cutting-
edge technology, empowering us to deliver transformative, data-driven
‘intelligent’ solutions that evolve with the needs of our customers.
This encompasses Intelligent Engineering Maintenance – ensuring round-
the-clock remote monitoring and predictive maintenance for connected
assets; Intelligent Security – optimising resource deployment to address
dynamic risk and threat profiles across customer estates; Intelligent
Hygiene – leveraging building usage data and sensor technology to
deliver demand-led hygiene services; and Intelligent Projects – utilising
our Emissions Intelligence platform to automate emissions data capture
and reporting, and establish Net Zero pathways for customers.
During FY25, we deployed Intelligent Engineering Maintenance across
700 connected sites and Intelligent Hygiene across over 100 sites,
whilst Intelligent Security has focused on assessing risk based on crime,
deprivation indices, demography, intelligence alerting and shrinkage data
at more than 8,200 retail customer sites. Emissions Intelligence has been
activated for 25 customers, and we have a strong pipeline to continue this
rapid pace of adoption.
We integrated our ‘intelligent’ solutions into Mozaic360 – a unified
platform that enables customers to monitor service, asset and
environment performance, manage their contracts and conduct
benchmarking analysis efficiently across all IFM services provided by
Mitie. Our customer-facing mobile app, Aria, with its built-in AI chatbot,
ESME, has been deployed across 38 of our largest strategic accounts and
now handles c.30% of service requests, automatically processing work
orders without human intervention.
Internally, Intelligent Process Automation (IPA) is a key pillar of our AI
strategy to enable end-to-end AI automation of systems and processes.
During the year, we implemented an autonomous AI email agent for the
engineering helpdesk to automate the process of raising service requests
or responding to status updates on a service request. The agent is live for
eight customers, achieving a success rate of 90% and saving more than
900 hours of time within the helpdesk team. Roll-out to the remaining
50 engineering helpdesk customers will continue in FY26. We have also
started to deploy IPA to enable operational digital twins for back-office
business processes, delivering further efficiencies and cost savings.
Technology leadership – our strategic focus on Artificial Intelligence and Intelligent Process
Automation differentiates our core capabilities
Embedding Mitie’s
AI strategy
Intelligent
Engineering
Back office
process
optimisation
Task
Mining
Autonomous
AI email
agent
Intelligent
Security
Intelligent
Projects
Intelligent
Hygiene
INTELLIGENT
SOLUTIONS
CORE SYSTEMS
INTELLIGENT PROCESS
AUTOMATION
CUSTOMER APPS
CONNECT
SECURE
27
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
‘One Mitie’ – we are an award winning destination employer in our industry
We have upgraded our Government and Commercial Maximo systems to
MAS 9.0, enabling us to embed AI features into core engineering processes
to enhance work order management, monitor asset health, and predict
failures, ensuring uninterrupted productivity for our customers. MAS 9.0
now includes workflow in security and hygiene, enabling a fully rounded
picture of a customer’s estate to be developed.
Additionally, we have equipped thousands of colleagues with Microsoft
Copilot tools to streamline routine tasks and improve decision-making.
We are collaborating with Corndel, Imperial College London, and
Microsoft to introduce a pioneering AI apprenticeship programme,
ensuring that our workforce is equipped with practical expertise to
lead in the AI-driven future.
ESG and social value leadership
Mitie is recognised as a leader in Environmental, Social and Governance
(ESG) matters and social value among global industry peers, with
these initiatives forming a key part of how we do business. Our leading
credentials also enable us to work with our customers to realise their
own sustainability and Net Zero ambitions.
We recently launched our new corporate purpose: ‘Better Places; Thriving
Communities’ – uniting everyone at Mitie, from the Board to frontline
colleagues, around a shared commitment to help shape the communities
where we live and work. To further support our purpose, we have set
bold social value pledges through our new ‘Plan Thrive’ initiative, including
to uplift one million lives across the UK.
Mitie has a strong track record of delivering impactful social initiatives,
including through the Mitie Foundation, apprenticeship schemes, learning
and development programmes and responsible supply chain management.
For example, we are currently supporting over 1,500 colleagues through
apprenticeships across 90 technical, professional and managerial courses.
Last September, we welcomed our largest ever cohort of early career
and new hires into our technical apprenticeship schemes and launched
a graduate engineering programme. We expanded our investment in
developing women in leadership. At 31 March 2025, 42% of our senior
leadership team are now women, an increase of 10ppt during the year
and exceeding our target of 40%.
Finally, we completed a ‘double materiality’ assessment, identifying the
sustainability issues that are most material to our business and stakeholders
by evaluating both their impacts on the environment and society and their
potential financial impacts on Mitie. We also published our first Climate
Transition Plan, building on the success of our 2020 Plan Zero initiative
to become Net Zero for our direct operations by the end of 2025.
Our largest carbon emissions relate to our vehicles, and we transitioned
a further c.1,200 to EVs during the year. At 31 March 2025, we had
c.6,250 EVs, one of the largest electric fleets in the UK, representing
85% of our total fleet where EV technology is available.
28
Mitie Group plc
Annual Report and Accounts 2025
Description
Operating profit and the operating profit margin before Other items reflect the
profit we generate after deducting the cost of goods sold and operating expenses.
Our target is to achieve an operating margin of at least 5% by FY27. A reconciliation
of operating profit before Other items to the equivalent statutory measure is
provided in Appendix – Alternative Performance Measures on pages 213 to 215.
Description
Dividend per share (DPS) represents the amount of our profit after tax and before
Other items that is paid out to shareholders (as an interim and final dividend),
divided by the weighted average number of shares in the year. The dividend payout
ratio reflects the percentage of Basic EPS before Other items that is paid out as
dividends. We are targeting a progressive dividend with a payout ratio of 30%–40%
over the Three-Year Plan.
Description
Revenue growth reflects new key accounts and scope increases for existing
customers, the ability to upsell projects and the contribution from infill M&A.
Our target is to achieve high single digit revenue growth annually over the
Three-Year Plan.
Description
Basic earnings per share (EPS) before Other items represents our profit after
tax and before Other items attributable to owners of the parent, divided by the
weighted average number of shares in the year. Our strategy focuses on creating
value for shareholders.
A reconciliation of basic EPS before Other items to the equivalent statutory
measure is provided in Appendix – Alternative Performance Measures on
pages 213 to 215.
Operating profit (£m) and margin (%) before Other items
From continuing operations
Dividend per share (p) and payout ratio (%)
From continuing operations
Revenue (£m)
Including share of joint ventures and associates
Basic EPS before Other items (p)
From continuing operations
operating margin
FY24 4.7%
increase from
previous year
increase from
previous year
increase from
previous year
4.6
%
8
%
13
%
3
%
Financial
Accelerating
growth
Operating margin
progression
Cash
generation
ESG
leadership
Linked to
remuneration
Linked to our strategic pillars
KEY PERFORMANCE INDICATORS
Monitoring our progress
The Board and Executive Committee review Mitie’s key performance
indicators (KPIs) to track performance against the Group’s priorities.
These KPIs include both financial and non-financial measures, ensuring
a balanced consideration of the interests of all stakeholders, including
shareholders, customers and colleagues.
Our FY25 results highlight our strong track record of delivery. We have
made significant progress across all KPIs this year, positioning us well to
achieve the ambitious targets set as part of our Facilities Transformation
Three-Year Plan (FY25 – FY27). For a detailed review of our performance
refer to the Chief Executive’s review and the Finance review on pages 22
to 27 and 45 to 49.
Our achievement
Revenue, including share of JVs and associates, increased by 13% to £5,091m.
Organic growth through key accounts growth, scope increases and projects upsell
contributed 9% to revenue growth, inclusive of 3% contract pricing. Infill M&A
completed since 1 April 2023 contributed a further 4% of inorganic growth.
Find out more on page 45
Our achievement
Basic EPS before Other items increased by 3% to 12.7p, with the benefits of higher
operating profit and a reduction in the weighted average number of shares as a
result of ongoing share buyback programmes, offset by a 4.8ppt increase in the
effective tax rate to 23.7% and higher finance costs, compared with the prior year.
Find out more on page 47
Our achievement
DPS increased by 8% to 4.3p, reflecting growth in our profitability and a payout
ratio of 34%. The dividend payment is consistent with our wider capital deployment
policy, and reinforces our confidence in continuing to deliver against our strategic
priorities, including the ability to generate sustainable free cash flow.
Find out more on page 48
Our achievement
Operating profit before Other items increased by 11% to £234.1m, driven by the
good trading performance. The operating margin before Other items was 4.6%
(FY24: 4.7%), primarily reflecting strategic investments, the impact of inflation, and
a loss in the telecoms infrastructure business, which returned to breakeven in Q4.
Find out more on pages 45 and 46
FY21
£3,997m
£2,529m
£4,511m
£4,055m
FY22
FY23
FY24
FY25
£5,091m
FY21
9.2p
3.1p
12.3p
9.5p
FY22
FY23
FY24
FY25
12.7p
FY21
4.2%
2.3%
4.7%
4.0%
£166.9m
£58.8m
£210.2m
£162.1m
FY22
FY23
FY24
FY25
4.6%
£234.1m
FY21
20%
0%
33%
30%
1.8p
0
4.0p
2.9p
FY22
FY23
FY24
FY25
34%
4.3p
29
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Description
Average daily net debt reflects how much we owed our debt providers on average
over the year. The leverage ratio is calculated as average daily net debt divided by
EBITDA. Both average daily net debt and leverage are calculated on a post-IFRS 16
basis, inclusive of lease liabilities. We have a target leverage range of 0.75x–1.5x over
the Three-Year Plan.
Description
The total order book includes secured fixed term contract work, and estimates for
projects and variable works. The total order book reflects our success in winning
and retaining customers, as well as upselling our services. Our market-leading
position, growing pipeline of opportunities, investments in our sales and marketing
capabilities, high levels of customer service and qualifications on public sector
frameworks are expected to increase the total order book.
See Note 3 to the consolidated financial statements for analysis of the secured order
book (which excludes unsecured projects and variable work).
Description
Free cash flow represents the cash we generate from our operating activities,
after working capital movements, capex and lease payments, that is available to
reinvest in our business for organic and acquisition-led future growth or to return
to shareholders. Our target is to deliver free cash flow of c.£150m annually by FY27.
A reconciliation of free cash flow to the equivalent statutory measure is provided in
Appendix – Alternative Performance Measures on pages 213 to 215.
Description
Return on invested capital (ROIC) is calculated as operating profit before Other
items and after tax, divided by invested capital. It is a measure of how efficiently the
Group utilises its invested capital to generate profits. We are targeting a ROIC of
>20% annually over the Three-Year Plan.
The ROIC calculation and a reconciliation of the Group’s net assets to invested
capital are provided in Appendix – Alternative Performance Measures on
pages 213 to 215.
Average daily net debt (£m) and leverage ratio (x)
Total order book (£bn)
Free cash flow (£m)
Return on invested capital (%)
from continuing operations
increase from
previous year
increase from
previous year
decrease from
previous year
decrease from
previous year
£
103.3
m
35
%
£
14.8
m
1.9
ppt
Financial
Accelerating
growth
Operating margin
progression
Cash
generation
ESG
leadership
Linked to
remuneration
Linked to our strategic pillars
Our achievement
ROIC of 24.5% remains above our target of >20% and is materially ahead of our
weighted average cost of capital. The 1.9ppt decrease from the prior year is a
result of an increase in invested capital (driven by the strategic acquisitions and the
increased value of leased assets) and the higher effective tax rate, partially offset by
the increase in operating profit before Other items.
Find out more on page 47
Our achievement
The total order book increased by 35% to a record £15.4bn, driven by new contract
wins, scope increases, pricing and extensions/renewals across each of the divisions.
This increase reflects the investments we have made, including in our sales and
marketing teams, in the foundation year of the Three-Year Plan.
Find out more on page 3
Our achievement
The Group generated free cash flow of £142.8m, with the good trading
performance partially offset by anticipated cash outflows from increased working
capital and capex, as well as higher lease and interest payments compared to the
prior year. The prior year also reflected a one-off benefit to working capital of
c.£25m relating to working capital process improvements.
Find out more on page 48
Our achievement
Average daily net debt of £264.0m increased by £103.3m, reflecting proactive
capital deployments across dividends, share buybacks, share purchases for incentive
schemes and M&A, alongside an increase in lease obligations as we continue to
transition our fleet to EVs, offset by free cash flow generation. Leverage of 0.8x
was at the lower end of our target range.
Find out more on page 48
FY21
£146.6m
£(24.5)m
£157.6m
£65.7m
FY22
FY23
FY24
FY25
£142.8m
FY21
29.9%
8.2%
26.4%
25.4%
FY22
FY23
FY24
FY25
24.5%
FY21
0.1x
0.5x
0.6x
0.4x
£24.7m
£47.1m
£160.7m
£84.3m
FY22
FY23
FY24
FY25
0.8x
£264.0m
FY21
£9.5bn
£9.3bn
£11.4bn
£9.7bn
FY22
FY23
FY24
FY25
£15.4bn
30
Mitie Group plc
Annual Report and Accounts 2025
KEY PERFORMANCE INDICATORS
continued
Description
Mitie’s success is underpinned by the way Mitie leads and engages with its colleagues.
The employee engagement (MyVoice) survey asks colleagues at Mitie how they feel
about working within the organisation, and what improvements could be made.
Beyond the annual survey, the Board and SLT regularly travel to UK and overseas
locations to engage with colleagues across the business.
Description
Mitie is committed to high standards of health, safety and wellbeing. Our objective
is to ensure that we engage with colleagues to instil appropriate behaviours and
provide necessary training, alongside promoting open communication and partnering
with suppliers, customers and contractors to maintain high standards. Our lost time
injury frequency rate is just one measure used to monitor our progress.
Description
Mitie measures the number of females in the senior leadership team (SLT) against
the total headcount of the SLT. The SLT includes the MGX (Executive Committee)
and those on the MLT (Management Leadership Team).
Description
Mitie measures the number of employees leaving us voluntarily over a 12-month
period against our overall headcount. Employee turnover has been a focus area for a
number of years as we strive to create a ‘Great Place to Work’ and be the employer
of choice in our industry.
Employee engagement (%)
Lost time injury frequency rate (per million hours worked)
Females in senior leadership team (%)
Employee turnover (%)
increase from
previous year
decrease from
previous year
decrease from
previous year
n/a
1.12
10
ppt
1ppt
Non-financial
Accelerating
growth
Operating margin
progression
Cash
generation
ESG
leadership
Linked to
remuneration
Linked to our strategic pillars
Our achievement
We have increased the number of females in the SLT by 10ppt to 42%. We have a
well-developed ED&I strategy at Mitie and we continue to focus on increasing the
representation of women in senior roles across the business by supporting their
ongoing career progression. This includes the expansion of our programmes
focused on developing women in leadership during the year.
Find out more on page 52
Our achievement
Employee turnover reduced by 1ppt to 12%, reflecting the high level of colleague
engagement, career progression opportunities and our comprehensive industry-
leading benefits packages. We also host a range of events attended by the Board and
SLT to promote diversity and inclusion, and ensure that our colleagues have their say.
Find out more on pages 70 and 71
Our achievement
Our lost time injury frequency rate reduced through a greater focus on data,
leading to more proactive interventions including more inspections and audits,
greater trend analysis, hazard spotting, targeted campaigns, and additional training
and development. We also introduced LiveSafe Champions – c.1,500 colleagues
who are helping to manage health and safety on the frontline, identifying and
mitigating hazards, and encouraging safe working practices within their teams.
Find out more on page 73
Our achievement
Our most recent MyVoice survey took place in April 2024 (relating to FY24), with
a record 63% of surveyed colleagues ‘fully engaged’ in the year, and actions from
the survey undertaken during FY25 are detailed on page 70. This score reflects
our commitment to being the destination employer in the industry and creating
a ‘Great Place to Work’. Our next MyVoice survey will take place during FY26.
Find out more on page 70
FY21
24%
21%
32%
28%
FY22
FY23
FY24
FY25
42%
FY21
19%
12%
13%
19%
FY22
FY23
FY24
FY25
12%
FY21
50%
55%
63%
57%
FY22
FY23
FY24
FY25
63%
FY21
3.55
2.85
3.82
3.87
FY22
FY23
FY24
FY25
2.70
31
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Description
Customer Net Promoter Score (NPS) is a widely used measurement derived
by asking customers how likely they are to recommend a company’s products
and services to others. NPS continues to be an important metric for Mitie,
to understand our customers’ overall satisfaction with the quality of services
provided and their willingness to recommend them to others.
Description
Mitie has set ambitious targets to reach Net Zero operational carbon emissions
by the end of 2025, with non-operational emissions targeted by 2035. Mitie will
eliminate emissions from power and transport, eradicate non-sustainable waste
and enhance inefficient buildings to meet the highest environmental standards.
In addition, we have validated science-based targets by the SBTi.
Mitie first reported Scope 3 global emissions data in FY23. Only UK emissions data
is externally verified at present.
Net Promoter Score (index)
Carbon emissions (Scope 1, 2 and 3) (tonnes CO
2
e)
increase from
previous year
decrease from
previous year
3
pt
7
%
Non-financial
Accelerating
growth
Operating margin
progression
Cash
generation
ESG
leadership
Linked to
remuneration
Linked to our strategic pillars
Our achievement
Mitie’s Scope 1, 2 and 3 global emissions (location based) reduced by 7% to 270,419
tonnes CO
2
e (inclusive of 4,066 verified emissions reduction carbon credits).
Within this, Scope 1 and 2 global emissions reduced by 6% to 20,130 tonnes CO
2
e
(excluding carbon credits), reflecting the continued removal of fossil fuel heating
systems and transition of the fleet to EVs. We have continued to enhance our
Scope 3 data capture and reporting, and also benefited from suppliers reducing
their own carbon emissions. In FY26, we will transition to market based reporting.
Find out more on pages 65 and 66
Our achievement
Mitie’s NPS increased by 3pts to a record +63. This continued improvement in
our NPS demonstrates our unwavering commitment to understanding the
changing needs of our customers and exceptional service delivery. By measuring
our customers’ willingness to recommend our services, we continuously refine
our understanding of where we excel and identify opportunities for enhancement.
The FY25 survey captured feedback from over 1,100 customers.
Find out more on page 35
FY21
+39
+24
+60
+42
FY22
FY23
FY24
FY25
+63
FY21
+39
+24
290,207
322,553
FY22
FY23
FY24
FY25
270,419
32
Mitie Group plc
Annual Report and Accounts 2025
OUR BUSINESS MODEL
Creating value for stakeholders
Our business is focused on creating smarter, safer, cleaner, more secure and more sustainable
places for our customers and their people. We go above and beyond to get the job done
because we care about every interaction, and we are passionate about the work we do and
the impact we make. We are experts in Facilities Transformation.
At Mitie we bring our best, all the time.
We deliver integrated FM, bundled or
single line services, underpinned by
technology, to enhance the customer
experience and drive efficiencies across
service lines and sectors.
Our core capabilities
Intelligent Engineering
Maintenance
See page 12
Intelligent Projects
See page 14
Intelligent Security
See page 16
Intelligent Hygiene
See page 18
Our resources and capabilities
Our people
We know that our people give their best when we show them we care.
Our success is underpinned by the way Mitie inspires, motivates and
engages with its people, who in turn take personal pride in their work
and deliver exceptional service to our customers.
See pages 68 to 74
Our technology
We invest in technology to enhance our unique Mitie Digital Platform
and deliver transformative solutions. We achieve operational excellence
through efficiencies and automation, as well as creating value and
improving the customer experience. Our Platform differentiates us
in the market, and drives adoption, loyalty and retention.
See page 26
Our expertise
We are a trusted partner through our market-leading services and
because we place the evolving needs of our customers at the heart of our
business. We use our expertise to improve efficiency, deliver innovative,
technology-led solutions and make a valuable, measurable difference.
See pages 12 to 19
Our scale and reach
We are the UK market leader in our industry and in each of our core
service lines. We also hold leading sector positions, including in central
government, defence, retail, manufacturing, transport and logistics.
The scale of our operations enables the self-delivery of services to
large blue-chip customers with a national footprint.
See pages 12 to 19
Our strategy
Our Three-Year Plan is based on satisfying our customers’ evolving needs;
delivering our three key pillars of growth (key account growth and scope
increases, projects upsell and infill M&A); and meeting our ambitious
financial targets.
See pages 21 to 24
Our commitment to society
Our vision is to make a lasting positive impact on society by delivering
long-term benefits for the environment, developing a skilled workforce
to support a brighter future for all and leaving a legacy for the
communities in which we operate.
See pages 50 to 52
Our financial position
We have a strong balance sheet, low leverage and an investment grade
credit rating. We are focused on generating sustainable free cash
flow, which will enable us to accelerate growth and deliver enhanced
shareholder returns.
See pages 45 to 49
33
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Diligence, innovation and design
We start by engaging with new or existing customers
to understand their needs or any changes to their
requirements. Using our strategic frameworks to help
link operational objectives to the bigger picture, we
design an innovative solution, leveraging our expertise,
knowledge, technology and people.
Mobilisation, transition and transformation
We mobilise our contracts in the most efficient
way. Once in operation, we are continually seeking
opportunities to reduce costs, drive efficiencies, expand
our offering and become a trusted strategic partner.
Insights to drive value and
continuous improvement
Using our technologies, we collect and analyse
workforce and workflow data across our
customers’ estates to drive greater value and
continuous improvement.
Communities and environment
Mitie’s vision is to generate social value
through everyday operations, leaving a
legacy for the communities in which we
work to support a brighter future for all.
See page 37
Government
Mitie is a significant contributor of tax
to the UK Exchequer, including UK
corporation tax and employer’s National
Insurance Contributions.
See page 38
Equity shareholders and debt holders
Creating value through growth and margin
progression, while generating sustainable
free cash flow, will deliver higher returns.
See page 34
Recognising that every customer is different, our
approach is tailored to each customer’s unique needs
and is designed to deliver continual improvements
throughout the life of the contract.
Customer NPS
+
63
Employee
engagement
63
%
Supplier NPS
+
62
MSCI rating
AA
ROIC
24.5
%
Taxes paid
£
1.1bn
Suppliers
We are committed to ensuring a responsible
supply chain by requiring our suppliers
to comply with our Procurement Policy
and Supplier Social Value Policy. In return,
our suppliers gain access to our extensive
network of blue-chip customers.
See page 37
Colleagues
We create a ‘Great Place to Work’ by
showing our colleagues that we care.
We inspire, motivate and engage with our
people, providing industry-leading benefits
alongside training and development to
support their career development.
See page 36
Customers
We are a trusted partner to our customers,
helping them create high performing places.
See page 35
How we do it
The value we create
34
Mitie Group plc
Annual Report and Accounts 2025
STAKEHOLDER ENGAGEMENT
Playing a crucial part in our strategy
Our equity shareholders range from global institutions to small retail
investors, including our frontline colleagues to whom we have gifted
free shares. We also have international debt holders.
Why we engage
Access to capital from supportive, long-term investors (the owners of our
business) is vital to our success. We also need access to sources of liquidity
and other banking services. Our priority is to ensure that our stakeholders
understand and support Mitie’s strategy, performance and culture.
How the Group engages
• Annual Report and Accounts
• Stock Exchange announcements and press releases
• AGM (hybrid to maximise shareholder participation)
• Corporate website, including Investors section
• Results presentations and post-results roadshows
• Capital market events and site visits
• Ad hoc analyst and investor interactions
How the Board engages and is kept informed
• Annual Chairman’s roadshow
• Ad hoc investor engagement with the Chairman and Non-Executive
Directors (NEDs)
• Board consideration of, and responses to, investor feedback and queries
• Investor Relations Board Report standing agenda item
Key issues
• Financial performance, including growth in revenue and profit
• Free cash flow generation and balance sheet strength
• Proactive capital deployment policy
• Remuneration policy and executive remuneration
• ESG matters
Actions taken in FY25
• 100 investor and bank sales team meetings with executive management
• Eight meetings between Chair/NEDs and shareholders
• Two formal results presentations with Q&A
• Investor and analyst site visits to our ISOC in Northampton
• Ongoing engagement with revolving credit facility (RCF) providers,
US private placement (USPP) noteholders and credit rating agency
• Engagement with USPP investors to establish a ‘shelf’ facility, through
which we issued £60m of USPP notes in December 2024
• Engagement with our RCF providers to extend the facility by one year
to October 2028
• Ongoing engagement with the trustees of Mitie’s defined benefit
pension schemes
Measurement (link to KPI)
• Revenue
• Operating profit and margin
• EPS
• Dividend
• ROIC
• Total order book
• Free cash flow
• Average daily net debt and leverage
• Carbon emissions
Equity shareholders and debt holders
Engagement in action
ISOC site visit
In April 2024, we hosted over 20 buy-side investors, sell-side analysts
and advisors at our ISOC in Northampton. Our ISOCs are at the
forefront of our technology-led approach and play a vital role in
protecting millions of people nationwide, every day. From these locations
we run security operations for some of the UK’s leading brands and
most high-profile locations. Our extensive Mitie footprint across the
UK allows our dedicated team of analysts to review large-scale data sets
to monitor crime and incident trends, enabling our customers to make
informed decisions, and implement appropriate security measures.
The site visit comprised a presentation by Jason Towse, MD, Business
Services, and his team, followed by a tour of the Intelligence Hub
and one of our customer SOCs, alongside a live link to our ISOC in
Craigavon, Northern Ireland. We revisited the ISOC in Northampton
with a small group of investors later in the year.
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Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
We have over 3,000 public and private sector customers across segments
such as central government, critical national infrastructure, defence,
financial and professional services, healthcare & life sciences, local
government & education, retail & logistics, and transport & aviation.
Why we engage
High-quality customer engagement offers benefits beyond service delivery.
Customers value our deep understanding of their unique environments,
allowing us to anticipate their needs and tailor solutions aligned with their
goals. Our NPS of +63 reflects our systematic approach to managing
customer relationships. By adopting structured customer feedback,
we have created a closed loop system where insights drive operational
improvements, with action plans in place for 96% of our strategic accounts.
How the Group engages
• Regular engagement by the SLT, including structured briefings featuring
customer feedback
• Customer experience and satisfaction surveys providing insights into
satisfaction and service delivery effectiveness
• Leveraging ISO 44001 both for full certification and implementing
principles across customer accounts
• Regular customer account health and performance reviews, identifying
relationship strengths, challenges and growth opportunities
• Contractual measurement through KPIs
• Participation in industry forums and events, including Mitie-delivered
customer briefing events
• Regular communications via press releases, our website, social media
channels, newsletters, articles and thought leadership pieces
How the Board engages and is kept informed
• Customer experience survey results
• Regular Board updates on customer views
• Accounts health and performance reviews
Key issues
• Technology and innovation
• Health, safety and sustainability
• Quality assurance and insights
• Economic outlook, i.e. inflation, cost of living and geopolitical uncertainty
• Regulatory compliance, governance and transparency
• Decarbonisation
• Energy security
Actions taken in FY25
• Annual customer experience programme measuring NPS
• Over 1,000 actions identified via the annual NPS programme, directly
addressing customer priorities and elevating service delivery standards
• Launched customised user experience surveys delivering granular
feedback related to capital projects
• Held strategic customer engagement events through webinars, breakfast
briefings and executive dinners to share insights and best practice
• Conducted in-depth market research to understand evolving customer
needs and emerging trends, enabling proactive solution development
• Achieved ISO 44001 accreditation for collaborative business relationships,
demonstrating our commitment to partnership excellence
• Multi-channel digital engagement programmes and campaigns to reach
customers, including via social media and email
• Annual programme of events and visits to Mitie’s four customer
experience hubs, covering topics such as Safer Communities, hygiene for
retailers and decarbonisation
Measurement (link to KPI)
• Customer satisfaction (customer NPS)
• User experience surveys
• Helpdesk user surveys
• 360 feedback from Cabinet Office supplier survey
• Satisfaction ratings for individual contract performance
• Engagement and satisfaction with events management
• ISO 44001 certification achievement across account base
Customers
Engagement in action
Working with NATS
Our work with NATS, the UK’s leading air traffic control services
provider, demonstrates how we approach customer engagement
and collaboration. The project focused on implementing ISO 44001,
the international standard for collaborative business relationships, to
support NATS’ 2040 strategy. Mitie was selected as NATS’ facilities
management partner after demonstrating alignment with ISO 44001
principles and a commitment to collaborative working.
We facilitated joint collaboration workshops to embed a culture of
partnership, focusing on risk management and value creation. The
workshops resulted in the creation of a joint relationship management
plan and a Partnership Charter, aligning both organisations to shared
goals. The plan and Charter ensured effective governance, value
tracking, risk management and alignment with NATS’ 2040 strategy.
Achieving ISO 44001
Achieving ISO 44001 (the international standard for collaborative
business relationships) certification in May 2024 represents a significant
milestone for Mitie as we work to create shared value and drive long-
term success across our client relationships. By embedding ISO 44001
principles into our culture, we not only strengthen trust with our
partners but also foster a more agile and responsive business model.
By closely aligning with our customers’ goals, we co-create innovative,
sustainable and mutually beneficial solutions. We are committed to
leveraging this certification to enhance collaboration with all customers
to deliver value in an evolving market.
36
Mitie Group plc
Annual Report and Accounts 2025
STAKEHOLDER ENGAGEMENT
continued
Mitie’s exceptional and diverse colleagues work around the clock, caring
and supporting each other, our customers and the communities we serve.
Why we engage
Mitie is a destination employer within our industry. We are committed to
providing our colleagues with a place of work where they can thrive and be
their best every day, and creating a diverse and inclusive workplace where
everyone can reach their full potential.
How the Group engages
• Regular colleague engagement surveys with action taken on feedback
• A mix of online and offline communications, campaigns and channels
• MyMitie – our Employee Value Proposition campaign
• Recognising exceptional and long-service colleagues through Mitie Stars
• Town Hall company updates, CEO updates, podcasts and videos
• Annual performance reviews, and learning and development training
• Career development through MyCareer
• Confidential whistleblowing service
• SLT outreach events (Team Talk Local)
How the Board engages and is kept informed
• Colleague listening sessions: engaging with and responding to feedback
from colleagues at events throughout the year, led by Jennifer Duvalier
(the designated NED for workforce engagement), and attended by up
to two other Board members per session
• Direct access to the CEO via ‘Grill Phil’, his interactive feedback channel
Key issues
• Culture and values
• Reward and recognition
• Tools to do the job: systems, processes and technology
• Health, safety and wellbeing
• Equality, diversity and inclusion
• Learning and development
• Rising cost of living
• People manager engagement
• Ability to attract, recruit and retain talent
Actions taken in FY25
• Awarded over 27,000 Mitie Stars and invested c.£83,000 of prize money
in reward schemes, as showcased at our Mitie Recognition Event
• Awarded free shares to all colleagues for the fifth year in a row
• Delivered 20 diversity network events, with our six flagship events having
over 500 colleagues participating
• Offered over 90 technical, professional and managerial apprenticeship
courses, including a Senior Women in Leadership Level 7 course in
partnership with Corndel
• Delivered 20 colleague listening events sessions, in the UK and overseas
• Delivered 655 Team Talk Local events
Measurement (link to KPI)
• Females in senior leadership
• Racial diversity in senior leadership
• Employee turnover
• Lost time injury frequency rate
• Number of apprentices
• Employee engagement
Colleagues
Engagement in action
Team Talk Local
Mitie launched Team Talk Local in FY24 to enhance colleague engagement,
with a particular focus on middle managers and frontline supervisors. The
initiative aims to bring engagement directly to the workplace, overcoming
barriers faced by colleagues in accessing digital tools and attending events.
A key element of Team Talk Local is the focus on equipping people
managers with high-quality materials to drive rich conversations, in a format
and location that works best for them and their teams. The content for
Team Talk Local sessions is 80% fixed and 20% tailored to the specific
audience. The fixed content comprises a blend of videos (including from
our CEO Phil Bentley) and guides to facilitate sessions on key topics
including Health & Safety, Employee Voice and team recognition events.
During FY25, we delivered 655 Team Talk Local sessions, almost twice that
of the prior year. Our data shows that a large majority of attendees were
from our target audience of middle managers and frontline colleagues.
As a result, Team Talk Local has become a priority channel for engagement
as we invest in and expand, our digital capabilities.
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Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Mitie spends over £2bn per annum across its supply chain and actively
promotes small and medium-sized enterprises (SMEs), voluntary,
community and social enterprises (VCSEs) and diversely owned businesses.
Why we engage
Over 8,000 suppliers make a vital contribution to Mitie’s performance,
of which 590 are on Mitie’s Preferred Supplier List (PSL) and account for
over 60% of spend. We encourage our suppliers to work collaboratively
and responsibly, to ensure continual improvement in our operations.
We are committed to ensuring a responsible supply chain.
How the Group engages
• Supplier NPS survey of Mitie’s PSL
• Supplier Management Programme, onto which the PSL are inducted
• Communications through various channels, including MitieSuppliers.com
and Coupa (our digital supplier platform)
How the Board engages and is kept informed
• Chief Procurement Officer updates are provided at Board meetings
• A report is issued for every Board meeting, highlighting key developments
affecting the business, including the impact of inflation, latest deals with
suppliers and progress against targets
• Monthly business reviews are conducted with each business division and
internal stakeholder group
Key issues
• Economic outlook, i.e. inflation, cost of living and geopolitical uncertainty
• M&A and subsequent integration and standardisation of processes within
acquired entities
• High standards of product quality and service delivery
• Continuous operational improvement and cost control
• Responsibility and integrity, including ESG matters, trust and ethics
Actions taken in FY25
• Continued deployment of Coupa and integration into Maximo and SAP
• Development of a new Social Value Charter that will underpin our
ESG initiatives from FY26
• Ongoing corporate membership of Minority Supplier Development UK
• Supported Social Enterprise UK, encouraging local enterprises to join
Mitie’s supply chain
• EcoVadis award for being in the top 4% of suppliers for sustainable
procurement practices
• Completed the deployment of a new Supplier Management Programme
across Mitie’s PSL
• Continued optimisation initiation, increasing PSL spend to over 60%
• Hosted first PSL supplier conference, attended by our top 250 suppliers
Measurement (link to KPI)
• Average daily net debt and leverage ratio
• Carbon emissions
• Supplier satisfaction score (supplier NPS)
• Supply chain diversity (e.g. VCSEs, SMEs and racial diversity)
Suppliers
Our communities comprise those who live and work locally to our
operations and those who represent the needs of the communities
in which we operate, including charities, independent bodies and
local government.
Why we engage
Building positive relationships with local communities is important for
our performance and helps us to recruit and retain talented colleagues.
We support our communities through a wide range of volunteer and
fundraising initiatives.
How the Group engages
• The Mitie Foundation programmes
• Plan Thrive social value programme
• Career events hosted in the local communities where we work
• Local charity fundraising events
• Local community events
• Giving Back colleague volunteering days
• Meeting local politicians
How the Board engages and is kept informed
• Mitie’s ESG Committee is chaired by a NED
• The ESG Committee oversees new initiatives and monitors our progress
on priorities, including volunteering, mental health and the Armed
Forces Covenant
• Each priority has an agreed target, with performance reported via Mitie’s
Social Value dashboard
• The chair of the Committee provides an update at each Board meeting
Key issues
• Jobs and investment
• Local operational and environmental impact
• ESG performance
• Rising cost of living
Actions taken in FY25
• 32,000 volunteering hours delivered
• Volunteering events undertaken with Poppy Appeal, Macmillan coffee
mornings, NSPCC and Career Ready Plus
• Introduced sponsored internships with Mencap and DFN Project
SEARCH
• Sponsored and promoted the Army Rugby Union
• Contributed £65,000 to good causes
Measurement (link to KPI)
• Carbon emissions
• Volunteer hours
• Community investment
• Ex-armed forces colleague recruitment
Communities
38
Mitie Group plc
Annual Report and Accounts 2025
STAKEHOLDER ENGAGEMENT
continued
We engage with the UK Government both in its capacity for setting
policies and the regulatory agenda and as a customer. The services we
provide on behalf of the UK Government affect the lives of thousands of
people every day. Public sector work accounts for over half of our revenue.
Why we engage
Our continued engagement with the UK Government enables us to
support it in shaping new policies and regulations that impact our business,
colleagues and customers, as well as the communities we serve.
How the Group engages
• Responses to government consultations
• Participation in industry forums
• Conferences and speaking opportunities
• Attendance at events with parliamentary stakeholders
• Letters to and meetings with policymakers and civil servants to share
relevant updates
• Engagement with relevant All-Party Parliamentary Groups and
other committees
How the Board engages and is kept informed
• Regular updates in Board papers
• Material issues discussed at Board meetings
• Weekly updates sent to Board
Key issues
• Mitie’s financial performance
• Major business updates
• Mitie’s ESG performance
• Mitie’s governance processes and transparency
• How existing or anticipated legislation is impacting or may impact
our business
• Mitie’s experience of public sector procurement processes
Actions taken in FY25
• 19 executive meetings with the Cabinet Office (CO) Strategic Partnering
Manager of Built Environment, and Director for Markets and Suppliers
• Annual, quarterly and monthly Partnership Executive Meetings with the
CO and government department representatives
• Submitted annual strategic review for Mitie to the CO for its assessment
• 15 meetings and events, engaging with over 50 parliamentary
stakeholders
• Labour Party Conference panel session hosted on ‘galvanising green
growth to decarbonise the built environment’
• London Parliamentary Labour Party reception hosted at The Shard,
welcoming 23 MPs to our offices, including five Ministers, five Select
Committee Chairs and the Mayor of London
• Ongoing development of senior stakeholder relationships and lobbying
across the public sector and the political spectrum, working with our
external public affairs consultants
Measurement (link to KPI)
• Customer satisfaction (customer NPS)
• Satisfaction ratings for individual contract performance
• Meetings with policymakers
• Evidence submissions and engagements related to policy
Government
39
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
s172 STATEMENT
Considering our stakeholders in key
business decisions
Considering stakeholders in key business decisions is essential for driving
long-term value creation. Balancing the needs and expectations of
stakeholders is a crucial and challenging task. Board Directors, under the
Companies Act 2006 (the Act), are required to promote the success of
the Company for the benefit of its members as a whole. In doing so, they
must consider the interests of all stakeholders to ensure the Company’s
long-term sustainability. The Board is responsible for ensuring that it meets
its obligations to those affected by our business through stakeholder
consideration and engagement. Stakeholder consideration is integrated
throughout the business, with the Board and senior management involved
in various communication and engagement initiatives.
Details of Mitie’s key stakeholders, how the Group has engaged with
them during FY25, and the outcomes of that engagement are set out on
pages 34 to 38. Engagement activities specifically carried out by the Board
collectively and individually can be found on page 99.
The following pages include our Section 172(1) statement, outlining how
the Board has considered the matters set out in Section 172(1) (a) to (f) of
the Act during the year, along with examples of how each key stakeholder
has been considered and engaged. Additional information is available
throughout the Annual Report.
s172 consideration
Further information
Pages
a) The likely consequences of any decision in the long term
• Strategy
• Business model
• Stakeholder engagement
• Board leadership and Company purpose
21
32
34
95
b) The interests of the company’s employees
• Stakeholder engagement
• Sustainability statement
• Principal risks and uncertainties
• Board activities: Stakeholder engagement
• Culture at Mitie
• ESG Committee report
• Directors’ remuneration report
34
50
76
99
102
121
124
c) The need to foster the company’s business relationships with
suppliers, customers and others
• Sustainability statement
• Stakeholder engagement
• Principal risks and uncertainties
• Non-financial and sustainability information statement
50
34
76
88
d) The impact of the company’s operations on the community
and the environment
• Sustainability statement
• Principal risks and uncertainties
• ESG Committee report
50
76
121
e) The desirability of the company maintaining a reputation for
high standards of business conduct
• Strategy
• Business model
• Principal risks and uncertainties
• Non-financial and sustainability information statement
• Board leadership and Company purpose
21
32
76
88
95
f) The need to act fairly as between members of the company
• Business model
• Finance review
• Stakeholder engagement
• Directors’ report
32
45
34
138
40
Mitie Group plc
Annual Report and Accounts 2025
s172 STATEMENT
continued
Plan Thrive
To further support the Company’s new purpose, the Board reviewed and
approved Plan Thrive – a strategic framework designed to embed social
value across Mitie’s operations. Plan Thrive aims to align more closely with
stakeholder priorities, enhance the Company’s competitive positioning
and meet various social and environmental challenges. Mitie already has
a strong track record of delivering impactful social initiatives, including
through the Mitie Foundation, apprenticeship schemes, learning and
development programmes, and responsible supply chain management.
In designing and implementing Plan Thrive, the Board considered the
views of various stakeholders to ensure it delivered meaningful and
measurable outcomes.
Stakeholder considerations
(colleagues, customers, community and environment)
• Plan Thrive was tested with key customers and delivery partners,
receiving strong support and a commitment to collaborate in its delivery
• Plan Thrive demonstrates the Company’s commitment to creating social
value and a lasting impact on communities and stakeholders
• Building upon the Company’s current Social Value offering to clients
and offering a more focused and tailored approach to provide social
outcomes aligned with Mitie’s suppliers
Key pledges include:
• Uplifting one million lives – through the creation of employment
opportunities, investment in skills development, and the promotion of
an inclusive and supportive workplace culture
• Enabling 1,000 places to prosper – by delivering meaningful social
value initiatives across the communities and environments in which
Mitie operates
• Championing investment in partnership and the supply chain – by
collaborating with Social Value Delivery Partners and enhancing how
social value is embedded across our supply chain
• Measuring impact transparency – through the phased implementation
of the Thrive platform to monitor, evaluate and report outcomes to
clients and stakeholders
Full details of these pledges are outlined within the ESG/Impact Report.
Actions taken by the Board
• Reviewed and approved Plan Thrive, a strategic framework to support
embedding social value across Mitie’s operations
• Engaged stakeholders during the design and implementation stages to
ensure that the Plan aligned with their key priorities
• Had oversight of Plan Thrive’s formation to ensure that it supported the
Company’s new purpose and long-term strategic objectives
• Endorsed specific pledges and goals to enhance accountability and
track progress
Outcome and impact of the decision
The approval of Plan Thrive by the Board has enhanced Mitie’s
stakeholder alignment and competitive edge, with strong client support.
It sets clear social value goals that reinforce Mitie’s impact across
communities and its supply chain.
New Company purpose
In FY25, the Board approved Mitie’s new Company purpose (the
‘purpose’), ‘Better Places; Thriving Communities’. The purpose unites
everyone at Mitie – from the Board to frontline colleagues – around a
shared commitment to help shape the communities where we live and
work. It reinforces our belief that everyone has a role in taking care of the
places that shape communities, while remaining dedicated to enhancing
performance and delivering long-term, sustainable value.
During the development of the purpose, the Board considered the need
for a refreshed narrative that aligned with Mitie’s strategy, market position
and feedback from internal and external stakeholders.
Stakeholder considerations
(colleagues, customers, community and environment)
• Acknowledging the importance for colleagues to work for an
organisation that makes a meaningful, positive impact on society
• Empowering Mitie people to bring their authentic selves to work
every day
• Clearly defining Mitie’s breadth of services and specialist capabilities and
capacity to create long-term value for customers
• Reiterating the importance of serving Mitie’s local communities
• Building Mitie’s brand awareness by communicating our purpose and
showcasing the positive impact the Company delivers
Actions taken by the Board
• Considered detailed papers prepared by management on the proposed
purpose and evaluated its alignment with the Company’s strategy,
particularly in relation to Mitie’s positioning during the year
• Unveiled the purpose at a conference of c.200 senior leaders and
Strategic Account Management colleagues in April 2025, and supported
a roll-out of the new purpose, including tools and training to help and
support all Mitie colleagues, shortly thereafter
Outcome and impact of the decision
The Board believes that, when people feel connected, collaboration
improves and colleagues feel safe and secure, with a strong sense of
belonging. This motivates Mitie to make every place we touch safer,
cleaner, more secure and sustainable. Taking care of places means
taking care of people and communities. When communities prosper,
everyone benefits.
Key decisions in the year
Our comprehensive governance framework facilitates Board decision-making through scheduled meetings and well-defined delegations of
authority. The Board ensures that it receives high-quality information, including stakeholder perspectives, to guide its decisions.
Throughout the year, the Board has taken numerous decisions that support the Company’s purpose, strategy and long-term sustainability.
Each decision was made in accordance with the considerations outlined in Section 172(1) of the Act. Herein, we provide a detailed analysis
of these decisions, and the considerations involved.
41
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Acquisitions
Mitie completed three strategic acquisitions during FY25: ESM Power
(July 2024), Spanish-based security company Grupo Visegurity (October
2024) and Argus Fire (October 2024). When considering each proposed
acquisition, the Board considered the strategic risks for stakeholders.
Stakeholder considerations
(colleagues, customers, community and environment)
• New colleagues benefit from becoming part of a larger, more profitable
company
• They also benefit from our established engagement mechanisms,
culture and values, substantial learning and development opportunities,
technology and innovation, benefits and rewards
• Potential people synergies on consolidation
• Talent flight risk from new colleagues
• Opportunities to enhance our portfolio of services, enabling us to
deliver new and complementary services to existing customers as well
as new customers
• Roll-out of our customer-facing technologies to the customers of the
acquired business, improving those customers’ experience
• Risk of renegotiation or early termination of customer contracts
• Impact on EPS and return on invested capital
• Potential cost synergies, as well as the possibility of unexpected liabilities
and costs or inaccurate assumptions and estimates relating to benefits
and synergies
• Expected stronger financial profile supporting a progressive
dividend policy
• Possible difficulties integrating the acquired businesses
• Impact on our social value agenda and Plan Zero targets and milestones
Actions taken by the Board
• Consideration of detailed Board papers prepared and presented by
divisional management and the output from a comprehensive due
diligence process
• Consideration of the proposed acquisitions in the context of
Mitie’s strategy
• Discussion and decision on the structure and timing of post-investment
reviews, based on learnings from previous acquisitions
Outcome and impact of the decision
After thoroughly considering Section 172 of the Act, associated risks
and opportunities, and the impact on various stakeholders, the Board
approved the acquisitions. These acquisitions strengthened Mitie’s
leadership in the electrical engineering market with ESM Power,
expanded the company’s security offerings in Spain with Grupo Visegurity,
and bolstered its engineering-led fire systems business with Argus Fire.
Share buyback and purchase of shares for all
employee incentive schemes
In April 2024, Mitie announced a share buyback programme with a
maximum value of £50m, split into two tranches of £25m each. The
announcement also reiterated the Board’s decision to repurchase shares
for all employee incentive schemes, aiming to prevent the dilutive effect
of issuing new shares to fulfil these schemes.
In evaluating the proposal, the Board considered the cash flow
generated during FY25, the strength of the balance sheet, and the
Company’s capacity to support future growth opportunities while
delivering increased returns to shareholders in relation to the capital
allocation policy.
Following a strong financial performance in FY24 and continued
momentum in Q1 of FY25, and after assessing the expected timing of
its M&A pipeline, the Company decided to increase its share buyback
programme by an additional £50m, raising the total to £100m. This
increase was officially confirmed in July 2024.
Stakeholder considerations
(colleagues, customers, community and environment)
• Return of value to shareholders and offsetting of any dilution from new
share issues in connection with Mitie employee incentive schemes
• Impact on distributable reserves and ability to pay dividends
• Impact on capital available for future M&A activities
• Ability to stay well within financial covenant ratios and maintain financing
headroom, ensuring RCF banks and private placement noteholders
would not be disadvantaged
• Ensuring the Mitie Group pension scheme would not be unfairly treated
as a result of implementing the buyback programme
• Launch of buyback programme sends a positive signal that the Company
is doing well and has a strong balance sheet
• Save As You Earn (SAYE) schemes to be satisfied with treasury shares
rather than shares held by the Mitie Group plc Employee Benefit Trust,
mitigating unnecessary stamp duty expenses for colleagues
Actions taken by the Board
• Consideration of detailed Board papers prepared and presented by
management on Mitie’s capital allocation policy, including updates on
financial performance and liquidity
• Discussions on the rationale for a buyback programme, including
the quantum and methodology, governance and affordability, level
of distributable reserves, mechanics, execution and the timing of
such purchases
• Consideration of detailed Board papers prepared and presented by
management on proposed share plan funding, including cash cost
and affordability
Outcome and impact of the decision
During the year, a total of 89m shares were purchased under the buyback
programme, of which 79m were cancelled. The remaining 10m shares
were purchased to satisfy awards vesting under Mitie’s 2021 SAYE scheme
in February 2025, for which Mitie received proceeds of c.£4m arising
upon exercises up to 31 March 2025 (being the discounted option price
paid by employees).
Further information on our discretionary share plans can be found in the
Directors’ remuneration report, which begins on page 124.
The Company has since launched a further £125m buyback programme
for FY26 as part of the capital allocation policy.
42
Mitie Group plc
Annual Report and Accounts 2025
OPERATING REVIEW
Our divisional performance
Performance highlights
Performance highlights
• Revenue +14% to £2,244m (FY24: £1,977m), reflects new wins, the
provision of ‘surge response’ security services, growth in projects, pricing
and acquisitions, offset by the completion of certain public sector contracts
• Operating profit before Other items +8.8% to £163.0m (FY24: £149.8m),
reflects revenue growth and MEIs, offset by the higher margin public sector
contracts that have ended and unfavourable weather conditions
in Landscapes
• £3.9bn TCV of wins and extensions/renewals, primarily in Central
Government and the retail sector, resulted in a 61% increase in the total
order book to £5.3bn (FY24: £3.3bn)
• Mitie’s position as a leading integrated fire & security systems provider
enhanced via the acquisition of Argus Fire
• Spanish security capability expanded through the acquisition of
Grupo Visegurity
Operational performance
Business Services delivered a good performance in FY25, with revenue
benefiting from new wins, the provision of short-term ‘surge response’
security services to the Home Office during the summer, projects work,
pricing and the contribution from recent acquisitions (Argus Fire, Grupo
Visegurity and GBE). This growth was partially offset by the completion
of higher-margin, short-term public sector works, such as the Afghan
Relocations and Assistance and Inland Border Forces contracts, and one
notable Central Government contract that ended in March 2024.
The division secured £3.9bn TCV of contract wins and extensions/
renewals, primarily in Central Government and the retail sector. This
included Mitie’s largest contract award to date of £1bn TCV (£136m p.a.)
over seven years plus a three-year extension, to provide security services
across the DWP’s national estate (from October 2025). Other wins
included security and hygiene services for Community Health Partnerships
and contracts with DVLA, Home Office and HMRC.
Retail is one of the division’s largest sectors, with revenue of c.£400m p.a.
and a blue-chip customer base of national retailers and flagship shopping
centres. Alongside the continued growth in existing accounts, the division
won new contracts to deliver security services for Aldi and Lidl, as well as
fire maintenance work for Halfords. The largest contract renewals and
extensions in the year were for the provision of hygiene services to a large
e-commerce business and security services for Marks & Spencer (M&S).
The demand for risk-based ‘intelligent’ security and remote monitoring
services continues to grow in the retail sector. During the year, the
division completed a large-scale extension of its M&S Security Operations
Centre (SOC) in Northampton, a large furniture retailer approved a
dedicated SOC following a successful trial, and the division has a strong
pipeline of opportunities to add to this unique offer with other national
retailers. This capability is complemented by the ongoing development of
leading technologies such as Vision AI theft analytics in partnership with
SeeChange, which will be rolled out in FY26 following successful trials.
The increased revenue and benefit from MEIs were offset by the
completion of the higher margin public sector contracts, a £1m debt
provision relating to the administration of ISG (net of c.£2m recovered
in H2) and the impact of unfavourable weather conditions on our
Landscapes business. MEIs primarily focused on operational excellence
and productivity improvements, including the outsourcing of mobile
security response services.
Mitie’s fire & security projects business enhanced its position as a top
three integrated systems provider through the acquisition of Argus Fire in
October 2024. This significantly increases Mitie’s scale and self-delivered
offering in the higher-growth, higher-margin c.£3bn p.a. UK fire & security
market, and complements the prior year acquisitions of GBE Converge and
RHI Industrials.
Overall, projects revenue in Business Services increased by 29% to £281m
(FY24: £217m). Key projects work included the upgrade of critical security
infrastructure across central government offices, the design and delivery
of an integrated physical security, fire and civil engineering solution across
10 sub-stations for Scottish Power, the fit-out of fire & security systems
within two data centres for Google and asset upgrades for National Grid.
The projects order book and pipeline remain strong for FY26.
Mitie Spain benefited from net wins and acquisitions, including Grupo
Visegurity, a leading security business acquired in October 2024. The
acquisition builds Mitie Spain’s security capabilities following the acquisition
of Biservicus in FY24, providing an increasingly differentiated offering in an
FM market dominated by single service providers.
Recent awards
include British Security Awards – Business of the Year;
Fire & Security Matters – Security Guarding Company and Security Project
of the Year; Retail Risk, Fraud Awards – Physical Risk Management Team of
the Year; OSPAS – Security Team of the Year.
Business Services, £m
FY25
Restated
1
FY24
Change
Revenue (including share of JVs and associates)
2,244
1,977
14%
Security
1
1,067
863
24%
Hygiene
461
407
13%
Central Government
1
384
447
(14%)
Spain
167
114
46%
Waste
85
77
10%
Landscapes
80
69
16%
Operating profit before Other items
163.0
149.8
8.8%
Operating profit margin before Other items
7.3%
7.6%
(0.3)ppt
Total order book
£5.3bn
£3.3bn
61%
1. Restated to reflect the change to divisional reporting to include Police services (within Security) and Central Government in Business Services. FY24 restated Central
Government revenue excludes £77m reclassified to Defence relating to the Landmarc step acquisition.
Business Services
Business Services is the UK’s largest provider of technology-led security and hygiene services across c.2,500 contracts, with
sector expertise in retail, transport & aviation, central government and financial & professional services. It also provides
landscaping and waste services, and Mitie’s Spanish business is reported within the division.
14
%
Revenue growth
8.8
%
Operating profit
growth
£
5.3
bn
Total order book
As part of our Facilities Transformation Three-Year Plan (FY25 – FY27), we have simplified our organisational structure to align to our core service line capabilities of Engineering
Maintenance, Security and Hygiene. As such, from the start of FY25, we absorbed the Central Government & Defence division into Business Services (Central Government) and
into Technical Services (Defence). Police services, which was previously reported within Care & Custody in Communities, is now reported within Business Services.
43
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Performance highlights
Performance highlights
• Revenue +9% to £1,977m (FY24: £1,817m), primarily driven by new wins
and scope increases, acquisitions and pricing, offsetting the loss of one
notable contract at the end of the prior year
• Operating profit before Other items +5.5% to £79.0m (FY24: £74.9m),
reflects MEIs and acquisitions, partially offset by net contract losses and
a loss in the telecoms infrastructure business
• £1.8bn TCV of contract wins and extensions/renewals resulted in a 25%
increase in the total order book to £5.0bn (FY24: £4.0bn)
• Expertise in the growing power & grid connections market enhanced
through the acquisition of ESM Power
Operational performance
Technical Services revenue benefited from good growth in Defence,
reflecting the new Germany and wider Europe Defence Infrastructure
Organisation contract which commenced in Q1, pricing, and the
consolidation of Landmarc in the prior year. In Engineering the contribution
from contract wins, scope increases and acquisitions (JCA and ESM Power)
was partially offset by contract losses. The latter primarily related to
one private sector IFM contract that ended in March 2024, although the
division continues to deliver engineering project works on the contract
(alongside subcontracted security, waste and landscaping services via
Business Services).
Notable new engineering and IFM contract awards during the year
included Colt Technologies, Dublin City University, EY, Grosvenor Ltd,
Halfords, Metropolitan Police Service and Port of Dover. The division
was also awarded a further contract extension with Mitie’s largest private
sector customer, LBG, in addition to notable extensions for Government
Estate Management, Heathrow Airport, Marsh & McLennan, Primark
and Vodafone.
MEIs focused on streamlining account structures, driving efficiency gains
through the introduction of generative AI (GenAI) assistants and AI-driven
tools to predict asset failures and optimise predictive maintenance, as well
as reducing divisional overheads. The increased self-delivery of certain
works, such as fire, water and asbestos compliance in Defence, is also
gaining momentum as part of a Group-wide initiative.
Overall, the Technical Services operating margin was 4.0% (FY24: 4.1%),
after factoring in an £11m loss (60bps) in the telecoms infrastructure
business, which we have taken steps to address and returned to breakeven
in Q4. Other factors that impact the margin include the division absorbing
the management cost of IFM contracts and exposure to non-recoverable
cost inflation. The division is expected to achieve an operating margin >5%
by FY27 through projects upsell and further MEIs, including help
desk consolidation.
Projects revenue in Technical Services increased by 7% to £821m (FY24:
£765m), reflecting underlying growth offset by the anticipated closure of
Mitie’s roofing business and the exit from certain unprofitable frameworks
in the telecoms infrastructure business. Technical Services projects
included the installation of solar photovoltaic (PV) panels for NATS,
Nuclear Restoration Services and across multiple David Lloyd sports
centre sites. For NATS, over 2,600 solar panels were installed on the roof
of its Swanwick control centre as part of their commitment to Net Zero,
supplying up to 10% of the centre’s electricity needs – equivalent to the
annual consumption of c.330 family homes. At Heathrow Terminal 3, a new
cooling package was designed and installed to maintain resilience ahead of
the busy summer period. The division also undertook the restoration of
a prominent LBG branch and commenced the refurbishment of a 1960s
scenery workshop to create editing suites and offices for the BBC.
Across MoD contracts the division continued to deliver a range of projects,
including to refurbish 174 service family accommodation properties,
commence work to resurface a critical airfield at RAF Mount Pleasant in
the Falkland Islands, and undertake refurbishment programmes, power
reconfigurations and demolition works for Future Defence Infrastructure
Services (FDIS) in Scotland and Northern Ireland.
Further projects capability was added in the growing power & grid
connections market during the year through the acquisition of ESM Power,
such that Mitie now offers a full suite of services of any size and voltage.
Recent awards
include PFM Awards – Partners in Workplace Re-
development (Royal London) and Partners in Cleaning for Large Estates
(Heathrow); RoSPA – ‘Gold’ Award (GSK contract); Global FM Awards
– Silver Award for People & Development; INEOS – European Safe
Contractor of the Year Award.
Technical Services
Technical Services is the UK’s largest provider of engineering maintenance services, managing facilities and critical assets across
c.350 contracts, including for the Ministry of Defence (MoD). The division also delivers projects in high-growth areas including
buildings infrastructure, decarbonisation and power & grid connections to help customers transform their built estates.
9
%
Revenue growth
5.5
%
Operating profit
growth
£
5.0
bn
Total order book
Technical Services, £m
FY25
Restated
1
FY24
Change
Revenue (including share of JVs and associates)
1,977
1,817
9%
Engineering maintenance and projects
1,421
1,326
7%
Defence
1
556
491
13%
Operating profit before Other items
79.0
74.9
5.5%
Operating profit margin before Other items
4.0%
4.1%
(0.1)ppt
Total order book
£5.0bn
£4.0bn
25%
1.
Restated to reflect the change to divisional reporting to include Defence within Technical Services. FY24 restated
Defence revenue includes £77m reclassified from Central Government relating to the Landmarc step acquisition.
44
Mitie Group plc
Annual Report and Accounts 2025
Performance highlights
Performance highlights
• Revenue +21% to £870m (FY24: £717m), reflecting contract scope
increases in Care & Custody, new wins, projects and variable works,
and pricing
• Operating profit before Other items up 31.6% to £47.5m (FY24: £36.1m),
largely reflecting good trading momentum, MEIs, reduced losses on one
PFI contract and a one-off legal settlement
• £1.8bn TCV of contract wins, extensions/renewals and scope increases,
resulted in a 24% increase in the total order book to £5.1bn (FY24:
£4.1bn)
Operational performance
Communities delivered strong revenue growth, reflecting sustained
higher volumes on the Immigration Escorting Services contract in Care &
Custody, projects and variable works, pricing, and the contribution from
current and prior year contract wins.
During the year, the division secured £1.8bn TCV of contract wins,
extensions/renewals and scope increases to existing contracts. Notable
wins included a 10-year £400m TCV contract to operate HMP Millsike
and a hard services contract for Coventry and Rugby Hospital, which
commenced in Q1 FY25. Notable extensions/renewals included
University Hospitals Dorset and Birmingham Community Healthcare
NHS Foundation Trusts.
Operating profit benefited from good trading momentum across several
Healthcare & Education accounts, MEIs, a further reduction in losses on
one historically challenging PFI hospital contract to £0.6m (FY24: £3.9m
loss) as a result of management actions to improve productivity and
re-set pricing, as well as a one-off legal settlement. As part of the MEI
programme, the division has driven cost savings through an enhanced
procurement strategy to further consolidate its list of preferred suppliers,
as well as adding additional commercial team capability to optimise
long-term PFI contracts.
These improvements more than offset the costs associated with
mobilising the HMP Millsike contract, including the recruitment and training
of colleagues to facilitate the opening of the prison. Following handover to
Mitie, the first prisoners were accepted in April 2025, and the prison has
capacity for c.1,500 Category C inmates.
A standalone PFI hand-back team has been established to monitor and
manage long-term PFI contracts as they approach maturity, and a playbook
has been created to manage the contracts during the final five to seven
years through standardised controls and processes. During FY25, one small
PFI contract was successfully handed back, with a further two due in FY26.
Overall, projects revenue in Communities increased by 26% to £144m
(FY24: £114m). Healthcare projects included starting work on a new
urgent treatment centre at the Cumberland Infirmary in Carlisle and
the construction of a new emergency department resuscitation building
for Dudley Hospital, alongside wider lifecycle project works. Across the
education sector, Mitie delivered lifecycle and upgrade projects to over
150 schools, including roof and asset replacements and energy efficiency
works. The division also delivered several large refurbishment projects in
the local government sector, while working towards securing over £5m
in Public Sector Decarbonisation Scheme projects. For Essex County
Council, decarbonisation and energy projects across the portfolio included
the replacement of gas fired boilers with ground source heat pumps, LED
lighting upgrades and the installation of ground mounted solar PV panels.
Communities has continued to develop its technology capabilities, including
to use the Internet of Things (IoT) to track the location of wheelchairs
and other mobile critical care appliances at a major acute care hospital in
partnership with Vodafone. This has resulted in a reduction in response
and porter task times and an increase in the number of daily hygiene
tasks completed. Trials of Mitie’s Merlin for Hygiene application have
been successfully completed in a health and care partnership facility to
enhance productivity.
Recent awards
include PFI Partnerships Bulletin Awards – Best FM and
Technology Provider (recognising the leading technology that we have
deployed at Cumberland Royal Infirmary); IWFM Positive Impact Climate
Action – Towards Net Zero (Essex County Council).
Communities
The Communities division delivers sustainable outcomes as a trusted partner to the public sector across Local Government
& Education, Healthcare and Care & Custody. The division operates over 100 private finance initiative (PFI) and traditional
commercial contracts.
21
%
Revenue growth
31.6
%
Operating profit
growth
£
5.1
bn
Total order book
Communities, £m
FY25
Restated
1
FY24
Change
Revenue including share of JVs and associates
870
717
21%
Local Government & Education
300
265
13%
Healthcare
321
275
17%
Care & Custody
1
249
177
41%
Operating profit before Other items
47.5
36.1
31.6%
Operating profit margin before Other items
5.5%
5.0%
0.5ppt
Total order book
£5.1bn
£4.1bn
24%
1.
Restated to reflect the change to divisional reporting to report Police services (previously in Care & Custody) in
Business Services.
OPERATING REVIEW
continued
45
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
FINANCE REVIEW
A strong financial performance
We have made a good start to our three year plan, with
robust revenue growth and further savings from margin
enhancement initiatives. Margins have been stable, despite
the investments we have made to drive future growth.
Another year of strong free cash flow generation has
underpinned our ongoing returns to shareholders.
Simon Kirkpatrick
Chief Financial Officer
Alternative Performance Measures
In addition to presenting statutory measures, the Group presents its
results before Other items. Management believes this is useful for
users of the financial statements, providing both a balanced view of the
financial statements, and relevant information on the Group’s financial
performance. Accordingly, the Group separately reports the cost of
restructuring programmes, acquisition and disposal related costs (including
the amortisation of acquisition-related intangible assets), gains or losses on
business disposals, and other exceptional items as ‘Other items’.
Financial performance
The reported Income Statement is set out below:
£m unless otherwise specified
FY25
FY24
Revenue including share of joint ventures
and associates
5,091.2
4,510.7
Group revenue
5,082.6
4,445.2
Operating profit before Other items
234.1
210.2
Other items
(72.5)
(44.5)
Operating profit
161.6
165.7
Net finance costs
(16.2)
(9.4)
Profit before tax
145.4
156.3
Tax
(37.0)
(25.4)
Profit after tax
108.4
130.9
Profit attributable to non-controlling interest
(7.0)
(4.6)
Profit attributable to owners of the parent
101.4
126.3
Basic earnings per share before Other items
12.7p
12.3p
Basic earnings per share
8.2p
9.8p
Revenue
Revenue for FY25 of £5,091m, including share of revenue from joint
ventures and associates, has improved by 12.9% compared to last year
(FY24: £4,511m). Of this growth, 8.5% (£383m) was organic, driven by
growth in Core FM (+5.6ppt), Projects (+0.2ppt) and pricing (+2.7ppt).
The remaining 4.4% (£197m) of growth was inorganic.
Organic Core FM growth of £251m included revenue from new key
accounts such as Aldi, Lidl and EY, higher volumes for the existing
immigration services contract, and the provision of ‘surge response’
security services for the Home Office during the summer. This more than
offset the completion of the Afghan Relocations & Assistance and Inland
Border Force contracts, and the prior year losses of two notable contracts;
one Central Government contract, and one private sector contract that
transitioned to a global provider.
Organic Projects growth was £11m in the period, driven by good growth
in Business Services and Communities, as a result of the upgrade of
critical security infrastructure across Central Government offices,
decarbonisation works, and asset lifecycle upgrades. This was largely offset
by a reduction in organic projects revenue in Technical Services, where
we took strategic decisions to exit certain unprofitable frameworks in the
telecoms infrastructure business and close the legacy roofing business,
combined with a number of delayed data centre builds, where customers
have been reassessing the significant increase in scale, power and cooling
requirements arising from AI.
The repricing of revenue for inflation has added £121m in FY25 (FY24:
£177m), reflecting the lower CPI rates this year, which drive repricing in
the majority of our contracts.
The £197m of inorganic growth related to the strategic acquisitions of
ESM Power, Argus Fire and Grupo Visegurity this year, combined with
the full-year impact of prior year M&A, related to the consolidation of
Landmarc (explained below) and the acquisitions of JCA Engineering and
GBE Converge.
Operating profit
Operating profit before Other items was £234.1m (FY24: £210.2m), an
increase of £23.9m (+11.4%) in the year. The improvement was driven by
Core FM and Projects growth (£12.2m), margin enhancement initiative
savings (£25.2m), and inorganic growth (£12.7m), partially offset by
investments being made to underpin our growth strategy (-£17.3m), and
unrecovered costs associated with inflation and the changes to employers’
National Insurance Contributions (-£8.9m).
The Core FM and Projects growth was driven by the revenue growth
outlined above, combined with contract margin improvements, in
particular in Communities where the profitability on one notable loss-
making contract acquired with Interserve has significantly improved
as a result of the successful execution of a turnaround plan, and some
commercial contract settlements. Core FM and Projects also includes
a loss of £10.7m from the telecoms infrastructure business which has
been undergoing a turnaround, resulting in it returning to breakeven in
the last quarter.
46
Mitie Group plc
Annual Report and Accounts 2025
FINANCE REVIEW
continued
Savings from margin enhancement initiatives (MEI) are largely driven by
the Target Operating Model programme, which contributed £8.6m of
savings through overhead efficiencies such as optimisation of the Group’s
organisational structure, and consolidating core systems and processes.
As previously highlighted, this programme has been extended into
contracts and operations, which contributed a further £5.4m of savings
during the year, through focusing on the design and optimisation of our
account structures, and increasing the levels of ‘self-delivery’ to customers
by reducing our reliance on third-party contractors. In addition, we have
continued to deliver incremental savings through the roll-out of Coupa
(our digital supplier platform) across the Group which was completed this
year, with an incremental £11.2m of savings.
Inorganic profit growth included profits from the FY25 acquisitions of
ESM Power, Argus Fire and Grupo Visegurity, together with the full-year
impact of prior year M&A, including £6.4m from the consolidation of
Landmarc (explained below), and the acquisitions of JCA Engineering
and GBE Converge.
The investments that we have made in FY25 (£17.3m) have largely focused
on sales, marketing and technology, and will help to drive growth in the
final two years of our Three-Year Plan. The investments include £7.0m
of mobilisation costs for the Millsike prison contract, which commenced
operations in April 2025.
Operating profit after Other items was £161.6m (FY24: £165.7m), with the
increase in operating profit from the factors outlined above being more
than offset by higher non-cash Other items, which are explained below.
Corporate overheads
Corporate overheads represent the costs of running the Group and
include costs for central functions such as commercial sales and business
development, finance, marketing, legal and HR. Corporate overhead costs
have increased by 9% to £55.4m (FY24: £50.6m), reflecting growth in
the business, partially offset by overhead savings across functions and
shared services.
Other items
£m
FY25
FY24
Target Operating Model
(14.4)
(20.4)
Digital supplier platform
(3.4)
(3.7)
Margin enhancement initiative cash costs
(17.8)
(24.1)
Target Operating Model non-cash costs
(2.2)
–
Margin enhancement initiative costs
(20.0)
(24.1)
Employment-linked earnout charges
(8.6)
(9.5)
Other acquisition-related costs
(4.9)
(4.0)
Acquisition-related cash costs
(13.5)
(13.5)
Landmarc step acquisition gain
–
17.9
Amortisation of acquisition-related
intangible assets
(29.6)
(24.8)
Acquisition-related costs
(43.1)
(20.4)
Pension-related cash costs
(3.0)
–
Pension-related non-cash costs
(6.4)
–
Pension-related costs
(9.4)
–
Total Other items
(72.5)
(44.5)
of which cash Other items
(34.3)
(37.6)
The Group incurred £72.5m of Other items in FY25 (FY24: £44.5m), of
which £34.3m were cash Other items, and £38.2m were non-cash.
Cash Other items of £34.3m in FY25 were £3.3m lower than in FY24
(FY24: £37.6m), and comprised the costs of delivering the Group’s margin
enhancement initiatives of £17.8m (FY24: £24.1m), acquisition-related costs
of £13.5m (FY24: £13.5m) and pension-related costs of £3.0m (FY24: £nil).
The margin enhancement initiative costs of £17.8m (FY24: £24.1m) included
the implementation teams, related redundancy costs, professional fees and
dual running costs as part of decommissioning systems.
Acquisition-related costs include employment-linked earnout charges of
£8.6m in FY25 (FY24: £9.5m), which will be payable to former owners of
acquired businesses if post-acquisition performance targets are achieved,
and employment conditions are satisfied.
Other acquisition-related costs of £4.9m (FY24: £4.0m) comprise
transaction costs of £4.3m (FY24: £2.9m), primarily related to professional
fees, and movements on opening balance sheet provisions recognised on
acquisition of Interserve and GBE of £0.6m (FY24: £1.1m).
Pension-related cash costs of £3.0m (FY24: £nil) largely relate to the
£2.8m settlement charge incurred in relation to Mitie’s Section 75 pension
liabilities under the Plumbers’ Pension Scheme. This was part of a full and
final settlement, which protects Mitie from any future liabilities from
the scheme. Further details are set out in Note 31 to the consolidated
financial statements.
Non-cash Other items of £38.2m (FY24: £6.9m) comprised £29.6m
(FY24: £24.8m) of amortisation of acquisition-related intangible assets,
£6.4m (FY24: £nil) of pension-related costs (which are further explained
in Note 4 to the consolidated financial statements), and £2.2m (FY24: £nil)
of Target Operating Model costs related to the disposal of software. The
non-cash Other items number in FY24 included a £17.9m fair value gain
(credit) from the Landmarc consolidation (which is explained below).
Net finance costs
Net finance costs increased to £16.2m in FY25 (FY24: £9.4m), as a result
of the increased utilisation of our Revolving Credit Facility (RCF) and a
decrease in surplus cash available to place on deposit, reflecting the higher
levels of net debt explained below. The interest charge on leases increased
by £3.1m, due to the higher lease liabilities explained below.
Tax
The tax charge for the year was £37.0m (FY24: £25.4m), comprising a tax
charge on profit before Other items of £51.6m (FY24: £37.9m) and a tax
credit on Other items of £14.6m (FY24: £12.5m).
The effective tax rate (ETR) on profit before Other items of 23.7% (FY24:
18.9%) is higher than in FY24, because FY24 benefited from the recognition
of deferred tax assets related to the losses acquired with the Interserve
business. Excluding the impact of this benefit, the ETR before Other items
in FY24 would have been 23.3%.
After Other items, the tax charge for the year equated to an ETR of
25.4%, which is higher than the standard UK corporation tax rate of
25% due to certain Other items costs, primarily related to acquisitions,
not being deductible for tax purposes.
Mitie is a significant contributor of revenues to the UK Exchequer, paying
£1.1bn of taxes in the year (FY24: £963m). Of this total, £201m (FY24:
£174m) relates to taxes borne by Mitie (principally UK corporation tax
and employers’ National Insurance Contributions) and £902m (FY24:
£789m) relates to taxes collected by Mitie on behalf of the UK Exchequer
(principally VAT, income tax under PAYE and employees’ National
Insurance Contributions).
47
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
The Group paid corporation tax of £11.0m (FY24: £16.9m) in the year, of
which £6.4m (FY24: £12.7m) was paid in the UK, and £4.6m (FY24: £4.2m)
overseas. The corporation tax paid in the UK is lower than the corporation
tax charge for the year due to the utilisation of deferred tax assets related
to losses.
Mitie has recently been awarded a Fair Tax Mark from the Fair Tax
Foundation, demonstrating the Group’s commitment to being a
responsible taxpayer.
Consolidation of Landmarc
As previously reported, Landmarc has been consolidated as a subsidiary
since November 2023, prior to which it was reported as a joint venture.
As a result of this change (known as a ‘step acquisition’), the Group has
reported an increase in revenue (including share of JVs and associates)
from Landmarc of £57.4m in FY25, comprising £53.3m from the step
acquisition (i.e. inorganic growth) and £4.0m of organic growth.
Operating profit before Other items from Landmarc increased by £5.5m,
comprising £6.4m from the step acquisition (i.e. inorganic growth), partially
offset by an organic reduction of £0.9m. The organic reduction was
driven by a change in mix, with reduced volumes on certain higher-margin
services in the year.
The consolidation of Landmarc from November 2023 also gave rise to
the recognition of a non-controlling interest deduction of £7.0m for FY25,
which represents the non-controlling interest’s (49%) share of Landmarc’s
profit after tax. As a result of this non-controlling interest deduction, the
consolidation of Landmarc has no impact on earnings per share before
Other items.
Earnings per share
Basic earnings per share before Other items increased by 3.3% to 12.7p
(FY24: 12.3p). This improvement is due to the increase in operating profit
in the year (+1.2p) and the reduction in the weighted average number
of shares as a result of the ongoing share buyback programme (+0.4p),
partially offset by the increase in the effective tax rate (-0.8p) and net
finance charges (-0.4p).
Basic earnings per share reduced to 8.2p (FY24: 9.8p), with the factors
outlined above being more than offset by the increase in non-cash Other
items (explained above, but primarily related to the prior year fair value
gain arising on the Landmarc step acquisition).
Return on invested capital (ROIC)
£m unless otherwise specified
FY25
FY24
Operating profit before Other items
234.1
210.2
Tax
1
(55.5)
(39.7)
Operating profit before Other items after tax
178.6
170.5
Invested capital
730.2
645.0
ROIC %
24.5%
26.4%
1. Tax charge has been calculated on operating profit before Other items using the ETR
for the year of 23.7% (FY24: 18.9%).
ROIC for FY25 was 24.5% (FY24: 26.4%), with the reduction being driven
by the increase in invested capital, related to the acquisitions completed
in FY25 and the increased value of leased assets due to the continued
transition of our fleet to EVs. ROIC is adversely impacted by in-year
acquisitions, because invested capital is increased by the full balance sheet
value, whereas operating profit only benefits by a part-year contribution.
Balance sheet
£m
FY25
FY24
Goodwill and intangible assets
664.5
645.1
Property, plant and equipment
246.9
204.7
Interests in joint ventures and associates
1.6
0.9
Working capital balances
(202.9)
(200.1)
Provisions
(84.1)
(113.2)
Net debt
(199.0)
(80.8)
Net retirement benefit assets / (liabilities)
13.9
(0.8)
Deferred tax
(17.9)
7.9
Other net assets
5.0
10.0
Net assets
428.0
473.7
At 31 March 2025, the Group’s reported net assets stood at £428.0m, a
decrease of £45.7m since 31 March 2024. This reduction is driven by the
planned distributions of £179.2m, in the form of share buybacks, dividends
and the purchase of own shares into trusts for share incentive schemes.
This reduction in net assets was partially offset by the profit generated for
the period of £123.9m (excluding share-based payments charges of £15.5m
which are held in equity, rather than as a liability on the balance sheet), and
movements in pension balances of £9.1m after tax, which are recorded
directly in equity rather than through the income statement.
Goodwill and intangible assets
Goodwill and intangible assets have increased by £19.4m, with acquisitions
completed in FY25 adding goodwill of £36.1m and acquired intangible
assets of £14.9m, which have been partially offset by the amortisation of
intangible assets during the year.
Property, plant and equipment
Property, plant and equipment increased by £42.2m due to the continued
transition of our leased fleet to EVs, including a higher proportion of more
expensive vans compared to FY24, as well as the expansion of the fleet as
result of acquisitions and new contracts.
Provisions
At 31 March 2025, provisions totalled £84.1m (FY24: £113.2m), which
largely comprised contract-specific costs of £43.0m (FY24: £49.2m) and
the insurance reserve of £27.3m (FY24: £27.2m). Provisions decreased
during the period by £29.1m, primarily due to the reclassification of
Section 75 pension liabilities of £21.7m to other payables following the
agreement of a schedule of payments to settle the liability related to the
Plumbers’ Pension Scheme. The reduction in contract-specific provisions
of £6.2m was a result of commercial settlements with customers that
enabled the release of provisions, or the utilisation of provisions as
operations on site progressed.
See Note 20 to the consolidated financial statements for further details
on provisions.
Retirement benefit schemes
At 31 March 2025, the Group’s net retirement benefit assets across all
schemes on an IAS 19 basis were £13.9m (FY24: £0.8m net liabilities).
The net improvement (£14.7m) was due to favourable movements in
financial assumptions that have resulted in the main Group scheme moving
to a surplus of £14.4m (FY24: £1.4m deficit).
The latest triennial valuation for the main Group scheme, which concluded
in March 2024, showed an actuarial deficit of £19.4m at 31 March 2023
(materially lower than the previous £72.7m triennial valuation deficit).
As a result, deficit repair contributions reduced from c.£14m p.a. to £8.4m
in FY25, with £6.4m planned for FY26.
48
Mitie Group plc
Annual Report and Accounts 2025
FINANCE REVIEW
continued
As noted above, the Group reached a settlement agreement with the
trustees on certain Section 75 liabilities (related to the multi-employer
defined benefit Plumbing & Mechanical Services (UK) Industry Pension
Scheme), which will extinguish any future liabilities relating to this scheme.
This will result in equal monthly payments totalling £24.5m over a three-
year period (which commenced in H2 FY25). This debt has been fully
recognised in other payables at 31 March 2025, through the transfer of
£21.7m from provisions and a £2.8m charge arising from the settlement
agreement which was included in Other items in FY25.
Deferred tax
The net deferred tax balance in FY25 was a liability of £17.9m (FY24: asset
of £7.9m). This change of £25.8m was primarily the result of a reduction
in deferred tax assets due to the utilisation of tax losses, and an increase in
deferred tax liabilities related to the higher pension scheme surpluses and
new acquisition-related intangible assets.
Cash flow and net debt
£m
FY25
FY24
Operating profit before Other items
234.1
210.2
Add back: depreciation & amortisation
76.8
57.9
EBITDA
310.9
268.1
Other items
(34.3)
(37.6)
Other operating movements
9.0
3.9
Operating cash flows before movements in
working capital
285.6
234.4
Working capital movements
1
(37.0)
(4.3)
Capex, capital element of lease payments
& other
(80.1)
(54.3)
Interest payments
(14.7)
(9.7)
Tax payments
(11.0)
(16.9)
Dividends from joint ventures
–
8.4
Free cash inflow
142.8
157.6
Share buybacks
2
(100.0)
(50.4)
Purchase of own shares into trusts
(14.6)
(19.6)
Acquisitions & employment-linked
earnout payments
(57.3)
(34.7)
Dividends paid
(64.6)
(44.0)
Lease liabilities & other
(24.5)
(45.6)
Increase in net debt during the year
(118.2)
(36.7)
Closing net (debt)
(199.0)
(80.8)
Average daily net (debt)
(264.0)
(160.7)
Leverage
3
(average daily net debt/EBITDA)
0.8x
0.6x
1. Adjusted to exclude movements in restricted cash and other adjustments which do
not form part of net debt (as explained in the Alternative Performance Measures
Appendix to the consolidated financial statements).
2. Share buybacks are presented net of the proceeds received from the exercise of SAYE
schemes of £4.7m in FY25 (FY24: £8.0m).
3. Leverage uses post-IFRS 16 net debt.
Operating cash flows before movements in working capital increased to
£285.6m in FY25 (FY24: £234.4m), with the £51.2m improvement driven
by the strong trading performance reflected in the increased EBITDA.
Other operating movements were £9.0m for FY25, primarily related to
the add back of non-cash share based payment charges of £15.5m, partially
offset by pension deficit repair contributions of £8.4m.
The Group generated a free cash inflow of £142.8m for FY25, with the
strong trading performance partially offset by anticipated cash outflows
from increased working capital and capex, as well as higher lease and
interest payments compared to FY24. Dividends received from joint
ventures in FY24 (of £8.4m) mainly related to Landmarc when it was
still reported as a joint venture.
In FY25 there was a cash outflow from working capital of £37.0m (FY24:
£4.3m), reflecting the investments required to support growth in our
projects business, as well as the longer payment terms agreed on several
new or renewed contracts in the retail sector.
Capex, the capital element of lease payments & other increased by £25.8m
compared to FY24. Capex increased by £11.3m in FY25, primarily related
to the mobilisation of the Millsike prison contract and the replacement
of fleet vehicles on the Landmarc contract. Capital lease repayments
increased by £15.1m, due to the continued transition of our leased fleet to
EVs, including a higher proportion of more expensive vans compared to
FY24, as well as the expansion of the fleet through acquisitions and new
contracts, both in the UK and overseas. Net interest payments increased
by £5.0m due to the higher levels of net debt, including higher lease
liabilities. Tax payments reduced by £5.9m, primarily due to tax refunds
received during the year.
The planned £100m share buyback programme was completed in FY25
and resulted in the purchase of 89m shares, of which 79m shares were
cancelled with the remainder held to settle the 2021 Save As You Earn
(SAYE) share scheme. A further 12.8m shares have been purchased in
relation to the settlement of other share incentive schemes.
Acquisitions increased net debt by £57.3m during the year, largely
comprising net consideration paid of £47.6m relating to the FY25
acquisitions of ESM Power, Argus Fire and Grupo Visegurity (after
offsetting net cash acquired of £9.7m). Acquisitions also include
employment-linked earnout payments of £7.0m related to prior period
acquisitions, and an increase to the consideration paid for GBE Converge
resulting from the completion accounts process.
Dividend payments of £64.6m in FY25 comprised the FY24 final dividend
of £38.5m, the FY25 interim dividend of £16.0m, together with dividends
paid to the Landmarc minority shareholder of £10.1m. The recommended
final FY25 dividend of 3.0p will result in an 8% increase in the total dividend
per share to 4.3p for FY25 (FY24: 4.0p), representing a payout ratio of 34%
(FY24: 33%).
Lease liabilities & other includes an increase in lease liabilities in FY25
(net of capital repayments) of £23.5m (FY24: £44.6m), as we continue to
transition our fleet to EVs. By the end of FY25, 74% of our UK fleet was
electric, compared with 66% at the end of FY24.
Net debt
Average daily net debt for FY25 was £264.0m FY24 (£160.7m), resulting
in an average leverage ratio (average daily net debt / EBITDA) of 0.8x for
FY25, at the lower end of our target range of 0.75x – 1.5x (FY24: 0.6x).
Closing net debt at 31 March 2025 of £199.0m was £118.2m higher than in
FY24 (£80.8m), contributing to Total Financial Obligations (TFO), including
a net retirement benefit asset of £13.9m (FY24: £0.8m liability), of £185.1m
(FY24: £81.6m).
The increases in net debt during FY25 were largely driven by capital
returns to shareholders and acquisitions totalling £236.5m, combined with
the net increase in lease liabilities of £23.5m, exceeding the free cash inflow
of £142.8m. These planned capital returns to shareholders included share
buybacks (£100.0m), share purchases for employee incentive schemes
(£14.6m) and dividends paid (£64.6m).
49
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Liquidity and covenants
At 31 March 2025, the Group had £430.0m of committed funding
arrangements, comprising £180m of US Private Placement (USPP) notes
with long-dated maturities between 2030 and 2034 at a blended average
interest rate of 3.86%, alongside a £250m RCF maturing in October 2028.
In December 2024, Mitie issued £60m of USPP notes with a seven-year
maturity at an interest rate fixed at 5.71%, following the maturity of a £30m
12-year USPP note with a fixed interest rate of 4.04% in the same month.
On 25 July 2024, DBRS Morningstar confirmed Mitie’s credit rating of BBB
with a ‘stable’ outlook.
Mitie’s two key covenant ratios are leverage (ratio of consolidated total net
borrowings to adjusted consolidated EBITDA) and interest cover (ratio of
consolidated EBITDA to consolidated net finance costs), with a maximum
of 3.0x and minimum of 4.0x respectively. Covenant ratios are measured
on a post-IFRS 16 basis with appropriate adjustments for leases, being
primarily the exclusion of lease liabilities from net debt and the inclusion
of a charge equivalent to lease payments against EBITDA.
At 31 March 2025, the Group was operating well within these ratios at
0.04x covenant leverage and 38.7x interest cover. A reconciliation of the
calculations is set out in the table below:
£m
FY25
FY24
Operating profit before Other items
234.1
210.2
Add: depreciation & amortisation
76.8
57.9
Headline EBITDA
310.9
268.1
Add: covenant adjustments
1
23.8
21.9
Leases adjustment
2
(64.1)
(43.3)
Consolidated EBITDA
(a)
270.6
246.7
Full-year effect of acquisitions & disposals
3.5
11.1
Full-year effect of Landmarc step
acquisition
–
5.7
Adjusted consolidated EBITDA
(b)
274.1
263.5
Net finance costs
16.2
9.4
Less: covenant adjustments
(0.5)
(0.4)
Leases adjustment
3
(8.7)
(5.6)
Consolidated net finance costs
(c)
7.0
3.4
Interest cover (ratio of (a) to (c))
38.7x
72.6x
Net debt
199.0
80.8
Covenant adjustment
4
5.7
0.0
Impact of hedge accounting & upfront fees
2.4
2.5
Leases adjustment
5
(197.5)
(174.0)
Consolidated total net debt/(cash)
(d)
9.6
(90.7)
Covenant leverage (ratio of (d) to (b))
0.04x
< 0x
1. Covenant adjustments for EBITDA relate to share-based payments charges, and
pension administration expenses and past service costs.
2. Leases adjustment for EBITDA relates to depreciation charge for leased assets and
interest charge for lease liabilities (i.e. application of a charge equivalent to lease
payments).
3. Leases adjustment for net finance costs relates to interest charge for lease liabilities
(i.e. removal of interest on lease liabilities).
4. Covenant adjustment for net debt relates to cash held in a bank in Cyprus.
5. Leases adjustment for net cash relates to lease liabilities (i.e. removal of lease liabilities).
50
Mitie Group plc
Annual Report and Accounts 2025
SUSTAINABILITY STATEMENT
Better Places; Thriving Communities
Our dedicated team of 76,000 colleagues deliver transformational services
to over 3,000 public and private sector customers, positively impacting
millions of lives in the UK and beyond.
Sustainability and social responsibility are at the core of our business.
They are fundamental to our resilient business model, helping to minimise
our environmental footprint while supporting the UK’s transition to a
low-carbon future through the services we deliver for our customers.
Integrity and ethical standards are equally important, and we outline
our principles through our policies and Code of Conduct (One Code).
We expect our colleagues and suppliers to uphold these principles,
ensuring a culture of transparency and accountability. Our robust
corporate governance framework underpins a sustainability strategy
that benefits our stakeholders and the wider community.
We are also committed to nurturing a skilled workforce by offering
meaningful employment and development opportunities alongside
supporting economic and social progress in local communities. We are
champions of responsible resource management and environmental
stewardship to secure a greener future. As leaders in Environmental, Social
& Governance (ESG) matters, we support our customers to achieve their
goals while contributing to a healthier planet and stronger communities.
At Mitie, we are committed to making a
significant positive impact. Sustainability is
at the heart of our approach, driving us
to reduce our environmental footprint,
support the wellbeing of our workforce
and uphold the highest ethical standards.
Through our transformational services,
we empower our clients to achieve their
sustainability objectives while advancing
societal decarbonisation, social value
and strong governance. Together, we
are building a resilient, future-focused
business that benefits our planet, our
people and the communities we serve.
Jason Roberts
Group Director for Sustainability
Introduction
ESRS 2 General Disclosures
Basis for preparation
53
BP-1:
General basis for
preparation of Mitie’s
sustainability statements
54
BP-2:
Disclosures in relation to
specific circumstances
Governance
54
GOV-1:
The role of the
administrative, management and
supervisory bodies
55
GOV-2:
Information provided
to, and sustainability matters
addressed by, the undertaking’s
administrative, management and
supervisory bodies
57
GOV-3:
Integration of
sustainability-related
performance in incentive schemes
57
GOV-4:
Statement on
sustainability due diligence
57
GOV-5:
Risk management
and internal controls over
sustainability reporting
Strategy
57
SBM-1:
Market position, strategy,
business model(s) and value chain
57
SBM-2:
Interests and views of
stakeholders
58
SBM-3:
Material impacts, risks
and opportunities and their
interaction with strategy and
business model(s)
Impact, risk and opportunity
management
59
IRO-1:
Description of the
processes to identify and
assess material impacts,
risks and opportunities
E1 Climate Change
Strategy
60
E1-1:
Transition plan for climate
change mitigation
60
E1-SBM-3:
Description of the
processes to identify and assess
material climate-related impacts,
risks and opportunities (IROs)
Impact, risk and opportunity
management
63
E1-2:
Policies related to climate
change mitigation and adaptation
63
E1-3:
Actions and resources in
relation to climate change policies
Metrics and targets
64
E1-4:
Targets related to climate
change mitigation and adaptation
64
E1-5:
Energy consumption and
mix
65
E1-6:
Gross Scopes 1, 2, 3 and
total GHG emissions
67
E1-7:
GHG removals and GHG
mitigation projects financed
through carbon credits
67
E1-8:
Internal carbon price
67
E1-9:
Anticipated financial
effects from material physical
and transition risks and potential
climate-related opportunities
S1 Own Workforce
Strategy
68
ESRS 2 SBM-2: Interests and
views of stakeholders
68
ESRS 2 SBM-3:
Material impacts,
risks and opportunities and their
interaction with strategy and
business model
Impact, risk and opportunity
management
69
S1-1:
Policies related to own
workforce
70
S1-2:
Processes for engaging
with own workers and workers’
representatives about impacts
71
S1-3:
Processes to remediate
negative impacts and channels for
own workers to raise concerns
71
S1-4:
Taking action on material
impacts on own workforce, and
approaches to mitigating material
risks and pursuing material
opportunities related to own
workforce, and effectiveness of
those actions
Metrics and targets
71
S1-5:
Targets related to managing
material negative impacts,
advancing positive impacts and
managing material risks and
opportunities
72
S1-6:
Characteristics of the
undertaking’s employees
72
S1-9:
Diversity metrics
72
S1-12:
Persons with disabilities
73
S1-10:
Adequate wages
73
S1-13:
Training and skills
development metrics
73
S1-14:
Health and safety metrics
74
S1-17:
Incidents, complaints and
severe human rights impacts
G1 Business Conduct
Impact, risk and opportunity
management
74
G1-1:
Corporate culture and
business conduct policies
75
G1-2:
Management of
relationships with suppliers
75
G1-3:
Prevention and detection
of corruption or bribery
Metrics and targets
75
G1-4:
Confirmed incidents of
corruption or bribery
75
G1-5:
Political influence and
lobbying activities
75
G1-6:
Payment practices
Contents
51
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Our industry-leading approach
We are targeting Net Zero for our direct operations by the end of 2025,
and our indirect operations by 2035. Since launching Plan Zero five years
ago, we have made significant progress towards our targets. During the
year, we published our first Climate Transition Plan, building on the success
of Plan Zero to guide us through the next decade.
For the second consecutive year, we have been ranked on the CDP’s
Climate A List for our carbon disclosures. This recognition reflects the
validation of our science-based targets by the Science Based Targets
initiative (SBTi), the ongoing transition of our fleet to EVs and improved
carbon data capture and reporting.
We have maintained ‘Platinum’ status in the Sustainable Facilities
Management Index for the fourth consecutive year and we received
a ‘Negligible’ risk rating from Sustainalytics. Our 14 ESG targets are
monitored and reviewed by our ESG Committee to ensure progress.
Our social value framework
Plan Thrive
We recently launched Mitie’s new Company purpose – ‘Better Places; Thriving Communities’ – uniting everyone at Mitie, from the Board to
frontline colleagues, around a shared commitment to help shape the communities where we live and work. To support this new purpose, we
have set bold social value pledges through our new Plan Thrive initiative, uplifting people and enabling places to prosper as a trusted partner
and employer.
Innovation
Innovation is embedded
within all our pillars, to
ensure that Mitie remains at
the forefront of technology
and ‘best-in-class’ service
delivery.
People
People are Mitie’s greatest
asset, and we have a duty of
care to ensure that they are
equipped to be productive
in the office and at home.
Environment
The climate emergency is
humanity’s biggest challenge.
We believe it is key for all of
our people to understand
our environmental impact.
Community
We are an active part of
the communities in which
we operate, helping to
deliver social value, not
only for Mitie, but also for
our customers.
Responsible
supply chain
Mitie has a robust and
responsible supply chain that
is engaged in the creation of
positive social impacts across
all areas of business.
Our Plan Thrive
pledges
01
Uplift one million lives –
through social mobility,
inclusion and wellbeing
02
Enable 1,000 places to
prosper
03
Champion and invest
in partnerships and
supply chain to deliver
sustainable impact
04
Measure and report our
impact transparently
Find out more about Mitie and
our commitment to ESG in
our 2025 ESG report
P
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O
P
L
E
I
N
N
O
V
A
T
I
O
N
I
N
N
O
V
A
T
I
O
N
E
N
V
I
R
ON
M
E
N
T
C
O
M
M
U
N
I
T
Y
R
E
S
P
O
N
S
I
B
L
E
S
U
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Y
C
H
A
I
N
Mitie’s social value framework aligns with the UK Government’s Social Value Model and the United Nations Sustainable Development Goals (SDGs).
It guides our approach to sustainability and social value across the value chain, with specific objectives and targets reported monthly on our website.
52
Mitie Group plc
Annual Report and Accounts 2025
Progress against our social value targets
In FY25, we achieved 12 out of our 14 social value targets across the pillars of People, Environment, Community and Responsible Supply Chain.
As at FY25, we have transitioned 74% of our total UK fleet to EVs, slightly below our 80% target. This shortfall was primarily due to our continued
business expansion, both organically and through infill M&A, which introduced new vehicles to the fleet, including those where commercially and
operationally viable EV options are not available. Overall, we have made substantial progress over the past five years, converting 85% of our fleet
where EV alternatives are available. We now operate 57% more EVs compared with the initial expectation when we launched Plan Zero in 2020.
The percentage of racially diverse colleagues on our senior leadership team (SLT) increased by 2.4ppt to 17.4%, and we continue to work towards our
target of 20%.
People
Target
FY25
Actual
FY25
Achieved?
% of colleagues, where Mitie sets salary, paid Real Living Wage
100%
100%
% of colleagues through apprenticeship scheme
5.0%
5.9%
% of women on SLT
40%
42%
% of racially diverse colleagues on SLT
20%
17.4%
Environment
Scope 1 and 2 emissions, net of carbon credits – global emissions (tonnes)
12,775
12,775
Scope 3 emissions – global emissions (tonnes)
275,752
254,355
% of fleet zero carbon
1
80%
74%
Waste to landfill (tonnes)
0
0
Community
Volunteer paid hours
23,680
32,512
Health and wellbeing training hours delivered
28,943
36,814
Armed Forces recruitment
2
2.3%
3.9%
Responsible supply chain
Spend with VCSEs
£2.3m
£3.4m
% of spend with SMEs
3
33%
47.3%
% of spend on Supplier Management Framework
40%
55.2%
SUSTAINABILITY STATEMENT
continued
1.
In FY24 we reduced the FY25 target for % of fleet zero carbon from 85% to 80% to reflect the increased size of our overall fleet of vehicles, due to organic growth and strategic
acquisitions, and the limited availability of commercially and operationally viable EV options for specialist vehicles and our highest mileage drivers.
2. This target relates to maintaining Armed Forces recruitment at a percentage of 0.5% above the population average.
3. Commitment to maintain public sector % SME spend above 33% target.
53
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Basis for preparation
BP-1: General basis for preparation of Mitie’s
sustainability statement
As part of our commitment to ESG, Mitie is preparing to comply with
the Corporate Sustainability Reporting Directive (CSRD) by adopting
new sustainability statements for our FY25 Annual Report, referencing
the European Sustainability Reporting Standards (ESRS) issued by the
European Financial Reporting Advisory Group (EFRAG).
Our double materiality assessment (DMA), completed in FY24, identified
E1 Climate Change, S1 Own Workforce and G1 Business Conduct as
material to our business. We have therefore focused on these key areas
of the CSRD while maintaining compliance with the Task Force on
Climate related Financial Disclosures (TCFD) and other relevant standards.
All data points in the ESG sections have been identified as material through
our DMA.
Climate-related disclosure for TCFD
Compliance statement
Under the Financial Conduct Authority’s Listing Rules, our reporting is
compliant with the four TCFD recommendations and 11 recommended
disclosures, as set out in Figure 4 of Section C of the TCFD report
‘Recommendations of the Task Force on Climate-related Financial
Disclosures’. During FY25, the Group has continued to transition from
a disclosure prepared using the TCFD recommendations to a disclosure
aligned with the International Sustainability Standards Board (ISSB)
standards, IFRS S1 and S2, and where possible has included information
to align with any additional reporting requirements. A summary of our
response to the TCFD recommendations is set out below.
Compliance summary
TCFD recommendation
Recommended disclosures
Compliance position
Page reference
FY22
FY23
FY24
FY25
Governance
Disclose the organisation’s
governance around climate-
related risks and opportunities.
A. Describe the Board’s oversight of climate-related risks and
opportunities.
54 to 56
B. Describe management’s role in assessing and managing climate-related
risks and opportunities.
55 to 56
Strategy
Disclose the actual and potential
impacts of climate-related
risks and opportunities on the
organisation’s businesses, strategy
and financial planning where such
information is material.
A. Describe the climate-related risks and opportunities the organisation
has identified over the short, medium and long term.
62
B. Describe the impact of climate-related risks and opportunities on the
organisation’s businesses, strategy and financial planning.
58 to 59
C. Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or
lower scenario.
60 to 61
Risk management
Disclose how the organisation
identifies, assesses and manages
climate-related risks.
A. Describe the organisation’s processes for identifying and assessing
climate-related risks.
59
B. Describe the organisation’s processes for managing climate-
related risks.
60
C. Describe how the processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s overall
risk management.
60 to 61
Metrics and targets
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where such
information is material.
A. Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
management process.
63
B. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse
gas (GHG) emissions and related risks.
65 to 66
C. Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets.
64
Disclosure consistent with the recommended disclosure.
Disclosure consistent with the recommended disclosure, further improvement opportunities planned.
Disclosure not consistent with the recommended disclosure.
ESRS 2 General Disclosures
54
Mitie Group plc
Annual Report and Accounts 2025
Continual improvement – FY25 progress
In last year’s report, we identified two areas where additional measures could be taken to enhance our TCFD reporting. The table below illustrates these
areas and the actions undertaken during FY25 to drive continual improvement.
Action required:
Update:
Roll out Board and MGX climate-related training
Information regarding the measures implemented in FY25 can be found
below (GOV-1)
Review carbon credits governance framework to ensure continual
alignment with evolving landscape
Information regarding the measures implemented in FY25 can be found on
page 67 (E1-7)
Our climate-related journey to date
FY19
• Launched Plan Zero
initiative and set
stretching net zero
targets (2025 – Scope
1 and 2 and 2035 –
Scope 3)
• Created governance
structures
FY20
• Signatories of all
three Climate Group
initiatives: RE100,
EV100 and EP100
• Achieved 20% small
vehicle EV transition
• Published first TCFD
FY21
• Committed to
a science-based target
• Expanded our TCFD,
incorporating
risks and
opportunities
• Achieved 15% EV
transition
FY22
• Achieved ISO
50001:2018
in Mitie Energy
• Enhanced our
TCFD further, by
incorporating scenario
analysis
• Achieved 30% EV
transition
FY23
• Received validation for
science-based targets
• Completed first full-
year carbon reporting
across the Group,
both UK and overseas
• Achieved 45% EV
transition
FY24
• Achieved CDP
A List for climate
submission
• Achieved ISO
50001:2018 across
the Group
• TCFD fully established
for all metrics
• Achieved 66% EV
transition
FY25
• Formally published
our Climate
Transition Plan
• Published a sustainable
risk quantification
framework
• Received EcoVadis
rating of 77 – Gold
• Achieved 74% EV
transition
SUSTAINABILITY STATEMENT
continued
BP-2: Disclosures in relation to specific
circumstances
Mitie is dedicated to delivering Plan Zero as outlined in our Climate
Transition Plan. However, we recognise that external factors could
affect our goal of aligning as closely as possible with the Paris
Agreement’s 1.5ºC target. Therefore, we continuously monitor risks
and opportunities to adapt to the changing environment and minimise
potential business impacts.
In FY25, we identified and monitored risks and opportunities with a
potential ‘material’ impact, meaning that they are of significant interest to
investors and stakeholders. To assess the impact of climate-related risks
and opportunities on our strategy and aid financial planning, we enhanced
our climate-related financial modelling framework. This framework builds
on our five-year cash flow forecast model, aligned with our strategic,
budgeting and business planning cycles, and relevant to the duration of
our existing contracts.
Time horizons
Time horizons and risk impact can be found in E1-SBM-3 on page 60.
Value chain estimation
The methodology for estimated metrics, including indirect sources, is
detailed in the metric descriptions. Relevant information sources, such as
conversion factors, are listed in the document. Assumptions, estimations
or approximations are described in the metric disclosure information.
Plans to enhance data accuracy and verifiability, such as through a carbon
accounting system, are noted in the metric or general information on the
topical standard.
Governance
GOV-1: The role of the administrative, management
and supervisory bodies
Mitie has a formal governance structure in place to ensure that all climate-
related risks and opportunities are correctly assessed and managed.
Overall responsibility for this resides with the Board, which is responsible
for the strategic direction of the business, setting targets and the
prioritisation of material issues affecting the Group.
The table on page 55 details the different committee roles and
responsibilities for the management of climate-related risks and
opportunities, along with information on specific climate-related decisions
taken during the year. A breakdown of the Board’s gender diversity can be
found on page 72.
In the past year, the Mitie Board participated in a comprehensive virtual
training programme titled Leading for Net Zero and Beyond. This bespoke
programme was specifically designed to ensure compliance with our
mandatory TCFD requirements. The training consisted of two sessions
aimed at providing knowledge and insights to help address climate change
and support Mitie’s position as an industry leader in ESG matters.
55
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Mitie governance body
and Chair
Frequency
Climate-related roles
and responsibilities
Decisions taken in FY25
Focus areas FY26
Mitie Board
Chairman
• Bi-monthly (at least six
meetings a year)
• ESG is a standing agenda
item. Information is
disseminated to the
Board via the ESG
Committee, including
climate-related updates
• Maintains oversight of climate-related risks
and opportunities
• Sets ESG targets, including climate-related
targets
• Monitors progress against climate-related
goals and targets
• Reviewed and integrated
DMA results into existing
business strategy
• Reviewed and approved
climate-related disclosure
and principal risks and
uncertainties
• Review and approve
new ESG targets for
FY26 to FY30
ESG Committee
Non-Executive
Director
• Bi-monthly (six meetings
a year) to align with
input into Board
meetings
• Climate-related
matters are fed into
the ESG Committee
via several channels,
including the Plan Zero
Steering Group, which
reports directly to the
Committee
• Drives the ESG agenda on behalf of the
Group
• Ensures that the Group conducts its
business in a commercially sensitive way
to achieve maximum positive impact on
the communities and people with which
it works and the environment which it
works within
• Formal reporting of climate-related risks
and opportunities
• Oversight of capital expenditure relating
to ESG
• Engages stakeholders to understand
expectations and concerns regarding
climate change and communicates the
Group’s efforts to address them
• Review and adoption of
carbon credits governance
framework
• Adoption of
decarbonisation agenda
for Mitie’s fleet, estate and
energy consumption
• Engagement improvements
with supply chain to ensure
alignment with the
Group’s science-based
target approach
• Embedding Mitie’s DMA
results into strategies
across the business
and developing new
ESG targets for Board
approval
• Supporting the
employment and
social mobility of
underrepresented
groups
• Launching Mitie’s new
comprehensive social
value strategy, to be
delivered across a wide
range of client accounts
Mitie Executive
Team
Chief Executive
• Weekly
• Climate-related
matters are discussed
as required – subject
matter dependent,
updates will be for
information only or
involve robust discussion
• Implementation and delivery of ESG
strategy and targets
• Ongoing review of Plan Zero
• Ongoing review of growth strategy
to ensure continual alignment with
decarbonisation agenda
• Ongoing review of
operational delivery to
ensure alignment with
decarbonisation agenda
• Ongoing review of
growth strategy and
the market with focus
on decarbonisation
opportunities
Audit Committee
Non-Executive
Director
• Climate-related
matters are discussed
twice yearly as part of
the principal risk and
uncertainties process
(annual and half-yearly
review). Information is
disseminated to the
Audit Committee via
the Risk Committee
• Reviews Annual Report and Accounts
(ARA), including TCFD, and advises
Board on whether it is fair, balanced
and understandable and provides the
necessary information to shareholders
to assess the Group’s position and
performance, business model and strategy
• Monitors impact of climate change on
the Group’s strategy, operations and
financial performance, and engages with
management to address any material risks
and opportunities
• Provision of risk assurance
against the climate change
and social value principal
risk and climate-related
risks and opportunities as
reported in the Group’s
annual climate-related
disclosure
• Ongoing evaluation of
climate-related transition
as part of internal
controls framework
Risk Committee
Chief Legal Officer
• Quarterly
• Climate-related matters
are fed into the Risk
Committee via several
channels, including the
Group Head of ERM
and Group Sustainability
and Social Value
Director
• Responsible for overseeing the Group’s
approach to risk management, including
ongoing review of principal and
emerging risks
• Ensures Group is adequately prepared
to manage risks associated with
climate change
• Ongoing management
of outputs from climate
scenario analysis to
wider business, focusing
on maintaining business
resilience
• Management of outputs
from annual risk maturity
assessment, which includes
climate-related responses
• Ongoing development
of key risk indicators for
principal risks, including
climate change and
social impact
• Management of
outputs from FY26 risk
maturity assessment,
including climate-related
responses
Governance
GOV-2: Information provided to, and sustainability matters addressed by, the undertaking’s administrative,
management and supervisory bodies
56
Mitie Group plc
Annual Report and Accounts 2025
Mitie governance body
and Chair
Frequency
Climate-related roles
and responsibilities
Decisions taken in FY25
Focus areas FY26
Nomination
Committee
Chairman
• Two planned meetings
as standard
• To evaluate and make recommendations
regarding the composition, diversity,
experience, knowledge, skills and
independence of the Board and its
Committees
• Broadening Board
awareness of climate-
related matters through
the delivery of Institute
of Environmental
Management and
Assessment (IEMA)
accredited training
• Ongoing review to
increase Board-level
skills and experience
Remuneration
Committee
Non-Executive
Director
• Three planned meetings
as standard
• Agrees climate-related KPIs that apply to
executive remuneration incentive plans
• Analysis of out-turns
for the maturity of LTIP
awards and Annual
Bonus Plan
• Ongoing review of
targets for FY26 awards
ESG Risk Group
Group Director for
Sustainability
Formerly known as
the Plan Zero
Steering Group
• Quarterly
• Climate-related risks
and opportunities are
standing agenda items
• Corporate Sustainability
Reporting Directive
(CSRD) is incorporated
into the responsibilities
of this group
• Responsibility for preparing and
responding to our climate-related
disclosure
• Reviews and mitigates identified climate-
related risks and realises climate-related
opportunities
• Initial review and approval of climate
change risk assessment document ahead
of submission to ESG Committee
• Oversees and directs the ESG Working
Groups
• Ongoing climate-related
disclosure enhancements
• Improved engagement
with supply chain to
influence uptake of
environmental initiatives
that work towards a 1.5ºC
trajectory
• Continued advancement of
a learning and development
programme accessible
to all Mitie colleagues,
particularly those in
frontline operations
• Established carbon credit
governance framework
• Undertake continual
improvement of CSRD
disclosures
• Ongoing review of
the Climate Transition
Plan and incorporation
of carbon reduction
initiatives
• Ongoing review of
regulatory requirements
• Further development of
scenario analysis
ESG Working
Groups
Senior Sustainability
Manager
In FY25, the
working groups
were repurposed to
cover the wider ESG
agenda, including
environment, labour
and human rights,
business ethics
and sustainable
procurement
• Quarterly
• Reports into the Plan
Zero Steering Group
• Delivers against Plan Zero, our
Climate Transition Plan, the internal
solutions and external opportunities
to Mitie’s customers
• Deployed initiatives to
address energy, water,
waste and plastics
reduction – focus to be
on what can be eliminated
across all business areas
• Increased engagement in
sustainable procurement
and reporting
• Completion of ISO
surveillance audits
• Establish a supplier
engagement platform
to measure, report and
influence supply chain
behaviour
• Improve sustainable
commuting engagement
and reporting
• Development of
biodiversity strategy
Mitie Group plc Board
Mitie Group Executive (MGX)
Mitie Business Units, Functions, Accounts, Projects
ESG Committee
Remuneration Committee
Nomination Committee
Audit Committee
Risk Committee
ESG Risk Group
ESG Working Groups
SUSTAINABILITY STATEMENT
continued
57
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
GOV-3: Integration of sustainability-related
performance in incentive schemes
Following extensive consultation with shareholders, the 2024 Long Term
Incentive Plan (LTIP) award, for which the performance period ends on
31 March 2027, will be measured against EPS, ROIC and revenue growth
targets. The Remuneration Committee will also have reference to leverage
and ESG underpins, such that if leverage and/or progress against the firm’s
ESG strategy is poor, there is specific discretion to allow the award to be
reduced accordingly, including to nil. ESG is a performance measure for
the 2022 and 2023 LTIP awards, for which the performance periods end
on 31 March 2025 and 31 March 2026 respectively. The targets for LTIP
awards are disclosed in the Directors’ remuneration report on page 124.
GOV-4: Statement on sustainability due diligence
Mitie has a robust sustainability due diligence process to ensure responsible
and ethical practices across our operations and supply chain. Our due
diligence process includes identifying, preventing, mitigating and addressing
environmental and social impacts, such as modern slavery, human rights
violations, and environmental degradation.
Core elements of due diligence
Paragraphs in the sustainability statement
(a) Embedding due diligence in
governance, strategy and business
model
GOV-5 and SBM-1
(b) Engaging with affected
stakeholders
SBM-2 and under E1-IRO-1, S1-2
(c) Identifying and assessing
negative impacts on people and
the environment
SBM-3 and IRO-1
(d) Taking action to address
negative impacts on people and
the environment
Environment: E1-3
Governance: G1-3
(e) Tracking the effectiveness of
those efforts and communicating
Environment: E1-4 to E1-6
Social: S1-6 to S1-17
Governance: G1-3
GOV-5: Risk management and internal controls over
sustainability reporting
The Board, through the Audit Committee, oversees Mitie’s internal
controls, risk management and compliance. Management maintains these
controls, supported by the Internal Audit function, which includes Internal
Audit, Internal Controls, and Investigations teams.
Mitie’s internal controls follow the COSO framework, covering financial,
operational and compliance controls. The Integrated Management System
(IMS) ensures adherence to policies and procedures.
To comply with the updated UK Corporate Governance Code, Mitie
introduced independent testing of internal controls, moving beyond self-
assessment. The Audit Committee review and approve this approach,
which has identified improvement opportunities and led to practical plans
Its focus includes IT General Controls (ITGC) and ESG controls, ensuring
robust technology infrastructure and responsible business practices.
More information on the entity-specific risks identified are found under the
chapters SBM-3 and IRO-1. Further information on risk management and
internal controls can be found on page 76.
Strategy
SBM-1: Market position, strategy, business model(s)
and value chain
We have industry-leading ESG credentials, including validated science-
based targets and a place on the CDP’s Climate A List for the second
consecutive year, alongside being recognised as a UK Top Employer for
the seventh consecutive year.
As a service-led organisation, our emissions mainly come from transporting
our people between customer sites, resulting in Scope 1 and 2 emissions
from diesel and EV charging. Mitie’s own relatively small estate of c.120 sites
account for only 7% of our total Scope 1 and 2 emissions, with our fleet
comprising 93%.
Mitie’s transition to EVs has reduced emissions from petrol and diesel
consumption by over 25% in the last three years. This initiative supports
our Plan Zero commitment to Net Zero operational emissions by 2025
and Net Zero non-operational emissions by 2035 through supplier
engagement. Following a ‘Do, Lead, Deliver’ approach, we are reducing
our environmental impact while helping customers accelerate their
decarbonisation journeys.
Our purpose is driven by a belief that better places lead to thriving
communities. That’s why, every day, we work to make places safer, cleaner,
more secure and more sustainable. Our strategy focuses on infill M&A
to acquire capabilities that support our customers in decarbonising their
estates and creating Net Zero pathways.
SBM-2: Interests and views of stakeholders
Mitie places significant emphasis on understanding and addressing the
interests of its stakeholders, including colleagues, customers, suppliers,
communities, the government and shareholders. The Company engages
with these groups through structured programmes and initiatives to ensure
that their feedback informs strategic decisions.
The Board and senior management are regularly informed about
stakeholder feedback and engagement outcomes. This information is
integrated into decision-making processes and strategic planning to ensure
that stakeholders’ interests and views are considered in key business
decisions. Further information regarding stakeholder engagement can
be found on page 34.
Our industry-leading ESG credentials
58
Mitie Group plc
Annual Report and Accounts 2025
SUSTAINABILITY STATEMENT
continued
Risk and/or opportunity
Impact
Water stress, water use,
waste water treatment
Climate change policy:
customer/investor/
response/education
Air quality and pollution
(local)
Operational resources:
materials/circular economy,
waste and recycling
Biodiversity loss (local and
regional soils, forest/
woodland, aquatic)
Anti-discrimination in
employee lifecycle (ED&I)
Responsible procurement
and supplier risk
Human rights across the
value chain
Public policy advocacy
Adaptation to natural
weather viability/climate
change
Energy transition:
positive and negative
environmental risk
Energy transition: social risk,
positive and negative
Occupational health and
safety (personal and process)
Colleague: fair employment
Colleague learning and
development, future skills
and apprenticeships
Corporate governance,
transparency and integrity
Operational energy
management:
energy efficiency, energy
security
GHG emissions:
decarbonisation of
operations, credible
carbon management
Colleague wellbeing (mental
and physical health)
Local community impact
Products and services:
enabling environmental
improvements (energy
efficiency, pollution, water
use, waste)
1
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
2
3
1
4
13
7
16
2
5
14
8
17
3
6
15
9
18
10
19
11
20
12
21
SBM-3: Material impacts, risks and opportunities and
their interaction with strategy and business model(s)
Double materiality assessment (DMA): long-term
sustainability and resilience
Mitie undertook a DMA during FY24, with the objective of developing
a comprehensive list of the material sustainability issues that matter
most to our stakeholders. This involved an assessment of impacts, risks
and opportunities (IROs) to ensure that our strategy and reporting are
focused, efficient and relevant.
The DMA applied a recognised approach in line with the requirements
of the latest global sustainability reporting disclosure rules, such as GRI
Universal Standards (2021), IFRS S1 (2023) and ESRS 2 (2023). The
assessment included stakeholder engagement via interviews and an online
StakeholderTALK survey.
The assessment comprised an evaluation of our impacts on the
environment and society, as well as investor-relevant financial effects
on Mitie. This dual ‘impact-financial effects’ approach has been termed
‘double materiality’. Our approach is based on the Five Part Materiality
Test (AccountAbility 2002–2018). It aligns with the SASB Five-Factor Test
(2015), and it is informed by the EFRAG Materiality Guide (2024).
The relative prioritisation process also accounts for the Sustainability
Context Principle and the Precautionary Principle in the evaluation of
potential or actual IROs. Research was completed using internal and
external materials, such as reports, policy reviews and articles, with the
scoring based on criteria aligned with the relevant sections of IFRS S1 and
ESRS 2. Validation was completed by a team of senior managers and the
ESG Committee signed off the process. The results of the assessment
were reviewed to identify the material topics, as well as other topics which
are below the threshold of materiality, and they are shown in the graphic
above right.
Outcome
Seven material topics were identified through our DMA, which map across
to three areas of focus.
ESG material topics identified by the DMA
ESRS category mapping
E Operational energy management, efficiency,
GHG emissions and decarbonisation
E1 Climate Change
E Products and services: enabling
environmental improvements
S Occupational health and safety (personal
and process)
S1 Own Workforce
S Colleagues: fair employment
S Colleague learning and development, future
skills and apprenticeships
S Colleague wellbeing (mental and
physical health)
G Corporate governance, transparency
and integrity
G1 Business Conduct
59
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Impact, risk and opportunity management
IRO-1: Description of the processes to identify and
assess material impacts, risks and opportunities
Mitie identifies and assesses material IROs to comply with the CSRD.
We use multiple sources, including the ESRS, to provide a comprehensive
list of sustainability matters. We also consider industry-specific issues,
covering our entire value chain from suppliers to customers, ensuring
a holistic view of our impacts and financial risks.
Our ESG Risk Group evaluates whether sustainability matters have
significant financial effects on our Company and considers the likelihood
and potential magnitude of these effects over various time horizons.
We use a traffic light system to assess the financial impact of material
physical risks across different time horizons, and prioritise IROs by applying
thresholds to determine which are material and should be reported.
High scores indicate materiality, while low scores indicate immateriality.
E1 Climate Change:
Our environmental impacts are tied to
our goal of reducing our own footprint
and offering decarbonisation solutions
for clients. This includes reducing the
environmental impact of our extensive fleet
and the credibility to deliver sustainability
consultancy services to our customers
to achieve Net Zero, supported by a
team managing energy consumption and
delivering carbon reduction projects such
as solar PV, heat pumps, battery storage
and EV charging solutions.
S1 Own Workforce:
As an organisation with 76,000 colleagues,
the DMA has underscored the importance
of fair employment practices and the health,
safety and wellbeing of our people. We are
committed to achieving zero harm, fostering
a just and inclusive culture, and enhancing
skills that promote social mobility, benefiting
local communities.
G1 Business Conduct:
Our commitment to ethical business
practices is reflected in the impacts and
risks identified. We prioritise strong
governance, transparency and integrity in
all our operations. This includes adhering
to the highest standards of business ethics,
ensuring compliance with regulations
and fostering a culture of accountability.
By maintaining robust business conduct,
we aim to build trust with our stakeholders
and drive sustainable growth.
E1 Climate Change:
The material risks include physical risks from
extreme weather for us, our customers and
our supply chain, plus transition risks from
regulatory changes and reputational risks
from not meeting sustainability targets.
Opportunities include expanding
decarbonisation services, leveraging
new technologies, strengthening market
leadership, and ensuring regulatory
compliance. Mitie’s Climate Transition
Plan and sustainability initiatives aim to
achieve Net Zero emissions and promote
responsible business practices.
S1 Own Workforce:
The material risks include high turnover
rates, skill shortages, employee wellbeing
concerns, and modern slavery in the
supply chain.
The material opportunities involve investing
in employee development, promoting
diversity and inclusion, developing
leadership skills, and enhancing social
mobility. Mitie addresses these risks and
opportunities through comprehensive
training programmes, improved working
conditions, mental health support, and
initiatives like the Mitie Women Can
network and the Proud to Be network
for LGBTQ+ colleagues.
G1 Business Conduct:
The material risks include regulatory
non-compliance, fraud and corruption,
reputational damage, and operational
disruptions.
The material opportunities involve
enhancing trust and reputation, ensuring
regulatory compliance, improving
operational efficiency, and driving
sustainable growth. Mitie addresses
these risks and opportunities through
its comprehensive Code of Conduct,
robust risk management frameworks,
and continuous monitoring of compliance
and ethical standards.
Environment
Material impacts
Material risks and opportunities
Social
Governance
60
Mitie Group plc
Annual Report and Accounts 2025
Strategy
E1-1: Transition plan for climate change mitigation
Climate Transition Plan: Plan Zero
At Mitie, we consider the climate emergency to be a critical business issue.
Five years ago, we launched our industry-leading Plan Zero commitment
to decarbonise our business and achieve Net Zero carbon emissions by
the end of 2025 (Scope 1 and 2). Our focus is on three key areas:
• Eliminating carbon emissions from power and transport
• Eradicating non-sustainable waste
• Enhancing inefficient buildings to meet the highest environmental
standards
Mitie’s Climate Transition Plan, approved by the Board and fully integrated
into our business strategy and financial planning, outlines the steps we are
taking to achieve our Net Zero targets. Published in our 2024 ESG Report,
the plan includes several key initiatives.
Our Plan Zero target in 2020 was to transition 85% of our fleet of 4,700
vehicles to EVs by 2025. Over the past five years, our fleet has grown to
over 8,500 vehicles as the business has grown, both organically and through
M&A. To reflect this growth, in FY24 we reduced our targets from 85% to
80% by the end of FY25. We remain committed to our target to transition
85% of the fleet to EV by 31 December 2025, aligning with our Net Zero
targets. At 31 March 2025 (FY25), we had transitioned 6,255 vehicles to
EVs, representing 74% of our total UK fleet.
This transition is reducing Scope 1 emissions from fossil fuels on our
journey to Net Zero. Additionally, we have implemented energy efficiency
measures across our built estate through our energy managers and
decarbonisation project teams. This includes installing low-carbon heat
pumps, LED lighting and solar panels, which help reduce both energy
consumption and carbon emissions. We send zero waste to landfill, and
our waste experts are improving segregation, increasing recycling rates
and reducing overall waste generation.
Our efforts have been recognised externally, with a ranking on the CDP’s
A List for the second consecutive year for our carbon disclosures and
reduction strategy, reflecting our leadership in environmental transparency
and performance. We achieved a Gold rating of 77 with EcoVadis and
were awarded Company of the Year by UK Green Business Awards and
the EMA Organisation 2024 by the Energy Managers Association.
Beyond our environmental initiatives, we continue to make a positive
impact on the communities we serve. In FY25, we supported over 1,500
apprentices, providing valuable training, enhancing green skills, promoting
STEM subjects and creating employment opportunities. Additionally, our
colleagues volunteered over 32,000 hours to local causes, exceeding our
target of 23,680 hours.
Future Commitments FY26 to FY30
EV transition
We intend to transition the remaining fleet to 95% EVs by the end of 2030,
contingent upon advancements in EV technology.
Renewable energy and carbon offsets
Mitie procures 100% renewable energy for the buildings we control
as part of our RE100 commitment. We also procure RE100 compliant
Renewable Energy Guarantees of Origin (REGOs) for all our EV charging
requirements and will report all Scope 2 emissions as zero under market-
based conditions. Our remaining Scope 1 emissions will be fully offset with
verified carbon credits through a balanced portfolio of energy, social and
environmental projects.
Re-baselining
With Scope 1 and 2 emissions offset as part of our Net Zero commitment,
we expect our intensity target to focus on Scope 3 emissions from
purchased goods and services. We will re-baseline our carbon emissions
during FY26 to reflect the significant growth of the business over the past
five years and improvements in Scope 3 reporting from our suppliers.
Carbon reporting
While continuing to report absolute carbon data, we will transition to an
intensity target to reflect the continued growth of the business. We will
reapply to the SBTi to obtain a new intensity target trajectory validated to
1.5°C above pre-industrial levels.
New environmental targets
Following the conclusion of Phase 1 of Plan Zero, we will maintain our
ambitious existing validated science-based targets in the interim. New
intensity targets for carbon emissions will be presented by FY27, once
validated by SBTi, while our wider 2030 targets for energy, total waste
generated, recycled waste and water will be disclosed in FY26.
E1–SBM-3: Description of the processes to identify
and assess material climate-related impacts, risks and
opportunities (IROs)
Climate-related IROs are managed through our Enterprise Risk
Management framework. Climate change is a principal risk, reviewed
quarterly and comprehensively assessed annually.
Our climate change risk assessment, documented on the Group’s Risk
Safe platform, supports this principal risk with numerous climate-related
IROs. At 31 March 2025, 14 climate-related IROs were identified. Details
on those with a potential ‘material’ impact are presented on page 61.
Additionally, account-level climate-related risk information is gathered and
managed with customers through account-level risk registers, all accessible
on Risk Safe.
All risk data is assessed for impact and likelihood, with the residual
score determining one of four risk ratings, from manageable to severe.
Mitie’s risk management structure ensures a consistent method for
effectively managing risks across the Group.
SUSTAINABILITY STATEMENT
continued
E1 Climate Change
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Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Each climate-related risk and opportunity has a designated owner
responsible for implementing appropriate management strategies,
with guidance from the risk and sustainability teams. The table below
provides a holistic view of all climate-related risks and opportunities.
For further information on the roles, responsibilities and oversight of
different committees in relation to climate-related risk management,
see pages 55 to 56.
Risk/opportunity description
Risk type
Time horizon
1. Extreme weather events
Physical
Short to medium
term
2. Increasing summer temperatures
Physical
Medium to long term
3. Decarbonising supply chain
Transition
Short to medium
term
4. Switching from fossil fuels to
low-carbon alternatives for
fleet operations
Opportunity
Medium to long term
5. Changes in customer behaviours
resulting in lost opportunities
Transition
Medium to long term
6. Increases in operating costs
relating to policy decisions to
reduce GHG emissions
Transition
Medium to long term
7. Access to new markets
Opportunity
Medium to long term
8. Investor confidence on climate
change management
Transition
Medium to long term
9. Minimise resource use through
a circular economy embedded
into our business supply chain
and operations
Opportunity
Medium to long term
10. Encourage agile and flexible
working through business processes
Opportunity
Short to medium
term
11. Development/expansion of low
emission services
Opportunity
Medium to long term
12. Procurement of verified and
high-quality carbon credits
Transition
Short to medium
term
13. Low emission and energy
efficiency strategy from Mitie estate
Opportunity
Short to medium
term
14. Potential for litigation if Mitie
does not adequately consider
or respond to the impacts of
climate change
Liability
Medium to long term
Further information on our Enterprise Risk Management framework can
be found on pages 76 to 87.
In FY25, ESG was fully integrated into our internal controls independent
testing programme. This is crucial because the adoption of ESG principles
assists Mitie in mitigating potential operational, financial and reputational
risks while fostering long-term sustainability and value creation, ultimately
leading to enhanced ESG outcomes.
Scenario analysis: improving our understanding of our climate-related
risk profile
Mitie acknowledges the substantial risk posed by failing to address
climate-related challenges. In FY25, we broadened our scenario analysis
to underscore the increasing threat from extreme weather events. As
a people business delivering services through our colleagues, extreme
weather such as flooding and storms can disrupt our ability to deliver these
services if our people cannot get to work. Our business strategy relies
heavily on the availability of our colleagues, supply chain and partners, all of
which can be significantly impacted by unusual weather events. Therefore,
it is crucial to closely monitor their impact to maintain business resilience.
In FY23, we engaged our insurance broker and risk advisor, Marsh, to
analyse physical climate risks, examining two scenarios: RCP 2.6 (best-case)
and RCP 8.5 (worst-case). The assessment covered 500 sites, to identify
high-risk assets. Results showed 87% of assets to be at medium or lower
risk, with flood exposure being the primary concern. Further analysis of
95 high-value sites highlighted sea-level rise and flooding as significant risks.
We also expanded our scenario analysis to include a broader range of
risks. Collaborating with our procurement and supply chain team, we
assessed the impact of climate change on essential materials, such as paper.
Our 2025 ESG report will outline projects with supply chain partners to
manage these risks, ensuring a consistent risk management approach.
Mitie is committed to delivering Plan Zero, as detailed in our Climate
Transition Plan. However, we acknowledge that external variables could
impact the achievement of the Paris aspiration (alignment as close to 1.5ºC
as possible). As a result, Mitie continues to proactively monitor its risks and
opportunities to adapt to the changing external environment and minimise
potential damage to the business.
To assess the potential impact that climate-related risks and opportunities
pose to our strategy and aid financial planning, we enhanced our climate-
related financial modelling framework in FY25. Our financial assessment
builds on our base five-year cash flow forecast model, aligned with our
strategic, budgeting and business planning cycles, and relevant to the
duration of our existing contracts.
The climate modelling framework covers three time horizons:
• Short (1–3 years)
• Medium (3–10 years)
• Long (10–15 years)
This approach ensures alignment with our Enterprise Risk Management
strategy. Details of the completed financial assessments have been
incorporated into the TCFD and underpinned by assumptions. The key
for the financial assessment is as follows:
Low impact: minimal material impact on EBIT (<5%)
Medium impact: significant material impact on EBIT (5–10%)
High impact: critical material impact on EBIT (>10%)
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Macro-level climate-related risks and opportunities
The table below reviews five key climate-related risks and opportunities, and includes current mitigation measures, potential financial impact and Mitie’s
latest working assumptions. This methodology, developed in partnership with our insurance broker and risk advisor, Marsh, seeks to create a sustainable
risk quantification framework that quantifies both principal business risks and climate risks, with the scope in FY24 broadened beyond physical factors.
As a result of the work, we have assessed the potential impact, our suggested strategic response, and the time horizon and financial impact of such a risk
based on a set of assumptions.
Risk/opportunity
description
Impact
Strategic response
Financial assessment and assumptions
Time
horizon
Worst
case
Most
likely
case
Best
case
1. Extreme
weather events
Physical risk
Short to medium
term
Increased costs owing to
damage to assets.
Impacts felt universally
– Mitie (UK and
overseas), customers and
subcontracting and strategic
partners affected.
• Enhanced HSE standards and
processes
• ISO 22301 certified
• Planned preventative
maintenance schedules aligned
with seasonal changes
• Estates strategy in place and
continually reviewed
• Insurance coverage
• Ongoing scenario testing
The modelling assumes
that around four extreme
weather events occur
annually. It also incorporates
the NATHAN approach,
which is a global assessment
of natural hazard risks
and impacts in order to
help calculate the financial
repercussions of severe
weather incidents on Mitie’s
asset portfolio.
Short
Medium
Long
2. Increasing
summer
temperatures
Physical risk
Medium to
long term
Increased costs resulting
from absenteeism and
reduced productivity.
Impacts felt universally
– Mitie (UK and
overseas), customers and
subcontracting and strategic
partners affected.
• Occupational health strategy
embedded
• Ongoing sickness monitoring
• Health surveillance and
monitoring framework
• Seasonal alerts reminding
colleagues of risks and
associated controls to
be followed
• Planned preventative
maintenance schedules aligned
with seasonal changes
The modelling is based
on costs related to heat-
related sickness experienced
by frontline staff and the
productivity costs incurred by
both back-office and frontline
staff at Mitie due to absences.
Short
Medium
Long
3. Decarbonising
supply chain
Transition risk
Short to medium
term
Increased costs arising from
the purchase of carbon
offsets in order to meet
emissions targets.
• Procurement leads identified
• Ongoing engagement with
supply chain
The modelling assumes that
the purchase of carbon
credits will be required to
achieve Mitie’s Scope 3
net emissions objective,
resulting in an increase in
Group expenditure.
Short
Medium
Long
4. Switching from
fossil fuels to low-
carbon alternatives
for fleet operations
Opportunity
Medium to
long term
Opportunities felt
predominately in Mitie
operations (Technical
Services, Business Services,
and Communities)
(UK and overseas).
Impacts felt universally
across the Group.
• Plan Zero commitment – 85%
EV fleet by the end of 2025
• Ongoing review of EV
transition
• Deployment of charging points
at Mitie and customer sites, as
well as colleagues’ homes
The modelling assumes that
by FY35 the Group’s fleet
will consist entirely of EVs.
The associated leasing expenses
are expected to rise by 6% per
year, with fuel costs determined
by average annual mileage and
cost per mile. As the Group
shifts entirely to EVs, charging
expenses are estimated based
on average annual mileage.
Short
Medium
Long
5. Changes
in customer
behaviours
resulting in lost
opportunities
Transition risk
Medium to
long term
Revenue reduction if Mitie
cannot keep up with demand
for the services.
Impacts felt universally
across the Group (UK
and overseas).
• Ongoing review of customer
behaviours via ESG
governance framework
• Ongoing review and
development of customer
propositions
• Feedback gathered internally
via various channels
The modelling assumes
that Mitie is able to grow its
decarbonisation business at
the same annual growth rate
as its markets.
Short
Medium
Long
SUSTAINABILITY STATEMENT
continued
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Strategic report
Governance
Financial statements
We have established metrics and targets that guide our business operations and customer service. These include ESG targets aimed at making Mitie more
environmentally and socially sustainable.
Our climate-related metrics are detailed in the table below. Our greenhouse gas (GHG) reporting methodology statement for FY25 provides further
context to our emissions metrics and targets on page 65.
Category
Sub-category
Unit measurement
Description of metric
FY25 risks and
opportunities
references
GHG emissions
Emission level
tCO
2
e
Total emissions
1,2,3,4,5
Intensity
tCO
2
e per £m revenue
Emissions intensity
1,2,3,4,5
Carbon credits
Plan Zero
£
Amount invested to support obtainment of Plan Zero targets
3,4
Energy/fuel
Energy usage
kWh
Total energy consumption
1,2,3,4,5
Transition to
greener fleet
%
Total percentage of EV fleet
1,3,4,5
Waste
Recycled
Tonnes
Total waste recycled
3,5
Risk adaptation and
mitigation
R&D
£
Amount invested in developing low-carbon products and services
3,4,5
CapEx
£
Amount invested in deployment of low-carbon technology, energy
and resiliency capabilities
3,4,5
SBTi
Acquisitions
%
Total percentage of acquisitions with agreed targets in place
1,2,3,4,5
Supply chain
%
Total percentage of supply chain with agreed targets in place
3,5
ISO management
system
14001
%
Total percentage of business certified
1,3,4,5
50001
%
Total percentage of business certified
2,3,4,5
Impact, risk and opportunity management
E1-2: Policies related to climate change mitigation
and adaptation
Policies
Our policies address the management of our material impacts for
climate change mitigation, adaptation and energy efficiency, as well as
associated IROs. They apply to all UK and overseas Mitie colleagues in
all operating countries.
Sustainability and Social Value Policy
Mitie’s Sustainability and Social Value Policy commits to stretching Net Zero
carbon targets, promoting a circular economy, and protecting biodiversity.
It emphasises fair employment practices, social mobility and community
engagement. The policy outlines our objectives to reduce environmental
impact, enhance energy efficiency and ensure compliance with legal and
contractual obligations.
Environmental Policy Statement
Mitie’s Environmental Policy Statement outlines a commitment to reducing
environmental impact through continuous improvement and compliance
with ISO 14001:2015 and ISO 50001:2018 standards. Our Plan Zero
Initiative aims for Net Zero carbon by 2025, focusing on decarbonisation,
resource efficiency and emissions reduction. Mitie promotes sustainability,
circular economy practices and robust environmental management across
its operations.
E1-3: Actions and resources in relation to climate
change policies
Mitigation
Transitioning our fleet (cars and commercial vehicles) to EVs is central
to our climate change mitigation strategy. In FY25, we transitioned 1,190
vehicles and had 6,255 EVs across our fleet at 31 March 2025, with 97% of
our company cars being EV. Since launching our first EV in FY20, Scope 1
emissions from fuel consumption have decreased by 45%.
We continued to install EV chargers during FY25, such that we now
have over 4,000 at colleagues’ homes, Mitie sites and customer locations,
supporting our EV transition and access to sustainable transport. Leasing
and operating an EV car or van over a five-year period is c.3% and c.5%
more expensive, respectively, than the equivalent combustion engine
vehicle, based on 18,000 miles travelled per year. Considering the benefit
of reduced pollution alongside our commitment to climate change, the
Board has approved the ongoing transition of our fleet to EVs.
Adaptation
We recognise that extreme weather events are becoming more frequent
and severe due to climate change. We have implemented additional
safety messaging and preventative methods to minimise risks associated
with these events. Our focus is on ensuring effective communication and
decision-making during extreme weather events to maintain the safety of
colleagues, customers, assets and the public.
We have modelled the costs associated with extreme weather events,
including insurance premiums and fleet repair costs, to understand the
financial implications and prepare for short, medium and long-term
scenarios. Insurance premiums have the potential to rise annually due
to the increasing frequency of weather-related events arising from
climate change.
We proactively support our colleagues during extreme weather events by
ensuring statutory compliance, testing business continuity plans (BCPs) and
sharing lessons learned from past experiences. Additionally, we leverage
weather intelligence and real-time alerts to keep our operations running
smoothly and efficiently during the more challenging winter months.
Energy efficiency
We are enhancing the energy efficiency of our built estate by reducing
energy consumption, replacing gas boilers with low-carbon heat pumps,
and championing initiatives that embrace circular economy principles
and biodiversity. We have 16 fully decarbonised buildings, we operate to
the ISO 50001 Energy Management Standard, and our in-house team of
energy managers ensure that our estate remains fully optimised.
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Metrics and targets
E1-4: Targets related to climate change mitigation and adaptation
Mitie carbon targets
Scope 1 and 2 emissions: Our target is to achieve Net Zero emissions by the end of 2025 by transitioning our fleet to full battery EVs to reduce and
eliminate our Scope 1 emissions from fossil fuels. We have made significant progress, with 6,255 EVs in the fleet, reducing emissions by 22% to 12,775
tCO
2
e in FY25 under market-based conditions and inclusive of carbon credits (FY24: 16,441 tCO
2
e).
Scope 3 emissions: These are the indirect emissions that occur in the value chain, including both upstream and downstream activities. We have set a target
to achieve Net Zero Scope 3 emissions by 2035. We have reduced these emissions by 7% to 254,355 tCO
2
e in FY25 (FY24: 273,336 tCO
2
e).
Science-based targets
In addition to Mitie’s own ambitious internal targets, we have validated science-based targets, using the Science Based Targets initiative (SBTi) calculation
methodology (version 5). Our near-term, long-term and Net Zero targets align with the goals of the Paris Agreement to limit global warming to 1.5°C
above pre-industrial levels (Mitie Group plc – Certificate No. MITI-UNI-001-OFF).
Mitie carbon targets (tCO
2
e)
FY22 baseline
FY23
FY24
FY25
FY26
Scope 1 and 2
20,596
20,300
16,900
12,775
8,400
Scope 3
332,035
315,433
296,507
275,752
253,692
Total
352,631
335,733
313,407
288,527
262,092
Note: Carbon credits have been included from FY24 onwards.
Science-based carbon targets (tCO
2
e)
FY22 baseline
FY23
FY24
FY25
FY26
SBTi Scope 1 and 2
20,596
19,558
18,520
17,482
16,444
SBTi Scope 3
332,035
317,085
302,135
287,185
272,235
SBTi total
352,631
336,643
320,655
304,667
288,679
Note: Carbon credits have been included from FY24 onwards.
E1-5: Energy consumption and mix
Environmental data
The below table provides further details on our UK environmental performance.
FY24
FY25
Change
Change %
Electricity consumed across occupied buildings (kWh)
4,790,022
5,949,994
1,159,972
24
Gas consumed across occupied buildings (kWh)
817,131
2,465,703
1,648,572
202
Fuel used by vehicles for business travel (kWh)
76,605,383
61,178,653
(15,426,730)
(20)
Electricity used by EV vehicles for business travel (kWh)
8,684,230
11,624,522
2,940,292
34
Total organisational energy consumption (kWh)
90,896,766
82,064,610
(8,832,156)
(10)
Water consumed across occupied buildings (m
3
)
27,941
32,145
4,204
15
Total waste generated across occupied buildings (tonnes)
398
313
(85)
(21)
Hazardous waste (tonnes)
–
–
–
–
Non-hazardous waste (tonnes)
398
313
(85)
(21)
Total waste to landfill (tonnes)
–
–
–
–
Energy from waste (tonnes)
188
127
(61)
(32)
Total waste recycled (tonnes)
210
186
(24)
(11)
Recycling rate
53%
59%
6ppt
12
SUSTAINABILITY STATEMENT
continued
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Strategic report
Governance
Financial statements
Scope of emissions
Scope 1 – Direct emissions
On-site fuel combustion
• Gas directly purchased for heating or generation across leased
property managed by Mitie
Company vehicles
• Fuel purchased for fleet vehicles
Fugitive emissions
• Refrigerant leaks from air-conditioning equipment in leased assets
and fleet vehicles
1
Scope 2 – Indirect emissions
Purchased electricity
• Electricity directly purchased across leased property and EVs
managed by Mitie
Scope 3 – Other indirect emissions
Category 1 – Purchased goods and services
• Purchased goods and services from supply chain
Category 3 – Fuel and energy-related activities
• Electricity transmission and distribution (T&D) losses
• Upstream emissions associated with the extraction of purchased
fuels and gas
• Gas and electricity recharges across leased property managed by
the landlord
Category 4 – Upstream transportation and distribution
• Transportation of goods
Category 5 – Waste
• Waste generation across leased property
Category 5 – Water
• Water usage across leased property
Category 6 – Business travel
• Expensed air, road and rail travel (including hotel stays)
Category 7 – Employee commuting
• Commuting (all forms of transport)
• Working from home
E1-6: Gross Scopes 1, 2, 3 and total GHG emissions
GHG reporting methodology statement for FY25
Reporting period
Mitie has applied the UK Government’s GHG reporting conversion factors for 2024 and emissions are reported over the period from 1 April 2024 to
31 March 2025 under a financial control approach. All GHG emissions are reported in tonnes of carbon dioxide equivalent (tCO
2
e) to account for all six
of the Kyoto Protocol GHGs. A new baseline was introduced for FY22 in line with our Energy Review Methodology procedure. Our carbon targets are
shown in the table on page 64.
Intensity ratio
Mitie uses tCO
2
e/£m revenue as its intensity ratio to compare its emissions over time, as this normalises for changes in the scale of Mitie’s business activities.
Exclusions
Mitie does not report fugitive emissions (refrigerant leakage) from refrigeration and air conditioning systems in leased properties or fleet. This is due to the
difficulty in obtaining centralised data on refrigerant top-ups and the landlords of many of our leasehold buildings managing the HVAC systems. Given the
size and types of emission sources listed by Mitie, fugitive emissions are expected to be immaterial.
FY25 – Carbon emissions breakdown
Annual total (tCO
2
e)
%
Electricity
1,315
0.5
Gas
506
0.2
Water
5
–
Transport/Travel
25,900
9.4
Waste
2
–
Commuting/Working from home
45,271
16.5
Supply chain
201,486
73.4
Total
274,485
100
Mitie Scope 1 and 2 (UK and overseas)
20,130
Mitie Scope 3 (UK and overseas)
254,355
Total
274,485
1. Values exclude 4,066 purchased verified emissions reduction carbon credits.
1. Fugitive emissions are not reported, as outlined in the exclusions statement.
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Process
Mitie follows the reporting approach set out in the UK Government’s Environmental Reporting Guidance (2019 version) to ensure that reporting
standards are robust and transparent. For most of its major emissions sources, Mitie uses primary data from Automated Meter Reading, meter readings,
utility bills, service charge data and expensed claims.
Emissions data is collated centrally by Mitie Energy on a quarterly basis and then restated at the end of the year to reflect any changes or to replace
any estimated data with actual data (where available). Emissions figures are verified by the ESG team, who have overall responsibility for ensuring the
calculations and methodology are correct. Further explanation of data sources can be found in our ESG Report.
Mitie obtained independent verification and reasonable assurance (Scopes 1 and 2) and limited assurance (Scope 3) on the accuracy of selected
information included in Mitie’s FY25 GHG emissions and water consumption datasets, in accordance with ISO 14064 Part 1 2018.
Absolute emissions
Emissions
FY24
FY25
Change
Change %
UK only
Total Scope 1 (tCO
2
e)
18,265
14,886
(3,379)
(18)
Emissions from fuel combustion across our fleet
18,229
14,560
(3,669)
(20)
Emissions from gas combustion in our occupied buildings
36
326
290
806
Overseas
Total Scope 1 (tCO
2
e)
873
1,955
1,082
124
Emissions from fuel combustion across our fleet
873
1,955
1,082
124
Emissions from gas combustion in our occupied buildings
–
–
–
–
UK and overseas
Total Scope 1 (tCO
2
e)
19,138
16,841
(2,297)
(12)
UK only
Total Scope 2 (tCO
2
e)
2,228
3,285
1,057
47
Emissions from the purchase of electricity across occupied buildings
430
821
391
91
Emissions from electricity consumption across our EV fleet
1,798
2,464
666
37
Overseas
Total Scope 2 (tCO
2
e)
5
4
(1)
(20)
Emissions from the purchase of electricity across occupied buildings
5
2
(3)
(60)
Emissions from electricity consumption across our EV fleet
–
2
2
-
UK and overseas
Total Scope 2 (tCO
2
e)
2,233
3,289
1,056
47
UK only
Total Scope 3 (tCO
2
e)
268,668
254,301
(14,367)
(5)
Mitie generated Scope 3
53,315
52,815
(500)
(1)
Supply chain emissions
215,353
201,486
(13,867)
(6)
Overseas
Total Scope 3 (tCO
2
e)
4,668
54
(4,614)
(99)
Mitie generated Scope 3
4,668
54
(4,614)
(99)
UK and overseas
Total Scope 3 (tCO
2
e)
273,336
254,355
(18,981)
(7)
UK only
Total Scope 1 and 2 (location based)
20,493
18,171
(2,322)
(11)
Total Scope 1 and 2 (market based)
20,063
14,886
(5,177)
(26)
Overseas
Total Scope 1 and 2 (location based)
878
1,959
1,081
123
Total Scope 1 and 2 (market based)
878
1,955
1,077
123
UK and overseas
Total Scope 1 and 2 (location based)
21,371
20,130
(1,241)
(6)
Total Scope 1 and 2 (market based)
20,941
16,841
(4,100)
(20)
Purchased verified emissions reduction carbon credits (VER)
(4,500)
(4,066)
434
(10)
Total Scope 1 and 2 (location based) inc. VER
16,871
16,064
(807)
(5)
Total Scope 1 and 2 (market based) inc. VER
16,441
12,775
(3,666)
(22)
UK and overseas
Total Scope 1, 2 and 3 (tCO
2
e)
294,707
274,485
(20,222)
(7)
Carbon credits against Scope 1 and 2
(4,500)
(4,066)
(434)
(10)
UK and overseas
Total Scope 1, 2 and 3 (tCO
2
e) (inc. verified emissions reduction carbon
credits – location)
290,207
270,419
(19,788)
(7)
UK and overseas
Total Scope 1, 2 and 3 (tCO
2
e) (inc. verified emissions reduction carbon
credits – market)
289,777
267,130
(22,647)
(8)
Intensity – emissions ratio
UK only
tCO
2
e/£m revenue (Scope 1 and 2)
4.55
3.75
(0.8)
(18)
UK and overseas
tCO
2
e/£m revenue (Scope 1 and 2)
4.75
3.96
(0.8)
(17)
UK and overseas
(including VER)
tCO
2
e/£m revenue (Scope 1 and 2)
3.75
3.16
(0.6)
(16)
The table above highlights that Mitie’s absolute emissions, excluding carbon credits, have reduced by 7%.
In line with our expectations, we continue to see a significant decline in carbon emissions from fossil fuels and a steady increase in electricity consumption
and carbon emissions for our EVs as we transition our fleet. Mitie has increased the number of EVs in operation by 1,190 in FY25.
During FY25, Mitie continued to record our full Scope 3 emissions from our supply chain and commuting figures for the whole organisation in line with our
validated science-based targets.
SUSTAINABILITY STATEMENT
continued
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Strategic report
Governance
Financial statements
Short term
2025
• Net Zero for Scope 1 and 2 direct
operational emissions
• Zero waste to landfill
• 85% EV transition
1
Our climate transition plan targets
TCFD continual improvement – actions we will take in FY26
During FY26, Mitie will:
• Continue the transition to ISSB requirements
• Establish EcoVadis as our supplier engagement platform to measure,
report and influence supply chain behaviours
• Improve sustainable commuting engagement and reporting
E1-7: GHG removals and GHG mitigation projects
financed through carbon credits
Last year we procured our first verified carbon credits and will continue
to purchase further credits to offset our residual emissions from fossil fuels
that fall outside of our carbon target. From 1 January 2026, all Scope 1
emissions from residual fossil fuel emissions will be offset through carbon
credits as we reach our Net Zero target.
The electricity consumption in our built estate energy contract comprises
Renewable Energy Guarantee of Origin (REGO) certificates to offset our
electricity consumption. As we transition our fleet to EVs, the consumption
of electricity is increasing, and our Scope 2 EV charging consumption has
been mitigated using REGO certificates in FY25.
We report energy consumption as location- and market-based. We will
report all Scope 2 carbon emissions from electricity consumption in our
fleet and built estate as zero under a market-based scenario.
E1-8: Internal carbon pricing
Mitie does not currently use an internal price on carbon. This decision is
based on our strategic focus on direct emissions reduction initiatives, the
complexity of implementing such a scheme, and our robust framework for
achieving Net Zero targets.
While we recognise the potential benefits of internal carbon pricing,
such as driving behavioural changes and guiding investment decisions,
we have prioritised other strategic initiatives that directly contribute
to our emissions reduction and sustainability goals. Our Plan Zero
initiative emphasises practical actions, such as switching to a zero-
emission fleet, using 100% renewable energy and reducing waste
through innovative solutions.
E1-9: Anticipated financial effects from material
physical and transition risks and potential climate-
related opportunities
As highlighted in IRO-1, Mitie conducted a climate scenario analysis in
collaboration with Marsh to understand the physical risks associated with
climate change. This analysis focused on extreme weather events and the
probability of long-term critical asset damage and failure.
We assessed the financial impact of material physical risks using a traffic
light system across several time horizons and likelihood of impact. The
analysis identified that 87% of assets are classified as having a medium- or
lower-risk score, with sea-level rise being a primary area of increased risk.
The anticipated financial effects include increased costs due to damage
to assets and impacts on productivity. To mitigate these risks, Mitie
has implemented initiatives such as enhanced HSE standards, planned
preventative maintenance schedules and business resilience testing.
Transition risks and opportunities
Mitie has identified several transition risks, including the decarbonisation of
its supply chain and the switch from fossil fuels to low-carbon alternatives
for fleet operations. The financial impact includes increased costs from
purchasing carbon offsets and the total cost of ownership from leasing
expenses associated with transitioning to an EV fleet. We have adopted an
EV First policy for new vehicle leases and collaborate with our supply chain
to enable decarbonisation. Additionally, we have developed a strategy to
address plastics reduction and improve processes around collecting supply
chain emissions.
We have also identified several climate-related opportunities, such as
the transition to EVs and changes in customer behaviours resulting in
new business opportunities. We have successfully transitioned 6,255 of
our vehicles to EVs, creating one of the largest EV fleets in the UK. Our
Plan Zero – Decarbonisation, Delivered™ offering supports customers
in setting and achieving Net Zero targets through our in-house holistic
end-to-end decarbonisation solutions. We continue to invest in utilities and
carbon efficiency solutions through acquisitions, aiming to grow our project
business significantly.
Medium term
2030
• 80% Net Zero for Scope 3 indirect
emissions
• 60% of suppliers by category spend to
have science-based targets
• 95% EV transition
1
Long term
2035
• Net Zero for Scope 3 indirect
emissions
• 100% EV transition
1
1. Where technology is available.
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Strategy
ESRS 2 SBM-2: Interests and views of stakeholders
Our vision is to be the destination employer in the industry, leading in how
we treat our people and supporting the communities we serve. We have
diverse and exceptional colleagues, who are proud to work for Mitie.
Integration of workforce interests and human rights
We set ambitious targets to ensure diversity across our workforce,
fair wages and market-leading benefits. We promote learning and
development opportunities, including through apprenticeships, and
respect human rights through specific policies and training programmes.
We gather feedback from our people through regular surveys and listening
sessions, ensuring their views inform our strategic decision-making.
ESRS 2 SBM-3: Material impacts, risks and
opportunities and their interaction with strategy
and business model
People strategy and business model
Mitie evaluates its risk portfolio by recognising that individual risks are
interrelated and can create a combined exposure. The Enterprise Risk
Management procedure ensures that risk management is embedded
in all critical decisions and supports our strategic objectives. The Risk
Committee oversees the implementation of the risk management strategy,
providing assurance to the Board and Audit Committee. We view effective
risk management as a competitive advantage, acknowledging human factors
and recognising that attitudes towards risk vary at different levels within
the organisation.
We have identified significant risks and opportunities impacting our
workforce, including high turnover rates, skill shortages, colleague wellbeing
concerns and modern slavery. Our workforce comprises colleagues
directly employed by Mitie, self-employed individuals and people provided
by third-party undertakings. To address these risks, we have implemented
comprehensive training programmes, improved working conditions,
and support for mental health and wellbeing. Positive impacts include
leadership development initiatives, diversity and inclusion programmes,
and continuous professional development.
Mitie is one of the UK’s largest employers. Our colleagues play a vital
role in Mitie’s success and that of our customers and make a significant
contribution to the UK economy. We prioritise the safety and wellbeing
of our colleagues, actively listen, take action, and celebrate diversity. We
strive to be a ‘Great Place to Work’ for all, supporting career development
and recognising and rewarding everyone for a job well done. We are
committed to developing skills for the future, benefiting both our growth
and wider society. Our material risks and opportunities relate to specific
groups, such as those that are underrepresented, colleagues in high-risk
regions, and those involved in high-risk operations. We actively work to
mitigate these risks and leverage opportunities to create a safer and more
inclusive work environment.
SUSTAINABILITY STATEMENT
continued
S1 Own Workforce
Our Strategic People Pillars
Focus on talent to support growth and retain core business:
Attract, retain and empower talent to thrive by evolving the
Employee Value Proposition (EVP) to lead the market on
reward, personal and professional development, and
employer brand.
Enhance the ‘Mitie Difference’ to support organic growth:
Differentiate in bids through social value, customer-focused
skill development, and Transfer of Undertakings (Protection
of Employment) TUPE experience to support growth.
Flex ‘Standards’ to power projects expansion:
Flex the EVP framework to power Facilities Transformation,
defining reward and development to attract and retain the
best talent.
Cultivate the culture to support growth:
Cultivate an inclusive, colleague-centric, high-performing,
OneMitie culture. Empowering our people to best serve our
customers and use their voice to improve our business.
Create ‘Good Jobs’ and reduce cost to serve:
Leverage technology to create ‘good jobs’ – simplifying work
and improving employee experience, in turn increasing
productivity, wellbeing and engagement.
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Governance
Financial statements
Impact, risk and opportunity management
S1-1: Policies related to own workforce
Policies
Our policies address the management of our material impacts on our
own workforce, as well as associated material risks and opportunities.
They apply to all Mitie colleagues in all operating countries.
People Policy
Mitie adopts an inclusive and diverse work environment, addressing
discrimination and promoting equal opportunities. We ensure safe,
clean and healthy working conditions, promote wellbeing initiatives and
provide protective equipment. We comply with equal pay requirements
and offer competitive remuneration. We provide training, development
and progression opportunities, and support colleague engagement and
participation, respecting freedom of association and collective bargaining.
Equality, Diversity and Inclusion (ED&I) Policy
Mitie is committed to fostering an inclusive and diverse work environment.
Our policy ensures that no job applicant or colleague faces discrimination
based on certain characteristics. We promote inclusion, equality and
diversity, and expect the same from our suppliers. We provide a safe
environment for raising concerns about discrimination, victimisation,
bullying or harassment.
Quality, Health, Safety and Environment (QHSE) Policy
Mitie is committed to high standards of health, safety and wellbeing.
We comply with laws, manage risks and promote continual improvement.
We engage with colleagues to instil appropriate behaviours and provide
necessary training, alongside promoting open communication and
partnering with suppliers, customers and contractors to maintain high
standards. Our performance is measured through metrics such as lost
time injury frequency rate (one of our KPIs) and regular reviews.
Employee Handbook
Mitie is committed to creating a great workplace where everyone can
thrive. Our Employee Handbook outlines our vision, values and policies and
we promote ED&I, ensuring a respectful work environment. Health, safety
and wellbeing are prioritised alongside offering competitive remuneration
and opportunities for career development.
MyMitie
We are continually evolving our EVP, MyMitie:
MyVoice
Ensuring our colleagues have their say and their
voices are heard
FY25 achievements
Held 20 Board listening sessions and facilitated
655 events through Team Talk Local
MyCommunity
Our commitment to building connections, taking
positive actions and giving back
FY25 achievements
Delivered 32,512 volunteering hours across
the Group
MyAchievement
Recognising the successes of our colleagues
FY25 achievements
Held our annual achievement event at The Shard,
including a top prize of £10,000, and awarded over
27,000 Mitie Stars during the year
MyCareer
Our learning and development offering
FY25 achievements
Supported over 1,500 colleagues through
apprenticeships
MySlice
Our industry-leading benefits package
FY25 achievements
Issued free shares for the fifth consecutive year
MyWellbeing
Prioritising our colleagues’ health and wellbeing
FY25 achievements
Launched a series of digital wellbeing
programmes on topics such as Sleep, Money
Worries and Resilience through our Employee
Assistance Programme
MyStory
Our colleagues telling their own stories to inspire
others and drive belonging
FY25 achievements
Launched our ‘This is Me’ Campaign, using the lived
experience of Mitie colleagues to put a spotlight
on important subjects to drive inclusivity across
the business
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SUSTAINABILITY STATEMENT
continued
S1-2: Processes for engaging with own workers and
workers’ representatives about impacts
Engaging our colleagues
Mitie encourages colleagues to voice concerns freely, including to those
in more senior roles. Our 360° listening approach ensures that everyone
has channels for being heard and our MyVoice Survey gathers feedback on
various topics. During FY25, we facilitated 655 engagement events through
our Team Talk Local programme. This is deployed through a framework
that equips leaders with the tools, materials and skills they need to deliver
high-quality events for Mitie colleagues where they work, in a format that
works best for them. The agenda is a blend of fixed content, including a
video message from Phil Bentley, CEO, and allows 20% of the time for
leaders to facilitate a listening exercise. A focus on ‘you said, we did’ allows
for a robust two-way feedback mechanism, with themes centrally captured
to inform our ongoing engagement strategy.
Colleagues can join any of our six ED&I networks to share experiences and
ideas, raise awareness and address biases. Each network has an executive
sponsor, and Board members also regularly join events. For urgent
concerns, we offer ‘Speak Up’, a 24/7 whistleblowing service. ‘Grill Phil’
enables the direct issue escalation of concerns to our CEO, Phil Bentley,
and our Board Listening programme ensures that Board members hear
directly from colleagues, including those on the frontline.
The role of the Internal Communications Director is to oversee all of
Mitie’s internal communication channels and to manage the in-house
communications team. Establishing a communications plan that aligns
with Mitie’s Facilities Transformation Three-Year Plan is central to this
role, ensuring that all colleagues understand the part they play in Mitie’s
success, and how they can benefit from the Group’s achievements.
The Internal Communications Director works to foster a positive and
engaging work environment by promoting transparency, encouraging
feedback and facilitating open communication channels between colleagues
and leadership.
Mitie’s main barriers to engagement include digital access – especially for
colleagues on the frontline, a diverse range in levels of digital literacy and
a geographical spread across multiple countries and remote locations.
To address these issues, we have been working with our technology
partners to expand access to Microsoft Teams to an additional 48,000
colleagues by the end of 2025, so that all UK colleagues are able to benefit
from the same digital experience, connecting with peers and building digital
networks through one single platform.
Mitie’s annual colleague engagement survey, MyVoice, provides feedback that management acts upon to improve the working experience at Mitie.
The results of the survey also provide the Board with a Group-wide snapshot of how our colleagues rate Mitie’s culture and engagement.
The most recent MyVoice survey took place in April 2024 (relating to FY24), with an employee engagement score of 63%, and the insights and actions
taken during FY25 are detailed below. Our next MyVoice survey will take place during FY26.
Insights and actions undertaken in FY25 (in response to the April 2024 survey)
Upload survey insights (You Said)
Action taken (We Did)
Pay, reward and recognition
• Review benefits for our frontline
colleagues, acknowledging the impact
of inflation and rising cost of living
• Develop Mitie Stars
• Launched our fifth award of free shares for all colleagues
• Increased the number of discounts across a range of retailers and partnerships through our reward platform,
which was also upgraded to single sign on for an enhanced user experience
• Launched 2024 SAYE scheme, offering colleagues risk-free savings with the opportunity to benefit from
Mitie’s success
• Delivered the annual Mitie Recognition event, with CEO and Board sponsorship, celebrating our colleagues’
achievements
• From January 2025, we increased paternity pay to two weeks of full pay across all roles
Autonomy, empowerment and
collaboration
• Ensure colleagues are listened to
and given a voice, and develop team
collaboration
• Increased the number of Board Listening sessions to expand reach across targeted teams within the business
alongside Board representation at diversity network and wider flagship events
• Regular all-colleague communications of Mitie’s strategy, operational changes and colleague experience
• Created new leadership cohort (top 250 leaders) to increase networking across the business
• Delivered CEO-led leadership events to provide updates on strategy
Systems and processes
• Improve access to and use of different
systems
• Ensure our systems and processes
maximise productivity
• Activated single sign on for Learning Hub (learning and development platform) and Celebration Hub
(Reward platform) to provide a seamless colleague experience
• Deployed 1,000 Microsoft Copilot licences throughout FY25
• Upgraded all IT users to Windows 11 software to optimise the latest developments from Microsoft
Communication barriers
• Develop communications within Mitie
so everyone is in touch
• Project underway to launch the MyMitie employee app, deploying an additional 48,000 Microsoft Teams
licences specifically for frontline colleagues by December 2025
• Changed our approach to senior leadership outreach events, to empower a wider range of leaders with
high-quality materials to deliver face-to-face sessions to more colleagues, more often. This approach enabled
371 in-person events to take place through the Team Talk Local initiative, compared with 12 in-person events
in the prior year
Annual survey – MyVoice
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Governance
Financial statements
S1-3: Processes to remediate negative impacts and
channels for own workers to raise concerns
Whistleblowing service – ‘Speak Up’
Mitie promotes a culture of open communication, transparency and
trust, empowering our colleagues to raise their concerns. Our ‘Speak Up’
service helps to address issues such as bullying, harassment, discrimination,
health and safety and fraud. The service enables anonymous reporting
by colleagues, customers, suppliers and third parties without fear of
retaliation, and is accessible via a freephone hotline and web portal.
The details are available in multiple languages through workplace posters,
the Employee Handbook and MitiePeople.com.
Reports are reviewed and investigated independently to avoid conflicts.
Mitie’s Whistleblowing Investigation Group, including the Deputy General
Counsel and senior members of the Internal Audit team, reviews all
reports, and updates on whistleblowing activity are provided to the Board.
Our Employee Handbook clearly states and describes how whistleblowers
or concerned colleagues are protected against both formal and informal
retaliation. We consider it important that all colleagues feel safe to raise
concerns without the fear of negative consequences.
S1-4: Taking action on material impacts on own
workforce, and approaches to mitigating material
risks and pursuing material opportunities related to
own workforce, and effectiveness of those actions
Material impacts and opportunities
Mitie recognises significant workforce IROs, including high turnover,
skill shortages, wellbeing concerns and modern slavery. To address
these, we offer training programmes, flexible working arrangements,
enhanced health and safety protocols, and mental health support.
We leverage opportunities through leadership training, diversity and
inclusion programmes, and continuous professional development.
Initiatives include our colleague networks, such as Mitie Women Can
and Proud to Be, promoting diversity.
Our risk and sustainability reporting details the actions taken, their
effectiveness and measurable outcomes. We set ambitious diversity
targets, ensure fair wages and provide market-leading benefits, while
colleague feedback through surveys and Board Listening sessions helps
to inform our strategic decisions.
We track our effectiveness through metrics such as engagement scores,
Glassdoor ratings, attrition rates and diversity targets. We adhere
to ethical standards in procurement, sales and data use, prioritising
colleague safety and wellbeing, and we invest in technology, training and
development programmes. Through our partnership with Wipro we are
using technology and AI to automate manual tasks, freeing up time for our
colleagues to undertake ‘value added’ activities, while the MyMitie app
enhances communication and engagement.
Metrics and targets
S1-5: Targets related to managing material negative
impacts, advancing positive impacts and managing
material risks and opportunities
Targets – impacts and opportunities
Mitie has set time-bound, outcome-oriented targets to create a supportive
and inclusive work environment, address negative impacts, advance
positive impacts and manage risks related to its workforce. We manage
risks by setting targets that are aligned with our strategic goals and leverage
technology to create employment opportunities and improve colleague
experiences across all operations.
To mitigate negative impacts, we are reducing colleague attrition through
an enhanced EVP, training programmes, flexible working, and improved
health and safety protocols. We are committed to eradicating modern
slavery with stringent monitoring and compliance measures.
To advance positive impacts, we are increasing diversity in leadership
positions and expanding our apprenticeship programmes to improve skills
in leadership, business and STEM subjects. Our commitment to diversity
includes ambitious targets for fair wages and market-leading benefits.
We promote learning and development opportunities, including through
apprenticeships, and uphold human rights through well-defined policies and
training programmes.
Our five-year plan incorporating our social value framework targets
concluded in FY25. The ESG Committee will establish a new five-year
plan setting out our 2030 targets during FY26 and these will be presented,
following Board approval, in our FY26 Annual Report. Our ESG targets,
and progress against them, are set out on page 52.
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Annual Report and Accounts 2025
SUSTAINABILITY STATEMENT
continued
Methodologies and assumptions used to compile data
• Colleague data is collected through Mitie’s internal HR systems and verified by cross-referencing with payroll records
• Non-guaranteed hours employees are assumed to work an average of 20 hours per week unless specified otherwise by their contracts.
This assumption helps in calculating full-time equivalent (FTE) for non-guaranteed hours employees
Contextual information
• The data includes all employees directly employed by Mitie, as well as those on temporary and non-guaranteed hour contracts
• The data is compiled by aggregating information from various departments and ensuring consistency in reporting across different business units
At 31 March 2025, Mitie Group plc had a total of 76,000 employees.
For countries with 50 or more employees, the breakdown is as follows:
Employees by gender (UK only)
UK gender breakdown
UK gender breakdown
Board
Employees over 50 years old
Employment of persons with disabilities
Employees 30 to 50 years old
Employees under 30 years old
Senior leadership team (SLT)
Employees by contract type, broken down by gender (UK only)
Global employees by contract type, broken down by region
Employees by country
Headcount/FTE
Female
Male
Total
Number of employees
23,430
41,932
65,362
Number of permanent employees
22,931
41,181
64,112
Number of temporary employees
406
641
1,047
Number of non-guaranteed hours employees
93
110
203
Number of full-time employees
9,742
29,794
39,536
Number of part-time employees
13,688
12,138
25,826
Note: gender breakdown data is UK only.
Headcount/FTE
UK
Ireland
Spain
Total
Number of employees
65,362
1,416
9,642
76,420
Number of permanent employees
64,112
1,351
7,953
73,416
Number of temporary employees
1,047
65
1,689
2,801
Number of non-guaranteed hours employees
203
0
0
203
Number of full-time employees
39,536
696
4,898
45,130
Number of part-time employees
25,826
720
4,744
31,290
Female
23,430
Female
4
Female
10,871
Female
1.94%
Female
9,243
Female
3,316
Female
29
UK
65,362
Male
41,932
Male
6
Male
17,114
Male
1.53%
Male
17,784
Male
7,034
Male
40
Ireland
1,416
Spain
9,642
S1-6: Characteristics of Mitie’s employees
S1-9: Diversity metrics
S1-12: Persons with disabilities
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Governance
Financial statements
S1-10: Adequate wages
Living wage
Mitie values fair pay. We are Recognised Service Providers with the Living
Wage Foundation and we encourage our customers to adopt the Real
Living Wage by showcasing the benefits. We achieved our FY25 target of
paying 100% of colleagues the Real Living Wage where Mitie sets the salary.
Colleague benefits
Under the MySlice banner, we offer a range of benefits including life
assurance, health insurance, virtual GP services, mortgage advice and
lifestyle products. Rewards include free shares, incentive plans and share
schemes such as Save As You Earn. Frontline colleagues have received
100 free shares annually in each of the past five financial years.
We offer enhanced maternity and paternity pay alongside carer’s leave
(providing one week’s unpaid leave annually). In FY25, we continued
to improve our benefits packages, with a renewed focus on frontline
incentive schemes.
•
4.4m free shares gifted
to colleagues in FY25; with a further 8.6m
shares gifted shortly after the year end over two awards (our first
‘double award’)
•
£378,295
of MiDeals on the employee discounts portal
•
27,299
colleagues received a Mitie Star
•
c.£83,000
awarded in prizes to Mitie Star recipients
S1-13: Training and skills development metrics
Learning throughout Mitie
At Mitie, we offer more than just a job by creating an environment for
professional and personal growth. Every person in Mitie is empowered
to take control of their own development journey through our broad
offering. During FY25, over 500,000 learning courses were completed by
our colleagues across a vast array of topics and skills, with an average of
seven courses completed per person.
We also supported over 1,500 colleagues through apprenticeships, with
over 90 courses ranging from level 2 to level 7 in technical, professional and
managerial qualifications. We spent over £5.5m of our apprenticeship levy
both on internal Mitie apprentices, and through our levy gifting activities.
We are currently supporting 33 external apprentices across 13 different
organisations and have been recognised as a Top 100 Apprenticeship
Employer for the third consecutive year.
We continue to leverage the success of our award-winning positive
inclusion learning campaign, Count Me In, with our Women in Leadership
programmes. All participants of the first cohort successfully completed
this level 7 programme with distinction. Additionally, we offer Women in
Leadership at level 3 and level 5 to ensure that we have a strong pipeline
of female talent in our succession plans.
Our people manager offer, Leading Together, has been recognised
externally in the Business Culture Awards as highly commended. Currently,
85% of our people managers have completed the learning programme and
92% have completed our additional Leading with Respect course.
In FY25, 82.6% of salaried employees received a end-of-year performance
review (FY24: 82.9%).
Year
Salaried headcount
Rating completion
% completion
2022
20,079
14,723
73.3
2023
20,002
15,696
78.5
2024
21,909
18,166
82.9
2025
24,520
20,264
82.6
S1-14: Health and safety metrics
Health, safety and wellbeing
Mitie prioritises health, safety and wellbeing by encouraging collaboration
and empowering individuals. Our Zero Harm goal, driven by our core
Values and the LiveSafe programme, enhances performance, ownership
and innovation, while reducing absences and accidents.
Key metrics demonstrate our commitment to being a responsible business.
In FY25, MyWellbeing initiatives ensured colleague safety, with 12,786
LiveSafe visits and 122,622 hazard observations logged, reducing our lost
time injury frequency rate (LTIFR) from 3.82 to 2.70 per million hours
worked. During Mental Health Awareness Week, we raised awareness
through MiNet communications and drop-in sessions. Mitie has over
400 trained mental health first aiders.
Stand Down Days during FY25 paused operations for safety discussions,
encouraging open communication and risk mitigation. We received
18 RoSPA awards during the year, up from nine the previous year,
highlighting the benefits of LiveSafe.
Mitie’s ISO 45001-accredited health and safety management system covers
all colleagues. FY25 performance metrics:
• Total recordable incident rate: 2.13 per 100,000 hours worked
• LTIFR: 0.07 per 100,000 hours worked
• Near miss reporting rate: 1.58 per 100,000 hours worked
• Health and safety training hours: >51,000 hours (third party specialist)
These metrics reflect our commitment to continuous improvement and
colleague competency.
Description
Value
Percentage of people in own workforce who are covered
by health and safety management system based on legal
requirements and (or) recognised standards or guidelines
100%
Number of fatalities in own workforce as result of work-
related injuries and work-related ill health
0
Number of fatalities as result of work-related injuries
and work-related ill health of other workers working on
undertaking’s sites
0
Number of recordable work-related accidents for
own workforce
2,804
Rate of recordable work-related accidents for own
workforce
2.13
Number of cases of recordable work-related ill health
of colleagues
42
Number of days lost to work-related injuries and fatalities
from work-related accidents, work-related ill health and
fatalities from ill health related to colleagues
7,870
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Annual Report and Accounts 2025
Impact, risk and opportunity management
G1-1: Corporate culture and business conduct
policies
Policies
Our policies address the management of our material impacts for business
conduct, as well as associated material risks and opportunities. They apply
to all Mitie colleagues in all of the countries in which we operate.
Ethical Business Practice Policy
Mitie is committed to ethical and moral stewardship, with zero tolerance
for bribery, corruption, tax evasion and fraud. We comply with
international sanctions and protect customer confidentiality. Our policy
promotes safe working conditions, human rights and labour standards.
We do not engage in political activities but do participate in policy debates
that are relevant to our business. Colleagues are encouraged to report
unethical behaviour.
Procurement Policy
Our Procurement Policy outlines Mitie’s procurement processes,
emphasising ethical business practices, financial controls and supplier
selection. It mandates compliance with legal standards, separation of
duties and conflict of interest management. The policy also covers
contracting, tendering thresholds, supplier due diligence and contract
administration, ensuring transparency, accountability and sustainability
in procurement activities.
Modern Slavery Statement
Mitie is committed to eliminating modern slavery and human trafficking.
Our 2024 statement outlines our efforts, including due diligence, risk
assessment and stakeholder engagement, while we also upgraded our
screening platform and collaborated with the Cabinet Office. We work
with around 8,000 suppliers, requiring transparency and compliance from
each of them. In FY25, no incidents of modern slavery were identified,
and we continue to closely monitor any high-risk suppliers.
Whistleblowing Policy
Our Whistleblowing Policy aims to identify and address issues of fraud,
corruption and other misconduct within Mitie. It applies to all colleagues,
including managers, directors, contractors and temporary staff. The
procedure encourages colleagues to raise concerns about unlawful
conduct, financial malpractice, health and safety dangers, environmental
damage, modern slavery and breaches of internal rules. Concerns can be
reported confidentially through an independent whistleblowing service,
reports are investigated independently and colleagues are protected
from retaliation.
Mitie Fraud Framework
The Mitie Fraud Framework establishes controls to prevent and detect
fraud within Mitie. It mandates the reporting of suspected fraud to the
Internal Audit team or via a whistleblowing helpline. The framework
includes investigation procedures, confidentiality measures, and
responsibilities for managers and supervisors. It also outlines specific
fraud risks and controls, alongside the importance of maintaining high
ethical standards.
G1 Business Conduct
SUSTAINABILITY STATEMENT
continued
S1-17: Incidents, complaints and severe human
rights impacts
Discrimination incidents related to equal opportunities
and grievances and complaints related to other work-
related rights
Mitie colleagues have a number of channels for reporting any alleged
discrimination or harassment incidents, including to their line manager,
as a grievance or via the whistleblowing hotline.
Discrimination grievances are investigated thoroughly by independent
managers, and colleagues have a right of appeal if they disagree with the
outcome. Mitie has a zero tolerance policy towards discrimination, and
if it is found a number of measures may follow, including training, policy
reinforcement and disciplinary actions, to ensure satisfactory resolution.
Mitie ensures that colleagues and their representatives are informed,
supported and protected when raising concerns through regular training,
clear communication of policies, and a commitment to confidentiality and
the prevention of retaliation.
Identified cases of severe human rights issues and incidents
Mitie did not identify any severe human rights issues or incidents
connected to its own workforce during FY25. There were also no
violations of UN Global Compact principles or OECD Guidelines for
Multinational Enterprises related to severe human rights issues within
our own workforce.
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Financial statements
G1-2: Management of relationships with suppliers
Engaging our supply chain
We work closely with our suppliers to maintain strong, transparent and
ethical relationships, and our Procurement Policy ensures that all activities
align with our sustainability objectives and ethical standards.
Our strategy for managing supplier relationships includes mitigating
supply chain risks and promoting sustainability. Through the Mitie Supplier
Management Framework, we conduct thorough due diligence, continuous
monitoring and regular assessments. Our procurement platform (Coupa)
and Supplier Maintenance Portal, Mitiesuppliers.com, ensure transparency
and efficiency in sourcing, onboarding and managing suppliers.
We consider social and environmental criteria when selecting suppliers,
in line with our Sustainable Procurement Policy objective to achieve value
for money while benefiting society and minimising environmental damage.
We conduct thorough due diligence on high-risk suppliers, ensuring robust
human rights and modern slavery checks, and we also collaborate with
strategic service providers and the Cabinet Office to support suppliers in
addressing modern slavery risks.
To support vulnerable suppliers, we provide tailored support to SMEs
and VSCEs, offering training and resources to help them meet our ethical
standards. Our partnerships with the Supply Chain Sustainability School
and other service providers empower suppliers to address social and
environmental risks, while our Supplier Social Value Policy ensures that
suppliers adhere to principles of fairness, accountability and sustainability.
G1-3: Prevention and detection of corruption
or bribery
Our anti-corruption and anti-bribery framework
We are committed to preventing and detecting corruption and bribery
across all our operations. Our comprehensive system includes policies,
procedures and training programmes designed to uphold high ethical
standards. Colleagues are expected to comply with anti-bribery legislation,
properly account for transactions and report any incidents of bribery
or corruption of which they become aware. If unable to report through
normal channels, they should use the ‘Speak Up’ service and/or seek
guidance from their manager or Mitie’s legal team.
Reporting a violation or raising concerns about potential breaches of our
Anti-Bribery and Corruption Guidance or Code of Conduct is mandatory
and should be done in accordance with the internal procedures outlined
in our Ethical Business Practice Policy. We also provide a confidential
whistleblowing service for reporting incidents.
Investigations are conducted by Mitie’s independent Investigation
team, part of the Group Internal Audit team, ensuring impartiality and
confidentiality. The outcomes of investigations are reported to the
administrative, management and supervisory bodies, with action plans
issued to ensure accountability.
Policies and employee handbooks are accessible on our intranet
site, ensuring that all colleagues are informed and understand their
responsibilities. During FY25, we provided mandatory training on our
policies to all at-risk workers, and voluntary training was made available
for other workers.
Metrics and targets
G1-4: Confirmed incidents of corruption or bribery
Corruption and bribery metrics
We have not identified any insufficiencies in actions taken to address
breaches in procedures and standards of anti-corruption and anti-
bribery. Neither Mitie nor any of its workforce has been subject to
legal proceedings regarding corruption or bribery during the year.
G1-5: Political influence and lobbying activities
Our approach to political influence and lobbying
We are committed to maintaining transparency and ethical conduct in all of
our political influence and lobbying activities. Our approach is guided by the
Mitie Code of Conduct, which ensures political neutrality when engaging
with government, regulators and the public sector. We recognise the right
of individuals to be involved in political activities, although colleagues must
make it clear that any views expressed are their own.
Mitie’s political influence and lobbying activities are overseen by the
Director of Corporate Affairs, who ensures compliance with our ethical
standards and policies. We do not make financial or in-kind political
donations and our Mitie Code of Conduct explicitly prohibits colleagues
from making donations to political parties on behalf of Mitie.
During FY25, Mitie provided support for two events, with an estimated
cost of c.£15,000. These were:
• A Parliamentary Labour Party reception in September 2024
• A fundraising event for Neil Coyle, MP for Bermondsey and Old
Southwark, in December 2024, for which Mitie provided the venue
Mitie’s lobbying activities primarily focus on sustainability, social value and
industry regulations. Key topics include:
• Advocacy for skills development, employment rights and opportunities,
alongside Apprenticeship Levy reform
• Engagement with the UK Government on its Net Zero, decarbonisation
and power connection ambitions
• Elevating our position on creating Safer Communities, including associated
initiatives around Retail Crime, the Terrorism (Protection of Premises)
Act 2025 and Violence against Women and Girls (VAWG)
• Ad-hoc lobbying activity that falls outside the scope of the above core
pillars, including work related to procurement, EVs, and immigration
and justice
These activities align with Mitie’s material impacts, risks and opportunities
identified in our materiality assessment, ensuring that our lobbying efforts
support our strategic goals and sustainability commitments.
G1-6: Payment practices
Our payment practices
We are committed to maintaining transparency in our payment practices,
recognising the importance of timely cash flows to business partners, and
our robust systems and processes ensure prompt payments to suppliers.
We take an average of 45 days to pay an invoice from the date when the
contractual or statutory term of payment starts to be calculated, and we
aim to pay 95% of our suppliers within 60 days.
We have implemented robust measures to prevent late payments to
SMEs. Our digital supplier platform ensures transparency and efficiency
in managing supplier relationships. We continuously monitor and review
our payment practices to ensure alignment with our ethical standards and
support the financial stability of our suppliers.
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PRINCIPAL RISKS AND UNCERTAINTIES
Effective risk management
Our risk management approach
During FY25, the Group has seen further enhancements to our risk
management and business resilience approach. Notable improvements
include:
• Successful launch of our first-ever Risk and Resilience Week – this
initiative aimed to promote a better understanding of risk management
and business resilience strategies across the Group
• Completion of a nine-month risk register quality assurance programme,
focused on refining the content of risk information captured across more
than 500 registers managed throughout the Group – this comprehensive
project has greatly improved the accuracy and quality of our risk data
• Roll-out of enhanced risk governance through the introduction of
divisional risk committees, ensuring that risk management responsibilities
are more effectively overseen and addressed across the Group
• Design of two new training offerings to boost awareness of risk
management at Mitie and equip our colleagues with the knowledge
and skills to respond effectively to a crisis
In our continuous pursuit of excellence, we have undertaken and
completed our third-party evaluations in relation to ISO 31000:2018
risk management and ISO 22301:2019 business continuity management
systems. These critical achievements demonstrate our commitment to
maintaining high levels of risk and resilience management practices.
We are also proud to have received external recognition for our risk
management software, Risk Safe, which was recognised again as the
Risk Management App of the Year at the Continuity, Insurance and Risk
Awards during this reporting period, a testament to the innovation
and effectiveness of our risk management solutions. As a result of the
improvements made during FY25, we have seen elevated risk maturity
levels, signifying that our approach to continual improvement in this field
is having the desired effect.
Mitie’s risk management process is straightforward and in line with the
Group’s operating model. Each business area is accountable for the
consistent management of existing and emerging risks, considering both
threats and opportunities. The following aspects are relevant to the
compilation of the Group’s principal risks and uncertainties:
• The Board is responsible for explicitly determining Mitie’s risk appetite,
monitoring the amount of risk taken and ensuring that activities
undertaken to achieve strategic objectives align with this appetite
• A level of risk appetite is set for all principal risks, which helps determine
the actions and resources needed for mitigation
• The Risk Committee, chaired by the Chief Risk Officer (Mitie’s Chief
Legal Officer) and comprising the Managing Directors of each of the
divisions, the heads of all functions, and relevant subject matter experts,
is responsible for overseeing the implementation of the Group’s
Enterprise Risk Management (ERM) framework from an operational
perspective, consistent with Mitie’s risk appetite
• Mitie’s risk management structure aims to ensure a uniform approach to
identifying, assessing, monitoring and effectively mitigating risks across the
business. All risks are reported based on criteria that consider potential
likelihood and consequences if a risk materialises
• Each business unit, function, project and account maintains a
comprehensive risk register using Risk Safe (Mitie’s automated risk
management platform), which includes risk controls and mitigation
measures approved by respective leadership teams
• Mitie has an automated risk treatment mechanism in place to properly
manage risks when a residual risk score is identified as exceeding specified
thresholds in terms of tolerance and/or risk appetite
• Risk registers are automated and continuously reviewed by management
• The Insurance team plays a crucial role in evaluating key exposures and
ensuring suitable risk transfer for insurable risks
• Risk management is proactively approached using Mitie’s Intelligence Hub
to assess threats and identify potential problems
• Mitie constantly monitors its internal and external environments to
ensure timely identification and appropriate response to new, emerging
or existing risks with elevated exposure
• Mitie actively promotes and supports a learning culture concerning
risk management to continuously enhance its ERM framework, remain
resilient and adapt to the ever-changing external environment
• The Group holds ISO 22301 certification and operates in accordance
with ISO 31000, which was externally verified in FY25
• Principal risks undergo a thorough biannual review (for half-year and
full-year financial reporting), with quarterly updates submitted to the Risk
Committee for consideration. The Board and Audit Committee actively
participate throughout the process and provide challenges. The Board
signs off on all outputs from this review. Principal risks can be found on
pages 80 to 87
• In evaluating Mitie’s long-term viability, the emerging and principal risks
facing the Group are considered. The viability statement can be found on
page 89
During FY25, businesses have faced a turbulent year marked by
political uncertainties, international tensions and policy changes which
have had a rippling effect, compelling companies to constantly adapt
and manage ever-evolving threats and opportunities. Amid these
challenges, the Group diligently pursued enhancements in both
risk management and business resilience, reinforcing a proactive
approach and maintaining a robust standing in the face of adversity.
Peter Dickinson
Chief Legal Officer
Mitie’s Chief Risk Officer and
Risk Committee Chair
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Governance
Financial statements
Internal reporting
Internal
reporting
External
reporting
External reporting
Group-level risks
Collection of risks which could
affect the performance, future
prospects or reputation of
the Group and are subject to
ongoing reviews
Complementary framework in
place for the management and
ongoing review of principal risks
and uncertainties as agreed by the
Mitie Board
Risk appetite and associated
parameters established for all risks
and subject to ongoing review
Principal risks
and uncertainties
Condensed version of principal
risks and uncertainties, which
has been reviewed and
approved by the Mitie Board
and Audit Committee
New and emerging risks
Ongoing review of internal and
external environment encapsulating
new risks in known context, known
risks in new context and new risks
in new context
Account-level risks
Identify, evaluate and mitigate
operational risks recorded in
the risk register
Report on current and
emerging risks
Business unit, function
and project risks
Identify, evaluate and mitigate risks
recorded in the risk register
Report on current and
emerging risks
RC
AC
PL
AC
AC
PL
BUL
AC
MB
AL
BUL
MB
MB
BUL
RC
RC
RC
IH
RT
RT
RT
AL
AL
PL
BFL
RT
MGX
BFL
MGX
MGX
BFL
IH
Contributors key:
Mitie Board
Mitie Group
Executive
Audit
Committee
Risk Team
Risk
Committee
Intelligence
Hub
Business Unit
Leadership
Team
Business
Function
Leadership
Team
Project
Leadership
Team
Account
Leadership
Team
Top down
Bottom up
Our risk management framework
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Annual Report and Accounts 2025
PRINCIPAL RISKS AND UNCERTAINTIES
continued
Our risk appetite framework
Mitie has a risk appetite framework, which formalises the Group’s risk appetite, tolerance limits and governance oversight processes to ensure that risks
across the Group are managed within acceptable limits.
Mitie considers its risk appetite in relation to its principal risks under three categories as set out below:
Risk appetite
Description
Latest principal risks position
Averse
The approach adopted seeks to minimise the risk. Mitigation
costs are accepted and there is an appreciation that these
might exceed expected losses.
• Cyber security and data protection (previously cyber
security and data management)
• Health, safety and environment
• Regulatory
• Reputational damage
Cautious
The approach adopted is balanced. Mitigation actions are
proportionate and based on cost-effectiveness.
• Economic and political uncertainties
• Climate change and social impact
• Funding
• Business resilience
• Employees
• Third-party management
• Business transformation (previously change management)
• Prison management (new)
Eager
The approach adopted is tilted towards taking greater risks
to achieve business objectives. There is an appreciation that
there will be higher exposure and volatility in returns.
• Competitive advantage
• Growth through acquisitions
• Adoption of new and emerging technologies
Time horizons and risk velocity
Mitie considers three distinct timeframes – short (one to three years), medium (three to ten years) and long (10–15 years) – to project when a risk might
possibly materialise, based on information accessible at any given instance. We also incorporate risk velocity, being the rate at which a risk manifests and
results in adverse consequences for the business, impacting the Group’s operations, reputation and financial stability. Comprehending risk velocity is
crucial as it enables us to develop and execute appropriate mitigation measures promptly, thereby improving management of and response to any
potential threats.
During FY25, an updated assessment of both our time horizons and risk velocity has been completed and the results are as detailed below:
Risk
Time horizon
Risk velocity
Economic and political uncertainties
Short
Weeks
Climate change and social impact
Short to medium
Years
Cyber security and data protection (previously cyber security and data management)
Short to medium
Hours
Health, safety and environment
Short to medium
Days
Funding
Short to medium
Months
Regulatory
Short to medium
Days
Competitive advantage
Short to medium
Months
Business resilience
Short to medium
Days
Employees
Short to medium
Months
Third-party management
Short to medium
Weeks
Growth through acquisitions
Short to medium
Years
Business transformation (previously change management)
Short to medium
Years
Adoption of new and emerging technologies
Medium to long
Months
Reputational damage
Short to medium
Hours
Prison management (new)
Short
Days
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Risk interconnectivity
The Group is aware of the inherent interconnectedness of risks within
its operations, acknowledging that if one principal risk was to materialise
it may have a domino effect on others. By maintaining a well-rounded
and holistic understanding of risk interconnectivity, we aim to anticipate
potential repercussions, allowing for effective mitigation measures and
business continuity. This also enables Mitie to not only address issues in
isolation but also devise comprehensive strategies that strengthen multiple
aspects simultaneously, thus ensuring the organisation’s resilience and
preparedness against an ever-evolving risk landscape.
Risk
Interconnectivity
1. Economic and political uncertainties
3, 5, 6, 7, 8, 9, 10, 14
2. Climate change and social impact
6, 7, 8, 9, 10, 14
3. Cyber security and data protection
(previously cyber security and data management)
6, 7, 8, 9, 10, 12, 13, 14
4. Health, safety and environment
6, 7, 8, 9, 10, 14
5. Funding
7, 11, 12, 14
6. Regulatory
7, 14
7. Competitive advantage
5, 9, 10, 11, 13, 14
8. Business resilience
4, 9, 10, 14
9. Employees
7, 12 ,14
10. Third-party management
4, 6, 7, 14
11. Growth through acquisitions
7, 14
12. Business transformation
(previously change management)
7, 11, 14
13. Adoption of new and emerging technologies
7, 9, 10, 14
14. Reputational damage
7
15. Prison management (new)
4, 7, 8,14
Changes to our risk profile
In FY25, the Group undertook a thorough review of the current operating
environment, focusing on several scenarios, including:
• New risks that have emerged in the external environment but are
associated with the Group’s existing strategy
• Existing risks that are already known to the Group but have developed
Prison management
HMP Millsike
• Risks that were not previously faced by the Group, because the risks are
associated with changed core processes
One new principal risk – prison management – was identified following
this review.
Emerging risks
In addition to examining the risks that Mitie currently faces, we also
consider emerging risks in both our internal and external environments
to maintain operational resilience and ensure that our future strategic
planning remains uncompromised. Current emerging risks under
observation include:
• Policy changes following UK change of government
• Potential for future widespread health events
• The growing prevalence of misinformation and disinformation, along with
the potential damage to reputation
Having considered the principal risks in the context of the current and
emerging risk landscape, movements in risk exposure have been assessed
as follows for the following four principal risks.
Principal risk
Movement in risk exposure
Economic
and political
uncertainties
Elevated net risk exposure due to an unstable external
environment. Ongoing uncertainty related to global socio-
political instability and its consequences on domestic
and international stages. Multiple consequences arising
from government alterations, encompassing budget
adjustments, approaches to outsourcing, and regulatory
and policy updates (for instance, employment legislation).
Health,
safety and
environment
Transitioning into prison management results in
heightened net risk exposure due to a variety of health
and safety concerns. These include the potential for
elevated levels of violence and an increase in mental
health challenges among both our colleagues and the
individuals under our care.
Business
resilience
Elevated net risk exposure due to an unstable external
environment.
Reputational
damage
Transitioning into prison management results in increased
net risk exposure because of the anticipated increase
in media coverage. Any perceived shortcomings in
management practices may contribute to heightened
negative public sentiment and scrutiny.
During FY25, Mitie successfully mobilised HMP Millsike, which has resulted in a material shift in
the Group’s risk profile as it transitions into prison management. Taking on the responsibility for
managing the United Kingdom’s newest and first ‘green’ all-electric Category C prison on behalf of
the Ministry of Justice has inevitably led to this adjustment, as this responsibility introduces a range
of new operational, reputational and financial risks.
The specialised nature of custodial services demands strict compliance with regulations and
contractual obligations, ensuring that the correct processes are followed, and the required
standards are met. In addition, the safety and wellbeing of the individuals under our care, our
colleagues, and the wider community are of the utmost importance, requiring constant vigilance
and adherence to best practice.
In response to this significant development in Mitie’s business operations, we have introduced a
new principal risk as shown on page 87. While managing HMP Millsike offers exceptional potential
for business growth and evolution, it also exposes Mitie to a more complex and diverse risk
environment. Consequently, the Group acknowledges that it is essential to ensure that these
new opportunities and challenges are carefully balanced by effective and stringent controls. By
acknowledging and addressing these risks, Mitie aims to maintain a robust and resilient approach
to prison management, safeguarding the interests of its stakeholders while pursuing new avenues
for growth and expansion in this sector.
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PRINCIPAL RISKS AND UNCERTAINTIES
continued
Controls and mitigation:
• Mix of long-term contract portfolio in both the public and
private sectors
• Continual development of new and innovative solutions
• Focus on higher-margin growth opportunities
• Regular reviews of the sales pipeline
• Increasing spread of customer base, reducing reliance on
individual customers
• Strategic account management programme
• Dedicated Finance, Risk and Intelligence Hub specialists scanning
environment
• Utilising contract mechanisms to recharge cost increases
• Coupa, Mitie’s digital supplier platform, providing greater visibility
of and ability to manage supply chain
• Leveraging buying power to help mitigate the increase in cost of
goods and services
Controls and mitigation:
• Plan Zero
• ESG Committee
• Environmental Management System ISO 14001 and Energy
Management System ISO 50001
• Climate change risk assessment maintained and approved by the
ESG Committee
• Key policies and associated operating procedures in place
• Use of in-house subject-matter experts specialising in an array of
topics, including energy, waste, biodiversity, procurement and fleet
• ISO 22301 – regular testing of crisis management and business
continuity plans
• Winter and summer preparedness planning at account level
• Ongoing reviews of Planned Preventative Maintenance (PPM)
lifecycles
• Continuous horizon scanning via the Group’s Intelligence Hub, with
regular alerts to teams on potential threats and significant events
• Insurance cover in place to cover property damage and
business interruption
• Targets in place for Mitie’s social value framework pillars
• The Mitie Foundation – Giving Back, Mitie’s employee
volunteering programme
• Active apprenticeship scheme across the Group, training Mitie
colleagues to enhance operational delivery and address skills gaps
Description and impact:
An inability to quickly identify and effectively respond to the risks
posed from either geopolitical or macroeconomic matters could
adversely impact Mitie. A sudden change in market conditions, such
as an economic slowdown or significant political uncertainty, either
nationally or globally, could have a negative impact on the demand for
the Group’s services.
Description and impact:
An inability to quickly identify and effectively respond to the
challenges posed by climate change could hinder the Group’s
transition to a lower-carbon business and result in significant business
interruption and missing new opportunities for growth. Furthermore,
a failure to appropriately consider the environmental and social
impact of Mitie’s business and its activities may create a negative
perception with colleagues, clients, investors, government and the
general public. This could lead to failures in securing and/or retaining
contracts and sources of funding, as well as impacting negatively on
Mitie’s reputation.
1. Economic and political uncertainties
(Strategic risk)
2. Climate change and social impact
(Strategic risk)
Responsibility:
Mitie Group
Executive
Risk appetite:
Cautious
Change in year:
Increased risk
exposure
Responsibility:
Chief Legal Officer
(Lead) supported
by Mitie Group
Executive
Risk appetite:
Cautious
Change in year:
No change
Time horizon:
Short to medium
Risk velocity:
Years
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short
Risk velocity:
Weeks
Strategic pillars that would be impacted if risk was to materialise:
Operating margin
progression
Accelerating
growth
Accelerating
growth
Cash
generation
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Financial statements
Controls and mitigation:
• Continued alignment with Cyber Essentials Plus requirements, and
ISO 27001 certified Information Security Management System in place
• Internal processes and controls for all systems changes to ensure cyber
best practice and compliance with data protection laws and regulations
• Dedicated information security team and data privacy officers in place
• Assured cyber incident response company (level 1) engaged and on
retainer with a one-hour response time
• Outsourcing of routine IT operations to a highly skilled partner
organisation, Wipro, to improve IT resilience and controls. Includes 24/7
service, providing Mitie with an enhanced level of information
• Security monitoring and alerting: the 24/7 Cyber Defence Centre
service provided by Wipro actively monitors all alerts and incidents
raised by the various security tools
• Microsoft and Wipro cyber toolsets and proactive monitoring and
management of cyber-threats
• Clear strategy to utilise leading-edge cloud technology, delivering
disaster recovery and business continuity improvements
• Crisis management and business continuity testing focused on cyber-
attacks, a series of exercises aimed at ensuring that downtime is
minimised and customer trust is maintained
• Regular communications to colleagues to highlight IT risks and
expected behaviours
• Cyber security training
• Cyber insurance policy
• MGX Playbook for the management of a cyber-attack
• Security assessments by a leading firm of cyber security experts,
including a phased threat assessment and stress test on the
Mitie network
Controls and mitigation:
• A comprehensive HSE strategy in place and under continual review
for effectiveness
• Major cultural HSE programme, LiveSafe, continuing, with clear
rules, engagement and training for staff
• Regular training and communication delivered throughout the
Group, in accordance with the LiveSafe principles. LiveSafe
eLearning training programme sets out HSE expectations, including
‘stop the job’, supported by key safety message from the Chief
Executive, Phil Bentley
• H&S management system certified to ISO 45001 and environmental
system to ISO 14001
• Fully integrated incident recording, monitoring and reporting system
• Regular HSE reviews conducted at Group and business unit level
• Clear and standardised KPIs to monitor progress and improvements
• Risk-based audit programme embedded
• Themes and root causes monitored from the results of audits to
target specific actions, including training
• HSE function Plan Zero champions, as part of the Plan
Zero programme to promote strategy and good practice in
environmental management
• Health and wellbeing framework integrated into the business
• Insurance cover in place to cover employers’ liability, public liability
and motor fleet insurance
• Focused zero harm weeks concentrating on pertinent subjects to
further strengthen Mitie’s HSE culture
• Ongoing review of HSE team, ensuring maintenance of
competencies and correct provision of support and guidance
across the Group
Description and impact:
In the normal course of business, Mitie collects, processes and retains
sensitive and confidential information about its customers, people and
operations. Hacking, phishing attacks, ransomware, insider threats,
physical breaches or other actions such as mistakes made by our own
people may cause this confidential information to be lost or misused.
Any data loss could affect customer delivery operations and may
result in a major data breach, leading to fines, remediation costs and
reputational damage.
Description and impact:
Failure to maintain appropriately high standards in health, safety and
environmental management may result in catastrophic events, harm
to our colleagues, client staff or members of the public, consequential
fines, prosecution and reputational damage.
3. Cyber security and data protection
(Previously cyber security and data management)
(Technological risk)
4. Health, safety and environment
(Regulatory risk)
Responsibility:
Chief Technology
and Information
Officer (Lead)
supported by Mitie
Group Executive
Risk appetite:
Averse
Change in year:
No change
Responsibility:
Chief Legal Officer
(Lead) supported
by Mitie Group
Executive
Risk appetite:
Averse
Change in year:
Increased risk
exposure
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Hours
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Days
Accelerating
growth
Accelerating
growth
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PRINCIPAL RISKS AND UNCERTAINTIES
continued
Controls and mitigation:
• Maintenance of strong banking, debt and equity relationships
• Regular forecasting of cash flow and net debt
• Thorough focus on working capital cycles with a clear set of KPIs
• Clear policy on provisions
• Strong focus on and monitoring of cash collection
• Regular reviews of payment terms with customers and supply chain
• Focus on working capital processes to reduce cycle times and
average daily net debt
• Resources allocated to drive cash performance and predictability
• Regular review of capital allocation policy to ensure plans are
affordable and the Group remains within required covenant and
rating agency parameters
Controls and mitigation:
• Specialist legal and HSE expertise aligned with business units
• Code of Conduct for all colleagues
• Independent whistleblowing system available to all colleagues to
report any concerns
• Group-wide policies updated for changes to laws and regulations
and maintained in the online information management system
• Regular and thorough internal and external regulatory audits
• Training and awareness materials communicated to colleagues via
Mitie’s digital learning hub and monitoring of completion performed,
especially for mandatory courses
• Regular monitoring of legal and regulatory changes by Group
functions, including Company Secretariat, Legal, HSE and HR
• Financial governance and controls in place
• Commercial governance and controls in place
• Establishment of Internal Control Declaration framework ongoing
to align with future corporate governance requirements
• AI governance and controls
Description and impact:
A failure to secure and renew access to suitable funding sources,
stemming from perceived risks within Mitie’s operations and/or the
broader sector, could adversely affect the Group’s capacity to uphold
a profitable business performance. Furthermore, an overextension
of Mitie’s leverage could result in diminished cash flow, restricted
growth opportunities, and compromised financial stability, leading to
a decline in shareholder confidence and a subsequent reduction in
Mitie’s market value.
Description and impact:
Failure to comply with applicable laws and regulations may lead to
fines, prosecution and damage to Mitie’s reputation.
5. Funding
(Financial risk)
6. Regulatory
(Regulatory risk)
Responsibility:
Chief Financial
Officer (Lead)
supported by Mitie
Group Executive
Risk appetite:
Cautious
Change in year:
No change
Responsibility:
Chief Legal Officer
(Lead) supported
by Mitie Group
Executive
Risk appetite:
Averse
Change in year:
No change
Time horizon:
Short to medium
Risk velocity:
Days
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Months
Strategic pillars that would be impacted if risk was to materialise:
Operating margin
progression
Accelerating
growth
Accelerating
growth
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Strategic report
Governance
Financial statements
Controls and mitigation:
• Bid Committee approval for complex bids
• Robust risk assessment of bids with input from key stakeholders such as
Commercial, Legal and Operational Teams
• Detailed contracting guidelines in place
• Clear delegated authorities register
• Strategic account management programme
• KPI/service level agreement formal reviews with customers
• Sales and customer relationship management (CRM) teams focused on
developing pipeline across all major sectors
• Improved CRM capabilities with active relationship management
• Focus on customer satisfaction (Net Promoter Score and soliciting
feedback)
• Sales development programme
• Procedural documentation in place
• Centre of Excellence Bid Team established
• Ongoing review of new and innovative service offerings
Controls and mitigation:
• Key policies and associated operating procedures in place
• Dedicated specialist teams, including Risk, Information Systems,
Finance, Occupational Health, Supply Chain and Intelligence Hub
• Maintained and updated crisis and business continuity plans for key
activities across all Mitie operations, including key service providers
• Disaster recovery framework embedded and managed
• Stringent governance controls, including oversight from Risk
Committee, with regular reporting to the Audit Committee and
the Board
• Close monitoring of supply chain to ensure continuity of
critical supplies
• Internal and external compliance audits
• Certified to ISO 22301:2019 and operating in accordance with
ISO 31000:2018, which is subject to annual external validation
• Regular Mitie Group Executive testing of crisis management and
business continuity scenarios
• Continuous horizon scanning via the Intelligence Hub, with regular
alerts to teams on potential threats and significant events
• Critical Engineering and Technical Assurance programme to help
manage high-risk contracts
• Insurance cover in place to cover business interruption
• Agile working framework embedded
• Themes and root causes monitored from the results of audits to
target specific actions
• Digital supplier platform supports the efficiency of Mitie supply chain
processes (supplier onboarding/supplier health, contract lifecycle
management, sourcing and purchase to pay)
Description and impact:
A failure to preserve our competitive edge or capitalise on
opportunities might result in the loss of key customers, excessive
dependence on a specific sector or the inability to generate financially
sound bids with a measured approach to risk. This could have a
significant effect on Mitie’s financial performance and reputation.
Description and impact:
An inability to effectively respond to global events, such as a
pandemic or supply chain disruption and/or a catastrophic event at a
key business location, could result in significant business interruption.
The effect on colleagues, customers and the supply chain could result
in severe consequences for the financial health and reputation of
Mitie’s business.
7. Competitive advantage
(Strategic risk)
8. Business resilience
(Strategic risk)
Responsibility:
Mitie Group
Executive
Risk appetite:
Eager
Change in year:
No change
Responsibility:
Mitie Group
Executive
Risk appetite:
Cautious
Change in year:
Increased risk
exposure
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Months
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Days
Operating margin
progression
Operating margin
progression
Accelerating
growth
Accelerating
growth
Cash
generation
Cash
generation
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PRINCIPAL RISKS AND UNCERTAINTIES
continued
Controls and mitigation:
• Consistent HR resourcing process and system across the Group
• Process in place for online training and development, with access to
online learning for all colleagues
• Consistent process to manage both temporary and permanent
recruitment
• Training and development programmes for senior leadership
• Developed talent identification, management and development
framework
• Performance management framework
• HR business partners aligned with business units
• Induction programme, mandatory for new starters
• Regular communications from leadership team – including Mitie
Group Executive country-wide roadshows
• Specific plans developed to address results of employee survey
• Competitive remuneration, terms and conditions
• Regular employee offers
• Succession plans in place for critical roles, especially for senior
leadership
• Attraction strategy developed and deployed
• Enhanced benefits such as free shares, life assurance, virtual GP
and a salary advance scheme
• Careers website
• Employee Value Proposition (EVP)
• Career band framework
Controls and mitigation:
• Key policies and associated operating procedures, including Supplier
Management Programme
• Dedicated Procurement and Commercial teams
• Centre of Excellence and dedicated Risk & Compliance team
embedded within Procurement and Supply Chain team
• ‘Mitie First’ approach adopted
• Optimisation of preferred suppliers framework
• Rigorous onboarding framework integrated into business utilising
the digital supplier platform
• Defined service level agreements and KPIs
• Ongoing spending review
• Dedicated risk management and assurance procedures (including
targeted HSE assurance programme and internal audit) to ensure
that internal controls are operating effectively
• Ongoing review of third-party business continuity arrangements
with regular reporting to Group Risk
• Digital supplier platform facilitating supplier health and risk checks
(including insolvency risk) as well as invoice processing
• Procurement and supply chain insights
Description and impact:
Significant challenges in attracting, recruiting and retaining suitably
talented people could lead to a detrimental skills shortage. This
shortage of skilled colleagues could adversely affect the delivery
of core operational activities and compromise the successful
implementation of long-term strategies. As a result, overall business
performance, growth and market competitiveness may be negatively
impacted, potentially leading to a decline in stakeholder confidence
and financial performance.
Description and impact:
An inability to successfully manage strategic third-party relationships
or a failure involving a third-party partner could impact Mitie’s ability
to deliver, resulting in financial losses owing to fines and, in some
circumstances, significant reputational damage.
9. Employees
(People risk)
10. Third-party management
(Operational risk)
Responsibility:
Chief People
Officer (Lead)
supported by Mitie
Group Executive
Risk appetite:
Cautious
Change in year:
No change
Responsibility:
Group
Procurement
Director (Lead)
supported by Mitie
Group Executive
Risk appetite:
Cautious
Change in year:
No change
Time horizon:
Short to medium
Risk velocity:
Weeks
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Months
Strategic pillars that would be impacted if risk was to materialise:
Accelerating
growth
Accelerating
growth
Operating margin
progression
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Governance
Financial statements
Controls and mitigation:
• Central acquisition function reporting into Group Legal
• Standardised governance framework, including risk management
• Ongoing review of market conditions and value for stakeholders
• Rigorous due diligence and risk management processes
• Financial governance and controls
Controls and mitigation:
• Executive sponsorship
• Deliverables agreed in advance by the Board and Mitie Group
Executive
• Centralised Project Management Office function
• Subject-matter experts appointed early on with agreed roles and
responsibilities
• Standardised programme governance framework, including risk
management
• Contract management controls embedded for third-party support
• Regular auditing with periodic reporting on key business activities to
the Audit Committee
Description and impact:
An important part of Mitie’s growth is generated through
acquisitions. Market conditions might mean that the ability to secure
such opportunities for future growth, which are favourable to
Mitie in respect of price and terms and conditions, may not always
be available.
Description and impact:
Fundamental to Mitie’s growth strategy is the ability to successfully
undertake business transformation projects and ensure that all
aspects of change management are correctly integrated. A failure
to successfully manage the aggregated impact of simultaneously
delivering transformation programmes could impact the delivery
of planned business benefits.
11. Growth through acquisitions
(Strategic risk)
12. Business transformation
(previously change management)
(Operational risk)
Responsibility:
Mitie Group
Executive
Risk appetite:
Eager
Change in year:
No change
Responsibility:
Mitie Group
Executive
Risk appetite:
Cautious
Change in year:
No change
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Years
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short to medium
Risk velocity:
Years
Operating margin
progression
Accelerating
growth
Accelerating
growth
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PRINCIPAL RISKS AND UNCERTAINTIES
continued
Controls and mitigation:
• Mitie Responsible and Ethical Use of Artificial Intelligence Policy
• AI Executive Oversight Committee
• AI Ethics Board
• Dedicated AI risk register
• AI directory
• AI Use Case Board
• Suppliers InfoSec mandate
• Learning and development programme
Controls and mitigation:
• Weekly MGX meetings
• Proactive media outreach to ensure validity of reports, including
correction methods via ongoing media campaigns
• Proactive monitoring of social media platforms
• Designated media liaisons
• Proactive engagement with key external stakeholders
• Daily media alerts
• Enhanced targeted monitoring on groups identified as posing an
increased risk
• Designated Corporate Affairs and Legal support
Description and impact:
A failure to capitalise on new and emerging technologies, along with
an inability to implement vital infrastructure and systems, could have a
detrimental impact on the Group’s long-term growth and profitability.
Description and impact:
Mitie’s participation in politically sensitive activities, such as the
provision of immigration removal services, draws media scrutiny and
amplifies the risks associated with misinformation and disinformation,
particularly in instances of perceived operational shortcomings.
The combination of Mitie’s involvement and inaccuracies in external
reporting could considerably damage the Group’s reputation,
resulting in the loss of customers’ trust, financial setbacks and long-
term challenges to Mitie’s stability, delivery and growth.
13. Adoption of new and emerging technologies
(Strategic risk)
14. Reputational damage
(Strategic risk)
Responsibility:
Mitie Group
Executive
Risk appetite:
Eager
Change in year:
No change
Responsibility:
Mitie Group
Executive
Risk appetite:
Averse
Change in year:
Increased risk
exposure
Time horizon:
Short to medium
Risk velocity:
Hours
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Medium to long
Risk velocity:
Months
Strategic pillars that would be impacted if risk was to materialise:
Accelerating
growth
Accelerating
growth
Operating margin
progression
Operating margin
progression
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Governance
Financial statements
Controls and mitigation:
• Weekly MGX meetings
• Stringent governance controls, including the Independent Prison and
Immigration Review Board and oversight from the Risk Committee,
with regular reporting to the Audit Committee and Board
• Designated subject matter experts and industry leaders appointed
• A comprehensive HSE strategy in place and under continual review
for effectiveness
• Fully integrated incident management recording, monitoring and
reporting system
• Insurance cover in place. Regular testing of crisis management and
business continuity, including MGX-led simulations
• Risk-based audit programme embedded
• Designated Corporate Affairs and Legal support
• Proactive engagement with key external stakeholders
• Daily media alerts
Description and impact:
A failure to effectively manage the risks associated with the provision
of prison management services could compromise the safety and
wellbeing of our colleagues and the individuals under our care, as
well as adversely impact future opportunities to expand in this sector.
This could negatively impact the Group’s financial, operational and
legal positions, putting our growth, stability and reputation at risk.
15. Prison management
(Operational risk)
Responsibility:
Mitie Group
Executive
Risk appetite:
Cautious
Change in year:
New
Strategic pillars that would be impacted if risk was to materialise:
Time horizon:
Short
Risk velocity:
Days
Operating margin
progression
Accelerating
growth
Focus areas for FY26
Moving into FY26, the Group is committed to continually
developing our risk management and business resilience strategies,
ensuring that the necessary protections and proactive measures
are in place to address the changing risk landscape. We will build
on the accomplishments of FY25, including the success of our
Risk and Resilience Week, improved risk data quality and
enhanced governance.
Our commitment to strengthening risk management continues
with ongoing training and innovation, as well as maintaining high
levels of risk and resilience management practices, as evidenced
by our ISO certifications. As we expand into new industries, such
as prison management, we will continue to adapt our approach
and mitigation efforts to address the unique risks posed by these
new ventures. Our aim is to remain resilient and agile in our
management of risk, ensuring that the Group can confidently
navigate an ever-evolving landscape and emerge stronger in the
event of disruption.
Cash
generation
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NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
We continuously seek opportunities to enhance Mitie’s standing as a responsible business and actively engage with stakeholders to improve the Group’s
impact. As elaborated on pages 50 to 75, Mitie has set specific social value and responsible business targets within its social value framework. Progress
towards these targets is reported monthly in Mitie’s ESG dashboard, available at www.mitie.com/esg. Mitie achieved 12 of its social value targets for FY25.
Mitie’s leadership position in ESG continues to be upheld, as evidenced by its ratings from major ESG agencies during FY25.
We employ a range of tools to monitor and evaluate our performance against strategic objectives. Our business model integrates the non-financial value
generated for our stakeholders from our resources, human capital, expertise and relationships. Through this business model, we create value for our
colleagues, suppliers, communities, shareholders and customers. Detailed information about our business model can be found on pages 32 to 33, and
our principal risks are outlined on pages 76 to 87. Climate-related financial disclosures, as stipulated in section 414CB(2a) of the Companies Act 2006,
are compliant and aligned with TCFD and are incorporated in the sustainability statement on pages 53 to 67.
The table below addresses the non-financial and sustainability reporting requirements outlined in sections 414CA and 414CB of the Companies Act 2006,
with cross-references to other sections of the Annual Report. The policies listed in the table are periodically reviewed.
Reporting requirement
Relevant policies and approach
1
Outcomes
Annual Report page reference
Environmental
matters
Environmental Policy Statement: Mitie recognises that in its day-to-
day operations it will inevitably impact on the environment in several
ways and is committed to reducing that impact through continual
improvement in its environmental and sustainability performance. Mitie’s
Environmental Policy Statement sets out how this is achieved as well as all
the environmental aspects and impacts specific to Mitie’s service delivery.
It also explains Mitie’s Plan Zero commitments.
74% of Mitie’s UK
fleet has been
transitioned to
electric vehicles.
Mitie has validated
near- and long-term
science-based targets.
Chief Executive’s review
pages 22 to 27
Sustainability statement
pages 50 to 75
ESG Committee report
pages 121 to 123
Principal risk 2: Climate change
and social impact
People
People Policy: Mitie recognises that to attract and keep exceptional
colleagues we must make Mitie a ‘Great Place to Work’. This is Mitie’s
number one aim as a business, because Mitie is nothing without its people.
This policy supports Mitie’s commitment to providing a rewarding, fair
and sustainable working environment for its people.
Equality, Diversity and Inclusion Policy: People are what makes Mitie great.
This policy sets out how Mitie upholds inclusion in the workplace and the
approach is based on three key principles: inclusion, equality and diversity.
Mitie’s success is built on its ability to embrace diversity – and we believe
that everyone should be able to bring their true selves to work and feel
valued for their contributions.
Health, Safety and Wellbeing Policy: This policy statement sets out
Mitie’s commitment to achieving the highest health, safety and wellbeing
standards and performance for the benefit of our colleagues, contractors,
client staff and members of the public.
Employee Handbook: Mitie’s Employee Handbook sets out Mitie’s vision
and values and applies to all colleagues.
Employee
engagement is at 63%.
In 2025, the Top
Employers Institute
certified Mitie as a
UK Top Employer
for the seventh
consecutive year.
We also ranked 9th
on the Inclusive Top
50 UK Employers list
for 2024/2025.
Chief Executive’s review
pages 22 to 27
Stakeholder engagement
pages 34 to 38
Sustainability statement
pages 50 to 75
Principal risk 4: Health, safety
and environment
Principal risk 9: Employees
Social matters
Sustainability and Social Value Policy: Mitie believes in the value of
sustainable actions and social equality. It commits to developing skills,
creating quality jobs and supporting our people to contribute to the
communities we serve. This policy sets out how Mitie manages its
approach to be a sustainable, energy efficient, environmentally and
socially responsible business.
Donations and gifts
in kind to the Mitie
Foundation of £0.4m
in FY25 to fund
operations.
Chief Executive’s review
pages 22 to 27
Sustainability statement
pages 50 to 75
Principal risk 2: Climate change
and social impact
Human rights
Mitie’s Equality, Diversity and Inclusion Policy sets the base for what our
colleagues should expect and what they must do to uphold our culture.
Mitie’s Employee Handbook and Ethical Business Practice Policy not
only ensures that Mitie conducts operations with honesty, integrity
and openness but also supports its approach to governance and
corporate responsibility.
Mitie publishes a
Modern Slavery
Statement each year,
which is available at
Stakeholder engagement
pages 34 to 38
Principal risk 6: Regulatory
Principal risk 9: Employees
Principal risk 10: Third-party
management
Principal risk 14: Reputational
damage
Anti-bribery and
anti-corruption
Ethical Business Practice Policy: Mitie has a duty to act responsibly and
to show the highest levels of ethical and moral stewardship. This policy
sets out Mitie’s ethical business practices and includes information on
Mitie’s zero tolerance approach to bribery and corruption.
E-learning module
available for
colleagues through
the process
repository and
Learning Hub.
People pages 68 to 74
Culture at Mitie pages 102
to 105
Principal risk 6: Regulatory
Principal risk 10: Third-party
management
Principal risk 14: Reputational
damage
Non-financial KPIs
Details of Mitie’s non-financial KPIs can be found on pages 30 and 31.
1. Policies, statements and codes are available at www.mitie.com.
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Strategic report
Governance
Financial statements
VIABILITY STATEMENT
The UK Corporate Governance Code requires the Board to explain how
it has assessed the prospects of the Group and state whether it has a
reasonable expectation that the Group can continue to operate and meet
its liabilities, taking into account its current position and principal risks.
The Group’s principal markets and strategy are described in detail in the
FY25 Strategic report (pages 3 to 89).
The key factors affecting the Group’s prospects are:
• Mitie is the leading UK facilities management business with c.14% of
the market
• The outsourcing market is relatively insensitive to economic cycles
• We have a clear vision for our technology-centric growth strategy
• We are making good progress in our transformation programmes
• We have a diverse portfolio of blue-chip and public sector clients,
the largest of which constitutes <5% of revenue
The Directors believe that a three-year period is appropriate for the
viability assessment as it is supported by our strategic, budgeting and
business planning cycles and is relevant to the duration of the Group’s
existing contracts with customers, which is typically around three years.
It therefore represents a timeframe over which the Directors believe
they can reasonably forecast the Group’s performance.
In making this statement, the Directors have carried out a robust
assessment of the emerging and principal risks facing the Group, including
those that would threaten its business model, future performance,
solvency or liquidity. This includes the availability and effectiveness of
mitigating actions that could realistically be taken to avoid or reduce the
impact or occurrence of the underlying risks. In considering the likely
effectiveness of such actions, the conclusions of the Board’s regular
monitoring and review of risk management and internal control systems,
as described on page 76, are considered.
Base case projections for viability purposes have been made using
prudent assumptions:
• Modest revenue growth and margin growth beyond FY25
• Working capital outflows in future years in line with revenue growth
• Future dividends in line with current policy
• Share buyback programme continuing in FY26
• Settlement of existing provisions according to our best estimates
• Funding costs for ongoing transformation activities
• No significant changes to Group structure
The resulting financial model assesses the ability of the Group to
remain within financial covenants and liquidity headroom of existing
committed facilities.
The Group’s principal debt financing arrangements at 31 March 2025
were a £250m revolving credit facility maturing in October 2028, which
was undrawn as at 31 March 2025, and £180m of US private placement
(USPP) notes. These financing arrangements are subject to certain financial
covenants which are tested every six months on a rolling 12-month basis,
as set out in the Finance review on page 49.
In September 2023, the revolving credit facility was amended from £150m
to £250m and its maturity date was extended by one year to October
2027, on the same terms, with an option to extend for a further one-year
period. This option was exercised in October 2024, with the maturity now
in October 2028.
Of the USPP notes, £120m were issued in December 2022 and are split
equally between 8, 10 and 12-year maturities, and were issued with an
average coupon of 2.94%. The remaining £30m of USPP notes, which
matured in December 2024, were replaced with £60m of new notes
drawn under a new uncommitted shelf facility at a coupon of 5.71% and
maturing in December 2031.
The remaining undrawn capacity of this uncommitted shelf facility was
c.£270m at 31 March 2025, which can be drawn down until October 2027.
A range of scenarios that encompass the principal risks were applied to the
base case and are set out in the table below. The analysis also considered a
reverse stress test scenario to understand the reduction required to cause
a breach of financial covenants.
Scenario
Principal risks
1
Demand/operational shock
Assumptions
Revenue:
5% year-on-year revenue reduction
across assessment period
Costs:
£40m one-off cost in FY26 (or equivalent
amount of savings not being realised)
3,4,6,7,8,15
2
Inflation/employee/supply chain disruption
Assumptions
Margin:
2% gross margin erosion across
assessment period
1,2,9,10,12
3
Reverse stress test
n/a
In each of scenarios 1 and 2, the Group was able to continue operating
within debt covenants and liquidity headroom of its existing committed
facilities. The conclusion from the reverse stress test is that the likelihood
of the reverse stress scenarios arising was remote and therefore does not
represent a realistic threat to the viability of the Group. In reaching the
conclusion of remote, the Directors considered the following:
• All stress test scenarios would require a very severe deterioration
compared with the Base Case Forecasts. Revenue is considered to be the
key risk, as this is less within the control of management. Revenue would
need to decline by approximately 34% (assuming the gross margin was
maintained) in the 12 months to March 2026 compared with the base
case, which is considered to be very severe given the high proportion of
Mitie’s revenue that is fixed in nature and the fact that in a COVID-hit
year, Mitie’s revenue excluding Interserve declined by only 1.6%.
• In the event that results started to trend significantly below those
included in the Group cash flow model, additional mitigation actions have
been identified that would be implemented. These include the short-
term scaling down of capital expenditure, overhead efficiency/reduction
measures including cancellation of discretionary bonuses and reduced
discretionary spend, asset disposals and reductions in share buybacks.
Based on this assessment, the Directors have concluded that there is
a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the three-year
period to 31 March 2028.
The Strategic report on pages 3 to 89 of Mitie Group plc, company
registration number SC019230, was approved by the Board of
Directors and authorised for issue on 4 June 2025.
It was signed on its behalf by
Phil Bentley
Chief Executive Officer
Simon Kirkpatrick
Chief Financial Officer
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Annual Report and Accounts 2025
Board leadership and Company purpose
A.
Board effectiveness
106
B.
Purpose, values, strategy and culture
95
C.
Board decision-making
100
D.
Engagement with stakeholders
99
E.
Oversight of workplace policies and practices
102
Division of responsibilities
F.
Role of the Chair
97
G.
Independence and division of responsibilities
96
H.
External commitments and conflicts of interest
109
I.
Board resources
96
Composition, succession and evaluation
J.
Appointments to the Board and succession planning
108
K.
Board composition and length of tenure
108
L.
Board and individual evaluation
106
Audit, risk and internal control
M.
Financial reporting
115
External audit and internal audit – independence and effectiveness
116
N.
Fair, balanced and understandable assessment
120
O.
Risk management and internal controls
117
Remuneration
P.
Remuneration philosophy
126
Q.
Remuneration policy
128
R.
Annual report on remuneration
129
Governance
UK Corporate Governance Code and statement of compliance
Mitie applied all the principles and complied with all the relevant provisions of the UK Corporate
Governance Code 2018 (the Code) during FY25. Details of how Mitie has applied the principles (A to R
below) set out in the Code and how governance operates at Mitie have been summarised throughout this
Annual Report and are set out on the pages indicated in the table below. A copy of the Code can be found
on the Financial Reporting Council’s website at www.frc.org.uk.
The Board acknowledges the release of the UK Corporate Governance Code 2024 (the 2024 Code) in
January 2024. Mitie will report on compliance with the 2024 Code from the financial year commencing on
1 April 2025, except for Provision 29, which will apply to the Company from 1 April 2026.
91
Chairman’s introduction to
governance and the Board
92
Board of Directors
95
Board leadership and
Company purpose
97
Division of responsibilities
99
Board activities: stakeholder
engagement
100
Strategy and the Boardroom
102
Culture at Mitie
106
Board effectiveness and
evaluation
108
Nomination Committee report
113
Audit Committee report
121
Environmental, Social &
Governance (ESG)
Committee report
124
Directors' remuneration report
138 Directors’ report
141
Statement of Directors’
responsibilities
Contents
91
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
CHAIRMAN’S INTRODUCTION TO GOVERNANCE AND THE BOARD
As Chairman, my primary responsibility is to maintain the Board and Mitie’s
high standards of corporate governance. This involves establishing and
continuously developing robust controls that provide the Board with the
necessary level of oversight and assurance. A sound corporate governance
framework ensures that the Board can make decisions effectively and
efficiently, while maintaining the appropriate balance of knowledge,
diversity, skills, experience and challenge needed to monitor and manage
the risks encountered by Mitie.
Board’s focus during the year
During FY25, the Board has focused on improving the strength of the
Mitie platform and investing in our capabilities to accelerate Facilities
Transformation for our customers, as well as continuing to reduce Mitie’s
cost base through innovation and margin enhancement initiatives (MEIs).
During FY25, the Board received updates on financial and operational
performance and:
• Considered and approved Mitie’s new Company purpose
• Approved the Group’s budget for FY25
• Considered and approved the implementation of a further £125m
buyback programme for FY26
• Considered feedback following the various Employee Voice listening
sessions held with frontline colleagues as part of the Board’s workforce
engagement activities
• Considered and approved several important strategic acquisitions, in line
with Mitie’s mergers and acquisitions (M&A) strategy
• Balanced business performance and shareholder interests in relation to
FY25 capital allocations
Board composition
The Nomination Committee continues to lead the process for Board
appointments and ensures that plans are in place for orderly Board and
senior management succession.
In March, Christopher Rogers was appointed as Chair Elect. This
appointment followed an extensive search process led by the Senior
Independent Director Roger Yates on behalf of the Nomination
Committee and wider Board, supported by external advisors MWM
Consulting. While I was not part of this process, which is described in more
detail on page 111, I was very pleased with the outcome, as Christopher is
an excellent successor, given his significant Board experience across a range
of sectors. Christopher will formally take over the Chair role at the Annual
General Meeting (AGM) in July.
Mary Reilly will be succeeded by Penny James as Chair of the Audit
Committee when she steps down from the role following the completion
of the FY25 Annual Report and Accounts. I would like to extend my
thanks to Mary for her expertise and leadership in guiding our financial
oversight and ensuring the integrity of our reporting processes over the
past eight years.
The Board evaluated whether the skills and experience of its members
are suitable both from a general Board composition perspective and
based on individual contribution. The biographies of the current Board
members and the Chief Legal Officer & Company Secretary are detailed
on pages 92 to 94.
Board evaluation
Following a comprehensive external evaluation process in FY24, this year’s
Board and Committee evaluation was conducted internally. I am pleased
to confirm the Directors’ view is that the Board and each Committee
are functioning effectively. Further details on the Board evaluation can be
found on page 106.
Stakeholder engagement
The Board ensures that stakeholder interests are considered when
making strategic decisions through effective engagement. Details of our
stakeholder engagement activities are available on page 99.
Our Section 172(1) statement highlights key decisions made by the Board
during FY25 and their impact on key stakeholders. The Section 172(1)
statement can be found on pages 39 to 41.
Jennifer Duvalier continues to serve as the Company’s designated Non-
Executive Director responsible for overseeing the Board’s engagement
with the workforce. All Non-Executive Directors in post during the period
participated in colleague listening sessions throughout FY25, maintaining
communication channels with the workforce and ensuring that the views of
those on the frontline were heard and understood. Notes from workforce
engagement sessions were made available to the Board via an electronic
Board portal. The Non-Executive Directors provided the Board with
updates at each Board meeting so that colleague views were regularly
communicated at the Board level and could be included in the Board’s
decision-making process. Further details on Jennifer’s role and activities
can be found on pages 104 to 105.
Annual General Meeting
The AGM is a significant event in the Company’s corporate calendar,
offering an opportunity for engagement with shareholders. Shareholders
are invited to attend the meeting in person to cast their votes and ask
questions, or to view the proceedings via a live webcast. Additionally,
shareholders can submit questions via email to investorrelations@mitie.
com. Detailed instructions on how to register and participate in the
webcast are provided in the Notice of AGM.
As I prepare to leave Mitie, I reflect on the significant progress made.
Mitie’s strength lies in its colleagues and collaborative culture. It has been
an honour to be part of this organisation, and I look forward to seeing its
continued growth.
Derek Mapp
Chairman
Effective corporate governance is fundamental to how the Board
fosters entrepreneurial and responsible management. This
approach facilitates the creation of long-term, sustainable value and
strengthens Mitie’s contribution to broader society.
Derek Mapp
Chairman
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BOARD OF DIRECTORS
Derek Mapp
Non-Executive Chairman
Date of appointment
to the Board
9 May 2017
Other current appointments
Derek is Non-Executive Chair
of the Board of Eurocell plc
and Chair of its Nomination
Committee. Derek is also Chair
and a Director of Woodall Group
Limited and Legatum Capital
Limited (both private companies)
and has several other private
business interests in hospitality
in Cornwall and Derbyshire.
Past roles
Derek was Chair of Informa plc
from March 2008 to June 2021.
He was also Chair of Huntsworth
plc from December 2014 to
March 2019. Previously he was
Chief Executive Officer of Tom
Cobleigh plc and Executive Chair
of Leapfrog Day Nurseries Limited.
Prior to that, he was Chair of East
Midlands Development Agency,
Sport England and British Amateur
Boxing Association Limited.
Skills and experience
• Experienced Chairman and
entrepreneur with exceptional
leadership skills
• Extensive career in ownership,
managerial, operational and
commercial roles in service
industries
• Wealth of commercial and
exceptional governance
experience within various sectors
• Promotes robust debate and an
open and engaged culture
Christopher Rogers
Independent Non-Executive
Director and Chair Elect
Date of appointment
to the Board
19 March 2025
Other current appointments
Christopher is currently Chair
of Wickes Group plc and Senior
Independent Director of
Kerry Group.
Past roles
In his executive career Christopher
was an Executive Director of
Whitbread plc from 2005 to
2016, where he held the position
of Chief Financial Officer (CFO)
from 2005 to 2012 and then
Global Managing Director of
Costa Coffee from 2012 to 2016.
Prior to Whitbread, Christopher
held senior commercial and
finance roles at Kingfisher plc and
Woolworths Group. Christopher
has also been a Non-Executive
Director at Vivo Energy plc and
Travis Perkins plc.
Skills and experience
• Extensive board and executive
leadership experience
• Strong financial management
and risk oversight, with
expertise in audit and
remuneration committees
• Proven success in the food
service and retail sectors, with a
deep knowledge of commercial
and strategic growth
• Fellow of Chartered Accountants
England and Wales and former
visiting Fellow at a UK university
Phil Bentley
Chief Executive
Date of appointment
to the Board
1 November 2016
Other current appointments
None
Past roles
Phil was Group Chief Executive
Officer of Cable & Wireless
Communications plc from January
2014 until its sale to Liberty Global
plc in May 2016. Prior to that, he
was a member of the Board of
Centrica plc from 2000 to 2013,
while also Managing Director of
British Gas from 2007 to 2013,
Managing Director, Europe from
2004 to 2007 and Group Finance
Director from 2000 to 2004. His
prior non-executive directorships
include IMI plc from 2012 to 2014
and Kingfisher plc from 2002 to
2010. His earlier career was in
international roles with BP
and Diageo.
Skills and experience
• Executive and non-executive
experience with FTSE 100
companies for over 20 years
• Significant strategic and
commercial experience at both
national and global levels
• Exceptional executive and
leadership experience across
a number of sectors
• Extensive financial and
investment community
experience
• Accountant by profession, with a
master’s degree from University
of Oxford and an MBA from
INSEAD, Fontainebleau
Simon Kirkpatrick
Chief Financial Officer
Date of appointment
to the Board
1 April 2021
Other current appointments
None
Past roles
Simon joined Mitie in July 2019
from Balfour Beatty plc, where he
held a number of senior finance
roles, including Finance Director
for Major Projects and Group
Head of Financial Planning &
Analysis. He began his professional
career with Ernst & Young,
where he was a Director in the
Energy practice.
Skills and experience
• Significant UK and international
plc experience
• Proven track record in
transforming complex
contracting businesses
• Exceptional financial experience
and extensive strategic and
commercial experience across a
number of sectors
• Chartered accountant, with a law
degree from University of Exeter
AC
NC
RC
Audit Committee
member
Committee Chair
Nomination
Committee member
Remuneration
Committee member
ESG Committee
member
ESG
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Strategic report
Governance
Financial statements
Jennifer Duvalier
Independent Non-Executive
Director
Date of appointment
to the Board
26 July 2017
Other current appointments
Jennifer is a Non-Executive
Director, Chair of the
Remuneration Committee and
a member of the Nomination
and Cyber Security Committees
of NCC Group plc, as well as
Senior Independent Director and
a member of the Audit and Risk,
Nomination and Remuneration
Committees of Trainline plc.
Additionally, Jennifer is a Director
of The Cranemere Group Limited,
where she is also Chair of the
Sustainability, People & Diversity
Committee, a Trustee of Somerset
House (a registered UK charity)
and an external advisor to the
Wellcome Trust.
Past roles
Jennifer was a Non-Executive
Director and Chair of the
Remuneration Committee of
Guardian Media Group plc from
May 2014 to April 2023. She
was Executive Vice President,
People for ARM Holdings plc,
a global technology business,
from September 2013 to March
2017 and was also an Executive
Committee member with
responsibility for its people and
internal communications activity.
Skills and experience
• Leadership development, talent
acquisition and management and
succession planning
• People strategy, organisation
development and change
management
• Employee engagement and
internal communications
• ESG-centred activities
• Executive remuneration and
performance management
experience
• MA (Hons) in English and French
from University of Oxford
Chet Patel
Independent Non-Executive
Director
Date of appointment
to the Board
1 April 2022
Other current appointments
With over 20 years’ commercial
experience at BT Group, Chet is
currently its Managing Director,
BT International.
Chet is also a Non-Executive
Advisor for Dentons and acts
as a mentor for tech start-up
organisations.
Past roles
Chet was a Non-Executive
Director at London First between
2013 and 2017. Chet was also a
non-executive member of the
London Enterprise Panel between
2013 and 2016.
Prior to joining BT Group in 2006,
Chet worked for Charles Schwab.
Skills and experience
• Proven ability to challenge
and support executive teams,
ensuring accountability and
alignment with shareholder
interests
• Commercial expertise in the
B2B service environment, with a
strong focus on driving growth
and sales strategies
• Deep knowledge of business
technology, cyber security, and
digital transformation
• Skilled in corporate strategy,
risk management, stakeholder
engagement, including with
government, regulators, and
international partners
• MBA from Henley Management
College
• Honours degree in economics
and politics from University
of Leeds
Penny James
Independent Non-Executive
Director
Date of appointment
to the Board
1 February 2024
Other current appointments
Penny is a Non-Executive Director
of QBE Insurance Group Limited,
Chair of the Audit Committee and
member of the Risk Committee of
Vitality UK (Life and Health), and
Co-Chair of the FTSE Women
Leaders Review.
Past roles
Penny was Senior Independent
Director of Hargreaves Lansdown
plc, as well as a member of its Risk
Committee and Nomination and
Governance Committee, until
March 2025. Penny was also Chief
Financial Officer and later Chief
Executive Officer of Direct Line
Insurance Group plc to January
2023, having joined its Board in
November 2017. Prior to this she
was Director of Group Finance
at Prudential plc, followed by the
Group Chief Risk Officer role.
She had previously been Group
Chief Financial Officer at Omega
Insurance Holdings Limited and
Chief Financial Officer of UK
General Insurance at Zurich
Financial Services Ltd. Penny was
a Non-Executive Director of
Admiral Group plc from 2015 to
2017. She was Chair of the Financial
Conduct Authority’s Practitioner
Panel from March 2022 to January
2023 and a Board member of the
Association of British Insurers.
Skills and experience
• Extensive financial services
experience with strong
leadership, finance and risk
expertise
• Strategic mindset and experience
in business transformation
• Chartered accountant, with
a degree in statistics from
University of Bath
Mary Reilly
Independent Non-Executive
Director
Date of appointment
to the Board
1 September 2017
Other current appointments
Mary is Senior Independent
Director and Chair of the
Audit Committee of Essentra
plc. Additionally, Mary is an
Independent Non-Executive
Director and Chair of the Audit
Committee of Gemfields Group
Limited and on the Board of
Mar Holdco S.a.r.l, a privately held
Luxembourg company. Mary is
also a Trustee of the PDSA.
Past roles
Mary was a Non-Executive
Director of Cazoo Group Ltd until
2023, a Non-Executive Director
and Chair of the Audit Committee
of Travelzoo from 2013 to 2022
and a Non-Executive Director and
Chair of the Audit Committee of
Ferrexpo plc from 2015 to 2019.
She was also a Non-Executive
Director and Chair of the Audit
& Risk Committee of the UK
Department for Transport and
of Crown Agents Limited from
2013 to 2017. Prior to this, she
was a Non-Executive Director of
Cape plc from 2016 to 2017. She
has served as a Non-Executive
Director on several other Boards
since 2000. She was a partner in
Deloitte LLP (and predecessor
firms) for over 25 years.
Skills and experience
• Exceptional audit, risk
management and assurance
experience
• Accounting, finance and
international experience
• Chartered accountant, with a
degree in history from University
College London
AC
NC
NC
RC
AC
AC
RC
NC
NC
ESG
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Annual Report and Accounts 2025
Salma Shah
Independent Non-Executive
Director
Date of appointment
to the Board
1 April 2022
Other current appointments
Salma is founder of Kraken
Strategy, a communications and
policy consultancy.
Past roles
Salma was a Partner at Portland
Communications from 2021 to
February 2023 and Chief of Staff
to the Home Secretary from
2018 to 2019. Salma held special
advisor roles in several government
departments between 2014 and
2018, including the Ministry of
Housing, Communities and Local
Government, Department for
Business, Innovation and Skills, and
Department for Culture, Media
and Sport. Prior to this, Salma
worked for BBC News as a news
and political programmes producer
from 2012 to 2014.
Skills and experience
• Public sector expertise
• Extensive experience in
public policy, public affairs and
communications
• An honours degree in
journalism and politics from
University of Salford
Roger Yates
Senior Independent Director
Date of appointment
to the Board
1 March 2018
Other current appointments
Roger is Chair of The Biotech
Growth Trust plc and Pacific
Horizon Investment Trust plc.
He is also Non-Executive Director
and Chair of the Remuneration
Committee of Jupiter Fund
Management plc.
Past roles
Roger was Senior Independent
Director at Jupiter Fund
Management plc until January
2025. He was also Senior
Independent Director and Chair
of the Remuneration Committee
of St James’s Place plc until May
2023, having served nine years
on its Board. Roger started his
career in asset management at
GT Management in 1981 and held
positions of increasing seniority at
Morgan Grenfell, LGT and Invesco.
He served as Chief Executive of
Henderson Group plc from 1999
to 2008 and as Chief Executive
of UniCredit’s asset management
arm, Pioneer Investments, from
2010 to 2012 and as Chairman
from 2012 to 2015.
Roger’s non-executive roles have
included F&C Investments, IG
Group plc, Electra Private Equity
plc and JPMorgan Elect plc.
Skills and experience
• Substantial board experience
• Strong business track record
• Exceptional knowledge of
the finance and investment
community
• BA in modern history from
Worcester College, University
of Oxford
Peter Dickinson
Chief Legal Officer & Company
Secretary
Date of appointment
to the Board
6 March 2017
Other current appointments
None
Past roles
Peter was a partner at the
global law firm Mayer Brown
International LLP (and its
predecessor firm) between 1995
and 2017 and played a leading
role in developing the firm’s
Technology, Media and Telecoms
(TMT) practice.
Between 2005 and 2015, Peter
was the head of Mayer Brown’s
Corporate practice in London.
Between 2008 and 2015, Peter
was the co-head of Mayer Brown’s
global Corporate practice. From
2015 until March 2017, Peter
co-headed Mayer Brown’s global
Technology Transactions practice.
Skills and experience
• Substantial experience of
providing legal, regulatory and
commercial advice at Board level
• Significant experience advising on
corporate merger and acquisition
transactions, joint ventures and
other significant commercial
transactions, including large-scale
multi-jurisdictional outsourcing
projects
• Qualified solicitor with an
LLB (Hons) law degree from
University of Southampton
AC
NC
RC
Audit Committee
member
Committee Chair
Nomination
Committee member
Remuneration
Committee member
ESG Committee
member
ESG
RC
ESG
NC
AC
RC
NC
ESG
Gender diversity
at 31 March 2025
Female
4
Male
6
Ethnicity diversity
at 31 March 2025
British Asian 1
British Indian 1
White British 8
Director age range
at 31 March 2025
31–40
1
41–50
1
51–60
3
61–70
3
71–80
2
Director independence
at 31 March 2025
Chairman
1
Executive
2
Independent 7
Director tenure
at 31 March 2025
Less than
6 years
5
6–8 years
4
Over 8 years 1
BOARD OF DIRECTORS
continued
95
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Strategic report
Governance
Financial statements
BOARD LEADERSHIP AND COMPANY PURPOSE
The Board
The Company’s formal governance framework underpins the Group’s operations.
The Board is responsible and accountable to shareholders for the sustainable long-term success of the Company. Subject to UK company law
and the Company’s Articles of Association, the Directors may exercise all the powers of the Company, may delegate authority to Committees
and day-to-day management and decision-making to individual Executive Directors.
Board Committees
Mitie has four formal Board Committees: the Audit, Nomination, Remuneration and ESG Committees. The Committees support the Board
by managing specific tasks or areas delegated to them. They examine critical areas in detail, facilitating informed decision-making and dedicated
oversight, as well as offering expert guidance for the whole Board.
Mitie Group Executive (MGX)
The MGX includes senior members of management from each business unit and central Group functions and meets weekly to discuss and
implement the Group’s strategic objectives. The Board is updated on matters discussed at MGX meetings at Board meetings as part of the
Chief Executive’s regular update paper, and on an ad hoc basis as required.
Disclosure Committee
Chaired by the Chief Executive, its members
include the Chairman, Chief Financial Officer,
Chief Legal Officer & Company Secretary
and the Deputy General Counsel. Its purpose
is to assist and inform decisions of the
Board concerning the identification of inside
information and to make recommendations
about how and when the Company should
disclose that information in accordance with
the Company’s disclosure policy.
Bid Committee
Chaired by the Chief Executive, its members
include the Chief Financial Officer, Chief
Legal Officer & Company Secretary, relevant
members of the MGX and members of the
sales team. The Bid Committee met weekly
during FY25. Its purpose is to consider
material bid submissions and to determine
whether such bids meet the Group’s financial,
commercial and legal objectives.
Risk Committee
Chaired by the Chief Risk Officer (Mitie’s
Chief Legal Officer) and comprising the
Managing Directors of each of the divisions,
the heads of all functions, and relevant
subject-matter experts, it is responsible
for overseeing the implementation of
the Group’s Enterprise Risk Management
framework from an operational perspective,
consistent with Mitie’s risk appetite.
Audit Committee
Purpose: to oversee the
integrity of the financial
reporting process, monitor
the effectiveness of the
internal control and risk
management systems, ensure
the independence and
effectiveness of internal and
external audits, and review
the compliance and fraud
prevention mechanisms.
Find out more on
pages 113 to 120
Remuneration
Committee
Purpose: to determine
and review the Group’s
remuneration policy and
monitor its implementation.
Find out more on
pages 124 to 137
Nomination Committee
Purpose: to evaluate and make
recommendations regarding
the composition, diversity,
experience, knowledge,
balance of skills and
independence of the Board
and its Committees.
Find out more on
pages 108 to 112
ESG Committee
Purpose: to provide oversight
and governance for all of
Mitie’s Environmental, Social &
Governance (ESG) initiatives,
ensuring they are aligned to
Mitie’s Purpose, Promises
and Values.
Find out more on
pages 121 to 123
INFORMING
INFORMING
INFORMING
REPORTING
REPORTING
REPORTING
In addition to the four main Board Committees, the Company has a Disclosure Committee, an informal Bid Committee and Risk Committee.
Terms of Reference for the Company’s formal Committees are available at www.mitie.com/investors/corporate-governance.
96
Mitie Group plc
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Purpose of the Board
The purpose of the Board is to provide leadership and direction to the
Group’s management within a framework of controls which enable risk to
be adequately assessed and managed.
Mitie’s governance framework is set out on page 95.
Matters reserved for the Board
A schedule of key matters and responsibilities that are to be dealt
with exclusively by the Board is maintained and regularly reviewed.
The schedule was last reviewed by the Board in January 2025 and is
available on Mitie’s website.
The key responsibilities of the Board include:
• Promoting the long-term sustainable success of the Company, ensuring
that workforce policies and practice support the Company’s long-term
sustainable success and are consistent with Mitie’s Values
• Approving the Group’s long-term objectives and commercial strategy
• Establishing Mitie’s Purpose, Promises and Values and satisfying itself that
these are aligned to the Group’s strategy
• Reviewing performance in light of the Group’s strategy, objectives,
business plans, budgets and ESG targets
• Approving the annual budget
• Approving the half-yearly financial report and Annual Report and
Accounts in accordance with legal and regulatory requirements
• Ensuring the Group’s compliance with statutory and regulatory
obligations
• Reviewing the effectiveness of the Group’s risk and control processes
• Reviewing the Company’s capital allocation policy and approving
shareholder returns through dividends and share buybacks
• Approving all material acquisitions and disposals, and material contractual
and other operational matters
• Ensuring adequate succession planning for the Board and senior
management
• Undertaking a formal and rigorous review annually of its own
performance and that of its Committees and individual Directors
• Making arrangements for dialogue with shareholders, canvassing
shareholder opinion and engaging with shareholders in relation to any
shareholder resolution which is opposed by more than 20% of the
votes cast
Board meeting process
The Chairman is responsible for setting the Board meeting agenda and
for ensuring that the style and tone of Boardroom discussions promote
effective decision-making and constructive debate.
Each Board meeting agenda is produced in consultation with the Chairman,
using items from a yearly meeting planner, actions arising from previous
meetings, project progress updates and any relevant governance and
regulatory matters. Items may also be added to the agenda at the request
of a Board member or in response to emerging issues.
Attention is given to timings for each agenda item to ensure that adequate
time is allocated for effective discussion and debate.
To allow sufficient time for the Directors to review Board meeting
materials and seek any clarification needed ahead of the meeting, Board
meeting materials are distributed to the Directors no fewer than five clear
calendar days prior to the meeting via a secure electronic Board portal.
Board paper guidelines and templates are provided to authors of meeting
materials to maintain a consistently high standard.
Mitie operates as ‘One Mitie’ and collaborates across all business areas,
facilitating greater consistency in processes and information control, which
aids in the preparation of consistent, high-quality and relevant Board
meeting materials. Authors of Board meeting materials consider the
impact, views and needs of key stakeholder groups, as well as the likely
consequences of decisions in the long term, assisting Board discussions and
decision-making.
The Chairman ensures that all Directors feel they can voice their opinion,
be listened to and contribute to the decision-making process.
Function heads and members of management are invited to attend Board
meetings to present their items to the Board and answer questions.
Company purpose
The Board is responsible for establishing Mitie’s Purpose and Values, and
satisfying itself that these are aligned with the Group’s strategy. The Board
approved a new Company purpose during the year: ‘Better Places; Thriving
Communities’. Further information can be found on page 40.
Advice of the Chief Legal Officer & Company
Secretary
All Directors have access to the advice of the Chief Legal Officer &
Company Secretary through various channels, including the Chief Legal
Officer & Company Secretary’s Board report, which is presented at
every Board meeting, and a secure electronic Board portal which is kept
up to date with the latest governance-related information and guidance.
The Chief Legal Officer & Company Secretary and Company Secretariat
team are also available to the Directors on an ad hoc basis as required.
The Chief Legal Officer & Company Secretary helps the Board ensure it
has the appropriate policies, processes, information, time and resources
in order to function effectively and efficiently.
The Board is responsible for the appointment and, where applicable,
removal of the Company Secretary.
Division of responsibilities
All Non-Executive Directors are considered independent when assessed
against the circumstances set out in Provision 10 of the Code. The
Chairman was considered independent against these circumstances
on appointment.
The Board continues to support separation of the roles of Chairman and
Chief Executive and considers itself to have an appropriate balance of
Executive Directors and Independent Non-Executive Directors. No one
individual or small group of individuals dominates Board decision-making.
As detailed on page 97, there is a well-defined separation of duties
between the positions of Chair and Chief Executive. To facilitate the
efficient execution of these responsibilities, the Chair and Chief Executive
engage in regular discussions outside of Board meetings, ensuring a
consistent and effective exchange of information. The Board believes that
when people feel connected, collaboration improves and colleagues feel
safe and secure, with a strong sense of belonging. This motivates Mitie to
make every place we touch safer, cleaner, more secure and sustainable.
Taking care of places means taking care of people and communities.
When communities prosper, everyone benefits.
There is a clear division of responsibilities between leadership of the
Board and executive management leadership of Mitie’s business.
Key responsibilities of the Board, its Committees and its members are
agreed by the Board and documented in writing. These responsibilities
are summarised on page 97. Further detail is publicly available at
BOARD LEADERSHIP AND COMPANY PURPOSE
continued
97
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Strategic report
Governance
Financial statements
DIVISION OF RESPONSIBILITIES
Non-Executive Directors
Chairman
In his role as Chairman, Derek Mapp’s responsibilities include:
• Leading and chairing the Board, Nomination Committee
and shareholder general meetings
• Ensuring overall effectiveness of the Board in all aspects of
its role
• Setting Board agendas, taking into account the issues and
concerns of all Board members
• Ensuring appropriate delegation of authority from the
Board to executive management
• Demonstrating objective judgement
• Promoting a culture of openness and debate
• Managing the Board to ensure sufficient time is allocated to
promote healthy discussion and open debate, supported by
the right level and quality of information to assist the Board
in reaching its decisions
• Holding meetings with the Non-Executive Directors
without the Executive Directors present
• Ensuring that new Directors participate in a full, formal and
tailored induction programme
• Ensuring that the performance of the Board, its
Committees and individual Directors is evaluated at least
once a year and acting on the results of such evaluation
• Maintaining sufficient contact with major shareholders to
understand their issues and concerns
• Ensuring that the views of shareholders are communicated
to the Board
Senior Independent Director
In his role as Senior Independent
Director, Roger Yates’ responsibilities
include:
• Acting as a sounding board for the
Chairman
• Serving as an intermediary for other
Directors when necessary
• Conducting the Chairman’s annual
performance evaluation (without the
Chairman present)
• Leading the appointment process for
any new Chairman
• Acting as chairman of the Board in the
absence of the Chairman
• Being available as an alternative
point of contact for shareholders if
they have concerns which have not
been resolved through the normal
channels, or for which such contact is
inappropriate in the circumstances
Non-Executive Directors
The responsibilities of the Board’s
Non-Executive Directors include:
• Scrutinising and holding to account
the performance of management and
individual Executive Directors against
agreed performance objectives
• Exercising independent skill and
judgement
• Constructively challenging proposals
based on relevant individual
experience, knowledge and skills
• Contributing to the formulation and
development of strategy and offering
specialist advice
• Monitoring corporate reporting
to ensure integrity of financial
information
• Playing a key role in determining the
remuneration policy for the Chairman,
Executive Directors, Chief Legal
Officer & Company Secretary and the
senior executive team
• Holding a primary role in Board
succession planning
Executive Directors
Chief Executive
In his role as Chief Executive, Phil Bentley’s responsibilities include:
• All aspects of the operation and management of the Group within the
authorities delegated by the Board
• Developing Group objectives and strategy, having regard to the
Group’s responsibilities to its shareholders, customers, colleagues and
other stakeholders
• The successful achievement of objectives and execution of strategy
following presentation to, and approval by, the Board
• Recommending to the Board an annual budget and long-term business
plan and ensuring their achievement following Board approval
• Optimising the use and adequacy of the Group’s resources
• Managing the Group’s risk profile, including the health and safety
performance of the business
• Making recommendations to the Remuneration Committee
on remuneration policy, executive remuneration and terms of
employment of the senior executive team
Chief Financial Officer
In his role as Chief Financial Officer, Simon Kirkpatrick’s responsibilities
include:
• Leading, directing and overseeing all aspects of the finance and
accounting functions of the Group
• Evaluating, approving and advising on the financial and commercial
impact of material contracts and transactions (including mergers and
acquisitions), technology investments, long-range planning assumptions,
investment return metrics, risks and opportunities, and the impact of
changes in accounting standards
• Managing relationships with the external auditor and key financial
institutions and advisors
• Ensuring effective internal controls are in place and compliance with
appropriate accounting regulations for financial, regulatory and tax
reporting
• Leading, directing and overseeing the Group’s Finance, Treasury, Tax
and Internal Audit functions
Chief Legal Officer & Company Secretary
In his role as Chief Legal Officer & Company Secretary, Peter Dickinson’s
responsibilities include:
• Advising the Board on governance matters and the Directors on their
duties, including on all aspects of the Group’s governance framework
and the application of its delegated authorities
• Ensuring the Group’s compliance with corporate legislation and the
Company’s Articles of Association
• Supporting the Board in ensuring it has the policies, processes,
information, time and resources to function effectively and efficiently
• Leading, directing and overseeing the Group’s Legal, Company
Secretarial, Pensions, Property, Insurance, Health & Safety, Risk &
Compliance and Sustainability functions
• In his role as Chief Risk Officer, overseeing the implementation of
Mitie’s Enterprise Risk Management framework and chairing the
Risk Committee
• Managing the Group’s relationship with the Cabinet Office
• Identifying and recommending to the Board acquisitions and disposals
• Leading, directing and overseeing the Strategic Projects Office and the
implementation of any projects thereunder
• Overseeing the Group’s margin enhancement initiatives programme
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Director attendance
The Board and its Committees held scheduled meetings which senior executives and advisors were invited to attend and to present on business
developments. The table below sets out attendance at the scheduled meetings in FY25. Attendance is expressed as the number of scheduled meetings
attended out of the number of such meetings possible or applicable for the Director to attend. In circumstances where a Director is unable to attend a
meeting, the Director receives papers in advance and has the opportunity to raise issues and provide feedback to the Chair in advance of the meeting.
Position
Name
Board
Nomination
Committee
Audit
Committee
Remuneration
Committee
ESG
Committee
Chairman
Derek Mapp
1,2
6/7
1/2
–
–
–
Executive Directors
Phil Bentley
7/7
–
–
–
–
Simon Kirkpatrick
7/7
–
–
–
–
Independent Non-
Executive Directors
Jennifer Duvalier
7/7
2/2
–
3/3
–
Penny James
3
7/7
2/2
7/7
–
4/6
Chet Patel
7/7
2/2
7/7
3/3
–
Mary Reilly
7/7
2/2
7/7
–
–
Christopher Rogers
4
1/1
–
–
–
–
Salma Shah
7/7
2/2
–
3/3
6/6
Roger Yates
7/7
2/2
7/7
3/3
–
1.
Derek Mapp was unable to attend the July 2024 Board meeting due to illness.
2. Derek Mapp was not in attendance at the January 2025 Nomination Committee meeting as the meeting considered candidates to succeed him as Chairman.
3. Penny James joined the ESG Committee in July 2024 (she was in attendance at the July meeting and subsequently appointed as a full member by the Board).
4. Christopher Rogers was appointed to the Board on 19 March 2025.
DIVISION OF RESPONSIBILITIES
continued
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Strategic report
Governance
Financial statements
2024
2025
BOARD ACTIVITIES: STAKEHOLDER ENGAGEMENT
April
• Jennifer and Mary met with colleagues from across Rock Power
Connection at its headquarters in Bromsgrove
• Mary and Chet met with colleagues at the MoD’s Episkopi campus
Cyprus base working on the Permanent Joint Operating Bases (PJOBs)
contract with the Defence Infrastructure Organisation (DIO)
• Derek hosted the annual Chairman’s investor roadshow over three
days, with Chet and Salma in attendance
May
• Penny visited the Mitie Technical Services Operations Centre in
Manchester, followed by the BBC site in Media City, Salford
• Phil hosted the MyAchievement Awards in London
June
• Chet visited colleagues at the MoD’s Gibraltar base working on the
PJOB contract
• Salma joined the panel at Mitie’s Senior Women in Leadership session
including senior female leaders
• Phil and Simon hosted a FY24 results presentation in London, with
investors, analysts and banks in attendance
• Phil and Simon hosted a colleague Town Hall event in London following
publication of the FY24 results. The event incorporated a live stream
from certain key Mitie office hubs
July
• 2024 AGM held as a physical meeting for shareholders, with all Board
members in attendance
• Simon hosted calls with analysts following Mitie’s Q1 trading update
• Phil and Simon held an event for Mitie’s Leadership Team at The Shard,
with Mitie’s top 70 leaders in attendance
August
• Derek and Mary visited Heathrow Immigration Removal Centre and
met with colleagues working across a range of roles
January
• Simon hosted calls with analysts following Mitie’s Q3 trading update
• Chet and Roger visited National Grid, Warwick, including a site visit
and meeting with the senior leadership team and other colleagues
February
• Derek and Chet visited Essex County Council and met with the senior
leadership team and colleagues from the Facilities Management and
Projects teams
• Jennifer met with a group of Mitie apprentices at The Shard
working across a variety of technical, managerial and professional
apprenticeships
September
• Chet and Penny visited NATS Swanwick and met with colleagues
spanning across various teams making up the Integrated Facilities
Management (IFM) Service
• Jenny visited colleagues working on the Future Defence Infrastructure
Services contract in Scotland, including a tour of Dreghorm and
Redform Barracks
• Jenny attended the ‘Making an Impact at Mitie’ event during National
Inclusion Week at The Shard
October
• Mary and Roger visited Network Rail at Waterloo Train Station,
including a tour of the station, and met with frontline colleagues
• Jenny attended Mitie’s CHORD network event, ‘A Narrative for
Change’, during Black History Month
• Phil and Simon held Mitie’s Growth Conference which was attended
by 150 colleagues, including the Mitie Leadership Team, strategic
account managers and the sales leadership team
November
• Mary and Salma attended a Remembrance event in London hosted
by the Mitie Military network
• Phil and Simon hosted an H1 FY25 results presentation in London,
with investors, analysts and banks in attendance
• Phil and Simon hosted a colleague Town Hall event in London
following publication of the H1 FY25 results. All Mitie hub offices,
including Ireland and Spain, joined the event electronically and a live
stream was made available to all colleagues
• Derek visited the British military base in the Falklands and met with
colleagues from the Technical Services Defence team
• Jenny visited JCA Engineering in Stevenage, meeting with the JCA
senior leadership team and other colleagues
December
• Phil and Simon hosted an investor roadshow in New York and
Boston, USA
March
• Simon attended the International Women’s Day event, ‘Empower
Women, Inspire Change’, hosted by the Mitie Women Can network
• All Board members attended Longcross Data Centre for a site visit
and met with members of the team
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STRATEGY AND THE BOARDROOM
Setting strategy
The Board reviews and agrees the strategy for the Group on an annual
basis and reviews aspects of that strategy at Board meetings during the
year. The Board’s annual strategy day for FY25 was held in October 2024.
When debating the Group’s strategy, the Board discussed a wide range of
matters, including, but not limited to:
• Technology and innovation
• People, culture and social value
• Brand strategy and marketing
• Sales
• Sustainability and decarbonisation
• Macro trends
• Market forecasts and Mitie performance
• Growth plans
• Global Facilities Management (FM) market
• Competitor analysis
• Stakeholder sentiment and shareholder returns
• Financial model
How governance contributes to the delivery of
strategy
Details of how opportunities and risks to the future success of the business
have been considered and addressed can be found in the Strategic report
on pages 10 to 11, 53 to 64 and 76 to 87. Details of the sustainability of
Mitie’s business model can be found in the Strategic report on pages 32
and 33. Mitie’s governance framework underpins the delivery of strategy
and can be found on page 95. An overview of the Group’s strategy can be
found in the Strategic report on pages 22 to 27.
How the Board considers the views of stakeholders
The Board recognises the significance of establishing and maintaining
robust relationships with all stakeholder groups. Consequently, the Board
periodically reviews and discusses the Group’s key stakeholders along
with the engagement mechanisms in place to support effective two-way
communication. Further details of the Group’s stakeholder engagement
mechanisms are available in the Strategic report on pages 34 to 38. Mitie’s
Section 172(1) statement, which outlines how the Board has engaged with
the Group’s stakeholders and approached decisions made during FY25,
can also be found in the Strategic report on pages 39 to 41. Details of the
stakeholder activities undertaken by the Board during FY25 are provided
on page 99. Resources for shareholders and other stakeholders are
accessible at www.mitie.com/investors.
The Board is committed to ongoing and proactive dialogue with
shareholders. A full programme of formal and informal events, institutional
investor meetings and presentations is delivered throughout the year. This
engagement programme aims to ensure that the performance, strategies
and objectives of the Group are clearly communicated to the investment
community and provides a forum for institutional shareholders to address
any issues.
Mitie actively engages with the investment community and sell-side
analysts, facilitating requests for meetings and calls with senior management
from both existing and potential institutional investors. This initiative is
spearheaded by the Executive Directors, with assistance from the Investor
Relations team. The Board is regularly updated on investor feedback,
stockbroker insights and detailed analyst reports. It is the responsibility
of the Chairman to ensure that the Board is aware of any issues or
concerns raised by major shareholders. Additionally, the Chairman and
Non-Executive Directors are available to meet with shareholders upon
request, and the Chairman conducts an annual roadshow. Committee
Chairs also seek dialogue with shareholders on major matters within their
areas of oversight.
Boardroom discussions
The Board held seven formal scheduled meetings during FY25. Individual Director attendance at meetings can be found on page 98.
In undertaking their duties, the Directors act in a way they consider, in good faith, will be most likely to promote the success of the Company for its
shareholders as a whole, having regard also to other stakeholders. Further detail on boardroom discussions relating to certain key Board decisions can
be found in the Section 172(1) statement on pages 39 to 41. Scheduled Board meetings focused on the main themes as detailed below:
Strategy
• Approving the Group’s strategic targets and monitoring the Group’s performance against them
• Approving strategic acquisitions
• Considering growth opportunities and conducting post-acquisition appraisal reviews
• Approving the Group’s budget
• Reviewing the progress of the Group’s margin enhancement initiatives
• Approving the Group’s new Company purpose
Financial performance
and investor relations
• Recommending a final dividend of 3.0 pence for FY24 and declaring an interim dividend of 1.
3 pence for FY25
• Approving the Group’s share buyback programme
• Setting financial plans, annual budgets and key performance indicators, and monitoring progress against them
• Approving financial results for publication
• Reviewing analyst research and consensus, alongside feedback from investor meetings
• Considering the appropriateness of potential excess capital distributions and distributable reserves
Governance
• Receiving updates from the Board Committee Chairs
• Reviewing and updating the matters reserved for the Board, as well as approving each Board Committee’s Terms of Reference
• Conducting the annual review of the effectiveness of the Board and Board Committees
• Receiving reports from the Chief Legal Officer & Company Secretary, which include updates on governance and regulatory
matters, whistleblowing and material litigation
• Reviewing and approving the Group’s reports on Task Force on Climate-related Financial Disclosures and sustainability
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Governance
Financial statements
In FY24, the Board approved the Group’s Facilities Transformation Three-Year Plan (FY25 – FY27) to deliver accelerated growth through three key pillars:
key account growth and scope increases; projects upsell; and infill M&A. Further information on the key pillars of the Three-Year Plan can be found in the
Strategic report on page 21.
Examples of Board activity in relation to Mitie’s strategy in FY25 can be found below.
Key account growth
and scope increases,
and projects upsell
In FY25 the Board reported that investments were delivering tangible results, including record contract wins and renewals/
extensions, investment in sales and marketing teams to develop sector and customer-driven strategies, while enhancing
customer relationship management functionality and business development skill sets. More resource has been put into
contract rebids and improved training and incentive structures for ‘in contract’ teams to drive growth over the contract life.
Mitie is continuing to invest in technology by developing ‘intelligent’ solutions and enabling AI in core systems.
The Board will continue to receive regular updates on new business, retention and extension divisional opportunities, as well
as cross-selling strategies.
Infill M&A
Over the Three-Year Plan, the Board has guided to approximately £75m per annum spend on infill M&A to enhance its
capabilities in high-growth, high-margin areas such as buildings infrastructure, decarbonisation, power & grid connections,
and fire & security.
During FY25, the Board oversaw the completion of three strategic acquisitions: Argus Fire, a leading UK fire systems business,
enhancing Mitie’s position in the £3bn UK fire & security market; ESM Power, a high-voltage electrical engineering business,
expanding Mitie’s services in the power & grid connections market; and Grupo Visegurity, a national security business in Spain,
supporting the strategic expansion of Mitie’s security services in the £13bn Spanish FM market.
These acquisitions complement previous purchases such as GBE Converge, RHI Industrials, Rock Power Connections, G2
Energy and Biservicus, demonstrating Mitie’s commitment to deepening its project capabilities and strategic growth.
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CULTURE AT MITIE
Culture at Mitie is underpinned by its purpose: ‘Better Places; Thriving Communities’.
The Board believes that when people feel connected, collaboration improves and
colleagues feel safe and secure, with a strong sense of belonging.
Mitie is a people business, offering FM services that are driven by Mitie
colleagues. Mitie’s vision is to be the destination employer in the FM
industry, creating a ‘Great Place to Work’, and a truly inclusive culture
where our people are supported to achieve their potential. Further detail
can be found in the Colleagues section on page 36.
All Directors lead by example and promote the desired culture.
Alignment of remuneration and culture
Successful people and organisations are clear about what they want to
achieve, how they are going to get there and their progress along the
way. The annual employee appraisal (MiReview) process allows Mitie
to set SMART objectives in areas that really add value to the business,
build development plans that help colleagues achieve their objectives and
personal development goals, and ensure pay reviews are carried out in a
transparent way, related directly to individual performance.
Details of Mitie’s approach to investing in and rewarding its workforce are
set out on pages 68 to 74 and Mitie’s Real Living Wage commitment on
page 73.
Ethics
Mitie is committed to: promoting equality, diversity and inclusion
(ED&I); eliminating discrimination; providing equality of opportunity; and
encouraging inclusivity among colleagues. All colleagues are required to
adhere to Mitie’s key ethics and compliance policies, which include the
Employee Handbook, Ethical Business Practice Policy, People Policy and
Equality, Diversity and Inclusion Policy. Colleagues are encouraged to
report any behaviours that they believe do not comply with the policies
or do not meet the standards of conduct expected at Mitie. Channels
for raising any such concerns include Mitie’s independent whistleblowing
service, line managers, People Support, directly with the Chief Executive
via email to ‘Grill Phil’, via email to the ED&I mailbox, and through Mitie’s
diversity networks.
Mitie’s award-winning inclusion learning and development programme,
Count Me In, helps us create an environment where everyone feels
supported, included and able to bring their true self to work.
Count Me In remains a key core offering for our colleagues. Since 2022,
interactions with our Count Me In programme have grown to over
196,000 interactions with the learning activities, equating to over
9,500 hours of focused learning across the business. Further details of
Mitie’s Count Me In programme can be found on page 73 and at
Our commitment to fostering a truly inclusive culture has been furthered
by the development of a leader-specific learning and development
programme. This was developed for all people managers in our business
and builds on our inclusion programme, Count Me In. The new leadership
programme provides real focus and clarity for leaders at Mitie on how to
lead respectfully, encouraging them to deeply invest in building trusting
and respectful relationships with their team members by providing
practical guidance on how to create the right environment to have inclusive
conversations and showing that we really care for our people.
Our people leaders go through a journey of discovery while completing
the Leading with Respect programme. The content is carefully crafted to
provide laser focus to ED&I, health and wellbeing, safety and employee
relations matters, and empower our people managers to effectively
manage grievances, absences and investigations with a colleague-focused
lens. Over 4,700 people managers have completed the programme since it
launched in September 2023, representing 92% of our target audience.
Inclusion Allies
Our Inclusion Allies programme is run in partnership with Inclusive
Employers and is sponsored by the MGX. The programme has been
designed to empower colleagues across our business to act in allyship
for diverse groups, role-model inclusion, break down silos and help drive
inclusion forward.
Allies undertake a four-week learning programme designed to take
colleagues on a personal journey to allyship. They explore privilege, circles
of influence and the boundaries of the role. They are given a framework
and techniques to challenge exclusion and have challenging conversations.
300 colleagues at different levels from across the organisation have
completed the programme and act as role models. They embed ED&I
into everything they do and take an active part in supporting initiatives
and running awareness campaigns.
Senior Women in Leadership
We are committed to supporting our people grow and advance their
careers with us. Our Senior Women in Leadership programme, sponsored
by the Chief People Officer, shows how we are encouraging the skills,
abilities, expertise and experience of women at Mitie to take on our most
senior roles. This programme is underpinned by a Level 7 Leadership
apprenticeship delivered in collaboration with Corndel College London
and paired with one-to-one mentoring. We also make sure that our
performance reviews and talent assessments are based on objective and
concrete criteria, lowering the chance for bias in any of our selection and
progression processes.
This is Me campaign
Our This is Me campaign is designed to encourage colleagues to bring their
true selves to work, update their diversity data and close the diversity gap.
We have made positive steps towards a more inclusive culture in the last
year. More of our colleagues who have disabilities or are LGBTQ+ have
shared their personal data with us, with an increase of about 1%.
Diversity networks
Our six diversity networks are aligned to supporting the delivery of the
ED&I strategy. Our Mitie Women Can and CHORD (race and ethnicity)
networks increase awareness of the challenges faced by the different
groups and address biases. Colleagues from across the business attend
all our networks’ activities, representing a variety of grades, genders and
ethnicities. Each network has an executive sponsor who champions the
network and provides mentoring and reverse mentoring. Membership to
the networks is growing year on year, with over 8,000 colleagues signed up.
ED&I flagship events
Each of our networks hosts a live flagship event that is streamed over
Teams, recorded and watched at microsites. With over 200 colleagues
joining each event, the networks raise awareness of issues, barriers
and good practice in relation to the diversity facet. The events are also
attended by Board members and members of the MGX. The events
involve Mitie colleagues sharing their lived experiences as well as customers
and external speakers.
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Strategic report
Governance
Financial statements
Accolades and events
• Winner of Global ESG Award for EDI
• Awarded Silver in EDI at the Most Admired Companies Awards
• Shortlisted for award at the Ex-Forces in Business Awards
• Ranked 7th in the Top Employers of Veterans in the UK 2024
• Recognised as the 9th Most Inclusive Company in the Top 50 UK Inclusive
Companies, from 24th in 2023
• Finalist for Head of EDI at the DIVA Awards
• Ranked 2nd in the DIAL Global Survey
How the Board assesses and monitors culture
Mitie’s Values help define the behaviours of its people and underpin its
vision of ‘Better Places; Thriving Communities’. An important element
of Mitie’s culture is establishing a ‘One Mitie’ way of operating across the
business. The ‘One Mitie’ way leads to consistent, high-quality and relevant
information flows across the business. Mitie’s colleague listening strategy,
which is focused on hearing from and acting on colleague feedback,
supports the adoption of a ‘One Mitie’ culture that is inclusive and high
performing. The strategy includes colleague listening sessions hosted by
Board members and Mitie business divisions in the UK and overseas, as
well as the colleague engagement survey, MyVoice. Members of the Board
attend regular events with colleagues at Mitie offices, as well as diversity
network events. Where virtual events are held, they include the ability for
colleagues to ask questions of management via a chat box (anonymously,
if preferred).
These information flows, together with direct engagement from each
of Mitie’s business divisions, are key to the Board’s oversight of cultural
matters. Mitie also measures several non-financial key performance
indicators (KPIs), such as colleague turnover, employee engagement and
lost time injury frequency rate (LTIFR), which allow trends and changes to
be identified and monitored.
Set out below are further examples of how the Board monitors culture.
Whistleblowing
Mitie has an independent whistleblowing service, ‘Speak Up’, to enable
colleagues, customers, suppliers and third parties to report any concerns
or wrongdoing anonymously, without any fear of retaliation. Mitie’s
whistleblowing service platform, EthicsPoint, is managed by an independent
third-party service provider, Navex Global. The service can be accessed via
a freephone hotline number and a web portal, details of which are made
available to colleagues in multiple languages via workplace posters, Mitie’s
Employee Handbook, intranet and MitiePeople.com. The service can also
be accessed by customer and supplier personnel, as well as members of
the public, with details being provided via www.mitie.com.
The whistleblowing service and related internal procedures are structured
to ensure that all reports are reviewed and investigated independently
from the area of the business to which they relate, thereby minimising the
risk of conflicts arising. All reports are copied to and reviewed by a central
Whistleblowing Investigation Group, which includes the Deputy General
Counsel and senior members of the Group’s Internal Audit function.
This helps to ensure transparency and enables any trends to be identified
and addressed.
An update on whistleblowing activity is provided to the Board at every
Board meeting and to the MGX as appropriate. The update includes
details of incident reports received in the period between Board meetings,
as well as details of ongoing, and the outcomes of recently completed,
investigations. The EthicsPoint platform provides Mitie with the ability to
report by business division and by investigation status/outcome, facilitating
the Board’s ability to effectively track the progress of investigations and to
monitor and address trends across individual business units and the Group
as a whole.
Quality, health, safety and environment (QHSE)/
LiveSafe
Mitie recognises that effective health, safety and wellbeing play a pivotal
role in achieving our vision of delivering the future of high-performing
places. We’re transforming places with our technology, innovation and
passion for excellence – creating zero-carbon, technology-enabled places
that are safe, connected, comfortable, responsive and resilient. Health,
safety and wellbeing are key metrics in demonstrating that Mitie is a
responsible business and adds social value, which helps Mitie to attract
and retain colleagues and customers.
We expect our colleagues to return from their work day healthy, safe and
well. This is achieved by creating an environment where Mitie colleagues
feel able to bring their whole selves to work, thereby improving health,
safety and wellbeing. Mitie’s aim for zero harm is underpinned by Mitie’s
Values and influenced through Mitie’s LiveSafe programme.
The programme facilitates proactive leadership, leading to better trust and
accountability in all aspects of health, safety and wellbeing management.
In turn, this helps increase performance and productivity, influence
ownership, improve customer service, reduce absence, reduce accidents
and increase creativity and innovation, ultimately embedding a thriving
culture throughout the organisation.
In December 2023, the LiveSafe safety champion network was launched.
LiveSafe Champions are identified as the main point of contact for routine
QHSE matters, guiding and supporting their line managers and colleagues.
LiveSafe Champions follow a structured programme that includes formal
and informal development opportunities, such as attending local QHSE
meetings and courses. Now with over 1,500 LiveSafe Champions, we have
seen how they have helped us deliver significant improvement in our health
and safety performance, for example by helping us to reduce our LTIFR by
29% in FY25.
2024 employee engagement survey
Mitie’s annual colleague survey, MyVoice, provides feedback that
management acts upon to improve the working experience at Mitie.
The results of the survey also provide the Board with a Group-wide
snapshot of how our colleagues rate Mitie’s culture and engagement.
The most recent MyVoice survey took place in April 2024, with an
employee engagement score of 63% based on a participation rate
of 60%, and the insights and actions taken can be found on page 70.
Our next MyVoice survey will take place during FY26.
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Designated Non-Executive Director
for workforce engagement
Jennifer Duvalier is Mitie’s designated Non-Executive Director
responsible for oversight of the Board’s engagement with Mitie
colleagues. Jennifer participates directly in employee engagement
initiatives and, along with other Board members, has carried out a
full programme of activities in FY25. These include colleague listening
sessions, which ensure that the Board hears directly from frontline
colleagues about what is working well at Mitie and what can be
improved. One of Jennifer’s main roles is to encourage colleagues
to share their views so that she can champion their voice in Board
discussions.
Details of the activities undertaken by Jennifer and other Non-Executive
Directors during the year can be found on page 99.
Why Jennifer?
Prior to joining the Board in 2017, Jennifer had a long career in HR,
working in several large, people-driven companies going through
significant transformation. Jennifer brings this wealth of experience
to Mitie.
Objectives
The objectives of Jennifer’s programme of activities include:
• Ensuring that the Board hears from a wide cross-section of Mitie
colleagues, both in the UK and internationally
• Hearing from colleagues from a diverse range of backgrounds, roles,
contracts and business units
• Ensuring Board and MGX involvement in key diversity network events
• Creating opportunities to get involved in the work of colleagues to
better understand their lived experience at work, subject to health
and safety rules
• Creating a cycle of feedback with the Board to inform decision-making
and people strategy setting/deliverables, and ensure colleagues hear
what actions are taken from these discussions
Board site visits
The Board aims to understand the perspectives of all colleagues and
the impact of its decisions on them. During FY25, Mitie continued its
process related to colleague listening sessions, with Jennifer and other
Board members hosting at least one session with Mitie colleagues or
attending a Mitie diversity network event each month. The wider Board
will support Jennifer by attending listening sessions and diversity network
events during FY26.
The Chief People Officer and the Communications Director support
the Board’s role in colleague engagement. In collaboration with business
division leads, they evaluate Mitie’s annual employee engagement survey
data to propose a range of site visits that ensure effective reach to Mitie
colleagues globally.
The Communications Director facilitates these visits alongside the
business unit and/or account lead. While each visit structure may vary,
generally Board members receive a tour of the site or an overview of
it, hold a one-on-one meeting with managers, and then hold an informal
session with frontline colleagues without managers present. No specific
topics for discussion are provided in advance, but the site team is advised
that the Board would like to hear about their experiences working at
Mitie, any challenges, concerns or ideas for improvement, and what they
consider Mitie does well.
A summary of what Board members hear from colleagues is shared with
the entire Board ahead of Board meetings and discussed during those
meetings. Specific matters raised are discussed with senior management
to ensure they are properly considered and addressed.
“Mitie places great importance on employee
engagement initiatives. By actively listening
to colleagues about their work experiences,
we aim to enhance their working conditions.
Our workforce is integral to our social value
framework, and their feedback provides valuable
insights that inform the Board’s decisions. I am
proud of our ongoing efforts to develop and
improve our people-focused agenda.”
Jennifer Duvalier
Designated Non-Executive Director for workforce
engagement
CULTURE AT MITIE
continued
Details of the Board’s engagement with colleagues are shared through
Mitie’s internal communication channels – MiNet (employee intranet
site) and MitiePeople.com.
Jennifer’s wider activities in relation to colleague listening
The Board considers it important that colleagues’ views are heard
through several mediums, including feedback from managers, surveys,
internal communications and digital channels (such as Yammer), to
develop an inclusive, two-way and ‘One Mitie’ culture. As well as site
visits and colleague listening sessions, Jennifer is involved in a range
of other activities, including leading remuneration listening sessions,
analysing feedback from Mitie’s annual employee engagement survey and
regular pulse surveys, spending time with the HR teams and attending
virtual Q&A events. She also invites colleagues to contact her directly via
her Mitie email address.
Why the role of designated Non-Executive Director for workforce
engagement adds value (over and above other employee engagement
mechanisms)
By hosting colleague listening sessions, Jennifer and the Board engage
with people across the business to gather their views and experiences,
aiming to understand what they value about Mitie and what they would
like to see changed. The Board ensures that people’s perspectives are
acknowledged at the highest level of the organisation. By analysing the
received feedback, the Board can identify common concerns within the
business and ensure these issues are managed effectively and efficiently.
Learnings and responses
Themes identified from the Board’s colleague listening sessions during
FY25 included:
• Pay, benefits and recognition
• Facilities, technology and access to systems: recognised as an area
for improvement
• Communications: a desire for more effective communication with
colleagues across business divisions
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Strategic report
Governance
Financial statements
Details of actions taken in response to feedback received are set out below.
Improvement areas
Actions taken
Pay, benefits and recognition
Feedback from colleagues saw a focus on ensuring fair compensation,
enhancing employee benefits and improving recognition programmes.
Key actions include reviewing pay against benchmarks and building
awareness of timelines for opting into key reward schemes. Colleagues
also requested opportunities for corporate gym memberships, clarity
on escalation processes for handling reward platform issues and more
prompts from managers to remind their teams to book annual leave
throughout the year.
Benchmarking for critical roles has been shared, and ad hoc benchmarking
is being completed as requirements arise. Communication regarding
pension and reward schemes has been issued, and colleagues have been
informed of corporate gym memberships which are available through the
reward platform.
The escalation process for reward platform issues has been provided with
context, and dedicated line manager communications have been issued
to ensure they issue regular reminders to their teams about booking
annual leave.
From a Group perspective, another free share award was issued, along with
the first double award in May 2025.
Facilities, technology and access to systems
Key concerns included the need for better facilities such as improved
accommodation for overseas teams and resolving issues with IT system
integration, and addressing access problems with software and finance
systems. Additionally, there were calls for exploring digital reminders for
pension opt-ins and annual leave usage.
Work is ongoing to ensure enhanced engagement around IT system
integration, and training on Mitie finance systems has been arranged on
several contracts.
Throughout FY26 we will be deploying licences for frontline teams to access
Teams. This will provide access to the Microsoft technology stack, including
Copilot chat, for all colleagues.
We are also rolling out AI-powered chatbots across our people systems
which will support a ‘self-serve’ approach to HR queries. For instance, a
colleague will be able to ask the bot how many days’ leave they have left
and book days off directly through the bot.
Communications
Key concerns include the need for better communication around policies,
such as hybrid working and the escalation process for handling reward
platform issues. There were also calls for more transparent updates on
M&A ambitions, clearer timelines for IT system integration, and ensuring
that important information, like the Speak Up whistleblowing line and
ED&I networks, is visible and accessible to all colleagues.
Updates on M&A ambitions have been delivered at Town Hall meetings,
when the timing has been appropriate. Information regarding our
whistleblowing has been distributed and shared across sites, and information
about the Mitie office hub locations, ED&I networks and gym options has
been amplified across Group channels. We will also deploy 48,000 Teams
licences for frontline teams throughout FY26, which will enable complete
digital connection with all of our colleagues. This will significantly enhance
our overall approach to engagement, but specifically with regards to the
ED&I networks.
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BOARD EFFECTIVENESS AND EVALUATION
Board effectiveness
The performance of the Board is a critical factor in the success of the
Company. Each year, the Board conducts a formal and rigorous evaluation
of its own performance and that of its Committees, the Chairman and
individual Directors. This evaluation examines factors such as composition,
diversity and the effectiveness of collaboration among members to achieve
objectives. The process enables the Board to enhance its effectiveness and
identify areas for improvement.
Board evaluation process
All Directors actively participate in the evaluation process and take
appropriate measures if development needs are identified. As part
of Mitie’s Board evaluation cycle, every three years the evaluation is
conducted by an external facilitator, while in other years it is conducted
internally. During internal evaluations, the Chairman leads the assessment
for each of the Independent Non-Executive Directors and Executive
Directors, while the Senior Independent Director facilitates the evaluation
of the Chairman. During FY25, the Board was evaluated internally; the
outcomes and actions are set out in more detail on page 107.
Progress made on actions identified in prior year external FY24 evaluation
Progress made during FY25 on actions identified as part of the FY24 evaluation is set out below.
Recommendations/suggestions
Actions undertaken or planned
Progress made on actions during FY25
Optimising Non-Executive Director (NED)
knowledge transfer: Consider how the NEDs
due to step down from the Board over the next
year or two could formally and/or informally
mentor newer and new NEDs to maximise the
opportunities for knowledge transfer.
A proposed ‘buddy’ programme will be
established, where existing NEDs are matched
with new NEDs, with the former to share their
experiences of working with Mitie.
NEDs have an open dialogue and meet regularly
outside of scheduled Board and Committee
meetings to leverage relevant knowledge, skills
and experience as appropriate.
Broadening the discussion about risk: Build
time into the calendar to allow the Board to: (i)
better understand the breadth of risks across
the divisions and how they feed into the Group
risk matrix; and (ii) look more expansively at the
Group’s risk horizons.
An overview of Mitie’s Enterprise Risk
Management programme was presented to
the Board. Regular risk updates are provided at
Board meetings.
Penny James will attend the Mitie Risk Committee
meeting in July 2024 to share her experiences as
the former Chief Risk Officer at Prudential Plc.
Enterprise Risk Management updates are
scheduled to be presented to the Board on a
quarterly basis, along with regular half- and full-
year updates on the Group’s principal risks.
Penny participated in the Risk Committee
meeting in July 2024 and contributes her
expertise, experience and knowledge in this
area whenever needed.
Consider whether more information about the
whistleblowing service procedures, cases and
associated management responses could be
reported to the Board.
Management to refresh the whistleblowing
report, to provide greater insights into the type
of issues being raised and provide additional
comfort regarding the effectiveness of the
whistleblowing procedures and the application
of Mitie’s Values in the resolution of any matters
raised.
The refreshed whistleblowing report is provided
to the Board at every meeting.
Streamline the primary Board and Committee
packs by creating a separate folder on an
electronic Board portal for supporting
documents.
The Board is broadly happy with the quality
and format of the Board papers and does
not propose any changes. It was agreed that
consideration should be given to incorporating
a ‘click-through’ functionality within reports,
where additional details could be provided
to those Board members who wish to access
greater detail in respect of certain matters.
Mitie’s online Board portal includes a ‘reading
room’, where relevant materials can be stored
and accessed independently from the
Board papers.
Year 1 – 2024/25
(Internal)
Internally led
evaluation focusing
on recommendations
and progress on
suggestions from the
external evaluation
in FY24
Year 2 – 2025/26
(Internal)
Internally led
evaluation focusing
on progress of the
FY27 Three-Year
Plan and Board and
senior management
succession planning
Year 3 – 2026/27
(External)
Externally led in-
depth, independent
assessment of the
Board, Committees
and individual
Directors
Year 1
2024/25
(Internal)
Year 2
2025/26
(Internal)
Year 3
2026/27
(External)
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Strategic report
Governance
Financial statements
Recommendations and suggestions from the internal FY25 evaluation
Recommendations/suggestions
Actions undertaken or planned
Care & Custody: Implementation of a specialist
independent advisory board.
A specialist advisory board, known as the Independent Prison and Immigration Review Board (I-PIRB),
has been set up. The I-PIRB will meet quarterly, with additional meetings scheduled as needed.
The I-PIRB is intended to serve as a strategic advisory body, providing expert guidance and insights
into criminal justice and immigration, reviewing Mitie’s performance within the immigration & justice
sectors, to enhance Mitie’s strategy, policy and research initiatives and operational performance in
prisons and immigration services.
Continued high-level visibility of QHSE.
Mitie appointed a new Group QHSE Director in May 2024, who has refreshed the Group’s HSE
strategy and raised the profile of HSE at the Board and across the business. The Group QHSE Director
presented to the Board at its meetings held in July 2024 and March 2025.
Strategic discussions and monitoring to be held
periodically throughout the year, in addition to
the annual deep-dive session held in September.
An additional strategy discussion was held in July 2024, with further sessions planned throughout FY26.
108
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NOMINATION COMMITTEE REPORT
As Chair of the Nomination Committee, I am pleased to report on the
work done by the Committee during the year.
Key activities during the year
Composition
As part of its annual responsibilities, the Nomination Committee assessed
the composition and leadership of the Board and its Committees
during FY25. The Committee is confident that the Board’s composition
and diversity have been appropriate throughout the year, particularly
considering the integrity, skills, knowledge and experience of its Directors,
as well as the size and nature of the business. The Board’s skills matrix is set
out on page 109.
Succession planning
One of the primary responsibilities of the Committee is to ensure an
orderly succession for the Board. The Committee regularly reviews
updates on the structure, size and composition of the Board and its
Committees to ensure that critical skills and experience are continually
refreshed. We firmly believe that the Board’s composition should reflect
broader society and encompass a diverse range of skills and experience to
promote effective governance. In March 2025, we welcomed Christopher
Rogers as Chair Elect; further details of this process can be found on
page 111.
During FY25, the Nomination Committee discussed succession planning at
both its meetings.
Half of Mitie’s Board has served for six or more years, so the Committee
has a detailed succession plan, to be implemented over the next three
years. Non-Executive Director tenure is also considered for assessing
independence.
The Board considered the Board skills matrix in the context of succession
planning as a tool to help identify composition needs for the future, and to
ensure that plans are proactive and not just reactive in nature.
All appointments to the Board are subject to a formal, rigorous and
transparent appointment process, and are based on merit and objective
criteria. The Committee engaged MWM Consultants as the search firm
involved with the recruitment of Christopher Rogers. MWM Consultants
had no other connection with the Company or any individual Director.
Individual Director contribution
The unique skills and experience of each Director enhance the Board’s
overall effectiveness in fostering the Company’s long-term sustainable
success. The skills matrix on page 109 illustrates how the individual
expertise and experience of each Director contribute to the balanced
perspective needed by the Board to assess the Group’s strategy and
manage risk.
Further details of each Director’s skills and experience are set out in their
biographies on pages 92 to 94.
Derek Mapp
Chair of the Nomination Committee
Nomination Committee members
At the date of this report, the Nomination Committee comprised:
Chair
1
:
Derek Mapp
Committee members:
Jennifer Duvalier
Penny James
Chet Patel
Mary Reilly
Christopher Rogers
Salma Shah
Roger Yates
All members of the Nomination Committee are considered
independent in accordance with the Code.
Nomination Committee meetings
The Committee met twice during FY25. The attendance of individual
Committee members can be found on page 98.
Key purpose of the Nomination Committee
The Nomination Committee assesses the skills and attributes
necessary for the Board and its Committees. In doing so, the
Committee takes into account the challenges and opportunities facing
the Group, as well as the expertise and diversity needed for future
success. This approach ensures the ongoing suitability of the Board
and its Committees’ composition.
Key responsibilities of the Nomination Committee
The key responsibilities of the Nomination Committee include:
• Regularly reviewing the structure, size and composition of the Board
• Ensuring plans are in place for an orderly succession to Board and
senior management positions
• Considering the length of service of the Board as a whole
• Identifying and nominating, for approval by the Board, candidates to
fill Board vacancies as and when they arise
• Keeping under review the number of external directorships held by
each Non-Executive Director
• Reviewing the results of the Board evaluation process that relate to
the composition of the Board
• Keeping the Board Inclusion Policy under review
The Nomination Committee’s Terms of Reference are available at
The Committee’s activities continued to focus on succession
planning, including the appointment of Chair Elect, Christopher
Rogers, who will succeed me as Chairman following the July 2025
AGM.
Derek Mapp
Chair of the Nomination Committee
1.
The Senior Independent Director chairs the Committee in circumstances where it
would be inappropriate for the Chairman of the Board to chair the Committee.
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Strategic report
Governance
Financial statements
Board skills matrix
Skills/experience area
Derek
Mapp
Phil
Bentley
Simon
Kirkpatrick
Jennifer
Duvalier
Penny
James
Chet
Patel
Mary
Reilly
Christopher
Rogers
Salma
Shah
Roger
Yates
Leadership and business operations
Strategy development
Corporate governance
Audit/risk management and assurance
Remuneration/HR
Commercial
Technology/digital
Finance
Investment community
Government/public sector experience
The collective skills and experience of individual Directors support the work of the Board and there is clear alignment between their respective competencies and the Group’s strategy.
Board discussions further benefit from the diversity of approach taken by each Director due to their individual background, career development and training.
Skills
Expert
Director external appointments and time
commitments
Directors can accept additional external appointments but must seek
prior approval from the Chairman. If a Director holds significant external
appointments, the reasons for these appointments will be explained in the
Annual Report.
When considering appointing a new Director, the Board reviews other
demands on the candidate’s time. Prior to appointment, the candidate
must disclose significant commitments and indicate the time involved.
The Nomination Committee reviewed the time commitments of
Non-Executive Directors to ensure there were no concerns about
overcommitment. This review considered the number of appointments,
their scope and the size and type of company in which the role is
held, the views of major shareholders, and the latest guidelines and
recommendations.
The Board remains confident that all members have sufficient time to
dedicate to their duties.
Re-election of Directors
In accordance with the Code and the Company’s Articles of Association,
all Directors are subject to election or re-election by shareholders. At the
2024 AGM, each Director in post at the time stood for re-election and was
re-appointed by shareholders. At the 2025 AGM, all Directors will stand
for election or re-election, except for Derek Mapp, who will stand down
from the Board at the AGM.
The rules governing the appointment and replacement of Directors are
set out in the Company’s Articles of Association, the Code, the Companies
Act 2006 and other related regulations.
The terms of appointment for Non-Executive Directors and service
contracts for Executive Directors are available for inspection at the
Company’s registered office and head office and will be available at the
2025 AGM.
Conflicts of interest
The Board has a policy on the declaration and management of Directors’
conflicts of interests. Any potential situation or transactional conflict
must be reported as soon as possible to the Chairman, Chief Executive
and Chief Legal Officer & Company Secretary. Where a potential
conflict is authorised under statutory powers and powers granted
under the Company’s Articles of Association, such conflict is kept under
ongoing review.
Executive Directors are permitted to accept external appointments,
provided these do not interfere with the Director’s ability to discharge
his/her duties effectively and permission is sought from the Board.
Executive Directors are entitled to retain fees earned from any external
appointments. Neither Phil Bentley nor Simon Kirkpatrick held any
external positions during FY25.
External positions held by the Chairman and current Non-Executive
Directors are detailed in their biographies on pages 92 to 94.
Board evaluation
In accordance with the Board’s evaluation cycle, I led a comprehensive
internal evaluation during the year. The outcomes and planned actions
from that process can be found on pages 106 to 107, along with progress
from the externally led evaluation in FY24.
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Annual Report and Accounts 2025
The information required under Listing Rule 14.3.30R(2) is set out on
page 110, for which purpose executive management comprises members
of Mitie’s Group Executive (the MGX). For the purpose of Listing Rule
14.3.30R(3), diversity data is disclosed by individuals via Mitie’s People Hub
system at the point of onboarding. Where ‘prefer not to say’ is selected,
colleagues can choose to update this selection later in employment.
Data provision is proceeded with clarity on how the data will be used.
A breakdown of the gender balance of the senior leadership team can be
found on page 112.
NOMINATION COMMITTEE REPORT
continued
Diversity and inclusion
Mitie has a Board Inclusion Policy (the Policy) which recognises the importance of the Board’s membership reflecting diversity in its broadest sense.
The Policy, which is monitored and reviewed annually by the Nomination Committee, is available at www.mitie.com/investors/corporate-governance.
Mitie’s annual statement on Board diversity targets, objectives under the Policy and the actions taken to implement the Policy can be found below.
Board diversity targets
As at 31 March 2025 (the Company’s chosen reference date), the Nomination Committee, on behalf of the Board, is pleased to confirm that two of the
three targets contained within the Policy, and which are in line with the diversity and inclusion targets as set out in Listing Rule 14.3.30R(1), have been met.
A summary is set out below.
Policy target
Met/not met
Position at 31 March 2025
Maintaining a balance so that a minimum of 40% of the Directors
are women, provided this remains consistent with the skills and
diversity requirements when searching for a new appointment to
the Board
Yes
40% of individuals on the Board are women
Ensuring there is at least one Director from a racially diverse
background, provided this remains consistent with the skills and
diversity requirements when searching for a new appointment to
the Board
Yes
Two members of the Board are from a minority ethnic background
Ensuring at least one of the Chair, Chief Executive, Chief Financial
Officer or Senior Independent Director is a woman, provided this
remains consistent with the skills and diversity requirements when
searching for a new appointment to the Board
No
The individuals currently performing these roles continue to
demonstrate the appropriate skills to support the long-term
strategic delivery of the Group; however, the Nomination
Committee will be mindful of the requirements under this Listing
Rule when considering an orderly succession for these roles as they
arise under the Company’s ongoing succession planning
Policy objective
Implementation
Ensuring the Board’s membership reflects a combination of
demographics, skills, experience, race, age, gender, educational and
professional backgrounds which provides the range of perspectives,
insights and challenges needed to support sound decision-making and
reflects the diverse workforce at Mitie
Details of the Board’s succession planning are set out on page 108, and the
skills matrix, considered regularly by the Nomination Committee, can be
found on page 109
Supporting and monitoring progress against Mitie’s equality, diversity and
inclusion strategy and goals
To increase racial diversity, the Board is supporting the introduction of
a bespoke Level 7 apprenticeship for racially diverse colleagues, a new
focused approach on our talent process with diversity at the heart of the
processes, and inclusive insights – an initiative to understand and remove
barriers enabling racially diverse colleagues to succeed
Broadening Board members’ perspectives in equality, diversity and
inclusion by participating in Mitie diversity network events and sharing
learnings and insights
Board members attended numerous network events during the year.
Further information on this can be found on page 99 (Board Activities:
Stakeholder Engagement)
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Strategic report
Governance
Financial statements
Chair Elect
Appointment process
Decision and process
Following Derek Mapp’s
decision to step down
from the Mitie Board
at the 2025 AGM, the
Nomination Committee,
chaired by Senior
Independent Director
Roger Yates, commenced
the process to recruit a
new Chair of the Board.
Independent search firm
MWM Consulting was
appointed to support with
the recruitment process.
Selection
The Nomination
Committee ensured that
the recruitment process
was conducted in line
with the Board’s Inclusion
Policy. More information
on the Board’s Inclusion
Policy can be found on
page 110.
Shortlist
Interviews with shortlisted
candidates were
conducted by the Senior
Independent Director
and Chief Executive, with
support from several
Independent Non-
Executive Directors.
Appointment
Considering shortlisted
candidates’ relevant
experience and fit with
the search brief, the
Committee unanimously
agreed that Christopher
Rogers be appointed as
the next Chair of the
Board. Christopher was
appointed on 19 March
2025 as Chair Elect and
will succeed Derek as
Chair of the Board from
22 July 2025.
Induction
All newly appointed
Directors undertake an
induction programme.
Further information on
this can be found in the
Induction and Training
section above.
Christopher Rogers’ induction
Chair Elect and member of the
Nomination Committee
Christopher joined the Board in March 2025. His induction is ongoing and
has so far included:
• One-to-one meetings with all Board members and the MGX
• Visit to JCA Engineering Limited, Longcross Data Centre
• Visit to Compass Centre (Heathrow Airport Limited), including a
presentation from the Heathrow Airport Strategic Account Manager
and team
• Visit to HMP Millsike
• Visit to Mitie’s Intelligence Security Operations Centre (ISOC)
Induction and training
On joining the Board, all Directors receive a personally tailored induction,
which includes: meetings with Executive Directors, the Chief Legal Officer
& Company Secretary and other members of senior management; an
overview of the Group’s governance policies, corporate structure and
business functions; details of risks and operating issues facing the Group;
visits (in person and/or virtually) to divisional offices; and a briefing on
key contracts.
All Directors have access to Mitie’s Board Handbook on an electronic
Board portal, which includes:
• Schedule of matters reserved for the Board
• Board Committees’ Terms of Reference
• The Company’s Articles of Association
• Guidance on Directors’ statutory duties
• An overview of the Group’s Directors’ and Officers’ liability insurance
arrangements
• Delegated authorities register
• Share dealing procedures
• Corporate governance and regulatory guidelines
• Key corporate documents and policies
The Board Handbook is subject to regular review and was last updated in
early 2025.
Briefing notes on changes in the regulatory and governance environment
are circulated to Directors on an ad hoc basis. Online training on
regulatory and governance changes is also made available to Directors.
Visits (in person and/or virtually) to different business sites and offices are
arranged for Directors to facilitate a deeper understanding of the business.
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Gender
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men
6
60%
4
7
78%
Women
4
40%
–
2
22%
Not specified/prefer not to say
–
–
–
–
–
Ethnic background
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other white (including minority-white groups)
8
80%
4
8
89%
Mixed/Multiple ethnic groups
–
–
–
–
–
Asian/Asian British
2
20%
–
1
11%
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group
–
–
–
–
–
Not specific/prefer not to say
–
–
–
–
–
Board and executive management diversity
at 31 March 2025
NOMINATION COMMITTEE REPORT
continued
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Strategic report
Governance
Financial statements
AUDIT COMMITTEE REPORT
Report from the Audit Committee Chair
On behalf of the Board, I am pleased to present the Audit Committee
report for the financial year ended 31 March 2025 (FY25). This year
marks the conclusion of my tenure as Chair of the Audit Committee.
It has been a privilege to serve in this role since July 2018, and to contribute
to the important work that the Audit Committee has performed.
I am delighted to be handing over the role of Audit Committee Chair to
my successor, Penny James, who has been a valued member of the Audit
Committee since February 2024. This will conclude a carefully planned
transition, ensuring continuity in governance and oversight. Penny brings
extensive financial services experience with strong leadership skills and
financial and risk expertise, and I am confident that the Audit Committee
will continue to thrive under her leadership.
I would like to take the opportunity to thank my fellow Audit Committee
members, who bring insights from their diverse experience, and other
attendees from the Group’s finance team, the Internal Audit function and
BDO LLP (BDO), the Group’s external auditor, who have all contributed
to open and robust Audit Committee discussions during the year and
throughout my term.
This report provides an insight into key areas considered by the Audit
Committee during the year to discharge its responsibilities in relation to
financial reporting, risk management, internal control, the Internal Audit
function and interactions with BDO.
Audit Committee members
Chair:
Mary Reilly
Committee members:
Roger Yates
Chet Patel
Penny James
Frequency of meetings:
The Audit Committee met seven times during FY25.
Key purpose of the Audit Committee
The Audit Committee provides effective governance of the
appropriateness of the Group’s financial reporting and the performance
of both the Internal Audit function and the external auditor. The Audit
Committee also supports the Board in meeting its responsibilities in
respect of overseeing the Group’s internal control systems, business risk
management processes and related compliance activities.
The Audit Committee’s Terms of Reference are available at
Key responsibilities
There were no significant changes to the Committee’s role and
responsibilities during the year.
Financial reporting:
• Review, with both management and the external auditor, the
appropriateness of the half-yearly financial report and the Annual
Report and Accounts
• Review the appropriateness of material accounting policies
and practices
• Review material financial estimates and judgements, drawing on
reports from the Chief Financial Officer and the external auditor
• Advise the Board on whether the Annual Report and Accounts
and half-yearly financial report, taken as a whole, is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the Group’s financial position and performance,
business model and strategy
External audit:
• Make recommendations to the Board on the appointment, removal,
remuneration and terms of engagement of the external auditor
• Review and assess the external auditor’s independence and objectivity
• Develop and recommend to the Board, and implement, a policy
and guidelines on the provision of non-audit services by the
external auditor
• Review and approve the annual audit plan and assess the effectiveness
of the audit process
Risk management:
• Review the adequacy and effectiveness of the Group’s risk
management systems established to identify, assess, manage and
monitor financial risks
• Advise the Board on how risks are tracked, managed, mitigated
and reported
• Review the framework and analysis to support both the going concern
and the long-term viability statement
Internal controls:
• Provide independent assessment and oversight of the internal
control framework
• Review the testing approach over key controls and provide oversight
of the testing programme
Internal audit:
• Review and approve the annual internal audit plan and monitor and
review its effectiveness
• Review and monitor the effectiveness of the internal audit
function, ensuring the necessary resources are in place for it to
perform effectively
The Group has continued to transform during the year, resulting in
strong growth and expanded operations through new acquisitions.
This progress has been supported by ongoing enhancements to the
control framework, to ensure the integrity of financial reporting
is maintained.
Mary Reilly
Chair of the Audit Committee
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Annual Report and Accounts 2025
Mitie has continued to focus on the implementation of its transformation
programme, and during FY25 the Group’s Central Government & Defence
division was successfully absorbed into the Business Services and Technical
Services divisions. This was reflected in the nature of some of the matters
presented for consideration at Audit Committee meetings during the year.
During FY25, the Group also acquired three strategically important
businesses, which necessitated integration activities to ensure robust
controls and processes were maintained, while also seeking to preserve
the entrepreneurial cultures that have made these businesses successful.
Given the evolving environment, I have continued to make a conscious
effort to meet frequently with senior finance staff, the Internal Audit team
and BDO’s senior staff, which has given me an opportunity to gauge the
extent of any significant emerging issues and to monitor developments.
As Mitie transforms and delivers growth, the Group has made good
progress on enhancing its internal control framework to ensure rigour
around financial reporting, operations and compliance, with key
initiatives including:
• The independent Internal Audit function has been enhanced in both
capacity and expertise over the past year. This development aligns with
Mitie’s commitment to continually advance its control environment,
ensuring readiness to meet the corporate governance reforms
introduced by the Financial Reporting Council (FRC) in January 2024.
• Under the sponsorship of the Group CFO, the emphasis on controls
has been significantly reinforced. Consequently, the business is now
better positioned to uphold a strong control framework, ensuring the
integrity of financial reporting, optimisation of operational processes and
achievement of compliance goals.
• The Group has progressed its independent testing programme, ensuring
that key controls are regularly updated to align with organisational
changes in a dynamic, growth-oriented environment. This initiative
safeguards the continued effectiveness of these critical controls,
reinforcing the Group’s commitment to robust governance.
• Proactive, data-driven reviews have been conducted to effectively
identify fraud risks and bolster preventative controls. As part of these
efforts, mandatory training has been implemented for Mitie staff to
enhance awareness and strengthen fraud prevention measures across
the organisation.
• Regular training sessions have been consistently delivered to divisional
finance teams throughout the year as part of the Group’s continuous
professional development (CPD) programme, including accounting topics
such as revenue recognition and provisions. This initiative reinforces the
Group’s commitment to fostering professional growth and maintaining
high standards of expertise within the finance function.
• For acquired businesses, comprehensive reviews of balance sheets,
accounting policies, processes and controls have been conducted as part
of the acquisition accounting and integration procedures. This ensures
alignment with the Group’s standards and facilitates a smooth transition.
This included focus on further improving controls and processes in
the underperforming telecoms infrastructure business, where a new
management team was appointed during the year.
In addition to fulfilling its normal programme of activities during the year,
the areas of focus for the Audit Committee in relation to the FY25 financial
statements have been:
• Assessing the classification of amounts reported within Other items
and the associated disclosure, by reviewing the framework of controls
operated by management around this area and challenging the nature of
the charges and credits classified as Other items. The focus was to ensure
that, for a reader of the Annual Report and Accounts, there is meaningful
and balanced insight into the underlying results of the business
• Evaluating judgements made by management related to provisions
required on onerous contracts, other contract-specific provisions
and provisions on trade and other receivables, including assessing the
adequacy of the provisions and the appropriateness of the related
disclosures
• Challenging management’s determination of operating segments and
cash-generating units (CGUs), in light of changes to the Group’s divisional
structure, to ensure compliance with IFRS criteria
• Challenging management’s judgements in relation to impairment
assessments for the carrying value of goodwill and the recoverability of
deferred tax assets in relation to losses
• Reviewing management’s approach to accounting for projects where
revenue is recognised over time, with particular focus on projects which
were ongoing at year end
• Reviewing the appropriateness of recognition of surpluses on defined
benefit schemes as assets on the Group balance sheet, based on the
Group’s unconditional right to a refund of the surplus
• Reviewing the judgements made by management in respect of
acquisitions accounting, including accounting treatment for deferred
consideration and employment-linked earnouts, and challenging the
methodologies used for the valuation of acquired intangible assets
• Challenging the approach taken by management to support the going
concern and viability statements set out on pages 157 and 89 respectively
• Reviewing the distributable reserves position of Mitie Group plc, to
ensure shareholder distributions are appropriately supported
• Assessing key financial reporting judgements made by management in the
context of applying the remuneration policy for executive management
as set out by the Remuneration Committee
Further detail regarding the Audit Committee and its work can be found
on pages 115 to 120.
In conclusion, the Audit Committee was able to provide positive
assurance to the Board that the Annual Report and Accounts 2025, when
taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position
and performance, business model and strategy. As Chair of the Audit
Committee, I will be available at the 2025 AGM to answer any questions
about the work of the Audit Committee.
Mary Reilly
Chair of the Audit Committee
AUDIT COMMITTEE REPORT
continued
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Audit Committee review of key financial
reporting matters
The Audit Committee gives attention to matters it considers to be
important by virtue of their size, complexity, level of judgement required
or potential impact on the financial statements and wider business model,
and matters pertaining to governance. Identification of the issues deemed
to be significant takes place following open, frank and challenging discussion
between the Audit Committee members, with input from the Chief
Financial Officer, the external auditor, the Director of Internal Audit, the
Director of Group Finance, the Group Financial Controller and other
relevant Mitie colleagues.
The Audit Committee considered the significant matters set out below.
Papers were presented to the Audit Committee by management, setting
out the relevant facts, material accounting estimates and the judgements
associated with each item. The external auditor provided papers setting
out its views on each key area of judgement.
The Audit Committee discussed the papers with management, challenged
the underlying assumptions and sought the views of the external auditor on
each matter. For each area of judgement considered, following review and
challenge, the Audit Committee concurred with the treatment adopted by
management and the related disclosure presented in the Annual Report
and Accounts.
Use of Alternative Performance Measures (APMs)
The Group’s performance measures continue to include some measures
which are not defined or specified under IFRS. The Audit Committee has
considered presentation of these additional measures in the context of
the guidance issued by the European Securities and Markets Authority
(ESMA) and the Financial Reporting Council (FRC) in relation to the use
of APMs, challenge from the external auditor and the requirement that
such measures provide meaningful and balanced insight for shareholders
into the results and financial position of the Group.
In particular, the Audit Committee challenged the classification of certain
costs within Other items, ensuring that there is a robust framework of
controls around the assessment, and that the classification and disclosure
are appropriate, with the aim of providing a reader of the Annual Report
and Accounts with a meaningful understanding of the underlying results
of the business. This was achieved through the review by the Audit
Committee of detailed papers prepared by management throughout the
year, setting out each category of Other items, analysing the charges and
credits reported within each category, ensuring consistency of treatment
and documenting the rationale as to why these charges and credits were
both incremental to ‘business as usual’ activities and directly related to
the category.
The Audit Committee challenged as to whether any charges or credits had
been rejected from the Other items category, based on the framework of
controls operated by Group Finance around the reporting of Other items.
Management confirmed that this had been the case and that the divisions
continued to engage proactively with Group Finance to discuss whether
potential charges or credits would qualify for reporting as Other items.
The Audit Committee concurred that clear and meaningful descriptions
have been provided for the APMs used, that the relationship between
these measures and the equivalent IFRS measures is clearly explained,
that the IFRS measures are afforded equal prominence to the APMs, and
that the APMs would enhance a reader’s understanding of the financial
performance and position of the business.
A reconciliation of the APMs to the equivalent IFRS measures is provided in
the Appendix – Alternative Performance Measures on pages 213 to 215.
Contract-specific provisions
During the year, management performed reviews of contracts to assess
whether any contracts may be onerous over the remaining term of the
contract and, where this is the case, the extent to which a provision
should be made for future forecast losses. Management also conducted
an assessment of the adequacy of provisions related to material
contractual disputes.
Onerous contract provisions totalling £10.0m have been recognised at
31 March 2025 (FY24: £8.8m). These primarily relate to a number of
loss-making contracts that were acquired with the Interserve business,
which are within the Communities division. Management’s assessments
were made in the context of the plans that have been developed and are
being implemented by divisional management to improve the profitability
of these contracts. The Audit Committee has been closely monitoring
the performance of one notable loss-making contract, for which a
turnaround plan was being implemented, and were pleased to note
a significant improvement in profitability during FY25.
Other contract-specific provisions, totalling £33.0m, have been recognised
at 31 March 2025 (FY24: £40.4m), which primarily relate to remedial
and rectification costs required to meet customers’ contract terms.
Management’s assessment included external expert opinions obtained,
where necessary, to assess the adequacy of the provisions recognised.
The Audit Committee has reviewed the assessments presented by
management, and taken into account the views of the external experts
and the views expressed by the external auditor, based on their
independent reviews of these contracts and the related forecasts.
Processes and controls in the telecoms infrastructure
business
Given the underperformance of the telecoms infrastructure business, the
Audit Committee has been monitoring progress on changes implemented
by management during the year to improve processes and controls, and
a particular area of focus was to improve the billing process to reduce
the ageing on accrued income. In this context, management conducted
an assessment to evaluate the appropriateness of provisions recorded
against aged accrued income.
The Audit Committee invited the Finance Director of the business to
attend a Committee meeting to present an update on processes and
controls, and in particular the progress on reducing the aged accrued
income through billing. The Audit Committee challenged the assessment,
but were ultimately reassured that good progress had been made and
the level of provisioning was appropriate.
Changes to operating segments and CGUs
During the year the Group’s Central Government & Defence division was
successfully absorbed into the Business Services and Technical Services
divisions. The Group’s operating segments are established on the basis
of those components of the Group whose performance is evaluated
regularly by the Board of Directors in deciding how to allocate resources.
As the Group manages its business on a service line basis, the change in
structure led to changes in operating segments and also separately the
determination of CGUs.
The Audit Committee evaluated management’s assessment, in the context
of the reporting on divisional performance that the Board received
throughout the year, and how resource allocation decisions were made
by the Board during the year.
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Accounting for acquisitions
The Group continued to transform and grow in FY25 with several strategic
acquisitions, including ESM Power, Argus Fire, and Grupo Visegurity in
Spain. The Audit Committee reviewed management’s assessments of
accounting outcomes for each acquisition and specifically challenged
management’s valuation approach to determine the fair value of the
intangible assets acquired.
Review of the Group’s going concern and viability statements
The Audit Committee has reviewed the Group’s assessment of going
concern. The Audit Committee also reviewed the Group’s viability
assessment over a period of three years to 31 March 2028, which
considered a range of scenarios that were based on the potential financial
impact of the Group’s principal risks and uncertainties as set out on
pages 76 to 87.
After due consideration, the Audit Committee concluded that the
assumptions used in both these assessments were appropriate and
reflected the Group’s principal risks and uncertainties. The Audit
Committee also reviewed the Group’s reverse stress testing and
challenged management’s conclusion that the likelihood of any such
scenarios occurring was remote. Factors that were considered included the
current trading performance compared with the base case, the Group’s
performance during historically challenging periods such as the Covid
pandemic, and the further mitigation actions available to management.
Based on the Group’s forecasts for the going concern assessment period,
and the Audit Committee’s recommendation, the Board is satisfied that
the Group will be able to operate within the level of its facilities for a
period of no less than 12 months from the date of approval of the FY25
consolidated financial statements. For this reason, the Board considered it
appropriate for the Group to adopt the going concern basis in preparing
its consolidated financial statements. Further details of the going concern
assessment are set out in Note 1 to the financial statements on page 157.
In accordance with the Code, the Directors have assessed the viability
of the Group over the three-year period to 31 March 2028. Based on
this assessment, the Directors have concluded that there is a reasonable
expectation that the Group will be able to continue in operation and meet
its liabilities as they fall due over the three-year period to 31 March 2028.
The more detailed assessment of the Group’s long-term viability is set out
in the viability statement on page 89.
Revenue recognition
Due to the complexity and scale of many of the Group’s contracts, revenue
recognition continues to be an area of focus for the Audit Committee.
The Audit Committee received updates from management throughout the
year, and also reviewed and discussed papers presented by management
on specific areas of revenue recognition where judgement is required.
During the year, the Audit Committee reviewed management’s assessment
on accounting for projects where revenue is recognised over time. This
included challenge by the Audit Committee on the policies applied to
ensure an appropriate and consistent determination as to whether the
output or input revenue recognition method should be applied, for
measuring progress on projects that were ongoing at year end. The Audit
Committee also sought to understand the work that was performed by
the Group Finance team during the year to roll out training to the divisional
teams, to ensure an appropriate level of knowledge and expertise across
the Group.
Other matters considered by the Audit Committee
Management has continued to operate an established, structured process
for the identification of material accounting judgements made, which are
assessed at both a divisional and Group level in arriving at the results.
The judgements with a significant actual or potential impact on the
Group’s results are presented to the Audit Committee for consideration.
In addition to the matters outlined above, the Audit Committee
considered papers prepared by management in respect of the
following matters:
• Assumptions used for pensions actuarial valuations for accounting
purposes
• Impairment review of goodwill for each individual cash-generating unit
• The effective management of potential foreign exchange exposures
• Key assumptions around tax, including recoverability of deferred
tax assets
• Distributable reserves assessments prior to distributions to shareholders
and review of associated interim accounts prepared for Mitie Group plc
Senior Accounting Officer update
The Chief Financial Officer presented a paper to the Audit Committee
detailing the processes in place to ensure that the relevant controls had
operated effectively during FY25, thereby supporting signature of the
Senior Accounting Officer certificate which is submitted to His Majesty’s
Revenue and Customs (HMRC). The Audit Committee considered this
paper, discussed in-year developments with management and concluded
that it was satisfied with the approach taken by management.
External audit
The Audit Committee is committed to ensuring the independence,
effectiveness and objectivity of the external auditor, and reviews the
performance of the external auditor in respect of audit-related services
and non-audit services every year.
Appointment and re-appointment of the external auditor
The Group undertook a competitive external audit tendering process in
2017 and BDO LLP (BDO) was selected as the Company’s external auditor
with effect from 19 September 2017. Since this date, BDO has continued
to provide external audit services to the Group. Greg Watts is the current
lead partner for BDO, and led the Group audit for FY25, which was his
third year in this role.
During FY25, Jon Gilpin, the lead partner for the Business Services division,
served his sixth year on the audit. Key audit partners normally only serve a
period of five years, however, it has been agreed that an exception should
be made for Jon Gilpin to extend his tenure for one additional year due to
a significant restructuring within the Business Services division during the
year, combined with a number of acquisitions which added complexity to
the divisional audit. This has been determined to be in accordance with the
relief included in the FRC’s Ethical Standard, and a succession plan has been
put in place for the audit for the year ending 31 March 2026.
During the year, a BDO employee applied for and accepted a role within
Mitie’s Group Finance team. The Audit Committee reviewed the matter
with BDO and it was confirmed that the individual was not part of the
Group’s audit team. Appropriate safeguards were then put in place
by BDO, upon acceptance of the role by the individual, to ensure the
continued independence of the external auditor.
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The Audit Committee considers annually the need to tender the audit
for audit quality or independence reasons. There are no contractual
obligations in place that restrict the Group’s choice of statutory auditor.
During the year, the Audit Committee also discussed the requirement,
for listed businesses such as Mitie, to run an audit tender process for the
external audit every 10 years. For BDO, FY25 represents the eighth year
of performing the audit for Mitie, which means that at the latest the audit
for year ending 31 March 2028 must be tendered under the regulations.
The associated planning for this audit tender is now underway.
The Audit Committee confirms that the Group is in compliance with
the Statutory Audit Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014.
External auditor effectiveness
The Audit Committee monitored the conduct and effectiveness of the
external auditor through its assessment of:
• The experience, expertise and perceptiveness of the auditor
• The planning and execution of the agreed audit plan and quality of
reports from the auditor
• The conduct of the auditor, including the Audit Committee’s experience
of interaction with the auditor
In addition to receiving written reports from the external auditor and
from management, the Audit Committee also conducted private meetings
with the external auditor and other meetings separately with management.
These meetings provided the opportunity for open discussion and
feedback on the audit process, the responsiveness of management and
the effectiveness of both the internal and external audit teams.
Meetings with the external auditor included challenge from the Audit
Committee around the efficiency and effectiveness of the audit process,
including use of data analytic techniques and opportunities to place more
reliance on controls as part of the audit approach. Enhanced data analytic
techniques were successfully implemented during the year, with the
objective of enhancing audit quality alongside creating efficiencies in the
audit process.
The Audit Committee also discussed and agreed an appropriate audit fee,
to support the performance of a thorough and effective audit process.
Non-audit services provided by the external auditor
The Group has a non-audit services policy, approved by the Audit
Committee, that ensures the external auditor remains independent and
objective throughout the provision of its independent audit services
and when formulating its audit opinion. This non-audit services policy is
underpinned by principles that ensure that the external auditor does not:
• Audit its own work
• Make management decisions for the Group
• Create a conflict of interest
• Find itself in the role of advocate for the Group
The Group non-audit services policy reflects the requirements of the
FRC’s Revised Ethical Standard 2019, which limits the types of non-audit
services that external auditors can provide. Under the requirements,
permitted services are largely those required by law or regulation, loan
covenant reporting, other assurance services closely related to the audit or
annual report, and reporting accountant services. The Audit Committee
confirms that the Group non-audit services policy is consistent with the
FRC’s Revised Ethical Standard 2019.
Under this policy, prior to the appointment of the external auditor to
provide any permitted non-audit services, approval must be obtained
from the Chair of the Audit Committee. A report of all non-audit services
performed by the external auditor during FY25, irrespective of value,
was submitted to the Audit Committee.
A summary of the fees paid to the external auditor for FY25 is set out
in Note 5 to the consolidated financial statements. Fees for other audit-
related services of £241,000 related to the review of the half-yearly
financial report. No other non-audit services were provided by BDO for
FY25. The Audit Committee considered reports from both management
and the external auditor, which included monitoring of fees for permitted
non-audit services compared with the FRC fee cap, none of which raised
concerns about external auditor independence.
Risk management
The Group’s risk management framework provides a flexible and adaptable
approach to the identification of risk across all areas of the business, to
meet the demands of the dynamic and fast-evolving environment in which
the Group operates.
Ultimate responsibility for maintaining and monitoring sound risk
management and internal control systems lies with the Board. This
responsibility is delegated to the Chief Executive Officer, who further
delegates it to the Chief Legal Officer (in capacity as Chief Risk Officer)
and the MGX, with accountability and responsibility assigned to specific
risk owners. The Audit Committee supports the Board in this respect by
monitoring the effectiveness of the overall risk management process and
the system of internal controls.
The Audit Committee considers emerging risks with management as
part of the risk management update it receives, and reviews the risk
management framework and outcomes to support the Group’s going
concern and viability statements.
The Audit Committee also keeps under review the adequacy and
effectiveness of the Group’s internal financial controls and internal control
and risk management systems established to identify, assess, manage and
monitor financial risks. The Audit Committee also advises the Board on
such risks and how these are tracked, managed, mitigated and reported.
Risk management approach
The Board understands that effective risk management and a sound system
of internal control are essential to the achievement of the Group’s strategy
and supporting objectives.
All risks across the business are captured on the Group’s automated risk
management platform (Risk Safe) and are subject to regular reviews, and
the Group’s risk profile is reviewed by the Chief Executive Officer, Chief
Financial Officer and Chief Legal Officer in advance of review by the Audit
Committee and approval by the Board.
The Risk Committee is chaired by the Chief Legal Officer (in capacity as
Chief Risk Officer) and comprises the Managing Directors of each of the
divisions, the heads of all functions and relevant subject-matter experts,
and met four times in FY25. The Risk Committee focuses on the risk
management framework to increase understanding of the nature of the
risks faced by the Group and the actions and controls in place to mitigate
them. This allows better coordination for the reporting of risks to the
MGX, the Audit Committee and the Board. Details related to the
Group’s principal risks and uncertainties and risk profile can be found
on pages 76 to 87.
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The Group continues to review and improve its approach to governance,
risk management and internal controls and, during FY25, the Group
made significant progress in its risk management approach. Notable
enhancements to the Group’s Enterprise Risk Management framework
during FY25 included the successful launch of Mitie’s inaugural Risk and
Resilience Week, completion of a risk register quality programme focused
on refining the content of risk information captured across the Group,
the roll-out of enhanced risk governance through the introduction of
divisional risk committees, and the design of new training offerings to boost
awareness of risk management at Mitie. In addition to this, the Group
also completed third-party evaluations in relation to ISO 31000:2018 risk
management and ISO 22301:2019, and saw elevated risk maturity levels
which signify that Mitie’s approach to continual improvement in
risk management is having the desired effect.
The Board considers the nature and extent of significant risks in setting
the Group’s strategy. The Group’s delegated authority register, which sets
out the accountabilities and authority to take decisions on specific matters
within defined financial limits and authority limits, is aligned at divisional
level. This approach helps to ensure that the Board’s risk appetite is clearly
communicated and understood across the Group. This structure ensures
a consistent approach to acceptance and management of risk across the
business and provides the Board with greater visibility of how effectively
risks are being managed.
Risk identification and assessment
The Board carries out robust assessments of the Group’s principal risks,
including emerging risks. In doing so, the Board takes both internal and
external perspectives into account to ensure the risk identification process
is thorough. The internal perspective takes into account factors such as
the changing and developing business profile, operational processes,
technology and people, while the external perspective includes the
economic environment, political factors and sector and geographical risks.
During FY25, the Risk Committee regularly reviewed the impact on the
business of the risks associated with the changing external environment
through horizon scanning. Changes to the risk profile were then reported
to the Audit Committee, the MGX and the Board for their consideration.
Employing both top-down and bottom-up approaches ensures the
systematic identification of significant risks to the business. Once identified,
risks are assessed using standard impact and likelihood ratings to quantify
the risk to the achievement of business objectives. During the FY25 risk
assessment, a new principal risk with respect to ‘Prison management’ was
identified, which is set out on page 87.
Risk assessments are based on a ‘5x5’ scale ranging from minimal to
catastrophic, with any risks falling into the Group’s upper limits having
mandatory mitigation plans with the expectation that these risks are
managed down to acceptable levels.
Risk culture
It is recognised that the risk management culture within the business is
as important as an effective risk management framework. In support
of this, the ‘One Mitie’ vision and Values have an important role to play.
As well as helping to achieve common ways of working and clarity of
approach for customers and colleagues, they also help set out, together
with the Employee Handbook and ethical business conduct policies, the
framework upon which Mitie’s risk culture is built. Emphasis is placed on
the importance of embedding risk management into all key decisions,
such that opportunities to grow the Group are balanced with effective
risk management decision-making. This means that opportunities may
continue to be exploited, provided risks have been properly identified
and the appropriate controls and mitigation plans established, or, in some
cases, potential opportunities are declined if they sit outside the Group’s
risk appetite.
The Employee Handbook sets out the expected behaviours for all
colleagues and supply chain partners and establishes zero tolerance in
specific areas as part of an established ethical business framework.
The Group continues to review and reaffirm its ethical business practice
policies with colleagues and supply chain partners to ensure awareness
of the ‘One Mitie’ vision, Values and expected behaviours is maintained.
Risk mitigation
Each identified risk has a defined control owner who is responsible for
developing and implementing a risk mitigation plan. As part of the risk
review process, each action and control is required to be reviewed
and formally assessed for its effectiveness in mitigating risk. The Risk
Committee provides oversight of the risk processes and monitors risk
mitigation actions.
In addition, second line assurance activities occur across the business, the
terms of reference for which are aligned with the objectives of the Risk
Committee. Reviews of business area risks and the progress of associated
mitigation plans are undertaken.
Assessment of the effectiveness of the control environment is undertaken
at both business and Group level, led by the Director of Internal Audit.
The Audit Committee formally reviews performance throughout the year
and advises on the effectiveness of the risk management system in place.
Risk monitoring and review
Risk registers are reviewed regularly throughout the year. Principal risks
to the business and associated mitigation plans are reviewed by the Risk
Committee and then presented to the Board, and are monitored on an
ongoing basis. In doing so, the Board considers the level of exposure for
each risk against an agreed appetite to the level of risk.
The risk management framework is designed to manage, rather than
eliminate, the risk of failing to achieve the objectives and strategy of the
Group and can therefore only provide reasonable, and not absolute,
assurance against material risk and loss. It should be noted that other risks
are identified as part of the risk management process, but these are not
considered to have a material impact on the Group’s overall ability to
achieve its business objectives.
The Audit Committee confirms that this risk management process was in
place during FY25 and remains in place up to the date of approval of the
Annual Report and Accounts. The process is continuing to evolve and will
be subject to review and improvement.
Internal controls
The Board is accountable for maintaining an effective system of internal
controls across Mitie. This responsibility is discharged through the Audit
Committee, which provides independent assessment and oversight
of financial reporting processes, the internal control framework, risk
management and compliance.
Management is responsible for maintaining a robust system of internal
controls, supported by the independent Internal Audit function within the
Group. The Group Internal Audit function comprises three distinct but
interlinked teams: Internal Audit, Internal Controls, and Investigations.
The Group’s internal control framework, devised in accordance with
the Committee of Sponsoring Organisations (COSO) framework,
encompasses financial reporting, operational controls and compliance-
related controls. This framework has led to improved internal processes
and controls, building a culture of compliance and accountability.
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During FY25, the Internal Controls team was strengthened in both
capacity and expertise to help the Group deliver its plan to achieve
compliance with the UK Corporate Governance Code 2024 requirements
(the ‘Code’), and in particular Provision 29 of the Code. This provision is
applicable to the Group for the year ending 31 March 2027, requiring the
Board to issue an annual formal declaration on the effectiveness of material
internal controls.
Mitie has been proactively preparing for the changes to the Code.
This forward-thinking approach has ensured that the Group’s programme
of work is well advanced towards meeting the new requirements,
reinforcing the commitment to maintaining a robust and effective system
of internal controls.
As part of the plan, in FY24 Mitie introduced a programme of
independent testing of internal controls, providing an independent
mechanism for evaluation. The Audit Committee has reviewed, challenged
and approved the testing approach over key controls, and the independent
testing programme continued across the Group during FY25, covering
multiple subdivisions with a comprehensive ‘top-down’ and ‘bottom-up’
approach. Assurance maps are being developed for all principal risks,
ensuring that assurance against these risks is mapped using a ‘four lines of
defence’ model.
The ‘top-down’ approach was introduced in 2025 and provides additional
assurance on Mitie’s control environment by linking the Group’s principle
risks to key controls.
The ‘bottom-up’ testing process involves agreeing on the scope of testing
with the business owner, followed by walk-throughs of key processes
with subject-matter experts. A risk and controls matrix is prepared
to identify and assess potential risks and corresponding controls.
Improvement opportunities are discussed and agreed with the process
owner, and an action plan is documented to address any identified issues.
The results and significant findings are reported to the Audit Committee,
providing an independent assessment of the internal control framework.
The independent test results have shown an improvement during FY25,
owing to the successful completion of identified remediation plans and
effective monitoring of action plans from the testing.
During FY25, the Group placed particular emphasis on IT General
Controls (ITGC) and financial controls testing, recognising their importance
in the overall success and viability of the business. By concentrating on
ITGC, the Group aims to maintain robust, reliable and secure technology
infrastructure and systems, ensuring the resilience and efficiency of its
operations. The financial controls testing serves as an essential aspect of
Mitie’s approach to responsible business practices, addressing key metrics
and performance indicators related to the Group’s financial reporting,
operational efficiency and compliance.
There has also been an increased focus on training and awareness, and
numerous CPD and fraud awareness sessions have been conducted for
divisional finance teams. These initiatives have led to increased engagement
and focus on internal controls.
In accordance with the Code, the Audit Committee performs an
evaluation of the effectiveness of internal controls across the Group on
an annual basis, covering all material controls, including financial, reporting,
operational and compliance controls. During FY25, the independent
testing results informed the basis of this evaluation, enabling the Audit
Committee to make better-informed decisions about resource allocation,
risk mitigation strategies and operational guidance.
Internal audit
The Director of Internal Audit at Mitie has continued to strengthen the
independent Internal Audit team to ensure there are adequate skills for
emerging risks such as new technologies and Artificial Intelligence (AI).
The authority and responsibilities of the Internal Audit function are
defined in its charter, which is reviewed regularly by the Audit Committee.
Reporting directly to the Audit Committee (administratively to the Chief
Financial Officer) allows the Internal Audit function to achieve objectivity
and offers independence from those activities being audited.
The work of the Internal Audit team helps to provide assurance over the
effectiveness of the Group’s governance, risk management and internal
control frameworks. The Audit Committee Chair assesses the Internal
Audit team’s performance against internal audit objectives and oversees
the appointment and removal of the Director of Internal Audit.
During FY25, the Internal Audit team engaged with key stakeholders
across the Group, including Board members and wider Mitie leadership
teams, including the Executive Committee, Risk Committee and finance
leadership team, to obtain business insight and feedback, which has been
used to develop a comprehensive internal audit plan. The internal audit
plan for FY25 was presented to and approved by the Audit Committee
in March 2024 and was kept under continual review throughout the year.
The plan was approved and delivered accordingly.
A tailored audit report is produced to present the findings of each
internal audit, and any remedial action plans developed by management
in response, which are tracked to completion by the Internal Audit team.
These reports are reviewed and challenged by the Audit Committee and
are made accessible to the members of the Audit Committee and BDO.
Regular progress updates were also provided to the Audit Committee
throughout FY25 by the Director of Internal Audit.
During FY25, improved formats of reporting were used, including an
‘audit on a page’ concept of one-page spot-check audits, designed to offer
rapid assurance over specific risk areas, in addition to comprehensive
reports and ongoing assurance memorandums over in-flight projects
and technology solutions.
The key areas of focus in the FY25 internal audit plan included:
• A post-implementation review of certain computer-aided facility
management system implementations
• A review of employee retention strategy and processes and their
effectiveness
• Assessment of employee onboarding and offboarding processes, risks
and controls
• A review of customer account management and related risk management
• A review of the control environment around the transition of outsourced
finance activities
• A review of user access controls across systems and applications
Whistleblowing and allegations of fraud
The Investigations team supports the whistleblowing and investigations
process by providing dedicated resource and expertise for fraud
investigations. In FY25, the Group continued to operate its independent
whistleblowing service via the EthicsPoint platform, while also receiving
whistleblowing concerns through the Chief Executive Officer’s direct
channel, ‘Grill Phil’, and various other means.
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Investigations of all natures are taken seriously by management and
the Board, and documented reports for investigations are created
and approved via a formalised process, and improvement actions
recommended by the Investigations team are tracked to completion.
In instances where allegations of fraud have been reported, these
are investigated as a matter of priority by the Investigations team and
reported to the Audit Committee. The related reports, summarising the
issues, conclusions and recommendations, are reviewed and discussed
by the Audit Committee. The Audit Committee then monitors the
implementation of any required actions, aimed at preventing future
occurrence of similar issues and enhancing internal processes and controls.
The Investigations team also regularly delivers fraud awareness sessions
across the business and conducts proactive reviews to identify fraud trends
using data analytics. These efforts have led to increased awareness and
vigilance among colleagues, reducing the risk of fraud.
To support readiness for the ‘failure to prevent fraud’ legislation applicable
from September 2025, the resources available have been strengthened,
including testing potential use of AI to detect fraud using case studies and
machine learning where possible. This proactive approach aims to enhance
the effectiveness of fraud detection and prevention measures.
Fair, balanced and understandable
In accordance with Provision 27 of the Code, the Directors confirm that
they consider the Annual Report and Accounts, taken as a whole, to be
fair, balanced and understandable, and that it provides the information
necessary for shareholders to assess the Group’s position, performance,
business model and strategy. When arriving at this position, the Board was
assisted by various processes, including the following:
• The Annual Report and Accounts was drafted by senior management
with overall coordination by Group Finance to ensure consistency across
the relevant sections
• A review was undertaken to assess the consistency of the Annual
Report and Accounts with internally reported information and investor
communications, and to assess the balance between reported measures
and Alternative Performance Measures
• Reviews of drafts of the Annual Report and Accounts were undertaken
by the Executive Directors, Chief Legal Officer & Company Secretary,
other senior management and external advisors
• The final draft was reviewed by the Audit Committee prior to
consideration by the Board
An explanation by the Directors of their responsibility for preparing the
Annual Report and Accounts can be found on page 141.
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Strategic report
Governance
Financial statements
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) COMMITTEE REPORT
On behalf of the Board, I am pleased to present the ESG Committee
report for the year ended 31 March 2025.
This report highlights the ESG Committee’s key activities and achievements
during FY25 and enhanced governance involvement in relation to
increasing regulatory requirements. Highlights of Mitie’s ESG activities
and outputs are set out on pages 50 to 75 of this Annual Report and
further information is also available at www.mitie.com/environment-
social-and-governance.
As detailed over the following pages, in FY25 the Committee focused on
areas such as:
• Establishing the reporting criteria from our double materiality
assessment, to ensure upcoming compliance with the Corporate
Sustainability Reporting Directive
• Enhancing the quality of our reporting both internally and externally to
ESG rating agencies and other disclosure organisations
• Updating Mitie’s Supplier Code of Conduct to include enhanced
environmental and social value requirements
• Appointing a new Director of Social Value and refreshing the social value
strategy, to be delivered from FY26
• Increasing the number of Ready to Work programmes through the Mitie
Foundation to support social mobility and inclusive employment
• Enhancing our Modern Slavery procedures and the Group’s Modern
Slavery statement
• Reviewing Mitie’s long-term ESG targets
• Supporting the creation and expansion of trailblazer apprenticeship
schemes, with the aim of closing future skills gaps
• Supporting the launch of Mitie’s first Level 7 Leadership cohort for senior
women in conjunction with Corndel, sponsored by CEO Phil Bentley
• Guiding our Apprenticeship Levy lobbying activity
• Delivering environmental training to ensure Board and senior leadership
ESG competence
• Improving metrics around business ethics reporting, incorporating
environment, labour standards and human rights
• Adopting the EcoVadis platform to engage with our suppliers’ ESG
performance and help identify opportunities for collaboration
• Supporting the implementation of Mitie’s M&A strategy, with its focus
on acquiring businesses that can enhance our decarbonisation project
delivery capabilities
• Expanding our Inclusion Ally training programme, resulting in 300 trained
allies who have demonstrated increased confidence and inclusivity in
their interactions
• Organising seven ED&I flagship events to raise awareness and
understanding of ED&I topics, with participation from approximately
300–500 colleagues
• Launching the ‘This is Me’ campaign to close diversity data gaps and
encourage colleagues to share their diversity information
ESG Committee members
As part of governance enhancements, the Committee’s membership
was formally revised on 23 July 2024. The Committee’s composition for
the financial year ended 31 March 2025 is set out below, including current
members and those who stepped down during the year.
Current membership overview (as at 31 March 2025)
Chair:
Salma Shah
Committee members:
Penny James, Non-Executive Director (appointed 3 June 2024)
Peter Dickinson, Chief Legal Officer & Company Secretary
Claire Lovegrove, Head of External Communications
Jason Roberts, Group Director for Sustainability
Jason Towse, Managing Director of Business Services
Jon Hughes, Group HSQE Director (appointed 23 July 2024)
Sameen Sheikh, Director of Internal Audit (appointed 23 July 2024)
Helen Longfils, Group Director of Social Value (appointed
9 September 2024)
Kate Heseltine, Group Investor Relations and Corporate Finance
Director (appointed 23 July 2024)
Former members (stepped down during the financial year)
Jasmine Hudson, Chief People Officer
Alice Woodwark, Managing Director of Mitie Communities
Danny Spencer, Managing Director of Care & Custody
Simon Venn, Managing Director of Technical Services & Chief
Government Officer
ESG Committee meetings
The Committee met six times during FY25.
Key purpose of the ESG Committee
To oversee Mitie’s ESG initiatives and provide governance support,
ensuring alignment with its Purpose, Promises and Values.
Key responsibilities of the ESG Committee
To benefit Mitie’s customers, colleagues, shareholders and other key
stakeholders, the ESG Committee is responsible for:
• Preparing the Group’s ESG strategy on an annual basis, and
submitting it to the Mitie Board for final approval and adoption
• Promoting, overseeing and monitoring the implementation of the
ESG strategy
• Ensuring the Group operates responsibly to positively impact
communities, people and the environment in line with the
ESG strategy
The Committee’s Terms of Reference are available at
Mitie’s strong commitment to ESG brings real purpose, improving
sustainability and social value within our organisation. This dedication
also enhances the services we provide, making a positive impact on
our customers and the communities we serve.
Salma Shah
Chair of the ESG Committee
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ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) COMMITTEE REPORT
continued
• Increasing diversity network membership from 5,684 to 8,065 members,
achieving over 1,000 members in each network
• Introducing the Sunflower Lanyard initiative to support colleagues with
neurodiversity and hidden disabilities
• Strengthening our commitment to disability inclusion by becoming
members of the Business Disability Forum
Mitie’s ESG leadership position has continued to receive external
recognition through both accreditations and awards, including the following:
• Sustainalytics – 8.3 Negligible Risk
• Business Green Awards 2024 – Organisation of the Year
• Energy Management Awards 2024 – Organisation of the Year
• Sustainable Facilities Management Index – Joint first with Platinum Status
• Top Employers Institute Awards 2024 – Top Employer United Kingdom
• Inclusive Companies Awards 2024 – 9th Inclusive Top 50 UK Employer
• National Apprenticeship Service 2023 – Top 100 Apprenticeship
Employers
• CDP ‘A-List’ for second year running
• Improved EcoVadis rating of 77 – Gold
• Ministry of Defence’s Employer Recognition Scheme 2023 – Gold
award winner
• HR Excellence Awards 2023 – Best Early Careers Strategy
• ProShare Awards 2023 – Best Overall Performance in Fostering
Employee Share Ownership: 50,000+ employees
• B2B Marketing Awards 2023 – Silver Award for the Best Use of
Customer Insight for Mitie Plan Zero – Decarbonisation Delivered™
• Ranked 7th in the Top Employers of Veterans in the UK 2024
• Winner of Global ESG Award for EDI
Areas of focus for the Committee in FY26 are expected to include:
• Embedding Mitie’s materiality assessment results into strategies across
the business
• Supporting the employment and social mobility of underrepresented
groups
• Launching Mitie’s new comprehensive social value strategy, to be
delivered across a wide range of customer accounts and through
partnerships with voluntary, charitable and social enterprises (VCSEs)
and small to medium-sized enterprises (SMEs)
• Incorporating further circular economy and reuse initiatives into
internal operations
• Expanding our internal deployment of nature-based initiatives to improve
biodiversity within the Mitie estate
• Monitoring Mitie’s performance against its FY26 social value targets and
intervening if required to ensure their fulfilment
• Ensuring successful utilisation of our supplier ESG scorecard and
deploying the EcoVadis platform for our preferred suppliers
• Enhancing colleagues’ knowledge and awareness of sustainability and
social value
Salma Shah
Chair of the ESG Committee
Task Force on Climate-related Financial Disclosures (TCFD)
Board oversight of climate-related risks and opportunities
Both the Board and the ESG Committee have oversight of climate-related
risks and opportunities.
At each Board meeting, the Chair of the Committee provides an
update that includes an overview of any Committee meeting and any
recommendations from the Committee requiring approval by the Board.
All members of the Board have access to ESG Committee meeting papers
via an electronic Board portal.
Management’s role in assessing and managing climate-related risks and
opportunities
Due to the action-oriented nature of the Committee, a significant
proportion of its membership comprises members of the MGX and
senior management. At 31 March 2025, two Committee members were
members of the MGX.
As illustrated below, a governance framework, comprising the ESG
Working Group (formerly the Plan Zero Working Group), ESG Risk Group
(formerly the Plan Zero Steering Group), the Committee and the Board,
ensures that climate-related risks and opportunities are appropriately
assessed and managed at Mitie.
Mitie’s climate change risk assessment (TCFD risks and opportunities) is
maintained by Jason Roberts, Group Director for Sustainability, who is
a member of the Committee and Chair of the ESG Risk Group. Senior
members of the Finance team distribute the document to all business areas
for them to review business and operation-specific risks and opportunities.
Governance framework
Board
The Board has overall responsibility for sustainability, environmental and
climate-related matters, including TCFD risks and opportunities.
The Board reviews climate-related risks and opportunities as part of its
principal risks and business strategy considerations.
ESG Committee
The Committee has oversight for social value, sustainability, environmental
and climate-related matters, including TCFD risks and opportunities.
The Committee reviews and approves Mitie’s climate change risk
assessment document (TCFD risks and opportunities) following its
approval by the ESG Risk Group.
The Committee receives regular updates on outputs from ESG Risk
Group meetings.
ESG Risk Group (formerly the Plan Zero Steering Group)
The ESG Risk Group meets quarterly in line with the Risk Committee
meetings, and reports to the Committee. This group comprises
representation from Finance, Risk, Legal, ESG and Investor Relations.
Its key responsibilities include:
• Overseeing and directing the ESG Working Group
• Reviewing and mitigating identified climate-related risks
• Realising climate-related opportunities
• Reviewing and approving Mitie’s climate change risk assessment
document (TCFD risks and opportunities)
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Strategic report
Governance
Financial statements
ESG Working Group (formerly the Plan Zero Working Group)
The ESG Working Group meets monthly to explore environment, business
ethics, sustainable procurement, and labour and human rights, and reports
to the ESG Risk Group. Its members include representation from ESG,
Procurement, Property, Fleet, Waste, HR, Ecology and Legal.
Its key responsibilities include:
• Identifying and delivering actions to achieve Mitie’s Plan Zero initiative
objectives
• Driving down energy consumption and associated carbon emissions
• Transitioning to a circular economy and improving biodiversity
• Improving Mitie’s processes around labour, human rights and
business ethics
• Engaging our supply chain and embedding sustainability within our
procurement processes
• Improving the accuracy of supply chain emissions data calculations
• Taking action in response to feedback from our reporting commitments,
such as CDP and EcoVadis
Key activities during the year
Materiality assessment
The Committee identified Mitie’s adherence to the EU’s Corporate
Sustainability Reporting Directive (CSRD) framework regulations,
which require the completion of a double materiality assessment.
The Committee collaborated with the ESG team to appoint an external
organisation to complete this assessment, and which stakeholders to
involve. Surveys and interviews with Mitie’s stakeholders provided
results that will be fed into Mitie’s FY25 strategies across the business.
Supplier ESG scorecard
The Committee worked to develop a mechanism to enable Mitie’s
supply chain’s ESG performance to be measured, by implementing an
ESG scorecard. The Committee collaborated with the ESG team to
ensure this process aligns to and covers areas included in other reporting
requirements, such as CDP (formerly the Carbon Disclosure Project) and
EcoVadis. The Committee identified the potential for this engagement
to identify opportunities for collaboration and enhancement of Mitie’s
decarbonisation delivery, extending to its supply chain. This scorecard will
enable Mitie to rank its suppliers in terms of ESG and directly support our
related science-based targets.
Enhanced reporting
The Committee continued to look for ways to improve Mitie’s ESG scores
with ESG rating agencies, accrediting bodies and sustainability indices in
FY25. The Committee reviewed responses to disclosure questionnaires
and identified areas for improvement. The Committee also initiated
engagement conversations with these organisations where needed.
As a result of these engagement activities, Mitie secured an A rating from
CDP within the Climate Change category, one of only 462 companies
worldwide to achieve this (top 2%).
ESG Report 2025
The Committee reviewed Mitie’s ESG Report 2025 and the Board’s
feedback on the report. This report outlines the progress made across
all areas of Mitie’s ESG strategy and shared key achievements for each of
the five pillars of Mitie’s social value framework: environment, responsible
supply chain, people, community, and innovation. Following publication,
the report will be available to download at www.mitie.com/esg/.
Support for apprenticeships
The Committee kept Mitie’s Apprenticeship Levy strategy under review
and discussed ways to increase Mitie’s Apprenticeship Levy utilisation
rate and Apprenticeship Levy gifting. As part of these discussions,
the Committee made the decision to join the 5% Club, organisations
committed to providing ‘earn and learn’ opportunities, and have
successfully increased Mitie’s utilisation rate. The Committee identified
obstacles that were limiting Mitie’s ability to maximise levy spend, including
a gap in programmes for colleagues in certain job roles, so therefore
supported the launch of the Level 2 Professional Security Operative
trailblazer apprenticeship and Mitie’s first Level 7 Leadership cohort for
senior women in conjunction with Corndel and Imperial College London
Business School.
Giving Back
The Committee was regularly updated on Mitie’s ‘Giving Back’ initiative,
which encourages eligible colleagues to use their annual volunteering day to
support good causes in the local community. The Committee discussed the
effectiveness of Mitie’s volunteer recording platform, along with colleague
eligibility criteria, with aims to maximise accessibility and engagement.
A total of 32,512 volunteer hours were recorded during FY25, 8,832 hours
over target.
Performance against targets
The Committee reviewed performance against its FY25 ESG targets at
every meeting. At times during the year when a particular target was
tracking behind schedule, the Committee discussed the reasons why and
identified ways to address the shortfall. For example, the Committee
drove the importance and requirement of electric vehicle (EV) uptake
among their teams to ensure Mitie’s EV target was achieved with minimal
pushback through ensuring awareness of purpose and application.
Mitie achieved 12 of its 14 FY25 ESG targets.
Mitie Foundation
The Committee was regularly updated on the activities of the Mitie
Foundation. During FY25, the Mitie Foundation continued to support
individuals with perceived barriers to employment, such as the
long-term unemployed, those with disabilities or learning difficulties,
veterans, ex-offenders and young people. A total of 256 Mitie
Foundation candidates were recruited into the Mitie business in FY25.
Further detail of the activities of the Mitie Foundation can be found at
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DIRECTORS’ REMUNERATION REPORT
The foundation year of the new Three-Year Plan for Facilities
Transformation delivered strong strategic, operational and financial
progress which is reflected in the incentive outcomes.
Jennifer Duvalier
Chair of the Remuneration Committee
Remuneration Committee members
At the date of this report and throughout FY25, the Remuneration
Committee comprised:
Chair:
Jennifer Duvalier
Committee members:
Chet Patel
Salma Shah
Roger Yates
Remuneration Committee meetings
The Remuneration Committee met three times during FY25.
Key purpose of the Remuneration Committee
The purpose of the Remuneration Committee is to develop and
oversee remuneration policies and practices that support Mitie’s
strategy and promote long-term sustainable success.
Key responsibilities of the Remuneration Committee
The Committee has responsibility for determining the remuneration
of Mitie’s Executive Directors and the Chairman, taking into account
the need to ensure Executive Directors are properly incentivised to
perform in the interests of the Company and its shareholders.
The Committee is also responsible for setting the remuneration for
other senior executives, including the Mitie Group Executive (MGX).
The Committee also reviews workforce remuneration and related
policies and takes these into account when setting the policy for
Executive Directors.
The Committee regularly consults with the CEO and key HR
executives on various matters relating to the appropriateness of
rewards for the Executive Directors. However, the CEO and other
Executive Directors are not present when matters relating directly
to their own remuneration are determined.
This is also the case for other executives attending Committee
meetings. The Company Secretary attended the meetings as
Secretary to the Committee. The CEO and HR executives attended
the meetings by invitation only.
The Remuneration Committee’s Terms of Reference are available at
On behalf of the Board, I am pleased to present the Directors’
remuneration report for the year ended 31 March 2025.
The report is split into two main parts:
• Executive remuneration at a glance: This sets out a summary of our
policy, remuneration outcomes for this year and how we intend to
operate our policy for next year
• The Annual Report on Remuneration: This provides more detail on the
above, as well as setting out other remuneration-related disclosures
Business performance and context
FY25 has been another year of good financial and operational progress
for Mitie. In the foundation year of the new Three-Year Plan for Facilities
Transformation the Group delivered revenue growth of 13%, including
9% organic growth, and operating profit before Other items growth of
11%. There has been strong free cash flow generation of £143m as well as
a return on invested capital significantly in excess of our weighted average
cost of capital. Basic earnings per share before Other items increased by
3% to 12.7p, with the benefit of higher operating profit and share buybacks
offsetting an increase in effective tax rate and higher finance costs.
Remuneration review and new policy
The Remuneration Committee undertook a detailed review of
remuneration arrangements as part of the renewal of the remuneration
policy at the 2024 AGM. As part of our review, we consulted with major
shareholders and took their feedback into account when finalising the
new policy, which was approved by shareholders with over 80% support.
Further detail on the implementation of the policy in 2024 is provided in
the Executive remuneration at a glance section following this statement.
The policy is set out in full in our Annual Report and Accounts 2024.
Supporting our colleagues
Mitie is a people business; our exceptional colleagues are integral to the
Group’s success. During FY25, we granted two free share awards to our
colleagues, with those earning the least receiving the most shares in line
with previous awards.
For our hourly paid colleagues, we increased pay in line with the National
Living Wage or Real Living Wage increases. In practice, this means that a
considerable number of our people received increases of around 6.3%.
For our salaried colleagues, the overall pay budget increase for 2024 was
set at 2.25%, balancing Group affordability with talent market pressures.
Remuneration decisions and outcomes in respect of FY25
Salary
The CEO’s salary of £900,000 has been unchanged since his appointment
in 2016. As in previous years, the Committee has decided to not
implement any salary increase for Phil Bentley.
The CFO’s salary has not been increased and remains at £412,000.
STATEMENT FROM THE REMUNERATION COMMITTEE CHAIR
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Strategic report
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Financial statements
FY25 bonus
The annual bonus for FY25 was based on profit, revenue, free cash
flow and strategic/individual performance. At the end of the year, the
Committee assessed performance against the targets and was mindful
of the latest shareholder guidance and market sentiment. As such, the
Committee gave careful consideration to the year’s context, taking into
account the experience of colleagues, stakeholders and shareholders.
FY25 was a good year of Group performance. Operating profit
1
of
£233.1m was between target and maximum, revenue of £5,091m was
between target and maximum and free cash flow of £142.8m exceeded
the maximum. Assessment against strategic and individual objectives was
such that 86.1% and 87.6% of the maximum overall bonus was determined
for the CEO and CFO respectively on a formulaic basis.
As in previous years, the Committee challenged itself to ensure that
bonus outcomes were appropriate in the round. As is usual, as part of this
assessment, the Committee took into account the wider performance
of the Group, and the context of both the shareholder and employee
experience. In doing so, it determined that a discretionary reduction of 5%
to the FY25 bonus outcomes for all participants (including the Executive
Directors) was appropriate. This resulted in a final out-turn of 81.8% of
maximum for the CEO and 83.2% of maximum for the CFO.
2022 LTIP
The Committee assessed the outcome of the June 2022 Long Term
Incentive Plan (LTIP) award against three performance measures: earnings
per share (EPS), return on invested capital (ROIC) and ESG targets.
Following a review of performance against targets, the Committee
determined that the formulaic out-turn was that 100% of the award
would vest in June 2025. Performance against targets for this award
are described in more detail on page 133 in the Annual Report on
Remuneration. The Committee determined that the formulaic outcome
of the 2022 LTIP was appropriate and no further discretion was applied.
Incentives approach for FY26
For FY26, the Committee is intending to operate the annual bonus and
LTIP using the same framework and measures used in FY25:
• Phil Bentley’s maximum bonus opportunity will be unchanged at 200%
of salary. As stated in last year’s report, Phil will not be granted an LTIP
award in FY26
• Simon Kirkpatrick’s maximum bonus opportunity and LTIP opportunity
will be unchanged at 175% of salary
• The annual bonus will continue to be based on financial and strategic
targets, with 80% based on financial measures and 20% on strategic and
personal objectives. The mix for FY26 will be: revenue (27.5%), profit
(27.5%), free cash flow (25%), strategic objectives (10%) and individual
objectives (10%)
• The LTIP measures will continue to be: EPS (33.3%), ROIC (33.3%) and
revenue (33.3%). The Committee will also have reference to ESG and
leverage during the period, and has the discretion to adjust the award
accordingly. As part of its assessment of the appropriate vesting amount,
the Committee will take into account all relevant factors including
the wider performance of the Group and the context of both the
shareholder and employee experience
• The Mitie strategy is typically set in three-year cycles and we are now in
the second year of the FY25 – FY27 Facilities Transformation strategy. In
the coming months the Board will be considering the strategy for FY28
onwards. The Committee have therefore made the decision to delay
setting the LTIP 2025 targets. The awards will be granted in due course,
and targets set before the end of October 2025 to allow for more
meaningful three-year targets aligned with the future strategic plans.
Once set, the targets will be disclosed in a stock exchange announcement
Engaging with the workforce
The Mitie Board values the views of our colleagues and has multiple
engagement routes. In addition to my role as the Chair of the
Remuneration Committee, I act as the designated Non-Executive Director
responsible for oversight of the Board’s engagement with the workforce.
In this role, I regularly engage with the workforce on a broad range
of topics, including reward and benefits. In addition, we undertake
engagement surveys in order to better understand the views of a wider
range of colleagues. The engagement surveys include a range of specific
questions on pay practices and presents an opportunity for the workforce
to ask its own questions about colleague or executive reward.
Through the feedback from surveys, supplemented with my findings
from regular direct engagement with the workforce, the voice of Mitie
people is heard at Remuneration Committee meetings. This enables the
Remuneration Committee to take into account the views of colleagues
when considering executive remuneration and the pay and employment
conditions throughout the wider workforce.
I attended a listening session with frontline colleagues specifically focused
on reward and executive remuneration. Colleagues fed back on their
benefits package, noting their thanks for the ongoing free share awards.
Colleagues were interested in understanding the Executive Directors’
incentive arrangements and were reassured to hear about the Board’s
rigour and fairness for the consideration of reward for executives in
relation to that of the wider workforce.
Conclusion
We will be seeking approval for the Directors’ remuneration report
(advisory vote) at the 2025 AGM. I welcome your views and feedback
on the report.
Jennifer Duvalier
Chair of the Remuneration Committee
1.
Operating profit before Other items, which (for the purpose of the Annual Bonus
Plan measure) has been adjusted to exclude the profit uplift associated with the
discretionary reduction of 5% applied to the bonus out-turn.
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DIRECTORS’ REMUNERATION REPORT
EXECUTIVE REMUNERATION AT A GLANCE
How we intend to operate our policy for FY26
The following table provides an overview of our remuneration policy and summarises the approach for remuneration arrangements for Executive
Directors for FY25 alongside how the Committee intends to apply it for FY26. The full policy approved at the 2024 AGM is available on our website
(www.mitie.com/investors/corporate-governance) and in the Annual Report and Accounts 2024.
At a glance
Overview of policy
FY25
FY26
Base salary
Salaries are generally reviewed annually,
effective from 1 April. The review may be
influenced by:
• The individual’s role, experience and
performance
• Business performance and the wider market
and economic conditions
• The range of increases across the Group
• An external comparator group comprising
sector comparators and size-adjusted
comparator organisations
CEO: £900,000
CFO: £412,000
CEO: £900,000 (no increase)
CFO: £412,000 (no increase)
Benefits
The Group provides a range of benefits which
may include a company car/car allowance,
private health insurance, life assurance and
annual leave.
Benefits are reviewed periodically against
market and new benefits may be added and/or
amended as required to support the attraction
and retention of key talent.
Benefits for FY25 include private
medical cover, car allowance/car
and financial/tax planning advice
No changes to benefits are planned
for FY26
Pension
Executive Directors are eligible to participate
in the defined contribution pension scheme or
to receive a cash allowance in lieu of a pension
contribution.
3% of base salary (in line with
the workforce)
3% of base salary (in line with
the workforce)
Maximum bonus
opportunity
Maximum bonus opportunity is 200% of
base salary.
CEO: 200% of base salary
CFO: 175% of base salary
CEO: 200% of base salary
CFO: 175% of base salary
Bonus deferral
50% of the bonus is normally deferred into
shares which vest after a minimum of two years
(subject to continued employment).
50% of bonus deferred into shares
which vest after at least two years
50% of bonus deferred into shares
which vest after at least two years
Bonus performance
measures – mix
Measures and targets are set annually and
payout levels are determined by the Committee
after the year end based on performance
against those targets.
80% financial, 20% strategic
80% financial, 20% strategic
Bonus performance
measures – metrics
Bonuses are based on stretching financial and
strategic objectives assessed by the Committee
at the end of the year, with the underlying aim
of encouraging and rewarding the generation
of sustainable returns to shareholders.
Revenue (27.5%)
Profit (27.5%)
Free cash flow (25%)
Individual (10%)
Other strategic (10%)
Revenue (27.5%)
Profit (27.5%)
Free cash flow (25%)
Individual (10%)
Other strategic (10%)
Maximum LTIP
opportunity
Awards may be made up to a maximum level of
200% of base salary.
CEO: 600% of base salary (in line
with CEO reward plan
1
)
CFO: 175% of base salary
CEO: nil
1
CFO: 175% of base salary
LTIP performance
measures
Performance over at least three financial years
is measured against stretching objectives which
have the underlying aim of encouraging and
rewarding the generation of sustainable returns
to shareholders.
EPS (33.3%)
ROIC (33.3%)
Revenue (33.3%)
EPS (33.3%)
ROIC (33.3%)
Revenue (33.3%)
1.
In line with the CEO reward plan approved at the 2024 AGM, a one-off LTIP award of 600% of base salary was made in respect of FY25, and no LTIP awards will be made to the CEO
in FY26 and FY27. The maximum LTIP opportunity applicable for a new CEO under the remuneration policy is 200% of base salary.
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Strategic report
Governance
Financial statements
At a glance
Overview of policy
FY25
FY26
LTIP holding period of
two years after vest
Awards will normally be subject to an additional
holding period of at least two years.
Shares released after at least five
years (vesting after three years plus
two-year holding period)
Shares released after at least five
years (vesting after three years plus
two-year holding period)
Share ownership
requirements
Executive Directors are required, over time, to build and maintain a minimum shareholding in the Company worth 200% of
base salary.
Executive Directors will be expected to maintain their shareholding at 100% of their ownership requirement for one year
post departure, reducing to 50% for the second year post departure, or in either case the actual shareholding on departure
if lower.
Malus and clawback
provisions
Recovery provisions (malus and clawback) have applied to incentives for a number of years. Further details of the recovery
provisions, including the circumstances and timeframe for which they can be applied, are set out in the remuneration policy.
Further information on the above is provided in the Annual Report on Remuneration.
Phil Bentley
2025
Salary
£900,000
Benefits
£61,428
Pensions
£27,000
Bonus
£1,472,400
LTIP
£4,069,587
Total
£6,530,415
Simon Kirkpatrick
2025
Salary
£412,000
Benefits
£4,308
Pensions
£12,360
Bonus
£599,872
LTIP
£1,281,920
Total
£2,310,460
2024
Salary
£900,000
Benefits
£45,095
Pensions
£27,000
Bonus
£1,291,624
LTIP
£3,308,464
One-off EDP
£11,157,977
Total
£16,730,160
2024
Salary
£400,000
Benefits
£4,032
Pensions
£12,000
Bonus
£494,349
LTIP
£968,098
One-off EDP
£1,762,805
Total
£3,641,284
Single figure for FY25
The table below reports a single figure of total remuneration for each of the Executive Directors for the financial year ended 31 March 2025 and their
comparative figures for the financial year ended 31 March 2024.
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DIRECTORS’ REMUNERATION REPORT
SUMMARY OF REMUNERATION POLICY
The standard remuneration approach for the Executive Directors comprises the following elements:
Annual bonus
27.5% profit
27.5% revenue
25% free cash flow
20% strategic and individual
objectives (inc. ESG)
LTIP1
33.3% EPS
33.3% revenue
33.3% ROIC
1.
Under the LTIP 2025, the Committee will also have reference to ESG and leverage during the period, and has the discretion to adjust the award accordingly, including to nil.
Note: details of the FY26 annual bonus targets will be disclosed in the FY26 remuneration report.
Base salary
LTIP
Annual bonus
Pension
Benefits
+
+
+
+
= Total
Fixed
Variable
UK Corporate Governance Code: Provision 40
The following table sets out how the remuneration policy addresses the factors set out in the UK Corporate Governance Code:
Clarity
The Committee considers that Mitie’s remuneration structures are transparent and welcomes open and frequent
dialogue with shareholders on its approach to remuneration. Major shareholders were consulted on the Committee’s
approach to remuneration, including the changes to the remuneration policy, which were approved by shareholders at
the 2024 AGM.
Simplicity
The remuneration policy is designed to be comprehensive without becoming overcomplicated and to encourage
Executive Directors to concentrate on the profitable growth of the business. When developing the remuneration
arrangements, the Committee was conscious of ensuring the overarching structure remained simple and easy to
understand for both shareholders and participants.
Risk
The Committee considers that the structures of the incentive arrangements do not encourage inappropriate risk-
taking. The following best-practice measures are in place to minimise risks:
• Deferral under the Annual Bonus Plan, the LTIP holding period and the shareholding requirement, including post
cessation, provide a clear link to the ongoing performance of Mitie’s business and the experience of shareholders
• The Committee has discretion to adjust the formulaic outcomes if it considers that they are not reflective of the
underlying performance of Mitie or the individual
• Malus and clawback provisions apply to the Annual Bonus Plan and LTIP
Predictability
One of the Committee’s principles is that the majority of reward opportunity for Executive Directors should be
provided through performance-related incentives linked to the Group’s strategic goals and taking account of the
Group’s attitude to risk; reward under these incentives is linked to both individual and Group performance. Page 146 of
the 2024 Annual Report and Accounts sets out four illustrations of the application of the remuneration policy, including
the potential opportunity levels resulting from threshold, target and maximum performance under the Annual Bonus
Plan and LTIP.
Proportionality
Performance measures and target ranges under the Annual Bonus Plan and LTIP are designed to be sufficiently
stretching in order to ensure out-turns are fully aligned with Mitie’s performance.
As above, the Committee has discretion to override formulaic outcomes in order to ensure performance is reflective
of Mitie’s underlying performance.
Alignment to culture
The Committee believes in an approach to executive pay which is commensurate with value creation for shareholders.
The remuneration policy and the Company’s incentive schemes have been designed to drive appropriate behaviours
consistent with Mitie’s Purpose, Values and strategy.
Accelerating
growth
Operating margin
progression
Cash
generation
ESG
leadership
Executive incentives and link to strategy
The following table sets out how the intended measures across the incentive plans for FY25 support the Group’s strategy and KPIs:
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Strategic report
Governance
Financial statements
Executive Director remuneration (subject to audit)
The table below reports a single figure of total remuneration for each of the Executive Directors for FY25 and their comparative figures for FY24:
Year
Salary
Benefits
1
Pension
2
Total fixed pay
Annual bonus
3
LTIP
4
EDP
5
Total
variable pay
Total
Phil
Bentley
2025
£900,000
£61,428
£27,000
£988,428
£1,472,400
£4,069,587
–
£5,541,987
£6,530,415
2024
£900,000
£45,095
£27,000
£972,095
£1,291,624
£3,308,464
£11,157,977
£15,758,065
£16,730,160
Simon
Kirkpatrick
2025
£412,000
£4,308
£12,360
£428,668
£599,872
£1,281,920
–
£1,881,792
£2,310,460
2024
£400,000
£4,032
£12,000
£416,032
£494,349
£968,098
£1,762,805
£3,225,252
£3,641,284
1.
Benefits are calculated in terms of UK taxable values and relate to the cost of private medical cover, car allowance and financial/tax planning advice. Simon Kirkpatrick’s benefits include
the use of an electric car. Phil Bentley’s benefits include the matching shares element from his SIP purchases based on the share price upon purchase.
2. The pension benefit disclosed above for Phil Bentley comprises cash allowances in lieu of pension contributions of 3% of base salary. For Simon Kirkpatrick, the pension benefit
disclosed comprises employer pension contributions of 3% of base salary.
3. Annual bonus payable in respect of the financial year includes any deferred element at face value at the date of award. Further information about how the level of the award for FY25
was determined is provided on pages 130 and 131.
4. The LTIP figures disclosed for FY25 are in respect of the 2022 LTIP awards and have been valued, in line with the regulations, using the average share price of the last three months of
FY25 (114.97p) and include dividend equivalents accrued over the vesting period. The share price at grant (using the average closing middle market price for the last five trading days
prior to the start of the financial year on 1 April 2022) was 55.10p, and 109% of the LTIP amounts included in the table above are attributable to share price appreciation. Further
information about how the level of vesting (100%) was determined is provided on page 133. The LTIP and EDP figures disclosed for FY24 include the 2021 LTIP for which the figures
included in the FY24 remuneration table have been adjusted to reflect the actual valuation based on the closing share price on the date of vesting, which was 118.00p, and include
dividend equivalents accrued until the vesting dates.
5. The Enhanced Delivery Plan (EDP) figures disclosed for FY24 include the 2021 EDP for which the figures included in the FY24 remuneration table have been adjusted to reflect the
actual valuation based on the closing share price on the date of vesting, which was 121.00p, and include dividend equivalents accrued until the vesting dates.
Non-Executive Director remuneration (subject to audit)
The fees for the Non-Executive Directors for FY25 and their comparative figures for FY24 are set out below:
2025
1
£’000
2024
1
£’000
Derek Mapp
274
247
Christopher Rogers
2
10
–
Jennifer Duvalier
71
67
Penny James
2
54
9
Chet Patel
54
52
Mary Reilly
64
62
Salma Shah
65
62
Roger Yates
63
61
Total
655
560
1.
All amounts were paid in cash and no other UK taxable benefits were received in either year.
2. Christopher Rogers joined the Board on 19 March 2025; Penny James joined the Board on 1 February 2024.
Base salary and benefits
For salaried colleagues, the overall pay budget increase for 2025 was set at 2.25%, balancing Group affordability with talent market pressures.
The CEO’s salary of £900,000 has been unchanged since his appointment in 2016. As in previous years, the Committee decided to not implement any
salary increase for Phil Bentley, and as discussed in the 2024 Annual Report and Accounts, his salary will remain frozen until at least 1 April 2027.
The Committee determined that the CFO’s salary would remain at £412,000 from 1 April 2025.
ANNUAL REPORT ON REMUNERATION
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Annual Report and Accounts 2025
DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION
continued
Non-Executive Director fees
Fees are reviewed on a periodic basis and at least every three years. Fees for the Non-Executive Directors were reviewed in 2023, which resulted in
an increase for the Chairman. Following a market review in FY25, it was determined that the Chairman fees would increase to £285,000, core fees for
Non-Executive Directors would increase to £62,000, Senior Independent Director fees to £11,000, Chair of Committee fees to £13,000 and designated
Non-Executive Director for workforce engagement to £10,000. Fee increases were effective from 1 January 2025. Non-Executive Director fees are
summarised in the table below:
From
1 April 2025
1
£’000
From
1 April 2024
£’000
Chairman fees
2
285
270
Non-Executive Director core fees
3
62
52
Additional fees:
Senior Independent Director
11
9
Chair of a Committee
13
10
Designated Non-Executive Director for workforce engagement
10
5
1.
The core fees of £62,000 per annum paid to each Non-Executive Director (including the Chairman) would ordinarily total £434,000 for FY26. Total fees including additional duties
would ordinarily amount to £717,000 for FY26 (£655,000 actual for FY25).
2. The Chairman’s fee is inclusive of the Non-Executive Director core fee and no additional fees are paid to the Chairman where he is Chairman or a member of other Committees.
3. For Non-Executive Directors, individual fees comprise the core fee and additional supplemental fees for the Senior Independent Director, for chairing Committees; and for the
designated Non-Executive Director for workforce engagement, to reflect the greater responsibility and time commitment required.
Annual Bonus Plan (ABP) FY25
Awards in respect of FY25 were considered under the ABP. Phil Bentley was eligible for a maximum bonus opportunity of 200% of base salary. Simon
Kirkpatrick was eligible for a maximum bonus opportunity of 175% of base salary.
The awards were structured by reference to performance against a blend of financial measures (80% of the bonus opportunity) and strategic/individual
objectives (the remaining 20%). At the threshold level of performance for financial targets, 25% of the maximum bonus opportunity is due, with 50% of
the maximum bonus opportunity due at the target level and 100% at the maximum level. Between these points, the out-turn is determined on a linear
sliding scale basis.
The table below shows actual performance and the corresponding out-turns for each measure on a formulaic basis. The Committee then used its
discretion to apply a reduction of 5.0% to the formulaic out-turn. This resulted in bonuses for the CEO and CFO of 81.8% and 83.2% of the maximum.
The following tables set out performance against the financial, strategic and individual measures and targets.
Performance measure
Weighting
Performance range
Performance
Formulaic out-turn
(% of bonus opportunity)
Operating profit
1
27.5% of the award
£215.8m threshold
£227.2m target
£238.6m maximum
£233.1m
20.9% out of 27.5%
Revenue
2
27.5% of the award
£4,701m threshold
£4,948m target
£5,195m maximum
£5,091m
21.7% out of 27.5%
Free cash flow
25% of the award
£87.4m threshold
£112.4m target
£137.4m maximum
£142.8m
25% out of 25%
Strategic objectives – CEO
and CFO
10% of the award
The Committee considered performance against the strategic objectives
set out below and determined that the out-turn was 95% of the maximum
for the CEO and 100% of the maximum for the CFO.
9.5% out of 10% for CEO
10% out of 10% for CFO
Individual objectives –
CEO and CFO
10% of the award
The Committee considered performance against the individual objectives
set out below and determined that the out-turn was 90% of the maximum
for the CEO and 100% of the maximum for the CFO.
9% out of 10% for CEO
10% out of 10% for CFO
Total formulaic out-turn
86.1% of max for CEO
87.6% of max for CFO
Application of
Committee discretion
As noted in the Committee Chair’s statement the Committee determined that, although the formulaic bonus out-turn was
justified, a discretionary reduction of 5% to the bonus out-turn for all participants was appropriate.
Annual bonus out-turn
81.8% of max for CEO
83.2% of max for CFO
1.
Operating profit before Other items which (for the purpose of the ABP performance measure) has been adjusted to exclude the profit uplift associated with the discretionary
reduction of 5% to the bonus out-turn for all participants, as explained on page 125.
2. Revenue including share of joint ventures and associates.
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Strategic report
Governance
Financial statements
Performance against the strategic targets and individual objectives set for Phil Bentley and Simon Kirkpatrick were as follows:
Phil Bentley (CEO)
Strategic objectives
Strategy
• Strong progress on execution of the Facilities Transformation Three-Year Plan and operational
delivery
• Developed Mitie AI strategy including new product development and strategic partnerships
• Three infill acquisitions completed in line with M&A strategy to build new capabilities
• Significant major account wins including EY, Aviva, Aldi, Lidl and DWP security. Improved sales
performance and introduction of specialised sales academy
Individual objectives
Colleagues
• Championed equality, diversity and inclusion (ED&I) throughout the organisation. Mitie was ranked
9th Most Inclusive Company in the Top 50 UK inclusive companies
• Development of MGX to ensure strong internal succession options
Stakeholders
• Successful dialogue with new UK Government on Employment Rights Bill, Justice, Crime, Military and
the Home Office. Building relationships with the Cabinet Office and Crown Commercial Services
• Customer NPS at a record 63pts, a 3pt improvement from the prior year
Simon Kirkpatrick (CFO)
Strategic objectives
Strategy
• Successful implementation of the new organisational structure delivering £25m of margin
enhancement initiatives
• Built a comprehensive programme of investor relations activity in the UK, Europe and
North America
• Implementation of capital allocation framework to effectively balance investor returns with
growth ambitions
• Achieved significant working capital improvements delivering £143m of free cash flow in FY25
Individual objectives
Finance function
• Implemented process efficiencies and cost reductions to reduce of the cost of the Finance function
• Ongoing centralisation of the Finance function including offshoring
• Improved employee engagement within the finance function
Financial control
• Further progress on Mitie controls framework implementing a top down and bottom up control
compliance framework, ahead of Provision 29 implementation
The bonus out-turn is therefore as follows:
Total bonus payable
% of maximum
Total bonus
£’000
Cash
£’000
Deferred shares
£’000
Phil Bentley
81.8% of maximum
1,472
736
736
Simon Kirkpatrick
83.2% of maximum
600
300
300
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Mitie Group plc
Annual Report and Accounts 2025
DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION
continued
Annual Bonus Plan FY26
Financial performance for the FY26 Annual Bonus Plan continues to be based on revenue, profit and free cash flow, with a combined weighting of 80%.
The remaining 20% is based on strategic and individual objectives. However, if none of the financial targets have been achieved, no bonus will be payable
by reference only to the strategic and individual objectives. Details of the targets set will be disclosed in the FY26 remuneration report.
LTIP awards granted in 2024 (subject to audit)
On 30 July 2024, the following conditional LTIP awards were granted to the Executive Directors:
Award
Type
Number
of shares
1
Face value
(£’000)
% of base
salary
Performance
conditions
Performance
period
Phil Bentley
Performance LTIP July 24
Nil-cost
options
5,162,523 £5,400,000
600%
Performance
conditions are
set out in the
table below
Three financial
years ending
31 March 2027
Simon Kirkpatrick
Performance LTIP July 24
Nil-cost
options
689,292
£721,000
175%
Performance
conditions are
set out in the
table below
Three financial
years ending
31 March 2027
1.
Number of shares was calculated based on the average closing middle market price of 104.6p for the five trading days prior to the start of the financial year on 1 April 2024.
The LTIP awards granted on 30 July 2024 are subject to three performance measures: EPS, ROIC and revenue. These awards will vest in July 2027
conditional on performance in respect of the period of three years ending 31 March 2027 against the following measures:
Performance measure
Weighting
Performance range
Vesting of portion of the award
EPS
33.3% of the award
Threshold = 12.3p
Target = 13.7p
Maximum = 15.0p
25%
70%
100%
Straight line vesting between
these points
ROIC
33.3% of the award
Threshold = 22.0%
Target = 24.0%
Maximum = 26.0%
25%
70%
100%
Straight line vesting between
these points
Revenue
33.3% of the award
Threshold = £5,200m
Target = £5,600m
Maximum = £6,000m
25%
70%
100%
Straight line vesting between
these points
The Committee will also have reference to leverage (average debt/EBITDA) and ESG underpins such that if leverage and/or progress against the firm’s ESG
strategy is poor, there is specific discretion to allow the award to be reduced accordingly, including to nil.
Notwithstanding the above, the Committee still has full discretion to determine the performance measures and how the performance ranges applicable to
the award are applied, including discretion to adjust them in the event of changes in IFRS accounting standards, while ensuring that they are not materially
easier or harder to satisfy than the original performance measures and ranges.
LTIP 2025
Simon Kirkpatrick will be granted an LTIP award in 2025 at 175% of base salary. The award will vest in 2028 conditional on performance in respect of the
period of three years ending 31 March 2028 against EPS (33.3% of the award), ROIC (33.3% of the award) and revenue (33.3% of the award). 25% of the
award will vest at threshold performance, 70% of the award will vest at target and 100% of the award will vest at maximum performance, There will be
straight line vesting between these points.
The Committee will also have reference to ESG and leverage during the period, and has the discretion to adjust the award accordingly. Notwithstanding
the above, the Committee still has full discretion to ensure that the level of any vesting out-turn is appropriate based on the overall performance of the
Group and the shareholder and employee experience. Awards are also subject to an additional post-vesting holding period of at least two years.
In the coming months the Board will be considering the strategy for FY28 onwards. The Committee have therefore made the decision to delay setting the
LTIP 2025 targets. The awards will be granted in due course, and targets set before the end of October 2025 to allow for more meaningful three-year
targets aligned with the future strategic plans. Once set, the targets will be disclosed in a stock exchange announcement.
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Governance
Financial statements
Details of June 2022 LTIP award vesting in FY26
The performance period for the June 2022 LTIP awards (in FY23) ended on 31 March 2025 (FY25). The Committee assessed performance against three
performance measures:
Performance measure
Weighting
Performance range
Vesting of portion of the award
Mitie performance Vesting (% of max)
EPS
1
50% of the award
Threshold = 7.1p
Target = 7.9p
Maximum = 8.7p
25%
70%
100%
11.2p
100%
ROIC
1
35% of the award
Threshold = 19.9%
Target = 22.1%
Maximum = 24.3%
25%
70%
100%
24.5%
100%
ESG targets
15% of the award
• Greenhouse gas emission reduction: reduction in revenue
intensity of Scope 1 and 2 emissions to 4.5%; 5% per annum
reduction in Scope 3 emissions
• Fleet zero carbon: 85% of Mitie’s total addressable fleet to be zero
tailpipe emissions
• Employee engagement: improve employee engagement by 4ppt
• Customer engagement: improve Net Promoter Score by 4ppt
• Gender diversity: increase percentage of women holding senior
leadership roles to 35%
• Ethnic diversity: increase percentage of racially diverse colleagues
holding senior leadership roles to 10%
6 out of 6
achieved
100%
1. Earnings per share before Other items, has (for the purpose of the LTIP performance measure) been adjusted to exclude the benefit of share buybacks on the weighted average
number of shares used in the calculation. The profit uplift associated with the discretionary reduction of 5% to the bonus out-turn does not affect the level of vesting for the EPS and
ROIC elements of the award and so has not been adjusted for.
This results in 100% vesting of the 2022 LTIP awards on a formulaic basis.
As is usual, as part of its assessment, the Committee also took into account the wider performance of the Group and the context of both the shareholder
and employee experience. In doing so, it determined that this out-turn was appropriate and no further discretion was applied.
The June 2022 LTIP awards will vest in June 2025 and LTIP awards granted to Executive Directors are subject to a two-year post-vesting holding period.
Furthermore, in-employment and post-employment shareholding guidelines also ensure that the true value delivered to Executive Directors will be
established only in the years ahead and not at 2025 share prices.
Loss of office payments (subject to audit)
There have been no loss of office payments to past Directors during FY25.
Payments to past Directors (subject to audit)
There have been no payments to past Directors during FY25 that relate to their period as a Director.
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DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION
continued
Percentage change in remuneration of Directors and employees
The table below sets out the change in remuneration of the Directors who served on the Board and Mitie’s UK employees, which is considered the most
appropriate group for comparison purposes.
FY20/FY21
FY21/FY22
FY22/FY23
FY23/FY24
FY24/FY25
Salary
2
Benefits
3
Bonus
Salary
2
Benefits
3
Bonus
Salary
Benefits
3
Bonus
Salary
Benefits
3
Bonus
Salary Benefits
3
Bonus
Average pay
based on
Mitie’s UK
employees
1
2.5% (20.8)% (23.9)%
4.1%
5.7%
99.4%
8.1%
(0.5)% 130.6%
5.7%
(0.5)%
(5.8)%
6.0%
1.9%
47.0%
Executive
Directors
Phil Bentley
(12.5)% (25.0)%
N/A
4
14.3%
10.1%
20.9%
0%
83.5%
(38.7)%
0%
8.2%
54.1%
0%
36.2%
14.0%
Simon
Kirkpatrick
5
N/A
N/A
N/A
N/A
N/A
N/A
8.0%
(49.6)% (31.6)%
5.8%
15.2%
67.1%
3.0%
6.8%
21.3%
Non-
Executive
Directors
Derek
Mapp
(12.5)%
–
–
14.3%
–
–
0%
–
–
10.0%
–
–
10.9%
–
–
Christopher
Rogers
6
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Jennifer
Duvalier
(12.5)%
–
–
14.3%
–
–
11.7%
–
–
0%
–
–
6.0%
–
–
Penny
James
7
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
–
–
Chet Patel
8
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0%
–
–
3.8%
–
–
Mary Reilly (12.5)%
–
–
14.3%
–
–
3.3%
–
–
0%
–
–
3.2%
–
–
Salma Shah
8
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
15.1%
–
–
4.8%
–
–
Roger Yates (12.5)%
–
–
14.3%
–
–
3.4%
–
–
0%
–
–
3.3%
–
–
1.
The average UK employee figures reflect the changes in average annual pay for UK employees employed throughout FY24 and FY25 for FY24/25, FY23 and FY24 for FY23/24,
throughout FY22 and FY23 for FY22/23, throughout FY21 and FY22 for FY21/22 and throughout FY20 and FY21 for FY20/21. Employees who were on furlough during the relevant
period have been excluded for the purposes of this analysis.
2. The increases in salary for Directors for FY22 compared with FY21 following the reductions in salary for FY21 compared with FY20 arose from the Non-Executive Directors and
Phil Bentley volunteering 30% reductions in their fees/salaries respectively for five months from 1 April 2020 as part of Mitie’s actions to mitigate the impact of Covid.
3. Includes taxable benefits such as car/car allowance, private medical benefit and private fuel. The increase of the benefit in kind tax on electric vehicles has impacted the benefits in
FY22 and FY23. The car allowance for Phil Bentley has impacted the benefits in FY23, and the move from car allowance to electric vehicle for Simon Kirkpatrick has impacted his
benefits figure. Also includes Phil Bentley’s matching shares element from his Share Incentive Plan (SIP) purchases for January 2022 onwards based on the share price upon purchase.
4. Phil Bentley waived his FY20 bonus.
5. Simon Kirkpatrick was appointed to the Board on 1 April 2021 and therefore there are no appropriate prior year comparatives in terms of Director remuneration for FY21 or FY22.
6. Christopher Rogers joined the Board on 19 March 2025 and therefore there are no prior year comparatives.
7.
Penny James joined the Board on 1 February 2024 and therefore there are no meaningful prior year comparatives.
8. Chet Patel and Salma Shah joined the Board on 1 April 2022 and therefore there are no prior year comparatives for FY21, FY22 or FY23.
CEO pay ratio
The table below sets out the CEO pay ratio in respect of FY25. CEO pay ratio data for previous financial years is provided for reference.
Year
Method
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
FY25
Option B
261:1
240:1
205:1
FY24
1
Option B
713:1
653:1
583:1
FY23
Option B
316:1
289:1
240:1
FY22
Option B
191:1
163:1
142:1
FY21
Option B
151:1
129:1
116:1
FY20
Option B
154:1
139:1
108:1
1.
The FY24 single figure has been updated as a result of reflecting the actual valuation on the closing share price on the first date of vesting of the LTIP and EDP awards.
The pay ratios set out above were calculated using the Group’s FY25 pay data based on employees as at 5 April 2024 under method B. Method B was
selected because it made use of robust, readily available data and did not require additional analysis into the 65,000 UK people employed by the Group.
Total pay was calculated for a sample of employees at each quartile in order to ensure that the three identified employees were suitably representative
of their quartile. A full-time equivalent total pay figure was calculated for each identified employee using the single figure methodology.
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Strategic report
Governance
Financial statements
In line with the Committee’s principles, the majority of the CEO’s reward opportunity is provided through performance-related incentives linked to the
Group’s strategic goals. The CEO pay ratios for FY25 have decreased compared with FY24. This is primarily due to the CEO’s single figure being lower
than the prior year in which the one-off EDP vested. As a Real Living Wage service provider, Mitie continues to increase pay levels among its various
contracts and to invest in competitive pay for all employees. Given that Mitie’s workforce profile is made up of predominantly frontline customer-facing
roles, the employees at each quartile used to compare Mitie’s CEO’s remuneration all operate within a frontline role. The Committee is comfortable that
the pay ratios are consistent with the pay, reward and progression policies at Mitie.
The following table sets out the base salary and total pay figures for the employees identified at each quartile.
Year
Element of pay
25th percentile employee
Median employee
75th percentile employee
FY25
Base salary (FTE)
£24,905
£27,040
£29,902
Total pay (FTE)
£25,000
£27,182
£31,849
Relative spend on pay
The table below shows the total cost of remuneration in the Group, compared with dividends distributed.
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Change
Aggregate employee remuneration
2,523
2,168
16%
Equity dividends
54.5
41.5
31%
Assessing pay and performance
The table below provides a summary of the CEO’s single figure remuneration over the past 10 years, as well as the payout and vesting levels of variable pay
plans in relation to the maximum opportunity. The chart below shows the historical Total Shareholder Return (TSR) performance over the same period,
with Mitie’s TSR restated for the bonus element of the 2020 rights issue. Three indices (FTSE 250, FTSE 350 Support Services and FTSE 350) have been
chosen as they are widely recognised and Mitie has been a member of these indices during the period.
0
50
100
150
200
250
TSR (rebased to 100)
March 15
Mitie
March 16
March 17
March 18
March 19
March 20
March 21
March 22
March 23
March 24
March 25
FTSE 250
FTSE 350
FTSE 350 Support Services
FY16
FY17 Ruby
McGregor-
Smith
1
FY17
Phil
Bentley
1
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
Single figure
remuneration
£2,448,161
£530,628
£479,073 £1,102,549 £2,248,948 £2,029,856
£2,891,623
£3,908,161
£6,814,848 £16,730,160
3
£6,530,415
Annual bonus element
(actual as a % of max)
73%
0%
waived
waived
79%
waived
78.6%
95%
58.2%
89.6%
81.8%
Long-term incentives
element (actual vesting
as a % of max)
69.5%
0%
N/A
N/A
N/A
79.7%
2
50%
100%
90%
91.9%
4
100%
1.
Ruby McGregor-Smith stepped down as Chief Executive Officer on 12 December 2016. Phil Bentley joined the Board on 1 November 2016 and assumed the position of Chief
Executive Officer on 12 December 2016. The figures above include Phil Bentley’s remuneration from 1 November 2016.
2. This figure includes two LTIP awards that vested based on performance to 31 March 2020 at 100% and 53% respectively.
3. The single remuneration figure for FY24 has been adjusted from the figure published in the FY24 remuneration table to reflect the actual valuation of Phil Bentley’s 2021 LTIP award
and EDP award based on the closing share prices on the dates of vesting, being 118.00p and 121.00p respectively.
4. This figure includes the one-off EDP award and the LTIP award that vested based on performance to 31 March 2024 at 92.5% and 90.2% respectively.
136
Mitie Group plc
Annual Report and Accounts 2025
DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION
continued
Share ownership (subject to audit)
Number of shares
owned as at
31 March 2025
1
Value of
target holding
Target
shareholding
2
Percentage of
salary held as at
31 March 2025
Percentage of target
achieved as at
31 March 2025
Compliance with
share ownership
guidelines
Phil Bentley
9,814,790
£1,800,000
1,718,213
1,142%
571%
Achieved
Simon Kirkpatrick
583,579
£824,000
786,560
148%
74%
Not achieved
but compliant
3
1. Includes shares owned by connected persons.
2. Target shareholding has been calculated using the average closing share price for the five business days prior to the end of FY24 (104.76p).
3.
Simon Kirkpatrick was appointed to the Board on 1 April 2021.
Directors’ outstanding share interests (subject to audit)
The following tables (‘Directors’ interests granted under the share schemes’ and ‘Directors’ share ownership’) provide the outstanding share interests for
the Executive Directors:
Directors’ interests granted under the share schemes
Year of grant
Options
outstanding as
at 31 March
2024
9
Granted
in year
Lapsed
in year
Exercised
in year
Options
outstanding
as at
31 March
2025
10
Exercise
price
Earliest
normal
exercise
date
Phil Bentley
June 2019 LTIP
1
2,275,608
–
–
(2,275,608)
–
Nil-cost
June 2022
8
Aug 2020 LTIP
2
4,750,732
–
–
–
4,750,732
Nil-cost
Aug 2023
8
Sep 2021 LTIP
3
2,975,206
–
(291,942)
–
2,683,264
Nil-cost
Sep 2024
8
July 2021 EDP
4
9,520,661
–
(714,050)
–
8,806,611
Nil-cost
July 2024
8
Nov 2021 Save As You Earn (SAYE)
35,714
–
–
(35,714)
–
50.40p
Feb 2025
June 2022 LTIP
5
3,266,787
–
–
–
3,266,787
Nil-cost
June 2025
8
June 2022 DBP
11
1,105,008
–
–
(1,105,008)
–
Nil-cost
June 2024
June 2023 LTIP
6
2,224,969
–
–
–
2,224,969
Nil-cost
June 2026
8
June 2023 DBP
12
440,220
–
–
–
440,220
Nil-cost
June 2025
June 2024 DBP
13
–
551,363
–
–
551,363
Nil-cost
June 2026
July 2024 LTIP
7
–
5,162,523
–
–
5,162,523
Nil-cost
July 2027
8
Simon Kirkpatrick
Sep 2021 LTIP
3
867,768
–
(85,150)
–
782,618
Nil-cost
Sep 2024
8
July 2021 EDP
4
1,504,132
–
(112,810)
–
1,391,322
Nil-cost
July 2024
8
Sep 2020 SAYE
46,187
–
–
(46,187)
–
27.28p
Dec 2023
June 2022 LTIP
5
1,029,038
–
–
–
1,029,038
Nil-cost
June 2025
8
June 2022 DBP
11
349,151
–
–
(349,151)
–
Nil-cost
June 2024
June 2023 LTIP
6
865,265
–
–
–
865,265
Nil-cost
June 2026
8
June 2023 DBP
12
155,386
–
–
–
155,386
Nil-cost
June 2025
June 2024 DBP
13
–
211,025
–
–
211,025
Nil-cost
June 2026
July 2024 LTIP
7
–
689,292
–
–
689,292
Nil-cost
July 2027
8
1.
The performance criteria applicable to the 2019 LTIP awards were disclosed on page 125 of the FY22 remuneration report.
2. The performance criteria applicable to the 2020 LTIP awards were disclosed on pages 108 and 109 of the FY21 remuneration report.
3. The performance criteria applicable to the 2021 LTIP awards were disclosed on page 123 of the FY22 remuneration report.
4. The performance criteria applicable to the 2021 EDP awards were disclosed on page 124 of the FY22 remuneration report.
5. The performance criteria applicable to the 2022 LTIP awards were disclosed on page 124 of the FY23 remuneration report.
6. The performance criteria applicable to the 2023 LTIP awards were disclosed on page 135 of the FY24 remuneration report.
7. The performance criteria applicable to the 2024 LTIP awards are disclosed on page 132 of this FY25 remuneration report.
8. Awards are subject to an additional two-year holding period.
9.
For all awards prior to August 2020, the number of options has been adjusted for the bonus element of the 2020 rights issue (x1.93426825).
10. The closing market price of the Company’s shares as at 31 March 2025 was 114.8p. The highest and lowest closing market prices during FY25 were 124.8p and 105.4p respectively.
11. The Deferred Bonus Plan award on 16 June 2022 represents the deferral of 50% of the bonus awarded for FY22, with the number of shares based on the lowest closing middle
market price for the five trading days before the date of grant (61.9p).
12. The Deferred Bonus Plan award on 16 June 2023 represents the deferral of 50% of the bonus awarded for FY23, with the number of shares based on the lowest closing middle
market price for the five trading days before the date of grant (95.2p).
13. The Deferred Bonus Plan award on 14 June 2024 represents the deferral of 50% of the bonus awarded for FY24, with the number of shares based on the lowest closing middle
market price for the five trading days before the date of grant (117.13p).
137
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Directors’ share ownership
Number of ordinary shares beneficially
owned as at 31 March 2025
(or date of cessation if earlier)
1
Number of ordinary shares beneficially
owned as at 31 March 2024
(or date of cessation if earlier)
Executive Directors
Phil Bentley
18,947,847
13,221,419
Simon Kirkpatrick
1,929,963
537,392
Non-Executive Directors
Derek Mapp
687,617
653,189
Christopher Rogers
2
–
–
Jennifer Duvalier
95,665
95,665
Penny James
47,091
0
Chet Patel
100,864
72,083
Mary Reilly
124,441
117,039
Salma Shah
25,233
14,738
Roger Yates
160,000
160,000
1.
The number of shares beneficially owned since 31 March 2025 has changed due to planned purchases that took place on 1 April 2025 for Non-Executive Directors. The revised
figures are as follows: Derek Mapp – 696,188 shares, Mary Reilly – 126,511 shares, and Salma Shah – 27,959 shares. In addition, Phil Bentley made two SIP transactions, one on 15 April
where an additional 188 shares were acquired and one on 15 May where an additional 151 shares were acquired.
2. Christopher Rogers joined the Board on 19 March 2025.
There have been no changes, other than those in Note 1 above, between 1 April 2025 and 3 June 2025, the last practicable date prior to the date of
this report.
Share dilution
The Company manages dilution rates within the standard guidelines of 10% of issued ordinary share capital in respect of all employee schemes and 5% in
respect of discretionary schemes. In calculating compliance with these guidelines, the Company allocates available headroom on a 10-year flat line basis,
making adjustments for projected lapse rates and projected increases in issued share capital.
LTIP, EDP and deferred bonus awards are satisfied through the market purchase of shares held by the Mitie Group plc Employee Benefit Trust. The
potential dilution of the Company’s issued share capital is set out below in respect of all awards granted in the last 10 years under the Company’s equity-
based incentive schemes which are being satisfied through the allotment of new shares or treasury shares.
Share dilution at 31 March 2025
Dilution
2025
Dilution
2024
All share plans (maximum 10%)
6.4%
6.0%
Discretionary share plans (maximum 5%)
2.7%
0.5%
Shareholder voting
Mitie remains committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes against
resolutions in relation to Directors’ remuneration, the Group seeks to understand the reasons for any such vote, and will detail here any actions in
response to it.
At the Company’s 2024 AGM, a resolution was passed to approve the 2024 Directors’ remuneration report and a separate resolution was passed to
approve the 2024 Directors’ remuneration policy. The results of the votes on these resolutions were as follows:
Number of votes
Votes in favour
Votes against
Withheld1
2024 Directors’ remuneration policy – 2024 AGM
710.1m
143.9m
100.0m
83.1%
16.9%
2024 Directors’ remuneration report – 2024 AGM
852.1m
101.1m
0.7m
89.4%
10.6%
1.
Votes withheld are not counted in the calculation of the proportion of votes for or against a resolution.
Remuneration Committee and its advisors
The Remuneration Committee seeks and considers advice from independent remuneration advisors where appropriate.
Deloitte LLP have acted as independent remuneration advisors to Mitie since September 2017. The advisors attended Committee meetings and provided
advice and analysis of executive remuneration. During their tenure, the advisors have provided no other services to the Company (save in relation to
services connected to executive remuneration and share plans) and have also complied with the Code of Conduct for Remuneration Consultants. The
advisors’ total cost of advice to the Committee for the year was £33,425 (such fees being charged in accordance with their standard terms of business).
The Committee specifically considered the position of the advisors and was satisfied that the advice the Committee received from them was objective and
independent, given that they provided no other services to the Company.
138
Mitie Group plc
Annual Report and Accounts 2025
The Directors present their Annual Report, together with the audited financial statements of the
Company and the Group, for the year ended 31 March 2025 as required by the Companies Act 2006.
The corporate governance statement required under the FCA’s Disclosure Guidance and
Transparency Rule 7.2 requires a corporate governance statement in the Directors’ report to
include certain information. You can find information that fulfils these requirements in this
Directors’ report, the corporate governance report, the Board Committee reports and the
Directors’ remuneration report.
The Directors’ report required under the Companies Act 2006 comprises the corporate governance
statement on pages 90 to 112. The corporate governance statement fulfils the requirement under
Disclosure Guidance and Transparency Rules of the Financial Conduct Authority (DTR) 7.2.1. For the
purposes of DTR 4.1.8R, the management report for the year ended 31 March 2025 comprises the
Strategic report and this Directors’ report.
Cross-references
Employee engagement
Details of how Mitie encourages employee involvement can be found in
the Strategic report on pages 68 to 74.
Equality, diversity and
inclusion (including
employment of disabled
persons)
Details of Mitie’s commitment to equality, diversity and inclusion,
including in relation to the employment of disabled persons, can be
found on pages 68 to 74.
Business relationships
Details of how the Directors have had regard to the need to foster
Mitie’s business relationships with suppliers, customers and others,
and the effect of this on the principal decisions taken by the Company
during the year can be found in the Strategic report on pages 39 to 41.
Important events since
FY24
Details of important events affecting the Group which have taken place
since 31 March 2024, can be found on pages 22 to 27.
Greenhouse gas emissions,
energy consumption and
efficiency
Details of greenhouse gas emissions, energy consumption and efficiency
can be found in the Strategic report on pages 63 to 67.
Environmental data
Environmental data can be found in the Strategic report on pages 63
to 67.
The information required to be disclosed by Listing Rule 6.6.1 can be found in the following locations:
Details of any long-term incentive schemes
Directors’ remuneration report on pages 124
to 137 and Note 30 to the consolidated
financial statements
Details of any arrangements under which a
Director has waived or agreed to waive any
emoluments or future emoluments
Directors’ remuneration report on pages 124
to 137
Shareholder waiver of dividends and
future dividends
Directors’ report on page 138
No shareholder is considered a controlling shareholder as defined in the Financial Conduct
Authority Handbook.
The remaining disclosures required by Listing Rule 6.6.1 are not applicable to the Company.
Principal Group activities
The Company is the holding company of the
Group and its principal activity is to provide
management services to the Group. The
Group’s activities are focused on the provision
of strategic outsourcing services, further
details of which can be found on page 5 of
the Strategic report.
The Company does not have any branches
registered overseas, but certain subsidiaries
of the Company have registrations/branches
across the United Kingdom, Republic of Ireland,
Guernsey, Jersey, Italy, Isle of Man, Ascension
Island, Austria, Belgium, Cyprus, Czech Republic,
Denmark, Falkland Islands, Finland, France,
Germany, Ghana, Gibraltar, Hungary, Kenya,
Luxembourg, the Netherlands, Norway, Nigeria,
Oman, Poland, Saudi Arabia, Slovakia, Spain,
Switzerland and the United Arab Emirates.
Details of the Company’s subsidiaries are
set out in Note 35 to the consolidated
financial statements.
Given the nature of its activities, no material
research and development work is carried out
by the Group.
The Board’s view on the likely future
development of the Group is set out in the
Strategic report on pages 22 to 27.
Financial results
A detailed commentary on the operational and
financial results of the Group for the year is
contained within the Strategic report, including
the Finance review on pages 45 to 49.
The Group’s profit before tax for the year
ended 31 March 2025 was £145.4m (FY24:
£156.3m).
Dividends
An interim dividend of 1.3p per ordinary share
(FY24: 1.0p) with a total value of £16.0m
(FY24: £12.9m) was paid to shareholders on
4 February 2025.
The Directors recommend a final dividend of
3.0p per ordinary share (FY24: 3.0p) with a total
value of £36.7m (FY24: £38.5m) based upon the
number of shares in issue (excluding treasury
shares and shares held by the Employee Benefit
Trust) as at 3 June 2025. Subject to approval at
the 2025 AGM, the final dividend will be paid on
4 August 2025 to shareholders on the register
as at close of business on 20 June 2025.
Total dividends per ordinary share for the year
ended 31 March 2025 will be 4.3p (FY24: 4.0p).
As at 31 March 2025, the Company had
distributable reserves of £261.7m (FY24:
£186.3m).
Mitie operates a Dividend Re-Investment Plan
(DRIP) which allows shareholders to use their
cash dividend to purchase additional ordinary
shares. Further details of the operation of the
DRIP and how to apply are available from
Mitie’s Registrar, MUFG Corporate Markets.
The trustees of the Company’s Employee
Benefit Trust agreed to waive dividends payable
on ordinary shares held by the Trust in respect
of the year ended 31 March 2025.
In accordance with Section 726 of the
Companies Act 2006, no dividends are paid
on ordinary shares held in treasury.
Directors
Full biographical details of the current Directors,
including Committee membership and external
appointments, are set out on pages 92 to 94.
Director independence
The Board considered the independence of
all Non-Executive Directors during FY25
and determined that, as at 31 March 2025,
all Non-Executive Directors continued to
be independent in mind and judgement, and
free from any material relationship that could
interfere with their ability to discharge their
duties effectively.
DIRECTORS’ REPORT
139
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Indemnification of Directors
and insurance
The Directors and the Company Secretary
benefit from an indemnity provision under the
Company’s Articles of Association (the Articles).
Additionally, all Directors and the Chief Legal
Officer & Company Secretary have been
granted a qualifying third-party indemnity
provision (as defined by Section 234 of the
Companies Act 2006) which has been in force
throughout FY25 and remains in force as at the
date of this report.
Certain colleagues who are directors of a
subsidiary of the Company have also been
granted a qualifying third-party indemnity
provision which has been in force throughout
FY25 and remains in force as at the date of
this report.
The Group maintains Directors’ and Officers’
liability insurance, which provides appropriate
cover for any legal action brought against
the Group’s Directors and/or Officers. The
Group also maintains pension trustees’ liability
insurance, which provides cover in respect
of legal action brought against the trustees of
Mitie’s pension schemes.
Share capital
The Group is financed through equity share
capital and debt instruments. Details of the
Company’s share capital are given in Note 27
to the consolidated financial statements.
Details of the Group’s debt instruments are
set out in Note 23 to the consolidated financial
statements. Throughout FY25, the Company’s
issued share capital was publicly listed on the
London Stock Exchange and it remains so as at
the date of this report.
Financial instruments
The Group’s financial instruments include bank
borrowing facilities, lease liabilities, overdrafts
and US private placement loan notes.
The principal objective of these instruments is
to raise funds for general corporate purposes
and to manage financial risk. Further details of
these instruments are given in Note 24 to the
consolidated financial statements.
The Company has a single class of shares divided
into ordinary shares of 2.5 pence each (ordinary
shares). The holders of ordinary shares are
entitled to one vote each per share at general
meetings and have no right to any fixed income.
In accordance with the Articles, holders of
ordinary shares are entitled to participate in any
dividends pro rata to their holding. The Board
may propose and pay interim dividends and
recommend a final dividend to shareholders
for approval at an AGM. A final dividend may
be declared by the shareholders at an AGM
by ordinary resolution, but such dividend
cannot exceed the amount recommended
by the Board.
Restrictions on the transfer of shares
The Company is not aware of any agreements
between holders of its securities which may
result in restrictions on the transfer of securities
or voting rights. No person has any special rights
of control over the Company’s share capital.
There are no specific restrictions on the size of
any shareholding or on the transfer of shares,
which are both governed by the provisions of
the Articles.
Under Mitie’s Rules on Share Dealing, persons
with access to certain confidential Company
information or inside information are required
to follow a clearance to deal procedure and may
be restricted from dealing in the Company’s
shares. Persons subject to these requirements
are notified individually and appropriately
informed of the rules.
Significant interests in the Company’s
share capital
As at 31 March 2025, insofar as it is known
to the Company by virtue of notifications
made pursuant to the Companies Act 2006
and/or Chapter 5 of the Disclosure Guidance
and Transparency Rules or otherwise,
the following persons were, directly or
indirectly, interested (within the meaning of
the Companies Act 2006) in 3% or more of
the Company’s issued share capital (being
the threshold for notification that applies to
shareholders pursuant to Chapter 5 of the
Disclosure Guidance and Transparency Rules):
Number of ordinary shares
% of voting rights
Silchester International Investors LLP
104,875,205
8.30%
Fidelity International Limited
94,719,418
7.50%
Fidelity Management & Research
88,463,137
7.00%
JPMorgan Asset Management
83,671,384
6.60%
Oasis Management Company
75,300,000
6.00%
The Vanguard Group
66,517,371
5.30%
Heronbridge Investment Management
40,742,919
3.20%
BlackRock Investment Management (UK) Ltd
40,626,384
3.20%
Changes that have been notified to the Company pursuant to Chapter 5 of the Disclosure Guidance and Transparency Rules between 31 March 2025 and
3 June 2025, the latest practicable date prior to the date of this report, are set out below.
Number of ordinary shares
% of voting rights
Apex Financial Services (Trust Company) Limited
41,381,462
3.29%
Apex Financial Services (Trust Company) Limited
33,986,624
2.70%
Directors’ interests in the Company’s share capital are set out in the Directors’ remuneration report on pages 136 and 137.
140
Mitie Group plc
Annual Report and Accounts 2025
DIRECTORS’ REPORT
continued
2025 Annual General Meeting
Mitie’s 2025 AGM will be held on 22 July 2025
at 11.30am at Level 12, The Shard, 32 London
Bridge Street, London SE1 9SG, and will be
viewable via a webcast.
The Board recognises that the AGM is an
important event in the Company’s corporate
calendar, providing an opportunity to engage
with shareholders. Shareholders will be able to
attend the meeting in person to vote and ask
questions or view the meeting via a live webcast.
Shareholders can also ask questions via email
to [email protected]. Instructions on
how to register and join the webcast are set out
in the Notice of AGM.
The Board also encourages shareholders to
appoint the Chairman of the AGM as their
proxy and provide voting instructions in
advance of the meeting in accordance with the
instructions set out in the Notice of AGM.
Powers of the Company to issue or
buy back its own shares
At the AGM held on 23 July 2024, the
Company’s shareholders authorised:
• The Directors to allot ordinary shares up to an
aggregate nominal amount of £3,325,810.14,
equating to 10% of the issued share capital of
the Company (excluding treasury shares) as at
4 June 2024
• The Company to make market purchases of
its own shares up to a total of 133,032,406
ordinary shares, equating to 10% of the issued
share capital of the Company (excluding
treasury shares) as at 4 June 2024
• These authorities will expire on the earlier
date of 30 September 2025 and the conclusion
of the 2025 AGM. A renewal of these
authorities will be put to shareholders at the
2025 AGM. Further details are included in the
notes to the Notice of AGM
During FY25, the Company utilised the above
authorities to undertake market purchases
in relation to the share buyback programme
announced on 15 April 2024 of 67,559,678
ordinary shares (representing 5.36% of the
issued share capital of the Company (including
treasury shares) as at 31 March 2025). The
aggregate nominal value of the shares purchased
was £1,957,465 and the total aggregate amount
paid was £78,298,601 (excluding expenses). No
new shares were allotted under this authority
in FY25.
During FY25, the Company utilised the
authorities granted at the AGM held on 25 July
2023 to undertake market purchases in relation
to the share buyback programme announced
on 15 April 2024 of 21,308,921 ordinary shares
(representing 1.69% of the issued share capital
of the Company (including treasury shares)
as at 31 March 2025). The aggregate nominal
value of the shares purchased was £632,535
and the total aggregate amount paid was
£25,301,399 (excluding expenses). Of these
shares, 11,266,736 were transferred into
treasury and 10,042,185 were cancelled.
No new shares were allotted under this
authority in FY25.
During FY25, the Employee Benefit Trust
acquired 11.7m ordinary shares through market
purchases (FY24: 21.3m shares) and distributed
24.8m shares to satisfy awards under Mitie
Group plc’s Long Term Incentive Plan, Deferred
Bonus Plan, Conditional Share Plan and to the
SIP Trust.
The total number of ordinary shares held by
the Company in treasury as at 31 March 2025
was 4,454,307, representing 0.35% of the issued
share capital of the Company (FY24: 5,125,595,
representing 0.38% of the issued share capital of
the Company). During FY25, 10,738,024 shares
were distributed from treasury in connection
with the exercise of options for aggregate
consideration of £4,772,658 by colleagues
participating in the Mitie Group plc 2011 SAYE
scheme. In March 2025, 1.2m shares held in
treasury were withdrawn and cancelled.
Articles of Association
Amendments to the Articles must be approved
by at least 75% of those voting in person or by
proxy at a general meeting of the Company.
The Articles are available at www.mitie.com/
investors/corporate-governance.
Significant agreements – change
of control
There are a number of agreements with
provisions that take effect, alter or terminate
upon a change of control of the Company
(including following a takeover bid), such as
bank facility agreements and other financial
arrangements and employee share scheme
rules. None of these are considered to be
significant in terms of their likely impact on the
normal course of business of the Group. The
Directors are not aware of any agreements
between the Company and its Directors or
employees that provide for compensation for
loss of office or employment that occurs solely
because of a change of control.
Disclosure of information to
the auditor
Each Director in office as at the date of this
Directors’ report confirms that:
• So far as he/she is aware, there is no relevant
audit information of which the Company’s
auditor is unaware
• He/she has taken all the steps that he/
she ought to have taken as a Director
to make himself/herself aware of any
relevant audit information and to establish
that the Company’s auditor is aware of
that information
This confirmation is given and should be
interpreted in accordance with Section 418
of the Companies Act 2006.
Post balance sheet events
There have been no material events since the
balance sheet date that require adjustment
or disclosure.
By order of the Board
Peter Dickinson
Chief Legal Officer & Company Secretary
4 June 2025
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Strategic report
Governance
Financial statements
The Directors are responsible for preparing
the Annual Report and 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 UK-adopted International
Accounting Standards and applicable law
and have elected to prepare the Company
financial statements in accordance with UK
Accounting Standards and applicable law,
including Financial Reporting Standard 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 the Group’s profit or loss for the period.
In preparing these financial statements, the
Directors are required to:
• Select suitable accounting policies and apply
them consistently
• Make judgements and accounting estimates
that are reasonable, relevant, reliable
and prudent
• For the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted International
Accounting Standards, subject to any material
departures disclosed and explained in the
financial statements
• For the Company financial statements, state
whether applicable UK Accounting Standards
have been followed, subject to any material
departures disclosed and explained in the
financial statements
• Prepare the financial statements on a going
concern basis unless it is inappropriate to
presume that the Group or Company will
continue in business
• Prepare a Directors’ report, 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 Group and 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, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the Group’s position and
performance, business model and strategy.
Directors’ responsibilities pursuant to
DTR4.1.12
The Directors confirm that to the best of
their knowledge:
• The Group financial statements, prepared
in accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial position
and profit or loss of the Company and the
undertakings included in the consolidation
taken as a whole
• The management report includes a fair review
of the development and performance of the
business and the position of the Company and
the undertakings included in the consolidation
taken as a whole, together with a description
of the principal risks and uncertainties that
they face
Website publication
The Directors are responsible for ensuring
that 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 UK 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.
By order of the Board
Phil Bentley
Chief Executive
4 June 2025
Simon Kirkpatrick
Chief Financial Officer
4 June 2025
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
in respect of the Annual Report, remuneration report and financial statements
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Financial statements
143
Independent auditor’s report to the members of Mitie Group plc
150
Consolidated income statement
151
Consolidated statement of comprehensive income
152
Consolidated statement of financial position
154
Consolidated statement of changes in equity
155
Consolidated statement of cash flows
157
Notes to the consolidated financial statements
207
Company statement of financial position
208
Company statement of changes in equity
209
Notes to the Company financial statements
213
Appendix – Alternative Performance Measures
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Strategic report
Governance
Financial statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MITIE GROUP PLC
Opinion on the financial statements
In our opinion:
• The financial statements give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 31 March 2025 and
of the Group’s profit for the year then ended
• The Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards
• The Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice
• The financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements of Mitie Group plc (the
Parent Company) and its subsidiaries (the Group) for the year ended
31 March 2025 which comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated
statement of financial position, the company statement of financial
position, the consolidated statement of changes in equity, the company
statement of changes in equity, the consolidated statement of cash flows
and notes to the financial statements, including material accounting policy
information. The financial reporting framework that has been applied
in the preparation of the Group financial statements is applicable law
and UK adopted International Accounting Standards (IAS). The financial
reporting framework that has been applied in the preparation of the
Parent Company financial statements is applicable law and United
Kingdom Accounting Standards, including Financial Reporting Standard
101 –
Reduced Disclosure Framework
(United Kingdom Generally Accepted
Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for
the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion. Our audit opinion is consistent with the
additional report to the Audit Committee.
Independence
Following the recommendation of the Audit Committee, we were
appointed by the Board of Directors on 19 September 2017 to audit the
financial statements for the year ended 31 March 2018 and subsequent
financial periods. The period of total uninterrupted engagement including
retenders and reappointments is eight years, covering the years ended
31 March 2018 to 31 March 2025. We remain independent of the Group
and the Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including
the Financial Reporting Council's Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. The non-audit services prohibited by
that standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group's and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
• We considered the principal risks identified by the Directors that are
associated with the Group’s customers, suppliers, workforce and wider
economic and macro-level risks. We assessed these against our own
views of the risks, based on our understanding of the business and its
performance in the year ended 31 March 2025.
• We obtained the Directors’ cash flow forecasts covering the period to
30 September 2026 and challenged the key assumptions in respect of
revenue growth, gross profit margins, and cash generation with reference
to our knowledge of the business, its historical performance and current
results. We evaluated whether the Directors had considered appropriate
risks and uncertainties in the preparation of the cash flow forecasts,
based on our assessment of the risks and issues relating to the business.
• We tested the integrity of the forecast model and assessed its
consistency with approved budgets.
• We obtained and critically reviewed the Directors’ reverse stress test
analysis, performed to determine the point at which:
– A downturn in revenues;
– A deterioration in gross margin; or
– An increase in costs
would result in a covenant breach or liquidity shortfall and without
further mitigation, would potentially impact the going concern of the
business. Our consideration included an assessment of whether the
reverse stress test analysis appropriately considered the key risks and
issues to which the models were sensitive, and we challenged the nature
and feasibility of the mitigating actions available to the business, as
identified by the Directors.
• We challenged the Directors’ conclusion that the likelihood of the
downside sensitivities required for either a covenant breach or liquidity
shortfall was remote, by reference to our knowledge of the business and
the wider environment in which it operates. This included an assessment
of reverse stress test sensitivities and current trading performance.
• We obtained the extension agreement in respect of the Revolving
Credit Facility utilised by the Group during the year, to check its terms
and covenants.
• We assessed covenants at year end to check that the Group was
compliant under the terms of the financing agreements.
• We evaluated forecast covenant compliance and headroom
calculations with reference to the covenants stated in the relevant
financing agreements.
• We reviewed the adequacy and completeness of disclosures in the
financial statements in respect of going concern, in line with the
Directors’ going concern assessment.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group's and the Parent
Company’s ability to continue as a going concern for a period of at least
12 months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the
UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the financial
statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect
to going concern are described in the relevant sections of this report.
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Overview
2025
2024
Key audit matters
1) Appropriateness of revenue recognition, accrued income and deferred income in relation to
project works revenue, and the existence and accuracy of aged accrued income
2) Contract-specific provision of £10.8m relating to a significant liability risk on a certain contract
(see Note 20 and Note 2)
3) Accounting for acquisition of Landmarc Support Services Limited (Landmarc)
Accounting for the acquisition of Landmarc is no longer considered a key audit matter for the year ended 31 March 2025, as it
related to the acquisition accounting, which was specific to the prior year ended 31 March 2024.
Materiality
Group financial statements as a whole
£9.2m (2024: £8.6m) based on 5% (2024: 5%) of profit before tax and Other items, excluding amortisation and net finance costs.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group
and its environment, the applicable financial reporting framework and
the Group’s system of internal control. On the basis of this, we identified
and assessed the risks of material misstatement of the Group financial
statements including with respect to the consolidation process. We then
applied professional judgement to focus our audit procedures on the
areas that posed the greatest risks to the Group financial statements.
We continually assessed risks throughout our audit, revising the risks
where necessary, with the aim of reducing the Group risk of material
misstatement to an acceptable level, in order to provide a basis for
our opinion.
Components in scope
The Group comprised 101 legal entities as at the year end, which
are grouped into divisions based on the nature of their operations.
Although each division includes multiple legal entities, each division has
its own distinct management structure, controls and IT systems, and
common business characteristics. Group management, and ultimately
the Board, monitor the position of the business on a divisional basis.
A consolidation of financial results occurs at the divisional level.
Based on our scoping assessment, we identified eight components,
which are considered unique due to their specific characteristics.
These components are primarily based on the divisions mentioned
above; however, in certain instances, further disaggregation was deemed
appropriate due to factors such as separate management teams or legal
entities located in different jurisdictions. These factors led us to consider
them as separate components for the purposes of the Group audit.
The components identified the purposes of the Group audit are detailed
in the table below.
For components in scope, we used a combination of risk assessment
procedures and further audit procedures to obtain sufficient appropriate
evidence. These further audit procedures included:
• Procedures on the entire financial information of the component,
including performing substantive procedures and tests for operating
effectiveness of controls for certain IT systems
• Procedures on one or more classes of transactions, account balances
or disclosures
Procedures performed at the component level
We performed procedures to respond to Group risks of material misstatement at the component level that included the following.
Component
Component name
Entity/segment name
Group Audit scope
1
Mitie Group plc
Mitie Group plc (Parent Company)
Statutory audit and procedures on one or
more classes of transactions, account balances
or disclosures
2
Business Services – United
Kingdom
Businesses comprising the Business Services
segment in Note 3 excluding the legal entities
registered in Spain
Procedures on the entire financial information of
the component
3
Business Services – Spain
Legal entities registered in Spain
Risk assessment procedures
4
Technical Services – excluding
Advisory, Design & Build
(‘AD&B’) business unit
Businesses comprising the Technical Services
segment in Note 3 excluding AD&B Projects and
Landmarc
Procedures on the entire financial information of
the component
5
Technical Services – AD&B
business unit
Businesses comprising the AD&B business unit
within Technical Services
Procedures on one or more classes of transactions,
account balances or disclosures
6
Technical Services – Landmarc
Landmarc
Statutory audit and procedures on the entire
financial information of the component
7
Communities
Businesses comprising the Communities segment
in Note 3
Procedures on the entire financial information of
the component
8
Corporate Centre
Businesses comprising the Corporate Centre
Procedures on one or more classes of transactions,
account balances or disclosures
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MITIE GROUP PLC
continued
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Financial statements
Disaggregation
The financial information relating to Group risks of material misstatement
is highly disaggregated across the Group. We performed procedures at the
component level in relation to these risks in order to obtain comfort over
the residual population of Group balances.
Locations
Mitie Group Plc’s operations are primarily focused in the United Kingdom,
spread over a number of different geographical locations. We visited all the
components that are located in the United Kingdom. The risk assessment
performed over the entities in Spain has been performed remotely by the
Group Engagement team.
In addition, our teams worked remotely, holding calls and video
conferences with Mitie Group Plc, and with digital information obtained
from Mitie Group plc.
Changes from the prior year
Following the implementation of ISA (UK) 600 (Revised), which outlines
the audit of group financial statements, the Group audit approach was
updated accordingly. This included revisiting and revising the identification
of components within the Group, where relevant, as described in the
table above.
Working with other auditors
As Group auditor, we determined the components at which audit work
was performed, together with the resources needed to perform this work.
These resources included component auditors, all of which were from
BDO LLP, who formed part of the Group engagement team as reported
above. As Group auditor we are solely responsible for expressing an
opinion on the financial statements.
In working with these component auditors, we held discussions with
component audit teams on the significant areas of the Group audit relevant
to the components based on our assessment of the Group risks of material
misstatement. We issued our Group audit instructions to component
auditors on the nature and extent of their participation and role in the
Group audit, and on the Group risks of material misstatement.
We directed, supervised and reviewed the component auditors’ work.
This included holding meetings and calls during various phases of the audit,
reviewing component auditor documentation in person and remotely, and
evaluating the appropriateness of the audit procedures performed and the
results thereof.
Climate change
Our work on the assessment of potential impacts on climate-related risks
on the Group’s operations and financial statements included:
• Enquiries and challenge of management to understand the actions they
have taken to identify climate-related risks and their potential impacts
on the financial statements and adequately disclose climate-related risks
within the Annual Report and Accounts
• Our own qualitative risk assessment taking into consideration the
sector in which the Group operates and how climate change affects
this particular sector
• Review of the minutes of Board and Audit Committee meetings and
other papers related to climate change, and performed a risk assessment
as to how the impact of the Group’s commitment as set out in the
Annual Report and Accounts may affect the financial statements and
our audit
We challenged the extent to which climate-related considerations,
including the expected cash flows from the initiatives and commitments
have been reflected, where appropriate, in management’s going concern
assessment and viability assessment.
We also assessed the consistency of management’s disclosures included as
statutory Other Information with the financial statements and with our
knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify any Key
Audit Matters that were materially affected by climate-related risks.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MITIE GROUP PLC
continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had
the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key audit matter
How the scope of our audit addressed the key audit matter
Appropriateness of
revenue recognition,
accrued income and
deferred income in
relation to project works
and the existence and
accuracy of aged accrued
income
Refer to Note 1(b) –
Revenue recognition
policy, project works,
accrued and deferred
income within Material
accounting policies.
The Group undertakes contracts
for specific projects where
contractual obligations span more
than one financial period. There
is a risk that revenue is incorrectly
recognised due to inaccurate
measurement of performance to
date and uncertainties dependent
on the outcome of future events.
We consider this risk to specifically
relate to fixed price, input-based
projects that are open at year
end, where revenue has been
recognised during the year, or
accrued/deferred income exists
above an agreed threshold. In such
cases, management judgement
and estimation are required
to determine forecast costs
to complete.
The Group also holds material
levels of aged accrued income, for
which there is a risk that revenue
has not been appropriately
recognised in respect of
accrued income.
We completed the following audit procedures in relation to revenue recognition:
• Agreed journals recorded within revenue, selected using specific risk criteria, to
appropriate supporting evidence
• For contracts where revenue is recognised over time, and meeting the criteria as
outlined in the Key Audit Matter, we critically assessed the appropriateness of the
methodology applied by management to recognise income over time using the
input method. We tested the accuracy of the revenue recognised by evaluating
management’s process for capturing costs incurred to date and forecast costs to
complete, for contracts where income is recognised using the input method
• For projects completed post year end, we obtained post-year-end completion
evidence and assessed the percentage of completion as at year end based on the
total project costs. For ongoing projects not completed post year end, we held
discussions with the relevant project managers to understand the project status,
compared the costs incurred in April 2025 to those forecast as at year end, and
where subcontractors were involved, we checked the forecast costs to complete
against contracts or purchase order
• Reviewed the project performance after year end and/or held discussions with the
project managers to assess any potential contract variations
• Tested a sample of accrued income balances over three months old at year end to
supporting documentation to check whether revenue had been recognised in the
appropriate period. Procedures included: reviewing contractual terms, agreeing to
proof and timing of service delivery, checking customer acceptance and subsequent
invoicing, and reviewing relevant customer correspondence in respect of the specific
accrued income balances
• Verified applications for payment and cash received for sales invoices recognised in
the year
Key observations
Based on the procedures performed, we did not identify any matters to suggest that
the revenue recognised, accrued income and deferred income in relation to Projects
revenue and the existence and accuracy of aged accrued income is not appropriate.
Contract-specific
provision of £10.8m
relating to a significant
liability risk on a
certain contract
Refer to Note 2 –
Contract-specific cost
provisions within critical
judgements in applying
the Group’s accounting
policies and Note 20 –
Contract-specific costs
within provisions for
further details.
Material contract provisions are
recognised within the Communities
component. Significant judgement
is required to determine the
extent of the Group’s liability,
and estimation is involved in
determining the likely costs to
resolve these claims.
The disclosures provided and
the estimated range of possible
outcomes represent key areas
of management judgement
and estimation. Due to this, we
considered a certain contract-
specific provision to be a key
audit matter.
We completed the following audit procedures in relation to contract-specific
provisions within the Communities component:
• Obtained an understanding of the matter through review of Audit Committee
minutes where the provision was discussed, and further discussions with senior
finance and non-finance management, the Group’s internal legal counsel and
external legal counsel where applicable
• Reviewed relevant communications with third parties and management's experts
• Critically evaluated the capabilities, competence, and objectivity of management’s
external experts
• Critically assessed management’s evaluations of the claim and challenged the key
assumptions used in the assessment
• Developed independent ranges and point estimates to consider the individual and
aggregate differences between those and management’s positions
• Reviewed the adequacy of the Group’s disclosures in respect of the provision and
their compliance with the requirements of IAS 37 –
Provisions, Contingent Liabilities
and Contingent Assets
Key observations
Based on the procedures performed, we did not identify any matters to suggest that
Management’s judgements and estimates in assessing contract-specific provisions are
not appropriate.
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Governance
Financial statements
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance
materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as
we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements
Parent Company financial statements
2025
£m
2024
£m
2025
£m
2024
£m
Materiality
9.2
8.6
8.7
6.0
Basis for determining materiality
5% of profit before tax and Other Items, excluding
amortisation and net finance costs
95% of Group
materiality
70% of Group
materiality
Rationale for the benchmark applied
We consider this to be the most appropriate
threshold since this removes the impact of certain
one-off items on the profit of the Group.
The Parent Company does not trade and
materiality was set at a percentage of Group
materiality.
Performance materiality
6.4
6.0
6.0
4.2
Basis for determining
performance materiality
70% of materiality
70% of materiality
95% of Group
performance
materiality
70% of materiality
Rationale for the percentage applied
for performance materiality
The level of performance materiality was set after considering a number of factors including significant
transactions in the year, the expected value of known and likely misstatements, and management’s
attitude towards proposed adjustments.
Component performance materiality
For the purposes of our Group audit opinion, we set performance
materiality for each component of the Group, apart from the Parent
Company whose materiality and performance materiality are set out
above, based on a percentage of between 30% and 75% of Group
performance materiality (2024: 15% and 77% of group materiality)
dependent on a number of factors including consideration of the
control environment, history of misstatements, disaggregation across
components, size of the components, any significant changes affecting the
component since the prior year and our assessment of the risk of material
misstatement of those components. Component performance materiality
ranged from £1.9m to £6.1m (2024: component materiality ranged from
£1.2m to £6.6m).
Reporting threshold
We agreed with the Audit Committee that we would report to
them all individual audit differences in excess of £460k (2024: £430k).
We also agreed to report differences below this threshold that, in our
view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other
information comprises the information included in the document entitled
Annual Report and Accounts, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The UK Listing Rules require us to review the Directors’ statement
in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Parent Company’s
compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the corporate governance statement
is materially consistent with the financial statements or our knowledge
obtained during the audit.
Going concern and
longer-term viability
• The Directors’ statement with regards to
the appropriateness of adopting the going
concern basis of accounting and any material
uncertainties identified set out on page 157
• The Directors’ explanation as to their
assessment of the Group’s prospects, the
period this assessment covers and why the
period is appropriate set out on page 89
• The Directors’ statement on whether they
have a reasonable expectation that the Group
will be able to continue in operation and meet
its liabilities set out on page 89
Other Code
provisions
• Directors’ statement on fair, balanced and
understandable set out on page 120
• Board’s confirmation that it has carried out
a robust assessment of the emerging and
principal risks set out on page 76
• The section of the Annual Report and
Accounts that describes the review of
effectiveness of risk management and internal
control systems set out on pages 117 to 119
• The section describing the work of the audit
committee set out on page 113
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MITIE GROUP PLC
continued
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed
during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as
described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in
the course of the audit:
• The information given in the Strategic report
and the Directors’ report for the financial year
for which the financial statements are prepared
is consistent with the financial statements
• The Strategic report and the Directors’
report have been prepared in accordance
with applicable legal requirements
In the light of the knowledge and understanding
of the Group and Parent Company and its
environment obtained in the course of the audit,
we have not identified material misstatements in
the Strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’
remuneration report to be audited has been
properly prepared in accordance with the
Companies Act 2006.
Matters on which we
are required to report
by exception
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report
to you if, in our opinion:
• Adequate accounting records have not been
kept by the Parent Company, or returns
adequate for our audit have not been received
from branches not visited by us; or
• The Parent Company financial statements and
the part of the Directors’ remuneration report
to be audited are not in agreement with the
accounting records and returns; or
• Certain disclosures of Directors’ remuneration
specified by law are not made; or
• We have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities,
the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view,
and for such internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the Group’s and the Parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance
, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of these financial statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates
• Discussions with Management and those charged with governance the
Audit Committee and in-house legal counsel
• Obtaining an understanding of the Group’s policies and procedures
regarding compliance with laws and regulations
we considered the significant laws and regulations to be the Companies
Act 2006, Corporate and VAT legislation, Task Force on Climate-related
Financial Disclosures (TCFD), Employment Law, Health and Safety
and the Bribery Act 2010, the UK Listing Rules and the applicable
accounting standards.
The Group is also subject to laws and regulations where the consequence
of non-compliance could have a material effect on the amount or
disclosures in the financial statements, for example through the
imposition of fines or litigations. We identified such laws and regulations
to be the health and safety legislation and employment laws.
Our procedures in respect of the above included:
• Review of minutes of Board and Audit Committee meetings, and
internal audit reports to identify any instances of non-compliance with
laws and regulations
• Review of financial statement disclosures and agreeing to supporting
documentation
• Involvement of tax specialists in the audit
• Review of legal expenditure accounts to understand the nature of
expenditure incurred
Fraud
We assessed the susceptibility of the financial statements to material
misstatement, including fraud. Our risk assessment procedures included:
• Enquiry with management, the Audit Committee, in-house legal counsel
and internal audit regarding any known or suspected instances of fraud
• Obtaining an understanding of the Group’s policies and procedures
relating to:
– Detecting and responding to the risks of fraud
– Internal controls established to mitigate risks related to fraud
• Review of minutes of Board and Audit Committee meetings for any
known or suspected instances of fraud
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• Discussion amongst the engagement team as to how and where fraud
might occur in the financial statements
• Involvement of forensics specialists in the audit during engagement team
fraud discussions
• Performing analytical procedures to identify any unusual or unexpected
relationships that may indicate risks of material misstatement due to fraud
• Considering remuneration incentive schemes and performance targets
and the related financial statement areas impacted by these
Based on our risk assessment, we considered the areas most susceptible
to fraud to be management override of controls through inappropriate
journal entries, accrued income cut-off, costs to complete estimates in
Projects revenue where the input method of revenue recognition is being
used, and bias in key estimates and judgements.
Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the year, which met
defined risk criteria, by agreeing to supporting documentation
• Testing a sample of accrued income for correct cut-off (refer to revenue
recognition Key Audit Matter (KAM))
• Testing a sample of contracts for accuracy of estimation where revenue
is recognised over time (refer to revenue recognition KAM)
• Assessing significant estimates made by management for bias (refer to
contract-specific provisions KAM)
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members including
component auditors who were all deemed to have appropriate
competence and capabilities and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
For component auditors, we also reviewed the result of their work
performed in this regard.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through
collusion. There are inherent limitations in the audit procedures performed
and the further removed non-compliance with laws and regulations is from
the events and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Parent
Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the
Parent Company and the Parent Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Greg Watts (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
4 June 2025
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
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Notes
2025
2024
Before
Other items
£m
Other items
1
£m
Total
£m
Before
Other items
£m
Other items
1
£m
Total
£m
Revenue including share of joint ventures and associates
3
Less: share of revenue of joint ventures and associates
2
14
(8.6 )
(8.6 )
(65.5 )
(65.5 )
Group revenue
3
Cost of sales
(4,512.9 )
(4,512.9 )
(3,945.3 )
(3,945.3 )
Gross profit
Administrative expenses
(341.4 )
(72.5 )
(413.9 )
(297.8 )
(62.4 )
(360.2 )
Other income
Share of (loss)/profit of joint ventures and associates
2
14
(0.1 )
(0.1 )
Operating profit/(loss)
3
3, 5
(72.5 )
(44.5 )
Finance income
7
Finance costs
7
(19.5 )
(19.5 )
(13.6 )
(13.6 )
Net finance costs
(16.2 )
(16.2 )
(9.4 )
(9.4 )
Profit/(loss) before tax
(72.5 )
(44.5 )
Tax
8
(51.6 )
(37.0 )
(37.9 )
(25.4 )
Profit/(loss) after tax
(57.9 )
(32.0 )
Attributable to:
Equity holders of the parent
(56.2 )
(31.5 )
Non-controlling interests
36
(1.7 )
(0.5 )
Profit/(loss) for the year
(57.9 )
(32.0 )
Earnings per share (EPS) attributable to owners of the parent
Basic
10
Diluted
10
Notes:
1. Other items are as described in Note 4.
2. The Group obtained control of Landmarc Support Services Limited (Landmarc) on 16 November 2023, and since that date Landmarc’s financial results have been consolidated as
a subsidiary of the Group (see Note 36). Prior to 16 November 2023, Landmarc was accounted for as a joint venture of the Group (see Note 14).
3. Including net impairment losses on trade receivables, accrued income and other receivables of £1.0 m (2024: £2.6 m) (see Note 24).
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2025
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2025
Notes
2025
£m
2024
£m
Profit for the year
Items that will not be reclassified to profit or loss in subsequent years
Remeasurement of net retirement benefit pension assets/liabilities
31
(14.2 )
Share of other comprehensive expense of joint ventures
14
(0.1 )
Tax (charge)/credit relating to items that will not be reclassified to profit or loss in subsequent years
8
(4.6 )
(10.7 )
Items that may be reclassified to profit or loss in subsequent years
Exchange differences on translation of foreign operations
(0.7 )
(0.8 )
Tax credit relating to items that may be reclassified to profit or loss in subsequent years
8
(0.7 )
(0.7 )
Other comprehensive income/(expense) for the year
(11.4 )
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income for the year
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Notes
2025
£m
2024
£m
Non-current assets
Goodwill
11
Other intangible assets
12
Property, plant and equipment
13
Interests in associates
14
Trade and other receivables
15
Contract assets
16
Retirement benefit assets
31
Deferred tax assets
21
Total non-current assets
Current assets
Inventories
17
Trade and other receivables
15
Contract assets
16
Current tax receivable
Cash and cash equivalents
22
Total current assets
Total assets
Current liabilities
Trade and other payables
18
(1,012.6 )
(892.4 )
Deferred income
19
(140.9 )
(91.8 )
Current tax payable
(3.4 )
(2.0 )
Financing liabilities
23
(52.2 )
(73.8 )
Provisions
20
(37.4 )
(66.5 )
Total current liabilities
(1,246.5 )
(1,126.5 )
Net current liabilities
(78.5 )
(83.0 )
Non-current liabilities
Trade and other payables
18
(22.2 )
(12.7 )
Deferred income
19
(33.1 )
(15.5 )
Financing liabilities
23
(322.9 )
(247.7 )
Provisions
20
(46.7 )
(46.7 )
Retirement benefit liabilities
31
(2.4 )
(5.0 )
Deferred tax liabilities
21
(17.9 )
Total non-current liabilities
(445.2 )
(327.6 )
Total liabilities
(1,691.7 )
(1,454.1 )
Net assets
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONTINUED
As at 31 March 2025
Notes
2025
£m
2024
£m
Equity
Share capital
27
Share premium
27
Merger reserve
28
Own shares reserve
28
(65.1 )
(69.8 )
Share-based payments reserve
28
Capital redemption reserve
28
Hedging and translation reserve
28
(2.8 )
(2.1 )
Retained profits
Equity attributable to owners of the parent
Non-controlling interests
36
Total equity
authorised for issue on 4 June 2025. They were signed on its behalf by:
Phil Bentley
Simon Kirkpatrick
Chief Executive Officer
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Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Own
shares
reserve
£m
Share-
based
payments
reserve
£m
Capital
redemption
reserve
£m
Hedging
and
translation
reserve
£m
Retained
profits/
(losses)
£m
Equity
attributable
to owners
of parent
£m
Non-
controlling
interests
£m
Total
equity
£m
At 1 April 2023
(59.0 )
(1.4 )
Profit for the year
Other comprehensive (expense)/income
(0.7 )
(10.8 )
(11.5 )
(11.4 )
Total comprehensive (expense)/income
(0.7 )
Transactions with owners
Dividends paid
(41.5 )
(41.5 )
(41.5 )
Purchase of own shares
1
(19.6 )
(19.6 )
(19.6 )
Share buybacks
2
(0.7 )
(31.8 )
(26.6 )
(58.4 )
(58.4 )
Share-based payments
(24.0 )
Tax on share-based payments
Non-controlling interest arising
on acquisition
3
Non-controlling interest dividends
(2.5 )
(2.5 )
Total transactions with owners
(0.7 )
(10.8 )
(81.4 )
(83.3 )
(67.5 )
At 31 March 2024
(69.8 )
(2.1 )
At 1 April 2024
(69.8 )
(2.1 )
Profit for the year
Other comprehensive (expense)/income
(0.7 )
Total comprehensive (expense)/income
(0.7 )
Transactions with owners
Dividends paid
(54.5 )
(54.5 )
(54.5 )
Purchase of own shares
1
(14.6 )
(14.6 )
(14.6 )
Share buybacks
2
(2.0 )
(12.2 )
(92.5 )
(104.7 )
(104.7 )
Share-based payments
(1.7 )
(11.0 )
Tax on share-based payments
Non-controlling interest dividends
(10.1 )
(10.1 )
Total transactions with owners
(2.0 )
(1.7 )
(155.4 )
(152.4 )
(10.1 )
(162.5 )
At 31 March 2025
(65.1 )
(2.8 )
Notes:
1.
The Employee Benefit Trust acquired 11.7m (2024: 19.1m) ordinary shares through market purchases for a consideration together with associated fees and stamp duty of £13.2 m
(2024: £18.9 m) and the Share Incentive Plan Trust acquired 1.1m (2024: 0.6m) shares for a consideration of £1.4 m (2024: £0.7 m).
2. The share buybacks resulted in the purchase of 89.0m ordinary shares (2024: 58.6m) for a consideration of £92.5 m (2024: £26.6 m), of which 78.9m ordinary shares (2024: 26.1m)
have subsequently been cancelled. In addition, 10.1m ordinary shares (2024: 32.5m) were bought into treasury for a consideration of £12.2 m (2024: £31.8 m). See Notes 27 and 28.
3. During the year ended 31 March 2024, the Group obtained control of Landmarc (from 16 November 2023), resulting in recognition of non-controlling interest of £18.3 m.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
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CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2025
Notes
2025
£m
2024
£m
Operating profit before Other items
3
Other items
4
(72.5 )
(44.5 )
Operating profit
Adjustments for:
Share-based payments expense
30
Defined benefit pension expense
31
Defined benefit pension contributions
31
(10.1 )
(13.2 )
Fair value gain on acquisition of Landmarc
4
(17.9 )
Depreciation of property, plant and equipment
13, 25
Amortisation of other intangible assets
12
Share of loss/(profit) of joint ventures and associates
14
(6.4 )
Amortisation of contract assets
16
Impairment of non-current assets
12
Loss on disposal of other intangible assets
12
Loss on disposal of property, plant and equipment
13
Operating cash flows before movements in working capital
Increase in inventories
(0.2 )
(0.6 )
(Increase)/decrease in receivables
(168.9 )
Increase in contract assets
(1.5 )
(0.9 )
Increase in deferred income
Increase/(decrease) in payables
(73.5 )
Decrease in provisions
(10.7 )
(2.1 )
Cash generated from operations
Income taxes paid
(11.0 )
(16.9 )
Interest paid
(17.7 )
(13.3 )
Net cash generated from operating activities
Investing activities
Acquisition of businesses, net of cash acquired
1
29
(49.1 )
(34.0 )
Investment in associates and joint ventures
14
(0.8 )
Interest received
Purchase of property, plant and equipment
13
(24.0 )
(11.5 )
Dividends received from joint ventures and associates
14
Purchase of other intangible assets
12
(7.6 )
(8.4 )
Disposal of property, plant and equipment
Net cash used in investing activities
(77.9 )
(41.7 )
Note:
1.
Acquisition of businesses is net of cash acquired of £9.7 m (2024: £53.6 m). See Note 29.
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Notes
2025
£m
2024
£m
Financing activities
Purchase of own shares
1
28
(14.6 )
(19.6 )
Shares bought back
2
27, 28
(104.7 )
(58.4 )
Capital element of lease rentals
25
(56.1 )
(41.0 )
Lease incentives received
Proceeds from new private placement notes
23
Repayment of private placement notes
23
(30.0 )
Repayment of bank loans
(0.4 )
(8.4 )
Payment of arrangement fees
(0.6 )
(1.2 )
Proceeds received on settlement of share-based payment transactions
28
Equity dividends paid
9
(54.5 )
(41.5 )
Dividends paid to non-controlling interest
36
(10.1 )
(2.5 )
Net cash used in financing activities
(206.3 )
(158.9 )
Net decrease in cash and cash equivalents
(64.2 )
(2.9 )
Net cash and cash equivalents at beginning of the year
Effect of foreign exchange rate changes
(0.3 )
(0.5 )
Net cash and cash equivalents at end of the year
22
Notes:
1. The purchase of own shares includes shares acquired by the Employee Benefit Trust and the Share Incentive Plan Trust of £13.2 m (2024: £18.8 m) and £1.4 m (2024: £0.8 m)
respectively.
2. Shares bought back includes £92.5 m (2024: £26.6 m) of consideration for shares bought back and cancelled, and £12.2 m (2024: £31.8 m) of shares bought into treasury.
CONSOLIDATED STATEMENT OF CASH FLOWS
CONTINUED
For the year ended 31 March 2025
Strategic report
Governance
Financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2025
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Annual Report and Accounts 2025
1. Basis of preparation and material accounting policies
the Companies Act 1929. The Company’s registered office is at 35 Duchess Road, Rutherglen, Glasgow, G73 1AU. The Group comprises the Company and
all of its subsidiaries. The Group’s consolidated financial statements are presented in pounds sterling, which is the Company’s functional and presentational
currency. All amounts have been rounded to the nearest one hundred thousand pounds, unless otherwise indicated.
The Group’s consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments which are required
The consolidated financial statements for the year ended 31 March 2025 have been prepared on a going concern basis. In adopting the going concern basis,
the Directors have considered the Group’s business activities as set out on pages 3 to 75 of the Annual Report and Accounts 2025 and the principal risks
and uncertainties as set out on pages 76 to 87 and the viability statement on page 89 of the same.
The Directors have carried out an assessment of the Group’s ability to continue as a going concern for the period of at least 12 months from the date of
approval of the consolidated financial statements (the Going Concern Assessment Period). This assessment was based on the latest medium-term cash
forecasts from the Group’s cash flow model (the Base Case Forecasts), which is based on the Board-approved budget. These Base Case Forecasts indicate
that the debt facilities currently in place are adequate to support the Group over the Going Concern Assessment Period.
The Group’s principal debt financing arrangements as at 31 March 2025 were a £250m revolving credit facility maturing in October 2028, which was
undrawn as at 31 March 2025, and £180m of US private placement (USPP) notes. These financing arrangements are subject to certain financial covenants
which are tested every six months on a rolling 12-month basis, as set out in the Finance review on page 45.
In September 2023, the revolving credit facility was amended from £150m to £250m and its maturity date was extended by one year to October 2027,
on the same terms, with an option to extend for a further one-year period. This option was exercised in October 2024, such that the facility now matures
in October 2028.
Of the USPP notes, £120m were issued in December 2022, were split equally between 8, 10 and 12-year maturities, and were issued with an average
coupon of 2.94%. The remaining £30m of USPP notes, which matured in December 2024, were replaced with £60m of new USPP notes drawn from the
new shelf facility at a coupon rate of 5.71% and mature in December 2031. The remaining undrawn capacity of this uncommitted USPP shelf facility was
c.£270m at 31 March 2025, which can be drawn down until October 2027.
Mitie currently operates within the terms of its agreements with its lenders, with consolidated net debt (i.e. net debt adjusted for covenant purposes,
primarily by the exclusion of lease liabilities) of £9.6m as at 31 March 2025. The Base Case Forecasts indicate that the Group will continue to operate within
these terms and that the headroom provided by the Group’s debt facilities currently in place is adequate to support the Group over the Going Concern
Assessment Period.
The Directors have also completed a reverse stress test using the Group cash flow model to assess the point at which the financial covenants, or facility
headroom, would be breached. The sensitivities considered have been chosen after considering the Group’s principal risks and uncertainties.
The primary financial risks related to adverse changes in the economic environment and/or a deterioration in commercial or operational conditions are
listed below. These risks have been considered in the context of any further UK fiscal and monetary policy changes, the current economic climate including
high inflation, as well as wider geopolitical uncertainties such as the Russian invasion of Ukraine and conflict in the Middle East:
• A downturn in revenues: this reflects the risks of not being able to deliver services to existing customers, or contracts being terminated or not renewed
• A deterioration of gross margin: this reflects the risks of contracts being renegotiated at lower margins, or planned cost savings not being delivered
• An increase in costs: this reflects the risks of a shortfall in planned overhead cost savings, including margin enhancement initiatives not being delivered,
or other cost increases such as sustained higher cost inflation
• A downturn in cash generation: this reflects the risks of customers delaying payments due to liquidity constraints, the removal of ancillary debt facilities
or any substantial one-off settlements related to commercial issues
As a result of completing this assessment, the Directors concluded that the likelihood of the reverse stress scenarios arising was remote. In reaching the
conclusion of remote, the Directors considered the following:
• All stress test scenarios would require a very severe deterioration compared to the Base Case Forecasts. Revenue is considered to be the key risk, as
this is less within the control of management. Revenue would need to decline by approximately 34% in the 12 months to 31 March 2026 compared to the
Base Case Forecasts, which is considered to be very severe given the high proportion of the Group’s revenue that is fixed in nature and the fact that even
in the Covid-hit year ended 31 March 2021, Mitie’s revenue excluding Interserve declined by only 1.6%
• In the event that results started to trend significantly below those included in the Base Case Forecasts, additional mitigation actions have been identified
that would be implemented. These include the short-term scaling down of capital expenditure, overhead efficiency/reduction measures including
cancellation of discretionary bonuses and reduced discretionary spend, asset disposals and reductions in cash distributions and share buybacks
Based on these assessments, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for
a period of no less than 12 months from the date of approval of these consolidated financial statements. In addition, the Directors have concluded that the
1. Basis of preparation and material accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
The following new standards and amendments became effective during the year ended 31 March 2025, none of which have had a material impact on
the Group:
• Amendments to IFRS 16 –
Leases – Lease Liability in a Sale-and-Leaseback
• Amendments to IAS 1 –
Presentation of Financial Statements – Classification of Liabilities as Current or Non-current
• Amendments to IAS 7 –
Statement of Cash Flows
and IFRS 7 –
Accounting standards that are not yet mandatory and have not been applied by the Group
At the date of authorisation of these consolidated financial statements, the Group has not applied the following revised standards that have been issued
but are not yet effective, none of which are expected to have a material effect on the Group other than presentational changes required under IFRS 18 –
Presentation and Disclosure in Financial Statements
, the impact of which is still being assessed:
• Amendments to IAS 21 –
The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability
• Amendments to IFRS 9 and IFRS 7 –
Amendments to the Classification and Measurement of Financial Instruments
• Amendments to IFRS 9 and IFRS 7 –
Contracts Referencing Nature-dependent Electricity
• IFRS 18 –
Presentation and Disclosure in Financial Statements
• IFRS 19 –
The material accounting policies adopted in the preparation of the Group’s IFRS financial information are set out below.
The Group’s consolidated financial statements comprise the financial statements of Mitie Group plc and all of its subsidiaries. The Company’s separate
financial statements are presented as required by the Companies Act 2006. The Company meets the definition of a qualifying entity under FRS 100 issued
by the Financial Reporting Council (FRC). Accordingly, for the year ended 31 March 2025, the Company reported under FRS 101 as issued by the FRC.
In preparing these Group consolidated financial statements, the Group’s accounting policies and methods of computation were, with the exception of the
changes to accounting standards referred to above, the same as those that applied in the preparation of the Group’s consolidated financial statements
for the year ended 31 March 2024, which were prepared in accordance with UK-adopted International Accounting Standards and in conformity with the
requirements of the Companies Act 2006.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is
Joint ventures are those entities over whose activities the Group has joint control, whereby the Group has rights to the net assets of the entity, rather than
rights to its individual assets and obligations for its individual liabilities.
Associates are those entities over whose financial and operating policies the Group has significant influence, but not control or joint control.
The results, assets and liabilities of joint ventures and associates are incorporated in the Group’s consolidated financial statements using the equity method
of accounting, except when classified as held for sale.
Under the equity method, an investment in a joint venture or associate is initially recognised in the consolidated statement of financial position at cost and
adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the joint venture or associate. Any excess of
the cost of acquisition over the Group’s share of net fair value of the identifiable assets, liabilities and contingent liabilities of the joint venture or associate
at the date of acquisition is recognised as goodwill. Where the Group entity transacts with a joint venture or associate, profits and losses are eliminated to
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control have the right to the assets, and obligations for the liabilities, relating
to the arrangement, or other facts and circumstances indicate that is the case. The Group’s share of the results, assets and liabilities of contracts carried
out in joint operations with another party are included under each relevant heading in the consolidated income statement and consolidated statement
of financial position.
The consolidated financial statements contain all the information and disclosures required by the relevant accounting standards and regulatory obligations
that apply to the Group.
In the consolidated financial statements, the Group has elected to provide some further disclosures and performance measures, reported as ‘before
Other items’, in order to present its financial results in a way that demonstrates the performance of its operations.
Other items are items of financial performance which management believes should be separately identified on the face of the consolidated income
statement to assist in understanding the underlying financial performance achieved by the Group. The Group separately reports impairment of goodwill,
impairment and amortisation of acquisition-related intangible assets, acquisition and disposal costs, charges with respect to employment-linked earnouts,
gain or loss on business disposals, cost of restructuring programmes, charges arising on exit of pension schemes and other exceptional items and their
related tax effect as Other items. Should these items be reversed, disclosure of this would also be as Other items. The associated post-acquisition trading
results generated by acquired businesses and the benefits from restructuring programmes are not included as Other items.
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Separate presentation of these items is intended to enhance understanding of the financial performance of the Group in the year and the extent to which
results are influenced by material unusual and/or non-recurring items. Further detail of Other items is set out in Note 4.
In addition, following the guidelines on Alternative Performance Measures (APMs) issued by the European Securities and Markets Authority (ESMA), the
The Group operates contracts with a varying degree of complexity across its service lines, so a range of methods are used for the recognition of revenue
based on the principles set out in IFRS 15. Revenue represents income recognised in respect of services provided during the year based on the delivery of
performance obligations and an assessment of when control is transferred to the customer.
IFRS 15 provides a single, principle-based five-step model to be applied to all sales contracts as outlined below. It is based on the transfer of control of
goods and services to customers and replaces the separate models for goods, services and construction contracts.
Step 1 – Identify the contract(s) with a customer
For all contracts with customers, the Group determines if the arrangement creates enforceable rights and obligations. This assessment results in certain
Framework arrangements or Master Service Agreements (MSAs) not meeting the definition of contracts under IFRS 15 unless they specify the minimum
quantities to be ordered. Usually the work order and any change orders together with the Framework or MSA will constitute the IFRS 15 contract.
Duration of contract
The Group frequently enters into contracts with customers which contain extension periods at the end of the initial term, automatic annual renewals,
and/or termination for convenience and break clauses that could impact the duration of the contract. Judgement is applied to assess the impact that
such clauses have in determining the relevant contract term. The term of the contract affects the period over which amortisation of contract assets and
revenue from performance obligations is recognised. In forming this judgement, management considers certain influencing factors, including the amount
of discount provided, the presence of significant termination penalties in the contract, and the relationship, experience and performance of contract
delivery with the customer and/or the wider industry, in understanding the likelihood of extension or termination of the contract.
Contract modifications
Where the Group’s contracts are amended for changes to customer requirements, such as change orders and variations, a contract modification takes
place when the amendment creates new enforceable rights and obligations, or changes the existing price or scope (or both) of the contract, and the
modification has been approved. Contract modifications can be approved in writing, by oral agreement, or implied by customary business practices.
If the parties to the contract have not approved a contract modification, revenue is recognised in accordance with the existing contractual terms. If a
change in scope has been approved but the corresponding change in price is still being negotiated, change to the total transaction price is estimated.
Contract modifications, including contract renewals, are accounted for as a separate contract if the contract scope changes due to the addition of distinct
goods or services and the change in contract price reflects the stand-alone selling price of the distinct goods or services. If the price of additional distinct
goods or services is not commensurate with the stand-alone selling prices for those goods or services, then this is considered a termination of the original
contract and the creation of a new contract which is accounted for prospectively from the date of modification. Where new goods or services are not
distinct from those in the original contract, then these are considered to form part of the original contract, with any update to pricing recognised as a
cumulative catch up to revenue. The facts and circumstances of any modification are considered in isolation, as these are specific to each contract and
may result in different accounting outcomes.
Step 2 – Identify the performance obligations in the contract
Performance obligations are the contractual promises by the Group to transfer distinct goods or services to a customer. For arrangements with multiple
components to be delivered to customers, such as in the Group’s Integrated Facilities Management (IFM) contracts, judgement is applied to consider
whether those promised goods or services are:
i.
Distinct and accounted for as separate performance obligations;
ii. Combined with other promised goods or services until a bundle is identified that is distinct; or
iii. Part of a series of distinct goods or services that are substantially the same and have the same pattern of transfer over time, i.e. where the customer is
deemed to have simultaneously received and consumed the benefits of the goods or services over the life of the contract, the Group treats the series as
a single performance obligation
Where the customer reimburses the Group for contract mobilisation activities, this is typically not considered to be a distinct performance obligation.
Amounts received from the customer in relation to mobilisation activities for the contract are deferred and allocated to the remaining distinct
performance obligations.
Step 3 – Determine the transaction price
At contract inception, the total transaction price is determined, being the amount to which management expects the Group to be entitled and has rights
under the contract. This includes the fixed price stated in the contract and an assessment of any variable consideration. Variability in revenue can arise from
a number of factors, including discounts, rebates or service penalties. Variable consideration is typically estimated based on the expected value method and
is only recognised to the extent it is highly probable that a subsequent change in its estimate would not result in a significant revenue reversal.
Certain contracts across the Group incorporate indexation related adjustments to consideration, whereby pricing is adjusted based on an external metric
(such as CPI or RPI). Variable consideration related to indexation adjustments is only recognised once these are confirmed.
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Step 4 – Allocate the transaction price to the performance obligations in the contract
The Group allocates the total transaction price to the identified performance obligations based on their relative stand-alone selling prices. This is
predominantly based on an observable price or a cost-plus margin arrangement. It is necessary to estimate the stand-alone selling price when the
Group does not sell equivalent goods or services in similar circumstances on a stand-alone basis. When estimating the stand-alone selling price, the
Group maximises the use of external inputs by observing the stand-alone selling prices for similar goods and services using an industry recognised
price list or cost indices in applying a cost-plus reasonable margin approach.
Step 5 – Recognise revenue when or as the entity satisfies its performance obligations
For each performance obligation, management determines if revenue will be recognised over time or at a point in time. For each performance obligation
to be recognised over time, the Group applies the relevant output or input revenue recognition method for measuring progress that best depicts the
Group’s performance in transferring control of the goods or services to the customer. The Group applies the relevant method consistently to similar
performance obligations.
Certain long-term contracts use output methods based upon surveys of performance completed, appraisals of results achieved, or milestones reached
which allow the Group to recognise revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to
date relative to the remaining goods or services under the contract. For certain long-term service contracts where the series guidance is applied, the
Group often uses a method of time elapsed which requires minimal estimation.
Under the input method, measured progress and revenue are recognised in direct proportion to costs incurred where the transfer of control is most
closely aligned to the Group’s efforts in delivering the service.
Where deemed appropriate, the Group will utilise the practical expedient within IFRS 15, allowing revenue to be recognised at the amount which the
Group has the right to invoice, where that amount corresponds directly with the value to the customer of the Group’s performance obligations completed
to date.
If performance obligations do not meet the criteria to recognise revenue over time, revenue is recognised at the point in time when control of the goods
or services passes to the customer. This may be at the point of physical delivery of goods and acceptance by a customer or when the customer obtains
control of an asset or service in a contract with customer-specified acceptance criteria. Sales of goods are recognised when goods are delivered and
The Group has a number of long-term contracts which are predominantly IFM arrangements. Typically, these contracts involve the provision of multiple
service lines, with a single management team providing an integrated service. Such contracts tend to be transformational in nature where the business
works with the customer to identify and implement cost-saving initiatives across the life of the contract.
Management considers that the majority of services provided within IFM contracts meet the definition of a series of distinct goods or services that are
substantially the same and have the same pattern of transfer over time. The series constitutes services provided in distinct time increments (e.g. monthly
or quarterly) and therefore the Group treats the series of such services as one performance obligation.
The Group has a number of long-term Private Finance Initiative lifecycle contracts to maintain properties over periods of up to 30 years. A fund is
established at the start of the contract and amounts are drawn down by the Group as maintenance work is performed. For certain contracts, the Group is
also entitled to share in any surplus left in the fund. Revenue is recognised over time to reflect the rendering of the service, including an assessment of the
appropriate proportion of the likely surplus in the fund, subject to being highly probable not to reverse. The amount of surplus available is dependent on
the rate of wear and tear of the assets, which is substantially outside the control of the entity and the customer. As such, the Group does not deem there
Project works
The Group also delivers project works that include performance obligations under which revenue is recognised over time as value from the service is
transferred to the customer due to an enforceable right to payment for performance to date where the Group creates or enhances an asset that the
customer controls and/or creates an asset with no alternative use. The Group measures progress using either an output method, where the value of
work transferring over time is based on observable outputs such as monthly external surveys of works or an input method where, in most cases, the
most appropriate input is the proportion of costs incurred to date compared to total forecast costs and applied to the total consideration. A consistent
methodology is applied for projects of a similar nature. During a project, there may be variations to amend or extend the original project as well as claims
for additional consideration. Variations are accounted for as contract modifications (see Step 1).
The Group operates a number of single or joint service-line arrangements where repeat services meet the definition of a series of distinct services that
are substantially the same (e.g. the provision of cleaning, security, waste and landscaping services). They have the same pattern of transfer of value to the
customer, as the series constitutes core services provided in distinct time increments (e.g. monthly or quarterly). The Group therefore treats the series of
The Group delivers a range of other short-term service-based performance obligations and professional services work across certain reporting segments
for which revenue is recognised at the point in time when control of the service has transferred to the customer. This may be at the point when the
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The Group incurs pre-contract expenses (e.g. legal costs) when it is expected to enter into a new contract. The incremental costs to obtain a contract with
a customer are recognised within contract assets if it is expected that those costs will be recoverable. Costs to obtain a contract that would have been
Costs incurred to ensure that the project or programme has appropriate organisational, operational and technical infrastructures, and mechanisms in place
to enable the delivery of full services under the contract Target Operating Model, are defined as contract fulfilment costs. Only costs which meet all three
of the criteria below are included within contract assets on the consolidated statement of financial position:
i.
The costs directly relate to the contract (e.g. direct labour, materials, subcontractors)
ii. The Group is building an asset that will subsequently be used to deliver contract outcomes
iii. The costs are expected to be recoverable, i.e. the contract is expected to be profitable after amortising the capitalised costs
Contract fulfilment costs covered within the scope of another accounting standard, such as inventories, intangible assets, or property, plant and equipment,
The Group amortises contract assets (pre-contract costs and contract fulfilment costs) on a systematic basis that is consistent with the entity’s transfer of
the related goods or services to the customer. The expense is recognised in the consolidated income statement.
A capitalised pre-contract cost or contract fulfilment cost is derecognised either when it is disposed of or when no further economic benefits are
expected to flow from its use.
Management is required to determine the recoverability of contract-related assets at each reporting date. An impairment exists if the carrying amount
of any asset exceeds the amount of consideration the entity expects to receive in exchange for providing the associated goods and services, less
the remaining costs that relate directly to providing those goods and services under the relevant contract. In determining the estimated amount of
consideration, management uses the same principles as it does to determine the contract transaction price. An impairment is recognised immediately
The Group’s customer contracts include a diverse range of payment schedules that are often agreed at the inception of long-term contracts under which
it receives payments throughout the term of the arrangement. Payments for goods and services transferred at a point in time may be at the delivery date,
in arrears or part payment in advance.
Where revenue recognised at the year end date is more than amounts invoiced, the Group recognises accrued income for the difference. Where revenue
recognised at the year end date is less than amounts invoiced, the Group recognises deferred income for the difference.
Where price step-downs are required in a contract and output is not decreasing, revenue is deferred from initial periods to subsequent periods in order
for revenue to be recognised on a consistent basis.
Providing the option for a customer to obtain extension periods or other services at a significant discount may lead to a separate performance obligation
where a material right exists. Where this is the case, the Group allocates part of the transaction price from the original contract to deferred income which
other than the functional currency are recorded at the rate of exchange at the date of transaction. Monetary assets and liabilities denominated in foreign
currencies at the statement of financial position date are reported at the rates of exchange prevailing at that date. Exchange differences arising on the
Non-monetary items are measured in terms of historical cost in a foreign currency and are not retranslated.
On consolidation, the assets and liabilities of the Group’s foreign operations, including goodwill and fair value adjustments arising on their acquisition, are
translated into pounds sterling at exchange rates prevailing at the statement of financial position date. Income and expenses are translated into pounds
sterling at average exchange rates for the period. Exchange differences arising are recognised directly in equity in the Group’s hedging and translation
reserve. On disposal of a foreign operation, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised
Finance costs consist of interest and other costs that are incurred in connection with the borrowing of funds. Finance costs are recognised in the
consolidated income statement in the year in which they are incurred, with the finance charges relating to the direct cost of debt issue spread over the
period to redemption using the effective interest method. The Group has elected to classify cash flows from interest paid as operating activities and
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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The tax expense represents the sum of the current tax and deferred tax expense.
The current tax expense is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the consolidated income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never
taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement
of financial position date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit and does not give rise to equal taxable and deductible
temporary differences.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based upon tax
rates and legislation that have been enacted or substantively enacted at the statement of financial position date. Deferred tax is charged or credited in
the consolidated income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and when
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The
Acquisition costs incurred are expensed. The identifiable assets, liabilities and contingent liabilities of the acquiree that meet the conditions for recognition
are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.
The Group recognises any non-controlling interest in an acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling
interest’s proportionate share of the acquired entity’s net identifiable assets. Where a business combination is achieved in stages, the Group’s previously
held interest in the acquired entity is remeasured to fair value at the acquisition date and the resulting gain or loss, if any, is recognised in the consolidated
income statement.
The fair value of customer contracts or customer relationships recognised as a result of a business combination is determined using forecast customer
cash flows from the contracts or relationships and expected renewal rates, and applying an appropriate discount rate specific to the asset. In determining
the cash flows, management uses judgement to estimate revenue growth, profit margins, contract renewal probability and the average contract duration
remaining, as well as the discount rate. Amortisation is charged on a straight-line basis through Other items over its useful economic life, up to a maximum
of 15 years.
Where applicable, the consideration for an acquisition includes any assets or liabilities resulting from a contingent consideration arrangement, measured
at fair value at the acquisition date. Subsequent changes in such fair values are adjusted against the cost of acquisition where they result from additional
information, obtained within one year from the acquisition date, about facts and circumstances that existed at the acquisition date. All other subsequent
changes in the fair value of contingent consideration classified as an asset or liability are recognised in the consolidated income statement, in accordance
with IFRS 9.
of the fair value of the consideration received and the fair value of any retained interest; and (ii) the previous carrying amount of the assets (including
goodwill) and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to
that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary, i.e. reclassified to profit or loss or
transferred to another category of equity as specified/permitted by applicable IFRS. The fair value of any investment retained in the former subsidiary at
the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9, when applicable, of an investment
The Group measures the lease liability for acquired leases at the present value of the remaining lease payments discounted using an appropriate discount
rate. As required by IFRS 3 –
Business Combinations
, the Group treats acquired leases as new leases, thereby recording the right-of-use asset as equal to the
lease liability.
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Acquisition-related liabilities or employment-linked earnouts are the estimated amounts payable to previous owners. The estimated future payments
that are accrued over the period the sellers are required to remain with the business are accounted for as remuneration for post-acquisition services
and recognised within the consolidated income statement and classified as Other items. The amounts not linked to employment are considered to be
contingent consideration and estimated and recognised at acquisition at their discounted fair value, with the unwind of the discount recorded as part of
finance costs.
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets,
liabilities and contingent liabilities of a subsidiary at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated impairment losses. It is reviewed for impairment
at least annually. Any impairment is recognised immediately in the consolidated income statement for the year and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (CGUs) and is monitored for internal
management purposes by operating segment. The allocation is to the CGUs expected to benefit from the synergies of the combination. CGUs to which
goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the
recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first, to reduce the carrying amount of any
goodwill allocated to the unit, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. On disposal
of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
When a business reorganisation results in changes to the composition of CGUs, goodwill is reallocated to updated CGUs. The goodwill allocated to a prior
CGU is wholly reallocated to an updated CGU, where the goodwill wholly arose on the acquisition of businesses comprised within the updated CGU.
Other intangible assets identified in a business acquisition are capitalised at fair value as at the date of acquisition.
Customer contracts and relationships are amortised over their useful lives based on the period of time over which they are anticipated to generate
benefits. Other acquisition-related intangibles include brands, acquired software and technology, which are amortised over their useful lives.
Software and development expenditure is capitalised as an intangible asset if the asset created can be identified, if it is probable that the asset created will
generate future economic benefits and if the development cost of the asset can be measured reliably. Software and development expenditure includes
internally generated intangible assets and is amortised over its useful life once it has been brought into use.
Upfront configuration and customisation costs incurred in implementing Software as a Service (SaaS) arrangements are recognised as operating expenses
when the services are received. Some of these costs incurred are for the development of software code that enhances or modifies, or creates additional
capability to, existing on-premise systems and meets the definition of, and recognition criteria for, an intangible asset. These costs are recognised as
intangible software assets and amortised over the useful life of the software on a straight-line basis.
Following initial recognition, the carrying amount of an intangible asset is its cost less any accumulated amortisation and any accumulated impairment losses.
Intangible assets are reviewed for impairment annually, or more frequently when there is an indication that they may be impaired. Amortisation expense is
charged to administrative expenses in the consolidated income statement on a straight-line basis over the useful life of the asset as follows:
Customer contracts and relationships |
5–15 years |
Brands, software and development expenditure |
3–10 years |
cost less expected residual value of the assets over their estimated useful lives and is calculated on a straight-line basis as follows:
Buildings |
50 years or lease term if shorter |
Plant and vehicles |
3–10 years |
The Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss. Where the
asset does not generate cash flows that are independent from other assets, management estimates the recoverable amount of the CGU to which the
asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to
its recoverable amount. An impairment loss is recognised as an expense immediately.
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss
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Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group becomes a party to the contractual
provisions of the instrument. The Group derecognises financial assets and liabilities only when the contractual rights and obligations are transferred,
discharged or expire.
Financial assets principally comprise cash and cash equivalents, trade receivables, accrued income and other receivables. The classification of financial assets
amount of cash and are subject to an insignificant risk of changes in value. Cash and bank overdrafts are only offset where the overdraft is part of the
Group’s cash-pooling arrangements and the Group has both the legal right to offset and intends to settle on a net basis at the period end through cash-
sweeping arrangements.
Cash where access is constrained is classified as restricted cash. Bank transactions are recorded on their settlement date. All of the Group’s cash flows
from customers are solely payments of principal and interest, and do not contain a significant financing component. Financial assets generated from all of
initial recognition at fair value and subsequently at amortised cost, with the exception of contingent consideration payable which is measured at fair value
The Group recognises a loss allowance for expected credit losses (ECLs) on all receivable balances from customers measured at amortised cost using the
simplified approach. Under this approach, the Group recognises a loss allowance based on lifetime ECLs at each reporting date. ECLs are calculated on the
basis of historical credit loss experience, adjusted for forward-looking factors that incorporate macroeconomic conditions, for example changes in interest
rates and inflation, and applied to customers with common risk characteristics, such as sector type (e.g. government or non-government).
For other receivables, ECLs are measured using those expected to arise in the 12 months subsequent to the statement of financial position date.
For cash and cash equivalents, the Group does not currently anticipate any future credit losses given the high-quality credit rating of the financial institutions
The Group has various lease arrangements for properties (e.g. office buildings and storage facilities), vehicles and other equipment, including IT equipment
and machinery. At inception of a lease contract, the Group assesses whether the contract conveys the right to control the use of an identified asset for a
certain period of time, and whether it obtains substantially all the economic benefits from the use of that asset, in exchange for consideration. The Group
recognises a lease liability and a corresponding right-of-use asset with respect to all lease arrangements in which it is a lessee, except low-value leases
and short-term leases of 12 months or less, costs for which are recognised as an operating expense within the consolidated income statement as they
are incurred.
A right-of-use asset is capitalised on the consolidated statement of financial position and presented within property, plant and equipment at cost, which
comprises the present value of future lease payments determined at the inception of the lease adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred in addition to an estimate of costs to remove or restore the underlying asset. Where a lease
incentive is receivable, the amount is offset against the right-of-use asset at inception. Right-of-use assets are depreciated using the straight-line method
over the shorter of the estimated life of the asset or the lease term and are reviewed for impairment to account for any loss when events or changes in
circumstances indicate the carrying value may not be fully recoverable.
The lease liability is initially measured at amortised cost using the effective interest rate method to calculate the present value of future lease payments and
is subsequently increased by the associated interest cost and decreased by lease payments made. The effective interest rate is based on the rate implicit
in the lease or, where not available, the incremental borrowing rate. Lease payments made are apportioned between a capital repayment amount and an
interest charge, which are disclosed within the financing and operating activities sections of the consolidated statement of cash flows respectively. Lease
payments comprise fixed lease rental payments only, with the exception of property leases for which the associated fixed service charge is also included.
The majority of the Group’s lease contracts include inflationary linked rent review clauses. Future increases or decreases in rentals linked to an index or
rate are not included in the lease liability until the change in cash flows takes effect. Lease liabilities are classified between current and non-current and
presented within financing liabilities on the consolidated statement of financial position.
The lease term comprises the non-cancellable period in addition to the determination of the enforceable period which is covered by an option to extend
the lease, where it is reasonably certain that the option will be exercised, and the period covered by the option to terminate the lease to a point in time
where no more than an ‘insignificant penalty’ is incurred. The Group assesses an insignificant penalty with reference to the wider economics of the lease,
including any investment in non-transferable leasehold improvements which may result in an impairment charge should the lease be terminated.
A modification to a lease which changes the lease payment amount (e.g. due to a renegotiation or market rent review) or amends the term of the lease,
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Provisions have been made for contract-specific costs, onerous contracts, insurance exposures, legal claims, other property-related commitments including
dilapidations and restructuring-related costs.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where management expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised
as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated income
statement net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contract-specific cost provisions are made when the Group expects to incur future remedial and rectification costs required to meet customers’
contractual terms. Costs are estimated using either the work of external consultants or internal experts. The amount recognised as a provision represents
management’s best estimate and is inherently uncertain and could change materially over time. The provision is reviewed at least on a biannual basis for
changes in cost estimates. Any change in cost estimate is recognised as a charge or a release to the provision when it occurs.
The insurance reserve relates to employers’ and motor and fleet liabilities retained in the Group’s self-insurance arrangement. The insurance
reserve includes the full estimated value of the liability, gross of amounts expected to be recovered from the Group’s insurer. Any related insurance
reimbursement asset that is virtually certain to be received is separately presented gross within trade and other receivables on the consolidated
statement of financial position.
No provisions are recognised and only a disclosure in the consolidated financial statements is made for contingent liabilities. Contingent liabilities are
possible obligations dependent on whether some uncertain future event occurs, or where a present obligation exists but an outflow of resources is not
probable, or the amount of the obligation cannot be measured reliably.
Onerous contracts
Onerous contract provisions arise when the unavoidable costs of meeting contractual obligations exceed the remuneration expected to be received.
The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is lower of the cost of fulfilling a contract and any
compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises both incremental costs and an allocation of other direct
costs related to contract activities.
Where a customer has an option to extend a contract and it is likely that such an extension will be made, the expected net cost arising during the
extension period is included within the calculation. However, where a profit can be reasonably expected in the extension period, no credit is taken on
The Group operates a number of executive and employee share option schemes. Equity-settled share-based payments to employees are measured at
the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market based vesting conditions. For grants of share
options and awards, the fair value as at the date of grant is calculated using the Black-Scholes model or the share price at grant date, and the corresponding
expense is recognised on a straight-line basis over the vesting period based on management’s estimate of shares that will eventually vest. At each statement
of financial position date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market
based vesting conditions. Save As You Earn (SAYE) options are treated as cancelled when employees cease to contribute to the scheme, resulting in an
acceleration of the remainder of the related expense.
The Group operates a number of defined contribution retirement benefit schemes for all qualifying employees. Payments to the defined contribution and
stakeholder pension schemes are charged as an expense as the related service is provided.
In addition, the Group operates and participates in a number of defined benefit schemes. In respect of the schemes in which the Group makes
contributions under Admitted Body status to clients’ defined benefit schemes in respect of certain employees who transferred to the Group under
Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the Group accounts for its legal and constructive obligations over the
period of its participation which is for a fixed period only.
For the defined benefit pension schemes, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations
being carried out at each statement of financial position date by qualified third-party actuaries. Actuarial gains and losses on obligations, the return on
scheme assets (excluding interest) and the effect of the asset ceiling (if applicable, excluding interest) are recognised in the consolidated statement of
comprehensive income in the period in which they occur.
Defined benefit pension costs (including curtailments) are recognised in the consolidated income statement, in administrative expenses, while the net
interest cost is recognised in finance costs.
The Group’s liability in respect of defined benefit schemes is calculated separately for each scheme by estimating the amount of future benefit that
employees have earned in the current and prior periods, discounting that amount using the market yield on a high-quality corporate bond and deducting
the fair value of any scheme assets. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of
economic benefits available in the form of any future refunds from the scheme, where the Group has the unconditional right to the surplus or reductions
in future contributions to the scheme. Assets recognised are adjusted for tax, where relevant.
1. Basis of preparation and material accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Insurance buy-in policies included within plan assets are measured at fair value. The timing and amount of payments exactly match a portion of benefits in
the scheme and therefore the present value of the related obligations (determined using the project unit method as set out above) is deemed to be the fair
value of the insurance policies.
For schemes where sufficient information is not available to use defined benefit accounting, no liability is recognised on the consolidated statement of
The preparation of consolidated financial statements under IFRS requires management to make judgements, estimates and assumptions that affect
amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the reporting period.
Actual results may differ from these judgements, estimates and assumptions.
Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, made by management in the process of applying the Group’s accounting policies, that have the most significant
effect on the amounts recognised in the Group’s consolidated financial statements.
Revenue recognition
The Group’s revenue recognition policies, which are set out under Revenue recognition in Note 1, are central to how the Group measures the work it has
performed in each financial year.
Some of the Group’s contracts, including Private Finance Initiative contracts, contain variable consideration where management assesses the extent to
which revenue is recognised. For certain contracts, key judgements were made on whether it is considered highly probable that a significant reversal of
revenue will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
Profit before Other items
Other items are items of financial performance which management believes should be separately identified on the face of the consolidated income
statement to assist in understanding the underlying financial performance achieved by the Group. Determining whether an item should be classified within
Other items requires judgement as to whether an item is or is not part of the underlying performance of the Group. See Note 1, which details the Group’s
accounting policy for Other items.
Other items after tax of £57.9m were charged (2024: £32.0m) to the consolidated income statement for the year ended 31 March 2025. A complete
analysis of the amounts included in Other items is detailed in Note 4.
Landmarc joint venture
The Group holds 51% of the equity shares in Landmarc Support Services Limited (Landmarc). The remaining 49% of the equity shares in Landmarc
are held by a single third party. Until 16 November 2023, when the shareholders’ agreement was amended, the Group did not control Landmarc and
therefore did not recognise it as a subsidiary. Management’s judgement is that the revisions made to the shareholders’ agreement resulted in the Group
obtaining control of Landmarc, and therefore Landmarc has been consolidated as a subsidiary of the Group from that date.
The significant accounting estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are discussed below:
Contract-specific cost provisions
The Company and various of its subsidiaries are, from time to time, party to legal proceedings and claims. Judgements are required in order to assess
whether these legal proceedings and claims are probable, and the liability can be reasonably estimated, resulting in a provision or, alternatively, whether
the items meet the definition of contingent liabilities.
Provisions are liabilities of uncertain timing or amount and, therefore, in making a reliable estimate of the quantum and timing of liabilities, judgement is
applied and re-evaluated at each reporting date. Those subject to estimation uncertainty relate to contract-specific costs, for which the Group recognised
provisions at 31 March 2025 of £33.0m (2024: £40.4m).
Within this total, £10.8m (2024: £10.9m) has significant estimation uncertainty and relates to a certain contract where a liability has been estimated in
relation to a commercial dispute. Management sought external assistance at the time of the acquisition of Interserve to value the potential risk exposure
to the Group and has periodically updated this assessment, including a revised cost estimation for the current period. The actual exposure to the
Group may differ from the amount provided at 31 March 2025 due to the compounding effect of multiple variables associated with the particular issues
involved in the dispute. The value of the provision represents management’s best estimate. Management considers that, to the extent that it is agreed or
determined that the Group has a liability, the assessed range of possible future outcomes could potentially lead to a reduction in the provision of up to £6m
or a further increase of up to £9m being recognised, and other possible outcomes could increase the liability further. Management will continue to assess
the value of the provision recorded in arriving at its best estimate of any potential resolution at each subsequent reporting date.
Provisions in relation to certain contracts are also subject to negotiation with the customers.
Measurement of defined benefit pension obligations
At 31 March 2025, retirement benefit assets of £16.3m (2024: £4.2m) and retirement benefit liabilities of £2.4m (2024: £5.0m) were recognised.
The measurement of defined benefit obligations requires judgement. It is dependent on material key assumptions, including discount rates, inflation
and life expectancy rates. See Note 31 for further details and a sensitivity analysis for the key assumptions.
Strategic report
Governance
Financial statements
2. Critical accounting judgements and sources of estimation uncertainty continued
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Other sources of estimation uncertainty
Onerous contract provisions
The recognition of onerous contract provisions is an area of focus for management which, while not considered to be a significant source of estimation
uncertainty as per the requirements of IAS 1 –
Presentation of Financial Statements
, is based on assumptions that are subject to longer-term uncertainties.
Onerous contract provisions totalling £10.0m have been recognised at 31 March 2025 (2024: £8.8m). These primarily arose on the acquisition of
Interserve.
Onerous contract assessments are performed by the Group at an individual contract level at each reporting date. Determining the carrying value of
onerous contract provisions requires assumptions and judgements to be made about the future performance of the Group’s contracts. The level of
uncertainty in the estimates made, either in determining whether a provision is required, or in the measurement of a provision booked, is linked to the
complexity of the underlying contracts.
The sources of judgement when measuring the level of provision to book are:
• The level of accuracy in forecasting future variable revenue and costs to complete the contract
• The ability of the Group to maintain or improve operational performance to ensure cost assumptions are in line with expected levels, including contract-
specific key performance indicators (KPIs)
• Identifying cost-saving initiatives that are considered to be probable in terms of timing and scale
• Expectations around the resolution of contract-specific disputes and the likelihood of incurring future costs associated with remediation or reactive work
Management regularly compares actual contract performance against previous forecasts used to measure the onerous contract provisions and considers if
The Group’s operating segments are established on the basis of those components of the Group that are evaluated regularly by the Chief Operating
Decision Maker (CODM) in deciding how to allocate resources and in assessing performance. The Group has determined the CODM to be its Board
of Directors.
The Group manages its business on a service division basis. During the period, the Group re-organised its Central Government and Defence (CG&D)
division, where the Central Government business was moved into the Business Services division, and the Defence business was moved into the Technical
Services division. As a result of the re-organisation, CG&D is not considered to be an operating segment for the 12 months ended 31 March 2025, and the
Group has three reportable segments (2024: four segments). Furthermore, the Police Services business has been re-organised from the Communities
division to the Business Services division. The change in operating segments reflects how the CODM evaluates the divisions and their performance and
decides on resource allocation.
The comparatives for the year ended 31 March 2024 have been restated for the change in the composition of reportable segments.
Revenue including share of joint ventures and associates, operating profit before Other items and operating profit margin before Other items are the
primary measures of performance that are reported to and reviewed by the Board. Segment assets and liabilities have not been disclosed as they are not
reviewed by the Board.
No single customer accounted for more than 10% of external revenue in the year ended 31 March 2025 or in the comparative year. The UK Government
is not considered to be a single customer.
Consolidated income statement information
| 2025 | 2024 (restated) 1 | |||||
Operating | Operating | |||||
profit/(loss) | Operating | profit/(loss) | Operating | |||
before | margin before | before | margin before | |||
Revenue 2 | Other items 3 | Other items 3 | Revenue 2 | Other items 3 | Other items 3 | |
£m | £m | % | £m | £m | % | |
Business Services | 2,244.0 | 163.0 | 7.3 | 1,977.2 | 149.8 | 7.6 |
Technical Services | 1,977.4 | 79.0 | 4.0 | 1,816.9 | 74.9 | 4.1 |
Communities | 869.8 | 47.5 | 5.5 | 716.6 | 36.1 | 5.0 |
Corporate Centre | – | (55.4) | – | – | (50.6) | – |
Total Group | 5,091.2 | 234.1 | 4.6 | 4,510.7 | 210.2 | 4.7 |
Notes:
1.
The comparatives for the year ended 31 March 2024 have been restated for the change in the composition of reportable segments.
2. Revenue includes share of associates of £8.6m (2024: £10.0m) within Communities. For Technical Services, revenue for the year ended 31 March 2024 includes the share of revenue
from the Landmarc joint venture of £55.5m. From 16 November 2023, Landmarc has been consolidated as a subsidiary of the Group.
3. Other items are as described in Note 4.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
3. Business segment information continued
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168
Annual Report and Accounts 2025
A reconciliation of segment operating profit before Other items to total profit before tax is provided below:
2025 |
2024 |
|
£m |
£m |
|
Operating profit before Other items |
234.1 |
210.2 |
Other items 1 |
(72.5) |
(44.5) |
Net finance costs |
(16.2) |
(9.4) |
Profit before tax |
145.4 |
156.3 |
Note:
1. Other items are as described in Note 4.
Revenue, operating profit and operating margin from external customers by geographical segment are shown below:
| 2025 |
2024 |
|||||
Operating |
Operating |
Operating |
Operating |
|||
profit before |
margin before |
profit before |
margin before |
|||
Revenue 1 |
Other items 2 |
Other items 2 |
Revenue 1 |
Other items 2 |
Other items 2 |
|
£m |
£m |
% |
£m |
£m |
% |
|
United Kingdom |
4,860.7 |
221.1 |
4.5 |
4,336.9 |
200.1 |
4.6 |
Other countries |
230.5 |
13.0 |
5.6 |
173.8 |
10.1 |
5.8 |
Total |
5,091.2 |
234.1 |
4.6 |
4,510.7 |
210.2 |
4.7 |
Notes:
1.
Revenue includes share of associates of £8.6m (2024: £10.0m) within Communities. For Technical Services, revenue for the year ended 31 March 2024 includes the share of revenue
from the Landmarc joint venture of £55.5m. From 16 November 2023, Landmarc has been consolidated as a subsidiary of the Group.
2. Other items are as described in Note 4.
The carrying amount of non-current assets, excluding financial instruments, retirement benefits, interest in associates and deferred tax assets, by
geographical segment is shown below:
2025 |
2024 1 |
|
£m |
£m |
|
United Kingdom |
879.0 |
825.3 |
Other countries |
34.3 |
25.0 |
Total |
913.3 |
850.3 |
Note:
1.
The comparatives for the year ended 31 March 2024 have been restated to exclude £21.0m of non-current financial instruments.
Supplementary information
| 2025 |
2024 (restated) 1 |
|||||
Depreciation of |
Amortisation of |
Amortisation of |
||||
property, plant |
other intangible |
Amortisation of |
Depreciation of |
other intangible |
Amortisation of |
|
and equipment |
assets |
contract assets |
property, plant |
assets |
contract assets |
|
£m |
£m |
£m |
and equipment £m |
£m |
£m |
|
Business Services |
7.3 |
0.1 |
0.3 |
4.9 |
0.1 |
0.2 |
Technical Services |
3.1 |
0.3 |
– |
2.3 |
0.2 |
0.4 |
Communities |
1.0 |
– |
0.1 |
1.2 |
– |
0.8 |
Corporate Centre |
56.5 |
37.7 |
– |
39.8 |
32.7 |
– |
Total |
67.9 |
38.1 |
0.4 |
48.2 |
33.0 |
1.4 |
Note:
1.
The comparatives for the year ended 31 March 2024 have been restated for the change in the composition of reportable segments.
Strategic report
Governance
Financial statements
3. Business segment information continued
Mitie Group plc
169
Annual Report and Accounts 2025
Disaggregated revenue
The Group disaggregates revenue from contracts with customers by sector (government and non-government). Management believes that this
best depicts how the nature and amount of revenue and cash flows are affected by economic factors. The following table includes a reconciliation of
disaggregated revenue with the Group’s reportable segments.
| 2025 | 2024 (restated) 1 | |||||
| Sector 2 | Sector 2 | |||||
Government | Non-government | Total | Government | Non-government | Total | |
£m | £m | £m | £m | £m | £m | |
Business Services | 935.5 | 1,308.5 | 2,244.0 | 905.6 | 1,071.6 | 1,977.2 |
Technical Services | 846.2 | 1,131.2 | 1,977.4 | 765.1 | 1,051.8 | 1,816.9 |
Communities | 867.9 | 1.9 | 869.8 | 714.7 | 1.9 | 716.6 |
Total Group including joint ventures | ||||||
and associates | 2,649.6 | 2,441.6 | 5,091.2 | 2,385.4 | 2,125.3 | 4,510.7 |
Less: Joint ventures and associates 3 | (8.6) | – | (8.6) | (65.5) | – | (65.5) |
Total Group excluding joint ventures | ||||||
and associates | 2,641.0 | 2,441.6 | 5,082.6 | 2,319.9 | 2,125.3 | 4,445.2 |
Notes:
1.
The comparatives for the year ended 31 March 2024 have been restated for the change in the composition of reportable segments.
2. Sector is defined by the end customer on any contract. For example, if the Group is a subcontractor to a company repairing a government building, then the contract would be
classified as government.
3. Revenue for the year ended 31 March 2025 includes share of associates of £8.6m (2024: £10.0m). For the year ended 31 March 2024 revenue includes the share of revenue from
the Landmarc joint venture of £55.5m. From 16 November 2023, Landmarc has been consolidated as a subsidiary of the Group.
Transaction price allocation to the remaining performance obligations
The table below shows the secured forward order book for each segment at the reporting date with the time bands of when the Group expects to
recognise secured revenue on its contracts with customers. Secured revenue corresponds to all fixed work contracted with customers and excludes
the impact of anticipated variable works.
| 2025 | 2024 (restated) 1 | |||||
Total secured | Total secured | |||||
Less than 1 year | More than 1 year | revenue | Less than 1 year | More than 1 year | revenue | |
£m | £m | £m | £m | £m | £m | |
Business Services | 1,003.3 | 4,233.9 | 5,237.2 | 1,008.0 | 1,638.3 | 2,646.3 |
Technical Services 2 | 787.6 | 1,949.9 | 2,737.5 | 745.4 | 1,889.9 | 2,635.3 |
Communities 2 | 579.8 | 3,347.2 | 3,927.0 | 466.2 | 2,753.4 | 3,219.6 |
Total Group | 2,370.7 | 9,531.0 | 11,901.7 | 2,219.6 | 6,281.6 | 8,501.2 |
Notes:
1. The comparatives for the year ended 31 March 2024 have been restated for the change in the composition of reportable segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
170
Annual Report and Accounts 2025
Other items are items of financial performance which management believes should be separately identified on the face of the consolidated income
statement to assist in understanding the underlying financial performance achieved by the Group.
The Group separately reports acquisition- and disposal-related costs which includes amortisation of acquisition-related intangible assets and charges with
respect to employment-linked earnouts, cost of restructuring programmes, impairment of goodwill and acquired intangible assets, gain or loss on business
disposals, charges arising on exit of pension schemes and other exceptional items as Other items, together with their related tax effect.
| 2025 |
||||
Acquisition- and |
||||
Restructure |
disposal-related |
Other |
||
costs |
costs |
exceptional items |
Total |
|
£m |
£m |
£m |
£m |
|
Other items before tax |
(16.6) |
(43.1) |
(12.8) |
(72.5) |
Tax |
4.1 |
7.6 |
2.9 |
14.6 |
Other items after tax |
(12.5) |
(35.5) |
(9.9) |
(57.9) |
| 2024 |
|||||
Fair value gain |
Acquisition- and |
||||
on acquisition |
Restructure |
disposal-related |
Other |
||
of Landmarc 1 |
costs |
costs |
exceptional items |
Total |
|
£m |
£m |
£m |
£m |
£m |
|
Other items before tax |
17.9 |
(20.4) |
(38.3) |
(3.7) |
(44.5) |
Tax |
– |
5.1 |
6.5 |
0.9 |
12.5 |
Other items after tax |
17.9 |
(15.3) |
(31.8) |
(2.8) |
(32.0) |
Note:
1.
During the year ended 31 March 2024, the Group obtained control of Landmarc and fair valued its investment in the joint venture as at 16 November 2023. This resulted in a fair value
gain of £17.9m as at the acquisition date.
Restructure costs
The Group has been undertaking a major transformation programme involving the restructuring of operations to reposition the business for its next
phase of growth. Material transformation programmes are included as Other items where initiatives are not considered to be normal operating costs of
the business. Restructure costs of £16.6m (2024: £20.4m) are in respect of the Target Operating Model (TOM) transformation programme, and includes
the further outsourcing of back-office functions, consolidating systems and processes, and optimising the organisation structure. Since its launch in the year
ended 31 March 2022, cumulative costs of £45.2m have been recognised within the consolidated income statement and classified as Other items, of which
£43.0m were cash costs. The programme is expected to complete by 31 March 2026.
The costs associated with the Group transformation programme include fixed-term staff costs of £5.5m (2024: £7.1m) to manage and implement changes,
redundancy costs of £4.7m (2024: £4.5m), £3.7m of external consultancy costs (2024: £5.7m), loss on disposal of software of £2.2m (2024: £nil) and dual-
run licence costs in relation to decommissioned operating systems of £0.5m (2024: £2.6m). For the year ended 31 March 2024 certain property exit costs
of £0.5m were also incurred. The associated tax credit for restructure costs recognised as Other items is £4.1m (2024: £5.1m).
Acquisition- and disposal-related costs
2025 |
2024 |
|
£m |
£m |
|
Amortisation of acquisition-related intangible assets |
(29.6) |
(24.8) |
Employment-linked earnout charges 1 |
(8.6) |
(9.5) |
Transaction costs 2 |
(4.3) |
(2.9) |
Other acquisition-related costs |
(0.6) |
(1.1) |
Acquisition and disposal costs |
(43.1) |
(38.3) |
Tax |
7.6 |
6.5 |
Acquisition and disposal costs net of tax |
(35.5) |
(31.8) |
Notes:
1.
Comprises amounts payable to former owners of acquired businesses where a condition of receiving the payment is the continued employment by the Group of the individual
receiving the payment. These payments are accrued over the period that the related employment services are received up until the point at which the consideration becomes payable.
2. Comprises professional fees of £3.6m (2024: £3.1m) and integration costs of £0.7m (2024: £0.4m). In the year ended 31 March 2024, this was offset by professional fee accrual releases
of £0.6m for completed acquisitions where no further costs were expected.
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Financial statements
Mitie Group plc
171
Annual Report and Accounts 2025
Other exceptional items
2025 |
2024 |
|
£m |
£m |
|
Digital supplier platform 1 |
(3.4) |
(3.7) |
Pension-related costs 2 |
(9.4) |
– |
Other exceptional items |
(12.8) |
(3.7) |
Tax |
2.9 |
0.9 |
Other exceptional items net of tax |
(9.9) |
(2.8) |
Notes:
1.
Comprises costs in relation to the implementation of a new digital supplier platform, resulting in a step change in the Group’s supply chain management capabilities. These comprise
fixed-term staff costs of £2.3m (2024: £2.8m) and third-party implementation costs of £1.1m (2024: £0.9m). This implementation, which is transformational in nature, is expected to be
completed during the year ending 31 March 2026. Cumulative cash costs of £14.9m have been recognised within the consolidated income statement and classified as Other items since
its launch in 2022.
2. Includes a £2.8m charge where the Group entered into a settlement agreement with the trustees of the Plumbing Scheme with respect to its Section 75 debt in relation to the
previously disposed Social Housing business. In addition, a £5.3m contract settlement charge has been recognised to reverse the gross surplus on certain Local Government Pension
Schemes (LGPS), however an asset ceiling had been applied and therefore no net surplus was recognised on the consolidated statement of financial position. The reversal of the
asset ceiling has been credited to other comprehensive income. There is also a £1.1m past service cost charge and a related £0.2m of administrative expense arising on changes to the
2025 |
2024 |
|
Total Group |
£m |
£m |
Depreciation of property, plant and equipment (Notes 13 and 25) |
67.9 |
48.2 |
Amortisation of other intangible assets (Note 12) |
38.1 |
33.0 |
Amortisation of contract assets (Note 16) |
0.4 |
1.4 |
Impairment of intangible assets (Note 12) |
– |
0.1 |
Loss on disposal of property, plant and equipment |
0.3 |
– |
Loss on disposal of intangible assets |
2.4 |
0.1 |
Impairment loss recognised on trade and other receivables (Note 24) |
1.0 |
2.6 |
A detailed analysis of auditor’s remuneration is provided below:
2025 |
2024 |
|
£’000 |
£’000 |
|
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts |
336 |
323 |
Fees payable to the Company’s auditor and its associates for the audit of the Company’s subsidiaries pursuant to |
||
legislation – current year |
4,113 |
4,041 |
Total audit fees – current year |
4,449 |
4,364 |
Fees payable to the Company’s auditor and its associates for the audit of the Company’s subsidiaries pursuant to |
||
legislation – prior year |
453 |
– |
Total audit fees |
4,902 |
4,364 |
Audit-related assurance services to the Group (interim review) |
241 |
230 |
Total non-audit fees |
241 |
230 |
Total |
5,143 |
4,594 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
172
Annual Report and Accounts 2025
Number of people | 2025 | 2024 (restated) 1 |
Business Services | 46,814 | 42,159 |
Technical Services | 13,510 | 12,062 |
Communities | 12,487 | 10,601 |
Corporate Centre | 171 | 158 |
Total Group | 72,982 | 64,980 |
Note:
2025 | 2024 | |
£m | £m | |
Wages and salaries | 2,225.6 | 1,926.9 |
Social security costs | 225.3 | 177.5 |
Other pension costs 1 | 55.9 | 43.2 |
Share-based payments 2 (Note 30) | 16.1 | 20.3 |
Total | 2,522.9 | 2,167.9 |
Notes:
1. Other pension costs for the year ended 31 March 2025 excludes £9.4m (2024: £nil) of pension-related costs charged to Other items (see Note 4). Including these expenses, other
pension costs total £65.3m (2024: £43.2m).
Executive and Non-Executive Directors’ aggregate emoluments are shown below:
2025 | 2024 | |
£m | £m | |
Short-term employment benefits | 4.0 | 3.6 |
Post-employment benefits | 0.1 | 0.1 |
Share-based payments | 4.7 | 5.5 |
Total | 8.8 | 9.2 |
2025 | 2024 | |
Finance costs | £m | £m |
Interest on bank loans | 3.5 | 1.8 |
Interest on private placement loan notes | 5.3 | 4.8 |
Bank fees | 1.2 | 1.4 |
Interest on lease liabilities (Note 25) | 8.7 | 5.6 |
Other interest | 0.8 | – |
Total | 19.5 | 13.6 |
2025 | 2024 | |
Finance income | £m | £m |
Bank interest | 3.0 | 3.7 |
Net interest on defined benefit pension scheme assets and liabilities (Note 31) | 0.3 | 0.5 |
Total | 3.3 | 4.2 |
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Financial statements
Mitie Group plc
173
Annual Report and Accounts 2025
2025 |
2024 |
|
Total Group |
£m |
£m |
Current tax |
20.4 |
22.1 |
Deferred tax (Note 21) |
16.6 |
3.3 |
Tax charge for the year |
37.0 |
25.4 |
Corporation tax is calculated at 25% (2024: 25%) of the estimated taxable profit for the year. A reconciliation of the tax charge to the elements of profit
before tax per the consolidated income statement is as follows:
| 2025 |
2024 |
|||||
Before |
Before |
|||||
Other items |
Other items 1 |
Total |
Other items |
Other items 1 |
Total |
|
Total Group |
£m |
£m |
£m |
£m |
£m |
£m |
Profit/(loss) before tax |
217.9 |
(72.5) |
145.4 |
200.8 |
(44.5) |
156.3 |
Tax at UK rate of 25% (2024: 25%) |
54.5 |
(18.1) |
36.4 |
50.2 |
(11.1) |
39.1 |
Reconciling tax charges for: |
||||||
Non-deductible/(taxable) items |
0.5 |
3.5 |
4.0 |
(1.0) |
(1.1) |
(2.1) |
Impact of equity accounted investments |
– |
– |
– |
(1.6) |
– |
(1.6) |
Credit for losses not previously recognised |
– |
– |
– |
(8.8) |
– |
(8.8) |
Overseas tax rates |
(1.0) |
– |
(1.0) |
(1.3) |
– |
(1.3) |
Adjustments in respect of prior years |
(2.4) |
– |
(2.4) |
0.4 |
(0.3) |
0.1 |
Tax charge/(credit) for the year |
51.6 |
(14.6) |
37.0 |
37.9 |
(12.5) |
25.4 |
Effective tax rate for the year |
23.7% |
20.1% |
25.4% |
18.9% |
28.1% |
16.3% |
Note:
1. Other items are as described in Note 4.
The tax charge during the year ended 31 March 2025, consists of charges with respect to current tax and deferred tax of £20.4m and £16.6m respectively.
The current tax element of the Group’s total tax charge of 14.0% is lower than the UK headline rate of 25% primarily due to the utilisation of brought
forward tax losses against current year profits. The utilisation of tax losses generates a deferred tax rather than a current tax charge.
Certain expenditure is not deductible for tax purposes as set out in tax legislation. The main categories of non-deductible expenditure are certain
acquisition-related costs, such as employment-linked earnout charges and professional fees that are classified as capital in nature for tax purposes.
Profits from joint ventures and associates are included in the consolidated financial statements on an after-tax basis.
Deferred tax is provided on items where the timing of tax relief differs from when the amounts are included in the financial statements such as tax
depreciation, retirement benefit assets/liabilities, share options and short-term timing differences.
The Group does not have any material uncertain tax positions.
In addition to the amounts charged to the consolidated income statement: (i) a £1.2m charge for current tax (2024: £3.6m credit) and a £3.4m charge
for deferred tax (2024: £nil) relating to remeasurements of retirement benefit assets/liabilities has been recognised within the consolidated statement of
comprehensive income; (ii) no deferred tax relating to hedged items has been recognised within the consolidated statement of comprehensive income
(2024: £0.1m); and (iii) a £4.7m credit for current tax (2024: £7.3m) and a £2.1m charge for deferred tax (2024: £3.4m credit) relating to share options have
been recognised directly within equity.
Impact of Pillar Two legislation
Pillar Two legislation has been enacted or substantively enacted in jurisdictions in which the Group operates. The legislation is effective for the Group’s
financial year beginning 1 April 2024. The Group is in scope of the enacted or substantively enacted legislation and has performed an assessment of the
Group’s potential exposure to Pillar Two income taxes.
The assessment of the potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by-country reporting and financial
statements for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions in which the
Group operates are above 15%. However, there are a limited number of jurisdictions where the transitional safe harbour relief does not apply and the
Pillar Two effective tax rate is close to 15%. A charge of £0.2m (2024: not applicable) as a result of the Pillar Two income taxes has been included in the
overall tax charge for the year.
Tax strategy
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
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2025
2025
2024
2024
Pence per share
£m
Pence per share
£m
Amounts recognised as distributions in the year:
Final dividend for the prior year
3.0
38.5
2.2
28.6
Interim dividend for the current year
1.3
16.0
1.0
12.9
54.5
41.5
Proposed final dividend for the year ended 31 March
dividend for the year ended 31 March 2025 will be paid on 4 August 2025 to holders on the register on 20 June 2025. The ordinary shares will be quoted
The calculation of the basic and diluted earnings per share (EPS) is based on the following data:
2025 | 2024 | |
£m | £m | |
Net profit before Other items attributable to owners of the parent | 157.6 | 157.8 |
Other items net of tax attributable to owners of the parent 1 | (56.2) | (31.5) |
Net profit attributable to owners of the parent | 101.4 | 126.3 |
Note:
1. Other items are as described in Note 4.
2025 | 2024 | |
Number of shares | million | million |
Weighted average number of ordinary shares for the purpose of basic EPS 1 | 1,237.7 | 1,282.9 |
Effect of dilutive potential ordinary shares 2 | 101.5 | 108.9 |
Weighted average number of ordinary shares for the purpose of diluted EPS 1,2 | 1,339.2 | 1,391.8 |
Notes:
1.
The weighted average number of ordinary shares in issue during the year excludes those accounted for in the Own shares reserve.
2. The dilutive potential ordinary shares relate to instruments that could potentially dilute basic earnings per share in the future, such as share-based payments. The diluted earnings
per share uses the weighted average number of shares adjusted for potentially dilutive ordinary shares, unless it has the effect of increasing the earnings per share.
2025 | 2024 | |
Pence per share | Pence per share | |
Basic earnings before Other items 1 | 12.7 | 12.3 |
Basic earnings | 8.2 | 9.8 |
Diluted earnings before Other items 1 | 11.8 | 11.3 |
Diluted earnings | 7.6 | 9.1 |
Note:
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Financial statements
Mitie Group plc
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Annual Report and Accounts 2025
£m | |
Cost | |
At 1 April 2023 | 344.8 |
Arising on business combinations | 49.4 |
At 31 March 2024 | 394.2 |
Arising on business combinations 1 | 36.1 |
At 31 March 2025 | 430.3 |
Accumulated impairment losses | |
At 1 April 2023, 31 March 2024 and 31 March 2025 | 32.5 |
Net book value | |
At 31 March 2025 | 397.8 |
At 31 March 2024 | 361.7 |
Note:
1.
See Note 29 for details of the current year acquisitions.
Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefit from that business
The Group has reorganised its business in the year ended 31 March 2025, and the determination of CGUs has been updated accordingly to meet the
criteria included in IAS 36 –
Impairment of Assets
. Business Services, Technical Services, Communities and Spain have been determined to be the relevant
CGUs for the year ended 31 March 2025. The information presented for the year ended 31 March 2024 has been re-presented to reflect these changes,
and, as a result, the £7.4m of goodwill previously allocated to the Central Government & Defence CGU has been reallocated on a relative value approach.
A summary of the goodwill balances and the discount rates used to assess the forecast cash flows from each CGU are as follows:
2025 | 2024 | ||
Pre-tax | Goodwill | ||
discount rate | Goodwill | (restated) 1 | |
% | £m | £m | |
Business Services | 9.5 | 167.5 | 139.1 |
Technical Services | 9.5 | 144.1 | 139.4 |
Communities | 9.5 | 81.0 | 81.0 |
Spain | 10.2 | 5.2 | 2.2 |
Total | 397.8 | 361.7 | |
Note:
1. The 2024 goodwill allocation by CGU has been restated to reflect the changes in the year to the way in which the Group monitors CGUs for goodwill impairment purposes.
At 31 March 2024 and under the previous organisational structure, the goodwill was allocated as follows:
2024 | ||
Pre-tax | Goodwill | |
discount rate | (as presented) | |
% | £m | |
Business Services | 10.6 | 138.1 |
Technical Services | 10.6 | 133.0 |
Communities | 10.7 | 81.0 |
Central Government & Defence | 10.7 | 7.4 |
Spain | 11.0 | 2.2 |
Total | 361.7 | |
Key assumptions
The recoverable amounts for each CGU are based on value-in-use, which is derived from discounted cash flow calculations. The key assumptions applied
in value-in-use calculations are those regarding forecast operating profits, growth rates and discount rates.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
11. Goodwill continued
Forecast operating profits
For all CGUs, the Group prepared cash flow projections derived from the most recent forecasts for the year ending 31 March 2026 and the Group’s
strategic plan to 31 March 2030. Forecast revenue and direct costs are based on past performance and expectations of future changes in the market,
operating model and cost base including the impact of inflation.
Growth rates and terminal values
Medium-term revenue growth rates applied to the value-in-use calculations of each CGU reflect management’s strategy for a period of five years.
Terminal values were determined using a long-term growth assumption of 2.0% (2024: 2.0%).
Discount rates
The pre-tax discount rates used to assess the forecast cash flows from CGUs are derived from the Group’s post-tax weighted average cost of capital,
which was 7.1% as at the time of the Group’s annual impairment review (2024: 7.9%). These rates are reviewed annually by external advisors and adjusted
for the risks specific to the business being assessed and the market in which the CGU operates. All CGUs have the same access to the Group’s treasury
functions and borrowing lines to fund their operations.
Sensitivity analysis
A sensitivity analysis has been performed and management has concluded that no reasonably foreseeable change in the key assumptions would result in
Acquisition-related | |||||
Customer | Software and | ||||
contracts and | Total acquisition- | development | |||
relationships | Other | related | expenditure | Total | |
£m | £m | £m | £m | £m | |
Cost or valuation | |||||
At 1 April 2023 | 338.2 | 10.9 | 349.1 | 90.8 | 439.9 |
Additions | – | – | – | 8.4 | 8.4 |
Arising on business combinations | 53.7 | 1.2 | 54.9 | 0.6 | 55.5 |
Disposals | (82.9) | (9.8) | (92.7) | (0.1) | (92.8) |
At 31 March 2024 | 309.0 | 2.3 | 311.3 | 99.7 | 411.0 |
Additions 1 | – | – | – | 8.9 | 8.9 |
Arising on business combinations | 14.7 | 0.2 | 14.9 | – | 14.9 |
Disposals | – | (1.2) | (1.2) | (30.7) | (31.9) |
At 31 March 2025 | 323.7 | 1.3 | 325.0 | 77.9 | 402.9 |
Amortisation and impairment | |||||
At 1 April 2023 | 135.2 | 10.8 | 146.0 | 41.3 | 187.3 |
Charge for the year | 24.6 | 0.2 | 24.8 | 8.2 | 33.0 |
Disposals | (82.9) | (9.8) | (92.7) | (0.1) | (92.8) |
Impairments | – | – | – | 0.1 | 0.1 |
At 31 March 2024 | 76.9 | 1.2 | 78.1 | 49.5 | 127.6 |
Charge for the year | 29.2 | 0.4 | 29.6 | 8.5 | 38.1 |
Disposals | – | (1.0) | (1.0) | (28.5) | (29.5) |
At 31 March 2025 | 106.1 | 0.6 | 106.7 | 29.5 | 136.2 |
Net book value | |||||
At 31 March 2025 | 217.6 | 0.7 | 218.3 | 48.4 | 266.7 |
At 31 March 2024 | 232.1 | 1.1 | 233.2 | 50.2 | 283.4 |
Note:
1. Additions includes cash payments of £7.6m (2024: £8.4m) and related accruals of £1.3m (2024: £nil).
Customer contracts and relationships are amortised over their useful lives based on the period of time over which they are anticipated to generate
benefits, with an average remaining useful life of eight years (2024: eight years). Other acquisition-related intangibles include brands and acquired software
and technology which are amortised over their useful lives, with an average remaining useful life of three years.
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Financial statements
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Property, plant and equipment comprise owned and leased assets.
2025 |
2024 |
|
£m |
£m |
|
Owned property, plant and equipment |
54.5 |
39.2 |
Right-of-use assets (Note 25) |
192.4 |
165.5 |
Total |
246.9 |
204.7 |
The table below relates to owned property, plant and equipment.
Buildings |
Plant and vehicles |
Total |
|
£m |
£m |
£m |
|
Cost or valuation |
|||
At 1 April 2023 |
8.6 |
66.8 |
75.4 |
Additions |
0.7 |
10.8 |
11.5 |
Disposals |
– |
(8.0) |
(8.0) |
Arising on business combinations |
0.7 |
5.0 |
5.7 |
Effect of movements in exchange rates |
– |
(0.4) |
(0.4) |
At 31 March 2024 |
10.0 |
74.2 |
84.2 |
Additions 1 |
0.8 |
26.5 |
27.3 |
Disposals |
(0.3) |
(14.3) |
(14.6) |
Arising on business combinations |
0.4 |
1.2 |
1.6 |
Effect of movements in exchange rates |
– |
(0.5) |
(0.5) |
At 31 March 2025 |
10.9 |
87.1 |
98.0 |
Accumulated depreciation and impairment |
|||
At 1 April 2023 |
6.5 |
35.8 |
42.3 |
Charge for the year |
0.7 |
9.8 |
10.5 |
Disposals |
– |
(7.7) |
(7.7) |
Effect of movements in exchange rates |
– |
(0.1) |
(0.1) |
At 31 March 2024 |
7.2 |
37.8 |
45.0 |
Charge for the year |
0.7 |
11.8 |
12.5 |
Disposals |
(0.2) |
(13.5) |
(13.7) |
Effect of movements in exchange rates |
– |
(0.3) |
(0.3) |
At 31 March 2025 |
7.7 |
35.8 |
43.5 |
Net book value |
|||
At 31 March 2025 |
3.2 |
51.3 |
54.5 |
At 31 March 2024 |
2.8 |
36.4 |
39.2 |
Note:
1. Additions includes cash payments of £24.0m (2024: £11.5m) and related accruals of £3.3m (2024: £nil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
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At 31 March 2025, the Group has interests in associates, which are equity accounted, as detailed in Note 35.
Landmarc was accounted for as a joint venture until 16 November 2023, at which time the Group obtained control of Landmarc. Since 16 November
2023, Landmarc’s financial results have been consolidated as a subsidiary of the Group.
In December 2024, the Group invested £0.8m in Chaperhome Ltd (Chaperhome). Chaperhome is the creator of WalkSafe, which is a personal safety
application which combines journey-sharing features and a national Safe Space map.
The Sussex associate represents the Group’s investment in Sussex Estates and Facilities LLP that provide FM services.
Equity accounted entities that were significant to the Group have been detailed below.
Interests in associates
Nature of |
2025 |
2024 |
||
Ownership % |
relationship |
£m |
£m |
|
Sussex |
35 |
Associate |
0.9 |
0.9 |
Chaperhome |
30.79 |
Associate |
0.7 |
– |
At 31 March |
1.6 |
0.9 |
Group share |
||||
Group share |
of joint ventures |
|||
of associates |
and associates |
|||
Sussex 1 |
Chaperhome 1 |
2025 |
2024 |
|
£m |
£m |
£m |
£m |
|
At 1 April |
0.9 |
– |
0.9 |
8.8 |
Additions in period |
– |
0.8 |
0.8 |
– |
Share of (loss)/profit before Other items |
– |
(0.1) |
(0.1) |
6.4 |
Share of other comprehensive expense |
– |
– |
– |
(0.1) |
Dividends |
– |
– |
– |
(8.4) |
De-recognised on obtaining control 2 |
– |
– |
– |
(5.8) |
At 31 March |
0.9 |
0.7 |
1.6 |
0.9 |
Notes:
1. Net assets/results of the entity multiplied by the respective proportion of the Group’s ownership.
2. The Group’s investment in the Landmarc joint venture was de-recognised on 16 November 2023.
Summarised statement of total comprehensive income (100%)
| 2025 |
2024 |
|||||
Sussex |
Chaperhome |
Total |
Sussex |
Landmarc 1 |
Total |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue (100%) |
24.5 |
– |
24.5 |
28.6 |
108.8 |
137.4 |
Group’s share of revenue of joint ventures |
||||||
and associates |
8.6 |
– |
8.6 |
10.0 |
55.5 |
65.5 |
Depreciation and amortisation |
– |
– |
– |
– |
(0.7) |
(0.7) |
Operating (loss)/profit |
(0.1) |
(0.2) |
(0.3) |
4.5 |
10.9 |
15.4 |
Finance income |
– |
– |
– |
– |
0.2 |
0.2 |
Tax |
– |
– |
– |
0.5 |
(2.1) |
(1.6) |
(Loss)/profit for the year |
(0.1) |
(0.2) |
(0.3) |
5.0 |
9.0 |
14.0 |
Other comprehensive expense |
– |
– |
– |
– |
(0.2) |
(0.2) |
Total comprehensive (expense)/income (100%) |
(0.1) |
(0.2) |
(0.3) |
5.0 |
8.8 |
13.8 |
Note:
1.
Reflects the financial performance of Landmarc as a joint venture until 16 November 2023, from which point the Group consolidated the results of Landmarc.
Strategic report
Governance
Financial statements
14. Interests in joint ventures and associates continued
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Summarised statement of financial position (100%)
| 2025 | 2024 | ||||||
Sussex | Chaperhome | Other | Total | Sussex | Other | Total | |
£m | £m | £m | £m | £m | £m | £m | |
Current assets | 6.5 | 0.7 | 0.8 | 8.0 | 7.9 | 0.8 | 8.7 |
Current liabilities | (3.9) | (0.1) | (0.8) | (4.8) | (5.4) | (0.8) | (6.2) |
Net assets (100%) | 2.6 | 0.6 | – | 3.2 | 2.5 | – | 2.5 |
Group’s share of net assets | 0.9 | 0.2 | – | 1.1 | 0.9 | – | 0.9 |
The above includes the following: | |||||||
Cash and cash equivalents (100%) | 1.8 | 0.6 | 0.8 | 3.2 | 0.5 | 0.8 | 1.3 |
The Group is not aware of any material commitments in respect of its interests in associates. There are no significant restrictions on the ability to transfer
2025 | 2024 | |
£m | £m | |
Trade receivables | 538.3 | 411.5 |
Accrued income | 339.3 | 302.7 |
Prepayments | 59.5 | 50.5 |
Other receivables | 51.3 | 31.4 |
Total | 988.4 | 796.1 |
Included in current assets | 967.9 | 775.1 |
Included in non-current assets | 20.5 | 21.0 |
Total | 988.4 | 796.1 |
Management considers that the carrying amount of trade and other receivables approximates their fair value.
Information about the Group’s exposure to credit risk and its loss allowance against the balance of trade receivables, accrued income and other receivables
Pre-contract | Contract | ||
costs | fulfilment costs | Total | |
£m | £m | £m | |
At 1 April 2023 | 0.6 | 1.3 | 1.9 |
Additions | – | 1.0 | 1.0 |
Amortisation | (0.4) | (1.0) | (1.4) |
At 31 March 2024 | 0.2 | 1.3 | 1.5 |
Additions | 0.5 | 1.0 | 1.5 |
Amortisation | (0.1) | (0.3) | (0.4) |
At 31 March 2025 | 0.6 | 2.0 | 2.6 |
Included in current assets | 0.2 | 0.5 | 0.7 |
Included in non-current assets | 0.4 | 1.5 | 1.9 |
Total | 0.6 | 2.0 | 2.6 |
Pre-contract costs and contract fulfilment costs are amortised on a straight-line basis over the contract life, which is consistent with the transfer of services
to the customer to which the asset relates.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
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2025 | 2024 | |
£m | £m | |
Materials and total | 14.9 | 14.7 |
2025 | 2024 | |
£m | £m | |
Trade payables | 205.0 | 171.6 |
Other taxes and social security | 202.1 | 156.1 |
Other payables | 70.5 | 42.9 |
Accruals | 557.2 | 534.5 |
Total | 1,034.8 | 905.1 |
Included in current liabilities | 1,012.6 | 892.4 |
Included in non-current liabilities | 22.2 | 12.7 |
Total | 1,034.8 | 905.1 |
Trade payables at 31 March 2025 represent 25 days credit on trade purchases (2024: 22 days).
The significant changes in deferred income are as follows:
2025 | 2024 | |
£m | £m | |
At 1 April | 107.3 | 103.1 |
Revenue recognised that was included in the deferred income balance at the beginning of the year | (90.6) | (65.4) |
Increase due to cash received, excluding amounts recognised as revenue during the year | 152.5 | 65.4 |
Arising on business combinations | 4.8 | 4.2 |
At 31 March | 174.0 | 107.3 |
Included within current liabilities | 140.9 | 91.8 |
Included within non-current liabilities | 33.1 | 15.5 |
Total | 174.0 | 107.3 |
Contract- | Insurance | ||||||
specific costs | reserve | Pension | Dilapidations | Restructuring | Other | Total | |
£m | £m | £m | £m | £m | £m | £m | |
At 1 April 2024 | 49.2 | 27.2 | 21.7 | 8.2 | 2.4 | 4.5 | 113.2 |
Additional provisions | 11.6 | 11.3 | – | 3.2 | 0.5 | 0.6 | 27.2 |
Released to the consolidated income statement | (6.7) | (0.8) | – | (1.2) | – | (0.4) | (9.1) |
Arising on business combinations | 0.1 | 1.3 | – | 0.4 | – | – | 1.8 |
Transferred to other payables | – | – | (21.7) | – | – | – | (21.7) |
Utilised | (11.2) | (11.7) | – | (0.2) | (2.6) | (1.6) | (27.3) |
At 31 March 2025 | 43.0 | 27.3 | – | 10.4 | 0.3 | 3.1 | 84.1 |
Included in current liabilities | 23.3 | 9.7 | – | 1.3 | 0.3 | 2.8 | 37.4 |
Included in non-current liabilities | 19.7 | 17.6 | – | 9.1 | – | 0.3 | 46.7 |
Total | 43.0 | 27.3 | – | 10.4 | 0.3 | 3.1 | 84.1 |
20. Provisions continued
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Financial statements
Contract-specific costs
Contract-specific costs provisions of £43.0m (2024: £49.2m) comprise onerous contract provisions of £10.0m (2024: £8.8m) and other contract-specific
provisions of £33.0m (2024: £40.4m).
Onerous contracts are mainly in respect of certain long-term Private Finance Initiative contracts. Due to the long-term nature of these contracts, it is
expected that these provisions will be utilised over a weighted average period of 11 years. The Group recognised additional provisions of £4.7m (of which
£0.1m arose on business combinations), released £0.7m and utilised £2.8m in the year with respect to onerous contract provisions.
Contract-specific provisions have been recognised primarily to cover remedial and rectification costs required to meet clients’ contract terms, and
include a £10.8m (2024: £10.9m) provision relating to a liability risk on a certain contract which is subject to dispute (see Note 2), £5.3m (2024: £6.3m) for
rectification works on a certain contract and a £4.7m (2024: £3.8m) provision relating to a commercial settlement dispute for a certain contract. The value
of these provisions reflects the single most likely outcome and is expected to be utilised over a maximum period of eight years. The remaining provisions
relate to other potential commercial claims and rectification work for other contracts. The Group recognised additional provisions of £7.0m, released
£6.0m and utilised £8.4m in the year with respect to other contract-specific costs provisions.
Insurance reserve
The Group retains a portion of the exposure in relation to insurance policies for employer liabilities and motor and fleet liabilities. The provision includes
claims incurred but not yet reported and is based on information available at the consolidated statement of financial position date using advice from third-
party actuarial experts. The provision is expected to be utilised over five years.
The insurance reserve of £27.3m is presented gross of an insurer reimbursement asset of £4.2m (2024: £4.9m), which represents the amount the Group
is virtually certain to recover for claims under its insurance policies. Of this other receivable, £2.7m (2024: £3.2m) is presented as non-current.
Pension
The pension provision balance at 31 March 2024 comprised £21.7m for Section 75 employer debt liabilities of Robert Prettie & Co Limited and Mitie FM
Limited as a result of their participation in the Plumbing & Mechanical Services (UK) Industry Pension Scheme (the Plumbing Scheme), a funded multi-
employer defined benefit scheme. During the period, a settlement agreement was reached with the trustees of the Plumbing Scheme. As a result of
this, the amount of £21.7m has been transferred from provisions to other payables, and a further charge of £2.8m has been recognised as Other items
in respect of Mitie Property Services (UK) Limited’s participation in the Plumbing Scheme. These amounts are expected to be paid over a period of
three years.
Dilapidations
The provision for dilapidations relates to the legal obligation for leased properties to be returned to the landlord in the contracted condition at the end
of the lease period. This cost would include repairs of any damage and wear and tear and is expected to be utilised in the next 10 years.
Restructuring
The restructuring provision as at 31 March 2025 is related to redundancies as part of the Group’s Target Operating Model programme. The amount is
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
182
Annual Report and Accounts 2025
The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon:
Accelerated | Retirement | Intangible | Short-term | ||||
capital | benefit | assets | Share | timing | |||
Losses | allowances | liabilities | acquired | options | differences | Total 1 | |
Assets/(liabilities) | £m | £m | £m | £m | £m | £m | £m |
At 1 April 2023 | 39.6 | 9.6 | 0.5 | (50.7) | 12.0 | 9.4 | 20.4 |
Arising on business combinations | 1.1 | – | – | (13.7) | – | – | (12.6) |
(Charge)/credit to consolidated income statement | (9.9) | (2.0) | 0.7 | 6.2 | 1.2 | 0.5 | (3.3) |
Credit to equity and other comprehensive income | – | – | – | – | 3.4 | – | 3.4 |
At 31 March 2024 | 30.8 | 7.6 | 1.2 | (58.2) | 16.6 | 9.9 | 7.9 |
Arising on business combinations | 0.1 | (0.1) | – | (3.7) | – | – | (3.7) |
(Charge)/credit to consolidated income statement | (16.8) | (4.6) | (1.3) | 7.3 | (0.4) | (0.8) | (16.6) |
Charge to equity and other comprehensive income | – | – | (3.4) | – | (2.1) | – | (5.5) |
At 31 March 2025 | 14.1 | 2.9 | (3.5) | (54.6) | 14.1 | 9.1 | (17.9) |
Note:
1.
Deferred tax liabilities of £58.1m are offset against deferred tax assets of £40.2m (2024: Deferred tax assets of £66.1m were offset against deferred tax liabilities of £58.2m) as they
relate to income taxes levied by the same tax authority, and the Group has the right to and intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets have been recognised in respect of all temporary differences where it is probable that these assets will be recovered.
The majority of the Group’s deferred tax assets and liabilities are expected to be recovered over more than one year.
The Group has unutilised income tax losses of £88.7m (2024: £151.4m) that are available for offset against future profits. A deferred tax asset has been
recognised in respect of £56.5m (2024: £123.2m) of these losses to the extent that it is probable that taxable profits will be generated in the future and be
available for utilisation. When considering the recoverability of deferred tax assets, the taxable profit forecasts are based on the same information used to
support the going concern and goodwill assessments. See Note 1 for more information on these forecasts and the methodology applied.
No deferred tax asset has been recognised in respect of losses of £17.0m (2024: £13.0m), and disallowed interest under UK corporate interest restriction
rules of £15.2m (2024: £15.2m) because recoverability is uncertain. All amounts may be carried forward indefinitely. Deferred tax has been calculated using
2025 | 2024 | |
£m | £m | |
Cash and cash equivalents | 180.4 | 244.9 |
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The Group
operates cash-pooling arrangements with certain banks for cash management purposes.
Strategic report
Governance
Financial statements
Mitie Group plc
183
Annual Report and Accounts 2025
2025 |
2024 |
|
£m |
£m |
|
Private placement notes |
180.0 |
150.0 |
Lease liabilities (Note 25) |
197.5 |
174.0 |
Loan arrangement fees |
(2.4) |
(2.5) |
Total |
375.1 |
321.5 |
Included in current liabilities |
52.2 |
73.8 |
Included in non-current liabilities |
322.9 |
247.7 |
Total |
375.1 |
321.5 |
In September 2023, the Group increased its revolving credit facility (RCF) from £150m to £250m, and the maturity date was extended by one year from
October 2026 to October 2027, with an option to extend for a further one-year period. This extension was exercised in October 2024 such that the
facility now matures in October 2028. All other terms remain unchanged and the facility was undrawn at the time of the modification. During the year
ended 31 March 2025, the RCF was utilised for short-term borrowings, with the average borrowing amounting to £22.6m over an average period of
10 days. Amounts drawn down during the year accumulated to £812m (2024: £8m) with equal amounts repaid (2024: £8m). There were no amounts
outstanding at 31 March 2025 (2024: £nil).
In December 2022, the Group issued £120.0m of new US private placement (USPP) notes, under a delayed funding agreement to avoid any overlap with
the £121.6m (being the repayment amount after taking account of the cross-currency interest rate swaps) of notes that matured in the same month.
These notes are split equally between 8, 10 and 12-year maturities, and were issued with an average coupon of 2.94%.
In October 2024, the Group additionally entered into a three-year uncommitted shelf facility with total undrawn capacity of c.£270m at 31 March 2025.
In December 2024, the Group issued £60m of new USPP notes, drawn from the new shelf facility, to replace the existing £30m note that matured in the
same month. The new notes have a seven-year maturity and were issued with a coupon rate of 5.71%.
The RCF and USPP notes are unsecured but have financial and non-financial covenants and obligations commonly associated with these arrangements.
The two key covenant ratios are leverage (ratio of ‘consolidated total net borrowings’ to ‘adjusted consolidated EBITDA’) and interest cover (ratio of
‘consolidated EBITDA’ to ‘consolidated net finance costs’), with a maximum of 3.0x and a minimum of 4.0x respectively. Covenant ratios are measured
after adjustments for IFRS 16 primarily excluding lease liabilities from net debt and the inclusion of a charge equivalent to lease payments against EBITDA.
The Group was compliant with these covenants as at 31 March 2025, with leverage of 0.04x (2024: <0x) and interest cover of 38.7x (2024: 72.6x) (as set
out in the Finance review on page 45) and hence all amounts are classified in line with repayment dates. The covenants are measured bi-annually on
a rolling 12-month basis at 31 March and 30 September.
At 31 March 2025, the Group had £250.0m (2024: £250.0m) of undrawn committed borrowing facilities available, in respect of which all conditions
precedent had been met.
The weighted average interest rates paid during the year were as follows:
2025 |
2024 |
|
% |
% |
|
Bank loans |
6.7 |
4.9 |
Private placement notes |
3.4 |
3.2 |
Private placement notes
The USPP notes issued by the Group are unsecured and rank pari passu with other senior unsecured indebtedness of the Group. The amount, maturity
and interest terms of these USPP notes as at 31 March 2025 are shown below.
Tranche |
Maturity date |
Amount |
Interest terms |
8 year |
16 December 2030 |
£40.0m |
£ fixed at 2.84% |
7 year |
22 December 2031 |
£60.0m |
£ fixed at 5.71% |
10 year |
16 December 2032 |
£40.0m |
£ fixed at 2.97% |
12 year |
16 December 2034 |
£40.0m |
£ fixed at 3.00% |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
184
Annual Report and Accounts 2025
The Group’s principal financial assets are cash and cash equivalents, trade receivables, accrued income and other receivables. The Group’s principal financial
liabilities are financing liabilities, trade payables, accruals and other payables.
Details of the material accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the bases for
recognition of income and expense) for each class of financial asset and financial liability are disclosed in Note 1.
The vast majority of financial instruments are held at amortised cost. The classification of the fair value measurement falls into three levels, based on the
degree to which the fair value is observable. The levels are as follows:
• Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities
• Level 2 fair value measurements are those derived from other observable inputs for the asset or liability
• Level 3 fair value measurements are those derived from valuation techniques using inputs that are not based on observable market data
There have been no transfers between levels in the year.
The Group held the following financial instruments at 31 March:
2025 |
2024 |
|
£m |
£m |
|
Held at amortised cost |
||
Cash and cash equivalents (Note 22) |
180.4 |
244.9 |
Trade receivables (Note 15) |
538.3 |
411.5 |
Accrued income (Note 15) |
339.3 |
302.7 |
Other receivables (Note 15) |
50.4 |
30.5 |
Financing liabilities (Note 23) |
(377.5) |
(321.5) |
Trade payables (Note 18) |
(205.0) |
(171.6) |
Other payables (Note 18) |
(69.7) |
(42.7) |
Accruals (Note 18) |
(557.2) |
(534.5) |
Held at fair value through profit and loss (FVTPL) |
||
Other payables (Note 18) 1 |
(0.8) |
(0.2) |
Held at fair value through other comprehensive income (FVTOCI) |
||
Other receivables (Note 15, 31) 2 |
0.9 |
0.9 |
Notes:
1.
Other payables measured at fair value of £0.8m (2024: £0.2m) represent the maximum contingent consideration payable for acquisitions which are level 3 within the fair value
hierarchy (see Note 29).
The Group’s treasury department monitors and manages the financial risks relating to the operations of the Group. These risks include those arising
from interest rates, foreign currencies, liquidity, credit and capital management. The Group seeks to minimise the effects of these risks by using effective
control measures and, where appropriate, derivative financial instruments to hedge certain risk exposures. The use of financial derivatives is governed
by Group policies and reviewed regularly. Group policy is to not trade in financial instruments. The risk management policies remain unchanged from the
previous year.
The Group’s activities expose it to the financial risks of interest rates. The Group’s treasury function reviews its risk management strategy on a regular
Interest rate sensitivity
The Group’s interest rate sensitivity has been determined based on the exposure to interest rates on cash balances net of financing liabilities (excluding
lease liabilities) at the consolidated statement of financial position date.
If underlying interest rates had been 0.5% higher for cash held on deposit and financing liabilities (excluding lease liabilities) at variable rates and all other
variables were held constant, there would be no change in the Group’s net finance costs for the year ended 31 March 2025 (2024: £0.4m).
Strategic report
Governance
Financial statements
24. Financial instruments continued
Mitie Group plc
185
Annual Report and Accounts 2025
Foreign currency risk
The Group has limited exposure to transactional foreign currency risk from trading transactions in currencies other than the functional currency of
individual group entities and some exposure to translational foreign currency risk from the translation of its foreign operations. The Group considers
the need to hedge its exposures and, as appropriate, will enter into forward foreign exchange contracts to mitigate any significant risks.
The Group monitors its liquidity risk using a cash flow projection model which considers the maturity of the Group’s assets and liabilities and the projected
cash flows from operations. Bank loans under committed facilities, which allow for appropriate headroom in the Group’s daily cash movements, are then
arranged. Details of the Group’s bank facilities can be found in Note 23.
The tables below summarise the maturity profile (including both undiscounted interest and principal cash flows) of the Group’s financial liabilities:
Within |
Between one |
After |
||
one year |
and five years |
five years |
Total |
|
Financial liabilities at 31 March 2025 |
£m |
£m |
£m |
£m |
Trade payables |
205.0 |
– |
– |
205.0 |
Other payables |
48.3 |
22.2 |
– |
70.5 |
Accruals |
557.2 |
– |
– |
557.2 |
Financing liabilities |
71.1 |
177.8 |
207.5 |
456.4 |
Financial liabilities |
881.6 |
200.0 |
207.5 |
1,289.1 |
Within |
Between one |
After |
||
one year |
and five years |
five years |
Total |
|
Financial liabilities at 31 March 2024 |
£m |
£m |
£m |
£m |
Trade payables |
171.6 |
– |
– |
171.6 |
Other payables |
30.2 |
12.7 |
– |
42.9 |
Accruals |
534.5 |
– |
– |
534.5 |
Financing liabilities |
87.3 |
141.7 |
150.8 |
379.8 |
Financial liabilities |
823.6 |
154.4 |
150.8 |
1,128.8 |
The Group’s credit risk is monitored on an ongoing basis and formally reported quarterly. The value of business placed with financial institutions is
reviewed on a daily basis. The Group’s credit risk on liquid funds and derivative financial instruments is limited because the external counterparties are
banks with high credit ratings assigned by international credit rating agencies and are managed through regular review. The maximum exposure to credit
risk on cash and cash equivalents at the consolidated statement of financial position date is £180.4m (2024: £244.9m).
The Group’s credit risk is primarily attributable to its receivable balances from customers. Before accepting a new customer, the Group uses external
credit scoring systems to assess the potential customer’s credit quality and define an appropriate credit limit, which is reviewed regularly.
The maximum exposure to credit risk in relation to trade receivables and accrued income at the consolidated statement of financial position date is the fair
value of trade receivables and accrued income. The Group’s customer base is large and unrelated and, accordingly, the Group does not have a significant
concentration of credit risk with any one counterparty.
receivables balances are presented net of loss allowances. The Group performs an impairment analysis at each reporting period and measures loss
allowances on receivable balances with customers at an amount equal to lifetime expected credit losses (ECLs) using both quantitative and qualitative
information and analysis based on the Group’s historical experience, and forward-looking information.
Other receivables are also subject to the impairment requirements of IFRS 9 and the loss allowance is measured using those losses expected to arise in the
12 months subsequent to the consolidated statement of financial position date. At 31 March 2025, a loss allowance of £3.0m (2024: £8.6m) was recognised
in respect of other receivables.
24. Financial instruments continued
Mitie Group plc
186
Annual Report and Accounts 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
The following tables provide information about the Group’s exposure to credit risk and ECLs against customer balances:
| 2025 |
2024 |
|||||
Gross carrying |
Net carrying |
Gross carrying |
Net carrying |
|||
amount |
Loss allowance |
amount |
amount |
Loss allowance |
amount |
|
Trade receivables |
£m |
£m |
£m |
£m |
£m |
£m |
Current (not overdue) |
492.2 |
(0.8) |
491.4 |
370.8 |
(1.2) |
369.6 |
1-30 days overdue |
35.8 |
(0.1) |
35.7 |
28.4 |
(0.1) |
28.3 |
31-60 days overdue |
7.1 |
(0.1) |
7.0 |
5.6 |
(0.1) |
5.5 |
61-90 days overdue |
1.9 |
(0.5) |
1.4 |
6.6 |
(0.1) |
6.5 |
More than 90 days overdue |
11.2 |
(8.4) |
2.8 |
10.4 |
(8.8) |
1.6 |
Total |
548.2 |
(9.9) |
538.3 |
421.8 |
(10.3) |
411.5 |
| 2025 |
2024 |
|||||
Gross carrying |
Net carrying |
Gross carrying |
Net carrying |
|||
amount |
Loss allowance |
amount |
amount |
Loss allowance |
amount |
|
Accrued income 1 |
£m |
£m |
£m |
£m |
£m |
£m |
1-30 days |
261.6 |
(0.8) |
260.8 |
241.6 |
(1.1) |
240.5 |
31-60 days |
27.8 |
(0.1) |
27.7 |
23.1 |
(0.2) |
22.9 |
61-90 days |
16.7 |
(0.1) |
16.6 |
13.1 |
(0.2) |
12.9 |
More than 90 days |
46.5 |
(12.3) |
34.2 |
39.0 |
(12.6) |
26.4 |
Total |
352.6 |
(13.3) |
339.3 |
316.8 |
(14.1) |
302.7 |
Note:
1.
Accrued income is aged from the date of recognition.
The following table provides the movement in the allowance for impairment in respect of trade receivables, accrued income and other receivables:
| 2025 |
2024 |
|||||||
Trade |
Accrued |
Other |
Trade |
Accrued |
Other |
|||
receivables |
income |
receivables |
Total |
receivables |
income |
receivables |
Total |
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
At 1 April |
10.3 |
14.1 |
8.6 |
33.0 |
13.3 |
11.6 |
6.2 |
31.1 |
Net impairment/(reversal) of impairment losses |
1.9 |
(0.8) |
(0.1) |
1.0 |
(2.3) |
2.5 |
2.4 |
2.6 |
Utilised |
(2.3) |
– |
(5.5) |
(7.8) |
(0.7) |
– |
– |
(0.7) |
Acquisition of businesses |
– |
– |
– |
– |
– |
– |
– |
– |
At 31 March |
9.9 |
13.3 |
3.0 |
26.2 |
10.3 |
14.1 |
8.6 |
33.0 |
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders
through the optimisation of debt and equity. The capital structure of the Group consists of net debt per Note 26 and equity per the consolidated
Strategic report
Governance
Financial statements
Mitie Group plc
187
Annual Report and Accounts 2025
Plant and |
|||
Properties |
vehicles |
Total |
|
Right-of-use assets |
£m |
£m |
£m |
At 1 April 2023 |
37.9 |
85.9 |
123.8 |
Additions |
2.0 |
76.1 |
78.1 |
Arising on business combinations |
2.6 |
2.6 |
5.2 |
Modifications to lease terms and disposals |
0.1 |
(3.8) |
(3.7) |
Depreciation |
(7.4) |
(30.3) |
(37.7) |
Effect of movement in exchange rates |
– |
(0.2) |
(0.2) |
At 31 March 2024 |
35.2 |
130.3 |
165.5 |
Additions |
5.7 |
72.0 |
77.7 |
Arising on business combinations |
0.6 |
0.7 |
1.3 |
Modifications to lease terms and disposals |
1.3 |
2.2 |
3.5 |
Depreciation |
(8.1) |
(47.3) |
(55.4) |
Effect of movement in exchange rates |
– |
(0.2) |
(0.2) |
At 31 March 2025 |
34.7 |
157.7 |
192.4 |
2025 |
2024 |
|
Lease liabilities |
£m |
£m |
At 1 April |
174.0 |
129.4 |
Additions |
77.1 |
80.2 |
Arising on business combinations |
1.2 |
5.1 |
Modifications to lease terms and disposals |
1.5 |
0.3 |
Interest expense related to lease liabilities |
8.7 |
5.6 |
Repayment of lease liabilities (including interest) |
(64.8) |
(46.6) |
Effect of movement in exchange rates |
(0.2) |
– |
At 31 March |
197.5 |
174.0 |
Included in current financing liabilities |
52.8 |
44.4 |
Included in non-current financing liabilities |
144.7 |
129.6 |
Total |
197.5 |
174.0 |
2025 |
2024 |
|
Maturity analysis – contractual undiscounted cash flows |
£m |
£m |
Less than one year |
62.4 |
50.8 |
One to five years |
145.6 |
124.1 |
More than five years |
13.4 |
16.6 |
Total undiscounted lease liabilities |
221.4 |
191.5 |
2025 |
2024 |
|
Amounts recognised in the consolidated income statement |
£m |
£m |
Depreciation of right-of-use assets |
(55.4) |
(37.7) |
Short-term lease expense |
(0.6) |
(0.4) |
Operating profit impact |
(56.0) |
(38.1) |
Interest on lease liabilities |
(8.7) |
(5.6) |
Profit before tax impact |
(64.7) |
(43.7) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
25. Leases continued
Mitie Group plc
188
Annual Report and Accounts 2025
2025 |
2024 |
|
Amounts recognised in the consolidated statement of cash flows |
£m |
£m |
Capital element of lease rental payments (financing cash flow) |
56.1 |
41.0 |
Interest payments (operating cash flow) |
8.7 |
5.6 |
Total cash outflow for capitalised leases |
64.8 |
46.6 |
As set out in the Task Force on Climate-related Financial Disclosures, the Group is in the process of transitioning to electric vehicles in response to climate
change. While the fleet utilising fossil fuels is expected to be phased out, existing vehicle leases are generally held for the full lease term. There is therefore
2025 |
2024 |
|
£m |
£m |
|
Cash and cash equivalents (Note 22) |
180.4 |
244.9 |
Adjusted for: restricted cash (Note 22) |
(4.3) |
(4.2) |
Bank loans (Note 23) |
– |
– |
Private placement notes (Note 23) |
(180.0) |
(150.0) |
Loan arrangement fees (Note 23) |
2.4 |
2.5 |
Net (debt)/cash before lease obligations |
(1.5) |
93.2 |
Lease liabilities (Note 25) |
(197.5) |
(174.0) |
Net debt |
(199.0) |
(80.8) |
2025 |
2024 |
|
Reconciliation of net cash flow to movements in net debt |
£m |
£m |
Net decrease in cash and cash equivalents |
(64.2) |
(2.9) |
(Increase)/decrease in restricted cash |
(0.1) |
2.2 |
Net decrease in unrestricted cash and cash equivalents |
(64.3) |
(0.7) |
Cash drivers |
||
Proceeds from new private placement notes |
(60.0) |
– |
Private placement notes repaid |
30.0 |
– |
Repayment of bank loans |
0.4 |
8.4 |
Payment of arrangement fees |
0.6 |
1.2 |
Capital element of lease rentals |
56.1 |
41.0 |
Non-cash drivers |
||
Non-cash movement associated with bank loans |
(0.6) |
(0.4) |
Non-cash movement associated with private placement notes |
(0.1) |
(0.1) |
Non-cash movement in lease liabilities |
(79.6) |
(85.6) |
Effect of foreign exchange rate changes |
(0.3) |
(0.5) |
Increase in net debt during the year |
(117.8) |
(36.7) |
Opening net debt |
(80.8) |
(44.1) |
Debt acquired as part of business combinations |
(0.4) |
– |
Closing net debt |
(199.0) |
(80.8) |
Strategic report
Governance
Financial statements
Mitie Group plc
189
Annual Report and Accounts 2025
Ordinary shares | Share capital | Share premium | ||||
2025 | 2024 | |||||
Number | Number | 2025 | 2024 | 2025 | 2024 | |
million | million | £m | £m | £m | £m | |
At 1 April | 1,340.4 | 1,365.3 | 33.3 | 34.0 | 132.0 | 131.5 |
Issue of shares | – | 1.2 | – | – | – | 0.5 |
Shares cancelled | (78.9) | (26.1) | (2.0) | (0.7) | – | – |
At 31 March | 1,261.5 | 1,340.4 | 31.3 | 33.3 | 132.0 | 132.0 |
Each allotted and fully paid ordinary share of 2.5 pence is a voting share in the capital of the Company, is entitled to participate in the profits of the
Company, and on a winding-up is entitled to participate in the assets of the Company. The Company has one class of ordinary shares, which carries no
right to fixed income.
Share premium represents the premium arising on the issue of equity shares.
During the year, no shares were issued to satisfy options under the Group’s Save As You Earn (SAYE) employee share scheme (2024: 1.2m).
The Company purchased 89.0m (2024: 58.6m) shares at an average price of 116 pence (2024: 100 pence) under share buyback programmes, of which
10.1m (2024: 32.5m) were bought into treasury and 78.9m (2024: 26.1m) were cancelled. The consideration of £91.5m (2024: £26.3m) for the cancelled
shares, together with associated fees and stamp duty of £1.0m (2024: £0.3m), utilised £92.5m (2024: £26.6m) of the Company’s distributable profits.
The cancellation of these shares led to a reduction of £2.0m (2024: £0.7m) in issued share capital and a corresponding increase in the capital redemption
Merger reserve
The merger reserve equates to £157.0m (2024: £157.0m) and represents amounts relating to premiums arising on shares issued subject to the provisions
of Section 612 of the Companies Act 2006.
The own shares reserve of £65.1m (2024: £69.8m) represents the cost of ordinary shares in Mitie Group plc held for the purposes of the share schemes.
The Group uses shares held in the Employee Benefit Trust (EBT) to satisfy conditional awards under the Group’s Long Term Incentive Plan (LTIP),
Conditional Share Plan (CSP), Enhanced Delivery Plan (EDP), Retention Share Plan (RSP) and Deferred Bonus Plan (DBP) share schemes, and shares held
in the Share Incentive Plan (SIP) Trust to provide free shares and matching shares under the SIP scheme. Treasury shares are used to satisfy share options
under the Group’s SAYE share schemes. Details of the movements in the own shares reserve are set out below:
| Cost of shares (£m) | Number of shares | |||||||
EBT | SIP Trust | Treasury | Total | EBT | SIP Trust | Treasury | Total | |
At 1 April 2024 | 47.1 | 17.9 | 4.8 | 69.8 | 47.7 | 17.0 | 5.1 | 69.8 |
Share purchases | 13.2 | 1.4 | 12.2 | 26.8 | 11.7 | 1.1 | 10.1 | 22.9 |
Transfers | (2.7) | 2.7 | – | – | (3.2) | 3.2 | – | – |
Distributions for exercises | (18.5) | (1.3) | (11.7) | (31.5) | (21.5) | (1.2) | (10.7) | (33.4) |
At 31 March 2025 | 39.1 | 20.7 | 5.3 | 65.1 | 34.7 | 20.1 | 4.5 | 59.3 |
Share-based payments reserve
The share-based payments reserve of £40.4m (2024: £42.1m) represents credits in respect of the expense recognised during the vesting period for
unexercised awards under the Group’s equity-settled share schemes (see Note 30). The £1.7m movement in the share-based payments reserve is set
out below:
£m | |
At 1 April 2024 | 42.1 |
Share-based payments expense | 15.5 |
Exercises | (17.2) |
At 31 March 2025 | 40.4 |
Exercises of £17.2m represents the fair value of the awards exercised by employees in the year, based on the date the share schemes were granted. The
net cost of these shares in the own shares reserve equated to £26.8m (being £31.5m cost of shares, offset by £4.7m of cash received from SAYE scheme
exercises). The exercises therefore generated a loss of £9.6m that has been recognised in retained earnings. In addition, a charge of £1.4m with respect to
dividend equivalents has been recognised in retained earnings, resulting in a total charge with respect to share-based payments (excluding tax) of £11.0m.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
28. Reserves continued
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190
Annual Report and Accounts 2025
Share-based payments movement in equity
The total movement in equity as a result of share-based payment related transactions is set out below.
2025 |
2024 |
|
£m |
£m |
|
Share-based payment expense (Note 30) |
15.5 |
20.3 |
Cash received from the exercise of SAYE scheme options |
4.7 |
8.0 |
Dividend equivalents (Note 30) |
(1.4) |
(2.8) |
At 31 March |
18.8 |
25.5 |
Capital redemption reserve
The capital redemption reserve equates to £5.3m (2024: £3.3m). The increase of £2.0m relates to the cancellation of the shares bought back by the
Company in the year. See Note 27.
The hedging and translation reserve equates to £2.8m (2024: £2.1m) and includes balances arising on translation of the Group’s foreign operations to which
Current year acquisitions
Argus Fire
On 24 October 2024, the Group completed the acquisition of the entire issued share capital of Slademain Limited and its subsidiary Argus Fire Protection
Company Limited (together Argus Fire) for a consideration of £44.2m, which comprises an initial cash consideration of £44.0m and £0.2m contingent on
the settlement of certain receivables and payables. Argus Fire is a UK engineering-led fire systems business with over 40 years of experience which will
enhance the Group’s scale and self-delivered offering in this market, and has been integrated into the Group’s Business Services division. Goodwill on the
acquisition of Argus Fire represents the premium associated with the operations of Argus Fire which are considered to strengthen the Group’s UK fire &
security market offering by complementing existing solutions and providing cross-selling opportunities.
Visegurity
On 7 October 2024, the Group completed the acquisition of the entire issued share capital of Visegurity Express S.L., JP Silcom Servicios S.L. and Silcom
Auxiliares S.L. (together Visegurity) for a consideration of €8.9m (£7.5m), which comprises an initial cash consideration of £7.0m, and £0.5m contingent
on no additional pre-acquisition liabilities being identified which will be paid across four years. Visegurity is based in Barcelona and has over 20 years of
experience in security services, employing 600 individuals and with a strong reputation in both public and private sectors representing a strategic expansion
of the Group’s security capabilities in Spain, and has been integrated into the Group’s Business Services division.
Amounts up to a maximum of €2.0m (£1.7m) payable to the former owners of the business have been accounted for as remuneration for post-acquisition
employment services because a condition of receiving payment is the former owners’ continued employment within the Mitie Group. These amounts
are payable based on two performance periods for the years ending 31 October 2025 and 31 October 2026 up to a maximum of €2.0m in total. These
payments are accrued, where relevant conditions are met, over the period that the related employment services are received up until the point at which
the consideration becomes payable. Goodwill on the acquisition of Visegurity represents the premium associated with the operations and workforce
of Visegurity which are considered to expand and complement the growing suite of services offered by the Group in Spain and enhance cross-selling
opportunities to an enlarged blue-chip, customer base.
ESM Power
On 1 August 2024, the Group completed the acquisition of the entire issued share capital of Woodford Investments Limited and its subsidiary ESM Power
Limited (together ESM Power) for a consideration of £6.4m, which comprises an initial cash consideration of £6.3m, and £0.1m contingent on the outcome
of a completion accounts process. ESM Power is a leading electrical engineering business specialising in power & grid connections which will enhance the
Group’s high voltage connections expertise, and has been integrated into the Group’s Technical Services division.
Amounts up to a maximum of £3.0m payable to the former owners of the business have been accounted for as remuneration for post-acquisition
employment services because a condition of receiving payment is the former owners’ continued employment within the Mitie Group. These amounts are
payable based on two performance periods for the years ending 31 March 2025 and 31 March 2026 up to a maximum of £3.0m in total. These payments
are accrued, where relevant conditions are met, over the period that the related employment services are received up until the point at which the
consideration becomes payable. Goodwill on the acquisition of ESM Power represents the premium associated with taking over the operations which
are considered to strengthen the Group’s high voltage connections expertise.
Strategic report
Governance
Financial statements
29. Acquisitions continued
Mitie Group plc
191
Annual Report and Accounts 2025
Revenue and operating profit from acquisitions
The acquired entities contributed the following amounts of revenue and operating profit before Other items to the Group’s results during the year ended
31 March 2025:
Argus Fire |
Visegurity |
ESM Power |
Total |
|
£m |
£m |
£m |
£m |
|
Revenue |
20.9 |
9.0 |
29.8 |
59.7 |
Operating profit before Other items |
1.0 |
0.7 |
2.5 |
4.2 |
Based on estimates made of the full year impact if all acquisitions had been completed on 1 April 2024, Group revenue for the year would have increased
by approximately £50.8m and operating profit before Other items would have increased by £3.2m, resulting in total Group revenue of £5,133.4m and total
Group operating profit before Other items of £237.3m.
Fair value of assets and liabilities
The Group’s assessments of the fair values of the assets and liabilities recognised as a result of the acquisition are provisional and will be finalised within
12 months of the acquisition date. The provisional purchase price allocation is as follows:
Argus Fire |
Visegurity |
ESM Power |
Total |
|
£m |
£m |
£m |
£m |
|
Customer relationships and contracts |
9.7 |
3.7 |
1.3 |
14.7 |
Brand |
0.2 |
– |
– |
0.2 |
Property, plant and equipment |
1.0 |
0.1 |
0.5 |
1.6 |
Right-of-use assets |
0.7 |
0.5 |
0.1 |
1.3 |
Trade and other receivables |
15.2 |
3.4 |
8.7 |
27.3 |
Current tax asset |
0.1 |
– |
– |
0.1 |
Cash and cash equivalents |
7.8 |
0.5 |
1.4 |
9.7 |
Trade and other payables |
(11.8) |
(1.9) |
(5.0) |
(18.7) |
Bank loans |
– |
(0.4) |
– |
(0.4) |
Deferred income |
– |
(0.1) |
(4.7) |
(4.8) |
Provisions |
(1.6) |
– |
(0.2) |
(1.8) |
Lease liabilities |
(0.7) |
(0.4) |
(0.1) |
(1.2) |
Deferred tax liabilities |
(2.5) |
(0.9) |
(0.3) |
(3.7) |
Net identifiable assets acquired |
18.1 |
4.5 |
1.7 |
24.3 |
Goodwill |
26.1 |
3.0 |
4.7 |
33.8 |
Total cash consideration |
44.2 |
7.5 |
6.4 |
58.1 |
Initial cash consideration |
44.0 |
7.0 |
6.3 |
57.3 |
Contingent consideration |
0.2 |
0.5 |
0.1 |
0.8 |
Total consideration |
44.2 |
7.5 |
6.4 |
58.1 |
Prior year acquisitions
On 1 November 2023 and 9 October 2023, the Group completed the acquisitions of GBE Converge Group Ltd (GBE) and Cliniwaste Holdings Limited
(Cliniwaste) respectively. The accounting for these acquisitions was disclosed as provisional within the Group’s results for the year ended 31 March 2024.
The Group has used the 12-month measurement period from the date of acquisition, in accordance with IFRS 3 –
Business Combinations
, to finalise the fair
value measurement relating to the completion accounts process.
During the year ended 31 March 2025, the fair value of consideration and corresponding goodwill for GBE was increased by £1.5m following the
outcome of the completion accounts process and the fair value of the acquired net assets decreased by £0.5m due to a fair value adjustment. This led
to a corresponding increase in goodwill of £2.0m. The increase in consideration was cash settled during the period.
In addition, the fair value of the acquired net assets for Cliniwaste decreased by £0.3m due to a fair value adjustment, which led to a corresponding
increase in goodwill of £0.3m.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
29. Acquisitions continued
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192
Annual Report and Accounts 2025
Cash flows on acquisitions
2025 | 2024 | |
£m | £m | |
Cash consideration 1 | 58.8 | 87.6 |
Less: cash balance acquired | (9.7) | (53.6) |
Net outflow of cash – investing activities | 49.1 | 34.0 |
Note:
1.
The Group has six equity-settled share schemes. The Group also has awarded performance-related bonuses for Executive Directors which are deferred
in conditional shares under the Mitie Group plc 2010 Deferred Bonus Plan (DBP) and are accounted for as a share-based payment charge.
The Mitie Group plc Long Term Incentive Plan (LTIP)
The conditional awards of shares or rights to acquire shares (awards) are offered to a small number of key senior management personnel. Where offered
as options, there is no associated exercise price. The vesting period is generally three years, although some awards are subject to a holding period of up
to a further two years. If the awards remain unexercised after a period of 12 months from the date of vesting, the awards expire. The awards may be
forfeited if the employee leaves the Group. Before the awards can be exercised, performance conditions must be satisfied that are based on movements
in a range of non-market measures over a three-year period.
Retention Share Plan (RSP)
The RSP was introduced in the year ended 31 March 2022. The awards are offered to a small number of key senior management personnel. Where
offered as options, there is no associated exercise price. The vesting period is three years. If the awards remain unexercised after a period of 10 years from
the date of grant, the awards expire. The awards may be forfeited if the employee leaves the Group. There are no performance conditions attached to
these awards.
The Enhanced Delivery Plan (EDP)
The EDP was introduced in the year ended 31 March 2021. The awards are offered to a small number of key senior management personnel. Where
offered as options, there is no associated exercise price. The vesting period is three years, and awards are subject to a holding period of two additional
years. If the awards remain unexercised after a period of 12 months from the date of vesting (but subject to the additional holding period), the awards
expire. The awards may be forfeited if the employee leaves the Group. Before the awards can be exercised, performance conditions must be satisfied
that are based on movements in non-market measures over a three-year period.
The Conditional Share Plan (CSP)
The awards are offered to a small number of key senior management personnel. Where offered as options, there is no associated exercise price.
The vesting period is determined at the discretion of the Remuneration Committee and is generally two or three years. If the awards remain unexercised
after a period of 10 years from the date of grant, the awards expire. The awards may be forfeited if the employee leaves the Group.
The Mitie Group plc Save As You Earn (SAYE) scheme
The SAYE scheme is open to eligible employees resident in the UK. The exercise price is not less than 80% of the market value of the shares, determined
using either: the share price preceding the date on which invitations to participate in the scheme are issued or an average share price over five days
preceding the invitation date. The vesting period is three years. If the options remain unexercised after a period of six months from the date of vesting,
the options expire. Options may be forfeited if the employee leaves the Group. An equivalent scheme is open to eligible Ireland-resident employees.
Strategic report
Governance
Financial statements
30. Share-based payments continued
Mitie Group plc
193
Annual Report and Accounts 2025
The Share Incentive Plan (SIP)
The SIP is open to eligible employees resident in the UK. Under the scheme, eligible employees are invited to invest in partnership shares which are
purchased in the market on their behalf and held in a separate UK trust. Since October 2021, one conditional matching share has been awarded for every
two partnership shares purchased and has a holding period of three years. Matching shares are funded by way of market purchases. The Group also, from
time to time, launches free share schemes under which all employees receive an allocation of shares at no cost to the employee. The free shares have a
holding period of three years.
Details of the awards and share options outstanding are as follows:
2025 | 2024 | 2025 | 2024 | |||
Number of | Number of | Weighted | Weighted | |||
conditional | conditional | Number of | average | Number of | average | |
share awards | share awards | share options | exercise price 1 | share options | exercise price 1 | |
(million) | (million) | (million) | (p) | (million) | (p) | |
Outstanding at 1 April | 83.2 | 92.9 | 58.3 | 64 | 69.8 | 63 |
Granted during the year | 19.7 | 13.6 | 25.0 | 86 | 25.2 | 78 |
Lapsed during the year | (10.9) | (6.3) | (6.4) | 66 | (7.7) | 68 |
Exercised during the year | (21.6) | (17.0) | (11.5) | 45 | (29.0) | 29 |
Outstanding at 31 March | 70.4 | 83.2 | 65.4 | 78 | 58.3 | 64 |
Exercisable at the end of the year | 1.0 | 4.0 | 5.6 | 50 | 4.0 | 28 |
Note:
1.
The weighted average exercise prices for non-discretionary share plans are stated excluding the SIP schemes which have no associated exercise price.
The Group recognised the following expenses related to equity-settled share-based payments:
2025 | 2024 | |
£m | £m | |
Discretionary share plans | 8.6 | 14.4 |
Non-discretionary share plans | 6.9 | 5.9 |
15.5 | 20.3 |
The equity-settled share-based payments expense charged to the consolidated income statement for the year is £15.5m (2024: £20.3m) and represents
share-based payment transactions relating to discretionary and non-discretionary share plans. The associated social security charge for the year is £3.9m
(2024: £5.5m).
In the year ended 31 March 2025, £1.4m of dividend equivalents have been accrued in relation to outstanding share awards (2024: £2.8m). Dividend
equivalents accrued under the share option schemes are forfeitable and are payable after the vesting date when the share awards are exercised.
The weighted average share price at the date of exercise for share awards and share options exercised during the year was 118p (2024: 95p). The
conditional share awards and share options outstanding at 31 March 2025 had exercise prices (other than £nil in the case of the LTIP, CSP, EDP, DBP and
the matching shares under the SIP) ranging from 27p to 86p (2024: 27p to 128p) and a weighted average remaining contractual life of 1.8 years (2024:
1.9 years). In the year ended 31 March 2025, 40.3m (2024: 34.6m) options were granted in respect of the SAYE, LTIP, CSP, RSP and DBP schemes and
awards of matching shares and 4.4m (2024: 4.2m) free shares were granted under the SIP. The aggregate of the estimated fair values of those options
granted and awards made was £36.5m (2024: £26.5m).
The fair value of options is measured by use of the Black-Scholes model.
The inputs into the Black-Scholes model for new schemes granted in the year are as follows:
2025 | 2024 | |
Share price (p) | 109 | 103 |
Exercise price (p) | 86 | 78 |
Expected volatility 1 (%) | 38 | 47 |
Expected life (years) | 3 | 3 |
Risk-free rate (%) | 4.2 | 4.2 |
Expected dividends (%) | 4.2 | 3.1 |
Note:
1.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
194
Annual Report and Accounts 2025
The Group operates a number of pension arrangements for employees:
• Defined contribution schemes for the majority of its employees
• Defined benefit schemes which include the Mitie Group plc Pension Scheme, the Landmarc Pension Scheme and other smaller schemes
A defined contribution scheme is a pension scheme under which the Group pays contributions to an independently administered fund; such contributions
are based upon a fixed percentage of employees’ pay. The Group has no legal or constructive obligations to pay further contributions to the fund once
these contributions have been paid. Members’ benefits are determined by the amount of contributions paid, together with investment returns earned on
the contributions arising from the performance of each individual’s chosen investments and the type of pension the member chooses to take at retirement.
As a result, actuarial risk (that pension will be lower than expected) and investment risk (that the assets invested in do not perform in line
with expectations) are borne by the employee.
The Group’s contributions are recognised as an employee benefit expense when they are due.
The Group operates four separate schemes: a stakeholder defined contribution plan, which is closed to new members; a self-invested personal pension
plan, which is closed to new members; and two Group personal pension (GPP) plans. Employer contributions are payable to each on a matched basis
requiring employee contributions to be paid. Employees have the option to pay their share via a salary sacrifice arrangement. The scheme used to satisfy
auto-enrolment compliance is a master trust, The People’s Pension.
During the year, the Group made a total contribution to the defined contribution schemes of £26.8m (2024: £18.1m) and contributions to the auto-
enrolment scheme of £24.7m (2024: £22.1m), which are included in the consolidated income statement charge. The Group expects to make contributions
Mitie Group plc Pension Scheme (the Group scheme)
The Group scheme comprises two segregated sections: Part A (the Group section) and Part B (the Interserve section). The assets and liabilities of the two
sections are ring-fenced.
The Group section provides benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on
members’ length of service and their final pensionable pay.
The Group section was closed to new members in 2006, with new employees able to join one of the defined contribution schemes.
The Interserve section was formed in the year ended 31 March 2023 when the assets and liabilities were transferred from the Interserve Scheme
Part C, which in turn had been formed to take Interserve members out of the Interserve Group Pension Scheme as part of the arrangements for Mitie’s
acquisition of Interserve in 2020.
The Group scheme is operated under the UK regulatory framework. Benefits are paid to members from the trust-administered fund, where the
Trustee is responsible for ensuring that the scheme is sufficiently funded to meet current and future benefit payments. Plan assets are held in trust and
are governed by pension legislation. If investment experience is worse than expected or the actuarial assessment of the scheme’s liabilities increases, the
Group’s financial obligations to the scheme rise.
The nature of the relationship between the Group and the Trustee is also governed by regulations and practice. The Trustee must agree a funding plan
with the sponsoring company such that any funding shortfall is expected to be met by additional contributions and investment outperformance. In order
to assess the level of contributions required, triennial valuations are carried out, with the scheme’s obligations measured using prudent assumptions (which
are determined by the Trustee with advice from the scheme actuary). The most recent triennial valuation was carried out as at 31 March 2023, which
indicated an actuarial deficit of £19.4m, an improvement of £72.7m since the last valuation. During the year, Mitie paid £8.4m of deficit repair contributions
and the Group has agreed to pay further deficit repair contributions of £6.4m in FY26 and a smaller contribution, as required, in FY27 in order to eliminate
the funding shortfall.
The Trustee’s other duties include managing the investment of the scheme’s assets, administration of plan benefits and exercising of discretionary powers.
The Group works closely with the Trustee to manage the scheme.
The Group has an unconditional right to refund of surplus assuming the gradual settlement over time until all members have left the section. Accordingly,
there is no restriction on the surplus.
31. Retirement benefit schemes continued
Mitie Group plc
195
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
The Landmarc Pension Scheme (the Landmarc scheme)
The Group obtained control of Landmarc Support Services Limited (Landmarc) on 16 November 2023 (see Note 36). Landmarc is the employing
company for the Landmarc scheme, which commenced on 1 July 2003, at which time approximately 1,000 employees became members of the scheme.
From that date the majority of new employees were provided with defined contribution benefits under a separate arrangement, with membership of the
Landmarc scheme for certain new employees only available at the discretion of the employing company. On 1 July 2021 the last remaining active members
ceased accrual and the scheme closed to future accrual.
In December 2022 the Trustee of the scheme entered into a qualifying insurance buy-in to secure the remaining uninsured benefits of the scheme.
The membership data used for the formal actuarial valuation as at 31 December 2020 has been rolled forward and used to calculate results under IAS 19
–
Employee Benefits
by an independent qualified actuary. As required by IAS 19, the value of the defined benefit liabilities has been measured using the
projected unit method.
The Group has an unconditional right to refund of surplus assuming the gradual settlement over time until all members have left the scheme. Accordingly,
there is no restriction on the surplus on the Group’s consolidated statement of financial position (or additional minimum liability to be recognised).
Other defined benefit schemes
Grouped together under Other schemes are a number of schemes to which the Group makes contributions under Admitted Body status to clients’
(generally local government or government entities) defined benefit schemes in respect of certain employees who transferred to the Group under
Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), as well as three smaller schemes that the Group acquired on the
acquisition of Interserve. The valuations of the Other schemes are updated by an actuary at each consolidated statement of financial position date.
For the Admitted Body schemes, which are largely sections of the Local Government Pension Scheme, the Group will only participate for a finite period up
to the end of the relevant contract. The Group is required to pay regular contributions, as decided by the relevant scheme actuaries and detailed in each
scheme’s Contributions Certificate, which are calculated every three years as part of a triennial valuation. In a number of cases, contributions payable by
the employer are capped and any excess is recovered from the entity that the employees transferred from. In addition, in certain cases, at the end of the
contract the Group will be required to pay any deficit (as determined by the scheme actuary) that is assessed for its notional section of the scheme.
The Group made contributions to the Other schemes of £0.1m in the year (2024: £0.4m). The Group expects to make contributions of a similar amount in
the year ending 31 March 2026.
Multi-employer schemes
As a result of acquisition activity and staff transfers following contract wins, the Group participates in three multi-employer pension schemes. The total
contributions to these schemes for the financial year ending 31 March 2026 are anticipated to be £0.1m. The Group’s share of the assets and liabilities in
respect of these schemes is minimal.
The Group previously participated in the Plumbing & Mechanical Services (UK) Industry Pension Scheme (the Plumbing Scheme), a funded multi-employer
defined benefit scheme. The Plumbing Scheme was founded in 1975 and to date has had over 4,000 employers. The Group has received a Section 75
employer debt notice in respect of the participation of Robert Prettie & Co Limited in the Plumbing Scheme. As a result of the Interserve acquisition, the
Group increased its participation in the Plumbing Scheme and the Group has received a Section 75 employer debt notice in respect of the participation of
Mitie FM Limited.
Provisions of £21.7m were held at 31 March 2024 for Section 75 employer debts in respect of the participation of Robert Prettie & Co Limited and Mitie
FM Limited in the Plumbing Scheme. During the year, a settlement agreement was reached with the trustees of the Plumbing Scheme. As a result of this,
the amount of £21.7m has been transferred from provisions to other payables, and a further charge of £2.8m has been recognised as Other items in
respect of Mitie Property Services (UK) Limited’s participation in the Plumbing Scheme. See Note 20.
Accounting assumptions
The assumptions used in calculating the accounting costs and obligations of the Group’s defined benefit pension schemes, as detailed below, are set after
consultation with independent, professionally qualified actuaries.
The discount rate used to determine the present value of the obligations is set by reference to market yields on high-quality corporate bonds. The
assumptions for price inflation are set by reference to the difference between yields on longer-term conventional government bonds and index-linked
bonds. The assumptions for increases in pensionable pay take into account expected salary inflation, the cap at CPI, and how often the cap is likely to
be exceeded.
The assumptions for life expectancy have been set with reference to the actuarial tables used in the latest funding valuations.
The Group is aware of a case involving Virgin Media and NTL Pension Trustee II Limited (and others). On 16 June 2023 the High Court issued a ruling in
respect of this case, which was subsequently upheld by the Court of Appeal in August 2024, and could potentially lead to additional liabilities for pension
schemes in the UK which were contracted out on a salary-related basis, and made amendments between April 1997 and April 2016.
Reasonable preliminary due diligence has concluded that the defined benefit obligation values disclosed in the Annual Report and Accounts 2025 do not
require adjustment for the impact of this case, however, further investigation is ongoing. A material impact is considered unlikely. No amendments for this
matter have been included in the IAS 19 actuarial valuation as the impact, if any, cannot be reliably assessed.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
31. Retirement benefit schemes continued
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196
Annual Report and Accounts 2025
Principal accounting assumptions at consolidated statement of financial position date
Group section | Interserve section | Landmarc scheme | Other schemes | |||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
% | % | % | % | % | % | % | % | |
Key assumptions used for IAS 19 valuation: | ||||||||
Discount rate | 5.79 | 4.84 | 5.82 | 4.80 | 5.70 | 4.80 | 5.82 | 4.80 |
Expected rate of pensionable pay increases | 2.57 | 2.63 | 2.70 | 2.80 | 2.60 | 3.30 | 3.39 | 2.80 |
Retail price inflation | 3.18 | 3.26 | 3.15 | 3.20 | 3.20 | 3.30 | 3.15 | 3.20 |
Consumer price inflation | 2.57 | 2.63 | 2.70 | 2.80 | 2.60 | 2.70 | 2.70 | 2.80 |
Future pension increases | 2.57 | 2.63 | 2.70 | 2.80 | 3.10 | 3.30 | 2.82 | 3.20 |
Group section | Interserve section | Landmarc scheme | ||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
Years | Years | Years | Years | Years | Years | |
Post-retirement life expectancy: | ||||||
Current pensioners at 65 – male | 87.1 | 87.1 | 84.7 | 85.7 | 85.0 | 84.9 |
Current pensioners at 65 – female | 88.7 | 88.6 | 87.0 | 88.3 | 88.6 | 88.6 |
Future pensioners at 65 – male | 88.1 | 88.1 | 85.7 | 86.6 | 86.2 | 86.1 |
Future pensioners at 65 – female | 89.9 | 89.1 | 88.2 | 89.4 | 89.7 | 89.7 |
Life expectancy for the Other schemes is that used by the relevant scheme actuary.
Sensitivity of defined benefit obligations to key assumptions
The sensitivity of defined benefit obligations to changes in principal actuarial assumptions is shown below.
Impact on defined benefit obligations | |||
Increase/(decrease) | Increase/(decrease) | ||
Change in | in obligations | in obligations | |
assumption | % | £m | |
Increase in discount rate | 0.25% | (3.1) | (7.9) |
Increase in retail price inflation 1 | 0.25% | 2.2 | 5.5 |
Increase in consumer price inflation (excluding pay) | 0.25% | 1.0 | 2.5 |
Increase in life expectancy | 1 year | 3.2 | 8.2 |
Note:
1.
Including other inflation-linked assumptions (consumer price inflation, pension increases and salary growth).
Some of the above changes in assumptions may have an impact on the value of the scheme’s investment holdings. For example, the Group scheme holds
a proportion of its assets in UK corporate bonds. A fall in the discount rate as a result of lower UK corporate bond yields would lead to an increase in the
value of these assets, mitigating the increase in the defined benefit obligation to some extent. The duration, or average term to payment for the benefits
due, weighted by liability, is around 14 years for the Group and Interserve sections, and 11 years for the Landmarc scheme.
31. Retirement benefit schemes continued
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Strategic report
Governance
Financial statements
Amounts recognised in consolidated financial statements
Amounts recognised in the consolidated income statement are as follows:
| 2025 | 2024 | |||||||||
Group | Interserve | Landmarc | Other | Group | Interserve | Landmarc | Other | |||
section | section | scheme | schemes | Total | section | section | scheme | schemes | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Current service cost | (0.1) | (0.3) | – | (0.7) | (1.1) | (0.1) | (0.5) | – | (0.9) | (1.5) |
Past service cost | ||||||||||
(including curtailments/ | ||||||||||
settlements) 1,2 | – | – | (1.1) | (5.3) | (6.4) | – | – | – | (0.3) | (0.3) |
Total administrative | ||||||||||
expense 1 | (1.0) | (0.2) | (0.5) | (0.2) | (1.9) | (1.1) | – | (0.1) | (0.1) | (1.3) |
Amounts recognised | ||||||||||
in operating profit | (1.1) | (0.5) | (1.6) | (6.2) | (9.4) | (1.2) | (0.5) | (0.1) | (1.3) | (3.1) |
Net interest | ||||||||||
income/(cost) | 0.2 | 0.1 | 0.1 | (0.1) | 0.3 | 0.3 | 0.2 | 0.1 | (0.1) | 0.5 |
Amounts recognised | ||||||||||
in profit before tax | (0.9) | (0.4) | (1.5) | (6.3) | (9.1) | (0.9) | (0.3) | – | (1.4) | (2.6) |
Notes:
1.
During the year ended 31 March 2025, an agreement to amend the Landmarc scheme rules to increase certain cash benefits which members receive on retirement was completed.
The Group incurred a £1.1m past service cost charge and administrative expenses of £0.2m in relation to the amendment of the Landmarc scheme rules, which have been recognised
in the consolidated income statement as Other items. See Note 4.
2. During the year ended 31 March 2025, the Group formally exited certain Local Government Pension Schemes (LGPS), resulting in a £5.3m contract settlement charge, which was
recognised within Other items. See Note 4.
Amounts recognised in the consolidated statement of comprehensive income are as follows:
| 2025 | 2024 | |||||||||
Group | Interserve | Landmarc | Other | Group | Interserve | Landmarc | Other | |||
section | section | scheme | schemes | Total | section | section | scheme | schemes | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Actuarial gains/(losses) arising due to | ||||||||||
changes in financial assumptions | 22.8 | 2.9 | 4.3 | 6.6 | 36.6 | 2.2 | 0.2 | (3.0) | 2.6 | 2.0 |
Actuarial gains/(losses) arising from | ||||||||||
liability experience | 0.9 | 1.8 | (0.1) | (0.2) | 2.4 | (8.0) | – | 0.4 | 0.5 | (7.1) |
Actuarial (losses)/gains due to changes | ||||||||||
in demographic assumptions | (0.1) | 0.1 | – | 0.5 | 0.5 | (0.5) | 0.3 | 0.6 | – | 0.4 |
Movement in asset ceiling, excluding | ||||||||||
interest 1 | – | – | – | (2.4) | (2.4) | – | – | – | (6.0) | (6.0) |
Return on scheme assets, excluding | ||||||||||
interest income | (19.0) | (2.3) | (3.8) | 1.7 | (23.4) | (7.9) | (1.7) | 2.2 | 4.0 | (3.4) |
Return on reimbursement asset 2 | – | – | – | – | – | – | – | – | (0.1) | (0.1) |
Amounts recognised in other | ||||||||||
comprehensive income/(expense) | 4.6 | 2.5 | 0.4 | 6.2 | 13.7 | (14.2) | (1.2) | 0.2 | 1.0 | (14.2) |
Notes:
1.
The £2.4m net charge for the year ended 31 March 2025 includes a £5.3m credit with respect to the reversal of gross surplus associated with the exit of certain LGPS schemes.
2. The reimbursement asset of £0.9m at 31 March 2025 (2024: £0.9m) is recorded within other receivables. See Note 24.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
31. Retirement benefit schemes continued
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Annual Report and Accounts 2025
The amounts included in the consolidated statement of financial position are as follows:
| 2025 | 2024 | |||||||||
Group | Interserve | Landmarc | Other | Group | Interserve | Landmarc | Other | |||
section | section | scheme | schemes | Total | section | section | scheme | schemes | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Fair value of scheme assets | 165.3 | 22.7 | 36.7 | 69.1 | 293.8 | 174.8 | 24.4 | 41.1 | 80.0 | 320.3 |
Present value of defined benefit | ||||||||||
obligations | (154.7) | (18.9) | (34.8) | (43.8) | (252.2) | (177.4) | (23.2) | (38.1) | (58.1) | (296.8) |
Surplus/(deficit) without restriction | 10.6 | 3.8 | 1.9 | 25.3 | 41.6 | (2.6) | 1.2 | 3.0 | 21.9 | 23.5 |
Asset ceiling | – | – | – | (27.7) | (27.7) | – | – | – | (24.3) | (24.3) |
Net pension asset/(liability) | 10.6 | 3.8 | 1.9 | (2.4) | 13.9 | (2.6) | 1.2 | 3.0 | (2.4) | (0.8) |
All figures above are shown before deferred tax. The total of schemes in a surplus position is £16.3m (2024: £4.2m).
Movements in the present value of defined benefit obligations were as follows:
| 2025 | 2024 | |||||||||
Group | Interserve | Landmarc | Other | Group | Interserve | Landmarc | Other | |||
section | section | scheme | schemes | Total | section | section | scheme | schemes | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 April | 177.4 | 23.2 | 38.1 | 58.1 | 296.8 | 169.6 | 22.5 | – | 62.2 | 254.3 |
Arising on business combination | – | – | – | – | – | – | – | 36.3 | – | 36.3 |
Current service cost | 0.1 | 0.3 | – | 0.7 | 1.1 | 0.1 | 0.5 | – | 0.9 | 1.5 |
Interest cost | 8.4 | 1.1 | 1.8 | 2.4 | 13.7 | 7.9 | 1.1 | 0.7 | 2.7 | 12.4 |
Contributions from scheme members | – | 0.1 | – | 0.1 | 0.2 | – | 0.1 | – | 0.2 | 0.3 |
Actuarial (gains)/losses arising due to | ||||||||||
changes in financial assumptions | (22.8) | (2.9) | (4.3) | (6.6) | (36.6) | (2.2) | (0.2) | 3.0 | (2.6) | (2.0) |
Actuarial (gains)/losses arising from | ||||||||||
experience | (0.9) | (1.8) | 0.1 | 0.2 | (2.4) | 8.0 | – | (0.4) | (0.5) | 7.1 |
Actuarial losses/(gains) due to changes | ||||||||||
in demographic assumptions | 0.1 | (0.1) | – | (0.5) | (0.5) | 0.5 | (0.3) | (0.6) | – | (0.4) |
Benefits paid | (7.6) | (1.0) | (2.0) | (1.4) | (12.0) | (6.5) | (0.5) | (0.9) | (1.4) | (9.3) |
Past service cost | – | – | 1.1 | – | 1.1 | – | – | – | (1.4) | (1.4) |
Contract transfer | – | – | – | – | – | – | – | – | (2.0) | (2.0) |
Contract settlement | – | – | – | (9.2) | (9.2) | – | – | – | – | – |
At 31 March | 154.7 | 18.9 | 34.8 | 43.8 | 252.2 | 177.4 | 23.2 | 38.1 | 58.1 | 296.8 |
The defined benefit obligations analysed by participant status is as follows:
| 2025 | 2024 | |||||
Group | Interserve | Landmarc | Group | Interserve | Landmarc | |
section | section | scheme | section | section | scheme | |
£m | £m | £m | £m | £m | £m | |
Active | 1.1 | 8.5 | – | 1.8 | 20.3 | – |
Deferred | 72.3 | 2.9 | 6.9 | 102.9 | 1.7 | 12.2 |
Pensioners | 81.3 | 7.5 | 27.9 | 72.7 | 1.2 | 25.9 |
At 31 March | 154.7 | 18.9 | 34.8 | 177.4 | 23.2 | 38.1 |
31. Retirement benefit schemes continued
Mitie Group plc
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Strategic report
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Financial statements
Movements in the fair value of scheme assets were as follows:
| 2025 | 2024 | |||||||||
Group | Interserve | Landmarc | Other | Group | Interserve | Landmarc | Other | |||
section | section | scheme | schemes | Total | section | section | scheme | schemes | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 April | 174.8 | 24.4 | 41.1 | 80.0 | 320.3 | 170.3 | 24.2 | – | 77.2 | 271.7 |
Arising on acquisition | – | – | – | – | – | – | – | 39.1 | – | 39.1 |
Interest income | 8.6 | 1.2 | 1.9 | 3.3 | 15.0 | 8.2 | 1.3 | 0.8 | 3.4 | 13.7 |
Actuarial (losses)/gains on assets | (19.0) | (2.3) | (3.8) | 1.7 | (23.4) | (7.9) | (1.7) | 2.2 | 4.0 | (3.4) |
Contributions from the sponsoring | ||||||||||
companies 1 | 9.5 | 0.5 | – | 0.1 | 10.1 | 11.8 | 1.0 | – | 0.4 | 13.2 |
Contributions from scheme members | – | 0.1 | – | 0.1 | 0.2 | – | 0.1 | – | 0.2 | 0.3 |
Expenses paid | (1.0) | (0.2) | (0.5) | (0.2) | (1.9) | (1.1) | – | (0.1) | (0.1) | (1.3) |
Benefits paid | (7.6) | (1.0) | (2.0) | (1.4) | (12.0) | (6.5) | (0.5) | (0.9) | (1.4) | (9.3) |
Past service cost | – | – | – | – | – | – | – | – | (1.7) | (1.7) |
Contract transfer | – | – | – | – | – | – | – | – | (2.0) | (2.0) |
Contract settlement | – | – | – | (14.5) | (14.5) | – | – | – | – | – |
At 31 March | 165.3 | 22.7 | 36.7 | 69.1 | 293.8 | 174.8 | 24.4 | 41.1 | 80.0 | 320.3 |
Note:
1.
Group section contributions of £9.5m (2024: £11.8m) is inclusive of £8.4m deficit repair contributions (2024: £10.6m).
Movements in the asset ceiling were as follows:
2025 | 2024 | |
£m | £m | |
At 1 April | 24.3 | 17.5 |
Interest cost on asset ceiling | 1.0 | 0.8 |
Change in asset ceiling excluding interest | 2.4 | 6.0 |
At 31 March | 27.7 | 24.3 |
Fair values of the assets held by the schemes were as follows:
| 2025 | 2024 | |||||||||
Group | Interserve | Landmarc | Other | Group | Interserve | Landmarc | Other | |||
section | section | scheme | schemes | Total | section | section | scheme | schemes | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Equities | 22.4 | – | – | 35.1 | 57.5 | 28.3 | – | – | 42.8 | 71.1 |
Government bonds | 72.4 | 8.5 | – | 3.2 | 84.1 | 70.7 | 10.6 | – | 4.0 | 85.3 |
Corporate bonds | 55.8 | 5.8 | – | 13.7 | 75.3 | 53.0 | 6.0 | – | 14.1 | 73.1 |
Property | 2.3 | – | – | 11.2 | 13.5 | 2.3 | – | – | 11.8 | 14.1 |
Diversified growth fund | 7.4 | 8.4 | – | 0.9 | 16.7 | 8.6 | 7.8 | – | 1.5 | 17.9 |
Cash | 3.8 | – | 2.5 | 4.1 | 10.4 | 11.2 | – | 1.9 | 4.7 | 17.8 |
Insurance policies | – | – | 34.2 | 0.9 | 35.1 | – | – | 39.2 | 1.1 | 40.3 |
Commodities | 1.2 | – | – | – | 1.2 | 0.7 | – | – | – | 0.7 |
Total fair value of assets | 165.3 | 22.7 | 36.7 | 69.1 | 293.8 | 174.8 | 24.4 | 41.1 | 80.0 | 320.3 |
The investment portfolios are diversified, investing in a wide range of assets, in order to provide reasonable assurance that no single asset or type of asset
could have a materially adverse impact on the total portfolio. To reduce volatility, certain assets are held in a matching portfolio, which largely consists of
government and corporate bonds, designed to mirror movements in corresponding liabilities.
The property assets represent quoted property investments.
31. Retirement benefit schemes continued
Mitie Group plc
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Annual Report and Accounts 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Risks and risk management
The Group scheme, in common with the majority of UK plans, has a number of risks. These areas of risk and the ways in which the Group has sought to
manage them, with respect to the Group scheme, are set out in the table below.
The risks are considered from both a funding perspective, which drives the cash commitments of the Group, and from an accounting perspective, i.e. the
extent to which such risks affect the amounts recorded in the Group’s consolidated financial statements:
Risk |
Description |
Asset volatility |
The funding liabilities are calculated using a discount rate set with reference to government bond yields, with allowance for |
additional return to be generated from the investment portfolio. The defined benefit obligation for accounting is calculated |
|
using a discount rate set with reference to corporate bond yields. The Group scheme holds 22% of its assets in equities and |
|
other return-seeking assets (principally diversified growth funds (DGFs) and property). The returns on such assets tend to |
|
be volatile and are not correlated to government bonds. This means that the funding level has the potential to be volatile in |
|
the short term, potentially resulting in short-term cash requirements, or alternative security offers, which are acceptable to |
|
the Trustee, and an increase in the net defined benefit liability recorded on the Group’s consolidated statement of financial |
|
position. Equities and DGFs are considered to offer the best returns over the long term with an acceptable level of risk and |
|
hence the scheme holds a significant proportion of these types of assets. However, the scheme’s assets are well-diversified |
|
by investing in a range of asset classes, including property, government bonds and corporate bonds. The Group scheme |
|
holds 4% of its assets in DGFs which seek to maintain high levels of return while achieving lower volatility than direct equity |
|
funds. The allocation to return-seeking assets is monitored to ensure it remains appropriate, given the scheme’s long-term |
|
objectives. The investment in bonds is discussed further below. |
|
Changes in bond yields |
Falling bond yields tend to increase the funding and accounting obligations. However, the investment in corporate and |
government bonds offers a degree of matching, i.e. the movement in assets arising from changes in bond yields partially |
|
matches the movement in the funding or accounting obligations. In this way, the exposure to movements in bond yields is |
|
reduced. |
|
Inflation risk |
The majority of the Group scheme’s benefit obligations are linked to inflation. Higher inflation will lead to higher liabilities |
(although caps on the level of inflationary increases are in place to protect the plan against extreme inflation). The majority |
|
of the Group scheme’s assets are either unaffected by inflation (fixed interest bonds) or loosely correlated with inflation |
|
(equities), meaning that an increase in inflation will also increase the deficit. |
|
Life expectancy |
The majority of the Group scheme’s obligations are to provide a pension for the life of the member, so increases in life |
expectancy will result in an increase in the obligations. |
Areas of risk management
Although investment decisions in the Group scheme are the responsibility of the Trustee, the Group takes an active interest to ensure that pension plan
risks are managed effectively. The Group and Trustee have agreed a long-term strategy for reducing investment risk where appropriate.
The Group is, from time to time, party to contractual disputes that arise in the ordinary course of business. Management does not anticipate that the
outcome of any of these disputes will have a material adverse effect on the Group’s financial position, other than as already provided for in the consolidated
financial statements. In appropriate cases, a provision is recognised based on best estimates and management judgement but there can be no guarantee
that these provisions (which may be subject to potentially material revision from time to time) will result in an accurate prediction, due to the uncertainty
Strategic report
Governance
Financial statements
Mitie Group plc
201
Annual Report and Accounts 2025
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in
this Note.
Mitie Group plc has a related party relationship with the Mitie Foundation, a charitable company. During the year, the Group made payments of £0.4m
(2024: £0.2m) to the Mitie Foundation to fund operations.
During the year ended 31 March 2025, the Group recognised revenue from transactions with associates of £1.9m (2024: £5.3m). The amount due from
associates at the year end is £0.1m (2024: £nil).
Details of the Directors’ remuneration are included in Note 6. The remuneration for the other members of the MGX, including the share-based payments
charge, is £8.2m (2024: £11.4m).
2025 |
2024 |
|
£m |
£m |
|
Short-term employment benefits |
5.5 |
5.8 |
Post-employment benefits |
0.4 |
0.3 |
Share-based payments |
2.3 |
5.3 |
At 31 March |
8.2 |
11.4 |
All transactions with these related parties were made on terms equivalent to those that prevail in arm’s length transactions.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
202
Annual Report and Accounts 2025
The subsidiaries, joint ventures, associates, and joint operations of the Group as at 31 March 2025 have been disclosed below. Unless otherwise stated, the
shareholding is held indirectly by Mitie Group plc and is represented by ordinary shares, of which the proportion of ownership interests held equals the
voting rights. No subsidiary undertakings have been excluded from the consolidation.
The principal activities of all undertakings, unless otherwise stated, is the performance of FM services or the holding companies of other undertakings
performing these services. All undertakings are tax resident in their country of incorporation unless otherwise stated.
Subsidiaries
Aggregate % |
||
Country/registered address/company |
of share class |
Share class |
United Kingdom |
||
35 Duchess Road, Rutherglen, Glasgow, Scotland, G73 1AU, United Kingdom |
||
Cliniwaste Health South Limited 1 (registration number SC648410) |
100 |
Ordinary |
Cliniwaste Holdings Limited 2 |
100 |
Ordinary |
P2ML Ltd 1 (registration number SC299864) |
100 |
Ordinary |
Level 12, The Shard, 32 London Bridge Street, London, SE1 9SG, United Kingdom |
||
8point8 Support Limited 1 (registration number 07370013) |
100 |
Ordinary (all classes) |
8point8 Training Limited 1 (registration number 10064042) |
100 |
Ordinary |
Argus Fire Protection Company Limited |
100 |
Ordinary |
Biotecture Limited 1 (registration number 06297364) |
100 |
Ordinary |
Care & Custody (Health) Limited 2 |
100 |
Ordinary |
Converge Technology Ltd 1 (registration number 08225307) |
100 |
Ordinary (all classes) |
CTI Power Limited 2 |
100 |
Ordinary |
Custom Solar Ltd 1 (registration number 07886213) |
100 |
Ordinary (all classes) |
ESM Power Limited 1 (registration number 04611637) |
100 |
Ordinary |
Esoteric Limited 1 (registration number 04441008) |
100 |
Ordinary |
G.B. Electronics Limited 1 (registration number 02674826) |
100 |
Ordinary |
GBE Converge Group Ltd 1 (registration number 03648989) |
100 |
Ordinary (all classes) |
Global Aware International Ltd 2 |
100 |
Ordinary |
Insitu Cleaning Company Limited 1 (registration number 01623889) |
100 |
Ordinary |
J C A Engineering Ltd |
100 |
Ordinary |
Jabez Holdings Limited 2 |
100 |
Ordinary |
JCA Head Co Limited 2 |
100 |
Ordinary (all classes) |
JCA HQ Group Holdings Ltd. 2 |
100 |
Ordinary |
Landmarc Support Services Limited |
100 3 |
Ordinary–A |
Linx International Group Limited 1 (registration number 02057133) |
100 |
Ordinary |
Maclellan International Limited 1 (registration number 03688689) |
100 |
Ordinary |
Maclellan Management Services Limited 2 |
100 |
Ordinary |
Mitie (Defence) Limited |
100 |
Ordinary |
Mitie (Facilities Services) Limited 1 (registration number 00725583) |
100 |
Ordinary |
Mitie Aviation Security Limited 4 |
100 |
Ordinary |
Mitie Built Environment Limited 2 |
100 |
Ordinary, preferred |
Mitie Care and Custody Limited 4 |
100 |
Ordinary (all classes) |
Mitie Catering Services Limited |
100 |
Ordinary (all classes) |
Mitie Cleaning & Environmental Services Limited |
100 |
Ordinary |
Mitie Company Secretarial Services Limited 5 |
100 |
Ordinary |
Mitie Environmental Services Limited |
100 |
Ordinary |
Mitie FM Limited |
100 |
Ordinary |
Mitie FS (UK) Limited |
100 |
Ordinary |
Mitie Group Pension Scheme Trustee Company Limited 5 |
100 |
Ordinary |
Mitie Holdings Limited 2 |
100 |
Ordinary |
Mitie Infrastructure Limited 2,6 |
100 |
Ordinary (all classes) |
Mitie Group plc
203
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Aggregate % | ||
Country/registered address/company | of share class | Share class |
Mitie Integrated Services Limited | 100 | Ordinary |
Mitie Landscapes Limited | 100 | Ordinary (all classes) |
Mitie Limited | 100 | Ordinary |
Mitie PFI Limited | 100 | Ordinary (all classes) |
Mitie Property Services (UK) Limited 7 | 100 | Ordinary (all classes) |
Mitie Roofing Limited 7 | 100 | Ordinary |
Mitie Security (First) Limited 2 | 100 | Ordinary, deferred |
(all classes) | ||
Mitie Security (Knightsbridge) Limited 2 | 100 | Ordinary |
Mitie Security Limited | 100 | Ordinary |
Mitie Shared Services Limited | 100 | Ordinary |
Mitie Specialist Services (Holdings) Limited 1 (registration number 03044401) | 100 | Ordinary |
Mitie Technical Facilities Management Limited | 100 | Ordinary (all classes) |
Mitie Technical Services Limited 2 | 100 | Ordinary |
Mitie Telecoms Assets Limited 2 | 100 | Ordinary |
Mitie Telecoms Limited | 100 | Ordinary |
Mitie Telecoms Towers Limited 1 (registration number 08811106) | 100 | Ordinary |
Mitie Telecoms Ventures Limited 2 | 100 | Ordinary |
Mitie Treasury Management Limited 7 | 100 | Ordinary |
Mitie Trustee Limited 5 | 100 | Ordinary |
Mitie Waste & Environmental Services Limited 4 | 100 | Ordinary (all classes) |
Mitiefm (Holdings) Limited 2 | 100 | Ordinary |
Mitiefm Services Limited 1 (registration number 02820560) | 100 | Ordinary, redeemable |
Ordinary, deferred | ||
Perpetuity Training Limited 1 (registration number 04505069) | 100 | Ordinary |
Procius Limited 1 (registration number 04730672) | 100 | Ordinary (all classes) |
RHI Industrials Limited 1 (registration number 04233669) | 100 | Ordinary |
Robert Prettie & Co Limited | 100 | Ordinary |
Rock Power Connections Ltd 1 (registration number 08247808) | 100 | Ordinary (all classes) |
Slademain Limited 1 (registration number 01776920) | 100 | Ordinary (all classes) |
Source Eight Limited 2,4 | 100 | Ordinary (all classes) |
Source8 Africa Limited 1 (registration number 08743753) | 100 | Ordinary (all classes) |
Tavcom Limited 1 (registration number 03120861) | 100 | Ordinary A |
UK CRBS Limited 1 (registration number 03656962) | 100 | Ordinary (all classes) |
Utilyx Asset Management Limited 2 | 100 | Ordinary |
Utilyx Healthcare Energy Services Limited 1 (registration number 06900475) | 100 | Ordinary |
Utilyx Limited 1 (registration number 03922833) | 100 | Ordinary |
Vantage Solutions Limited 1 (registration number 10902316) | 100 | Ordinary |
Wealthy Thoughts Limited 2 | 100 | Ordinary |
Woodford Investments Limited 1 (registration number 10714484) | 100 | Ordinary |
Mitec Operations Centre, Unit 9B, First Floor, Silverwood Business Park, Silverwood Rd, Lurgan, Craigavon, Northern Ireland, BT66 6SY, | ||
United Kingdom | ||
Mitie NI Limited | 100 | Ordinary |
France | ||
259 Rue St Honore, 75001, Paris, France | ||
Mitie France SAS | 100 | Ordinary |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
35. Related undertakings continued
Mitie Group plc
204
Annual Report and Accounts 2025
continued
Aggregate % | ||
Country/registered address/company | of share class | Share class |
Germany | ||
c/o Pinsent Masons Germany LLP, OTTOSTR. 21, 80333, Munich, Germany | ||
Mitie Deutschland GmbH | 100 | Ordinary |
Guernsey | ||
Plaza House, Third Floor, Elizabeth Avenue, St. Peter Port, GY1 2HU, Guernsey | ||
Mitie Engineering Services (Guernsey) Limited 8 | 100 | Ordinary |
Ireland | ||
108 Q House, 76 Furze Road, Sandyford, Dublin 18, D18 AY29, Ireland | ||
Mitie Facilities Management Limited 4 | 100 | Ordinary (all classes) |
Jersey | ||
IFC 5, St Helier, JE1 1ST, Jersey | ||
Mitie Engineering Services (Jersey) Limited 8 | 100 | Ordinary |
Kingdom of Saudi Arabia | ||
PO Box 26982, Riyadh, 11595, Kingdom of Saudi Arabia | ||
Interserve Saudi Arabia LLC 2 | 100 | Ordinary |
Netherlands | ||
Javastraat 12, Rotterdam, Netherlands | ||
Mitie Nederland B.V. | 100 | Ordinary |
Ondernemingsweg 25, 1422 DZ, Uithoorn, Netherlands | ||
GBE Converge B.V. | 100 | Ordinary |
Nigeria | ||
235 Ikorodu Road, Ilupeju, Lagos, Nigeria | ||
Source8 Delivery (Nigeria) Limited | 100 | Ordinary |
Spain | ||
Avenida de Cornellá 140, Planta 6, Puerta 2 (08950) Esplugues de Llobregat, Barcelona, Spain | ||
JP Silcom Servicios S.L. | 100 | Ordinary |
Silcom Auxiliares S.L. | 100 | Ordinary |
Visegurity Express S.L. | 100 | Ordinary |
c/o Cala Blanca, Número 15, Polígono Son Fuster, 07009, Palma, Spain | ||
Mitie Integra Baleares S.L. | 100 | Ordinary |
c/o Luciano Ramos Diaz, 1, Local 2 Despacho 4 – S Cristobal Laguna, 38202, San Cristobal de la Laguna, Tenerife, Spain | ||
Mitie Integra Canarias S.L. | 100 | Ordinary |
Calle Fernando Beautell, 25, 1 Planta, Polígono Costa Sur, 38009, Santa Cruz de Tenerife, Spain | ||
Bisermax Control S.L. | 100 | Ordinary |
Biservicus Sistemas De Seguridad S.A. | 100 | Ordinary |
Calle Juan Ignacio Luca de Tena, 8, 28027, Madrid, Spain | ||
Mitie Facilities Services S.A. | 100 | Ordinary |
Translimp Contract Services S.A. | 100 | Ordinary |
Calle Metalurgia, 8, planta 2 puerta A, 47610 Zaratán, Valladolid, Spain | ||
Fundación Mitie | 100 | Ordinary |
Calle San Miguel 25, Bajo 1, Azuqueca de Henares, 19200, Guadalajara, Spain | ||
Mitie Centro Especial de Empleo S.L. | 100 | Ordinary |
Carretera Santa Creu do Calafell 81, Gava, 08850, Barcelona, Spain | ||
Mitie Integra S.L. | 100 | Ordinary |
Switzerland | ||
Brandschenkestrasse 90, CH-8027, Zurich, Switzerland | ||
Mitie Schweiz GmbH | 100 | Ordinary |
Strategic report
Governance
Financial statements
35. Related undertakings continued
Mitie Group plc
205
Annual Report and Accounts 2025
Aggregate % |
||
Country/registered address/company |
of share class |
Share class |
United Arab Emirates |
||
PO Box 41394, Abu Dhabi, United Arab Emirates |
||
Landmarc Gulf Consultancy Management LLC |
49 |
Ordinary |
Joint ventures
Aggregate % | ||
Country/registered address/company | of share class | Share class |
United Kingdom | ||
Level 12, The Shard, 32 London Bridge Street, London, SE1 9SG, United Kingdom | ||
Pride (SERP) Ltd | 100 9 | A Ordinary |
Kingdom of Saudi Arabia | ||
Unit 6 and 7, Al Amani Center, Anas Bin Malik Road, Building number 2727, Additional number 8114, Riyadh, Postal Code 133, | ||
Kingdom of Saudi Arabia | ||
Interserve Rezayat Company LLC 2 | 50 | Ordinary |
United States of America | ||
4800 Westfields Boulevard, Suite 400, Chantilly, Virginia, 20151, United States of America | ||
Amentum Mitie Pacific LLC | 30 | Ordinary |
Associates
Aggregate % | ||
Country/registered address/entity | of share class | Share class |
United Kingdom | ||
Level 12, The Shard, 32 London Bridge Street, London, SE1 9SG, United Kingdom | ||
Sussex Estates and Facilities LLP | 35 | Partnership interest |
Suite 1, First Floor Coachworks Arcade, Northgate Street, Chester, CH1 2EY, United Kingdom | ||
Chaperhome Ltd | 36.78 10 | Ordinary A |
Joint operations
Aggregate % |
Share class |
|
United Kingdom |
||
OneAim 11 |
50 |
Not applicable |
Notes:
1. These subsidiaries have taken advantage of the audit exemption under Section 479A of the Companies Act 2006 for the period ended 31 March 2025. As such, Mitie Group plc has
provided a guarantee against all debts and liabilities in these subsidiaries as at 31 March 2025.
2. In liquidation as at 31 March 2025.
3.
100% ownership held in Ordinary-A shares. 51% ownership of total share capital, as another party owns the remaining 49%. See Note 36.
4. The Company holds direct minority interest in these subsidiaries.
5. These subsidiaries were dormant during the year ended 31 March 2025 and will take the exemption from audit for the year by virtue of Section 480 of the Companies Act 2006.
6. The Company has voting control of this subsidiary through direct interests in a class of shares representing fewer than 50% of the total issued share capital of the subsidiary.
7. Held directly by the Company.
8. The Company is also a tax resident in the United Kingdom.
9.
100% ownership held in A Ordinary shares. 50% ownership of total share capital, as another party owns the remaining 50%.
10. 36.78% ownership held in Ordinary A shares. 30.79% ownership of total share capital due to existence of other share classes and other parties own the remaining 69.21%.
Voting rights are 32.7% as a certain share class is non-voting. See Note 14.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Mitie Group plc
206
Annual Report and Accounts 2025
The Group has opted to recognise the non-controlling interest in Landmarc at its proportionate share of the acquired identifiable net assets.
The summarised financial information represents the consolidated position of Landmarc and its subsidiaries that would be shown in its consolidated
financial statements prepared in accordance with UK-adopted International Accounting Standards under Group accounting policies before
intercompany eliminations.
The comparative summarised statement of total comprehensive income is for the period from 16 November 2023 to 31 March 2024. Landmarc was
accounted for as a joint venture until 16 November 2023, at which time the Group obtained control of Landmarc. Since 16 November 2023, Landmarc’s
financial results have been consolidated as a subsidiary of the Group.
Summarised statement of total comprehensive income
16 November |
||
Year to |
2023 to |
|
31 March 2025 |
31 March 2024 |
|
£m |
£m |
|
Revenue 1 |
206.6 |
93.2 |
Profit for the financial year/period before Other items |
17.8 |
10.4 |
Other items |
(3.5) |
(1.0) |
Profit for the year/period |
14.3 |
9.4 |
Other comprehensive income |
0.4 |
0.2 |
Total comprehensive income |
14.7 |
9.6 |
Profit attributable to non-controlling interests after Other items |
7.0 |
4.6 |
Total comprehensive income attributable to non-controlling interest |
7.2 |
4.7 |
Dividends paid to non-controlling interests |
10.1 |
2.5 |
Note:
1.
Includes £14.9m (16 November 2023 to 31 March 2024: £14.4m) of intercompany revenue at nil margin which has been eliminated on consolidation.
Summarised statement of financial position
2025 |
2024 |
|
£m |
£m |
|
Non-current assets |
37.6 |
37.9 |
Current assets |
47.2 |
56.9 |
Total assets |
84.8 |
94.8 |
Current liabilities |
(40.8) |
(45.2) |
Non-current liabilities |
(8.1) |
(7.8) |
Total liabilities |
(48.9) |
(53.0) |
Net assets |
35.9 |
41.8 |
Equity shareholders’ funds |
18.3 |
21.3 |
Non-controlling interests |
17.6 |
20.5 |
Total equity |
35.9 |
41.8 |
Summarised statement of cash flows
16 November |
||
Year to |
2023 to |
|
31 March 2025 |
31 March 2024 |
|
£m |
£m |
|
Net (decrease)/increase in cash and cash equivalents |
(12.5) |
7.3 |
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Financial statements
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
Notes
2025
£m
2024
£m
Non-current assets
Investments in subsidiaries
4
661.2
652.5
Other receivables
5
0.2
0.2
Deferred tax assets
6
11.1
9.4
Total non-current assets
672.5
662.1
Current assets
Trade and other receivables
5
260.4
195.7
Current tax receivable
7
13.1
36.5
Cash and cash equivalents
1.7
0.5
Total current assets
275.2
232.7
Total assets
947.7
894.8
Current liabilities
Trade and other payables
8
(66.9)
(99.3)
Provisions
9
(5.7)
(5.4)
Total current liabilities
(72.6)
(104.7)
Net current assets
202.6
128.0
Non-current liabilities
Provisions
9
(10.2)
(10.1)
Total non-current liabilities
(10.2)
(10.1)
Total liabilities
(82.8)
(114.8)
Net assets
864.9
780.0
Equity
Share capital
10
31.3
33.3
Share premium
10
132.0
132.0
Merger reserve
10
157.0
157.0
Own shares reserve
10
(65.1)
(69.8)
Share-based payments reserve
10
40.4
42.1
Capital redemption reserve
10
5.3
3.3
Retained profits
1
10
564.0
482.1
Total equity
864.9
780.0
Note:
1. The profit for the year ended 31 March 2025 was £238.2m (2024: £173.9m).
The accompanying notes on pages 209 to 212 form an integral part of the financial statements.
The Company financial statements of Mitie Group plc, company registration number SC019230, were approved by the Board of Directors and authorised
for issue on 4 June 2025. They were signed on its behalf by:
Phil Bentley
Simon Kirkpatrick
Chief Executive Officer
Chief Financial Officer
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COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Own shares
reserve
£m
Share-based
payments
reserve
£m
Capital
redemption
reserve
£m
Retained
profits
£m
Total equity
£m
At 1 April 2023
34.0
131.5
157.0
(59.0)
33.7
2.6
395.0
694.8
Profit for the year
–
–
–
–
–
–
173.9
173.9
Total comprehensive income
–
–
–
–
–
–
173.9
173.9
Transactions with owners
Dividends paid
–
–
–
–
–
–
(41.5)
(41.5)
Purchase of own shares
1
–
–
–
(19.6)
–
–
–
(19.6)
Share buybacks
2
(0.7)
–
–
(31.8)
–
0.7
(26.6)
(58.4)
Share-based payments
3
–
0.5
–
40.6
8.4
–
(21.4)
28.1
Tax on share-based payments
–
–
–
–
–
–
2.7
2.7
Total transactions with owners
(0.7)
0.5
–
(10.8)
8.4
0.7
(86.8)
(88.7)
At 31 March 2024
33.3
132.0
157.0
(69.8)
42.1
3.3
482.1
780.0
At 1 April 2024
33.3
132.0
157.0
(69.8)
42.1
3.3
482.1
780.0
Profit for the year
–
–
–
–
–
–
238.2
238.2
Total comprehensive income
–
–
–
–
–
–
238.2
238.2
Transactions with owners
Dividends paid
–
–
–
–
–
–
(54.5)
(54.5)
Purchase of own shares
1
–
–
–
(14.6)
–
–
–
(14.6)
Share buybacks
2
(2.0)
–
–
(12.2)
–
2.0
(92.5)
(104.7)
Share-based payments
3
–
–
–
31.5
(1.7)
–
(10.6)
19.2
Tax on share-based payments
–
–
–
–
–
–
1.3
1.3
Total transactions with owners
(2.0)
–
–
4.7
(1.7)
2.0
(156.3)
(153.3)
At 31 March 2025
31.3
132.0
157.0
(65.1)
40.4
5.3
564.0
864.9
Notes:
1.
The Employee Benefit Trust acquired 11.7m (2024: 19.1m) ordinary shares through market purchases for a consideration together with associated fees and stamp duty of £13.2m
(2024: £18.9m) and the Share Incentive Plan Trust acquired 1.1m (2024: 0.6m) shares for a consideration of £1.4m (2024: £0.7m).
2. The share buybacks resulted in the purchase of 89.0m ordinary shares (2024: 58.6m) for a consideration of £92.5m (2024: £26.6m), of which 78.9m ordinary shares (2024: 26.1m) have
subsequently been cancelled. In addition, 10.1m ordinary shares (2024: 32.5m) were bought into treasury for a consideration of £12.2m (2024: £31.8m). See Notes 27 and 28 of the
consolidated financial statements.
3. The £10.6m (2024: £21.4m) loss in retained earnings with respect to share-based payments represents the loss on exercises of share scheme awards of £9.6m (2024: £21.2m) and the
charge with respect to dividend equivalents of £1.0m (2024: £0.2m). See Note 28 of the consolidated financial statements.
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Financial statements
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31 March 2025
1. Basis of preparation and material accounting policies
(a) Basis of preparation
Mitie Group plc (the Company) is a public company limited by shares, incorporated in the United Kingdom and registered in Scotland. It was incorporated
on 16 July 1936 under the Companies Act 1929. The Company’s registered office is at 35 Duchess Road, Rutherglen, Glasgow, G73 1AU. The Company’s
financial statements are presented in pounds sterling, which is the Company’s functional and presentational currency. All amounts have been rounded to
the nearest hundred thousand pounds, unless otherwise indicated. The Group comprises the Company and all its subsidiaries.
These financial statements were prepared in accordance with Financial Reporting Standard 101 – Reduced Disclosure Framework (FRS 101).
In preparing its financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted International
Accounting Standards, but makes amendments where necessary in order to comply with the Companies Act 2006 and to take advantage of FRS 101
disclosure exemptions.
The Company’s financial statements have been prepared on the historical cost basis and on a going concern basis.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
• A cash flow statement and related notes
• The statement of compliance with UK-adopted International Accounting Standards
• The effects of new but not yet effective UK-adopted International Accounting Standards
• Disclosures in respect of capital management
• Disclosures in respect of the compensation of Key Management Personnel
• Disclosures in respect of related party transactions entered into between two or more members of a group, provided that any subsidiary which is a
party to the transaction is wholly owned by such a member
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect
of the following disclosures:
• IFRS 2 –
Share-based Payment
in respect of Group settled share-based payments
• Certain disclosures required by IAS 12 –
Income Taxes
• Certain disclosures required by IFRS 13 –
Fair Value Measurement
and the disclosures required by IFRS 7 –
Financial Instruments: Disclosures
In accordance with Section 408(3) of the Companies Act 2006, the Company is exempt from the requirement to present its income statement.
There are no new and mandatorily effective standards in the year that could have a material impact on the financial statements.
(b) Material accounting policies
The material accounting policies and measurement bases adopted are the same as those disclosed in Note 1 of the consolidated financial statements
except as noted below, and have been applied consistently throughout the year and the preceding year, unless stated otherwise.
Investments
Investments in subsidiaries are shown at cost less any impairments. Investments in subsidiaries are reviewed on an ongoing basis for any indication of
impairment and, if any such indication exists, the investment’s recoverable amount is estimated. An impairment loss is recognised in the income statement
whenever the carrying value of an asset exceeds its recoverable amount.
Financial instruments
Intercompany loans are all assessed as being repayable on demand. The impairment assessment of receivables is in accordance with IFRS 9.
The Company enters into financial guarantee arrangements to guarantee the indebtedness of other companies within the Group. The financial guarantee
contracts are measured in accordance with IFRS 9.
Taxation
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted at the
statement of financial position date.
Deferred tax is provided in full on temporary differences that result in an obligation at the statement of financial position date to pay more tax, or a right to
pay less tax, at a future date, at rates expected to apply when they crystallise based upon tax rates and legislation that have been enacted or substantively
enacted at the statement of financial position date. Temporary differences arise from the inclusion of items of income and expenditure in tax computations
in periods different from those in which they are included in the financial statements. Deferred tax is not provided on unremitted earnings of subsidiaries,
joint ventures and associates where there is no commitment to remit these earnings. Deferred tax assets are recognised to the extent that it is regarded
as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.
Share-based payments
Details of the Company’s equity-settled share schemes are provided in Note 30 of the consolidated financial statements. The cost of options and
conditional awards over the Company’s shares granted to employees of the Company’s subsidiaries are accounted for as a capital contribution within
the carrying value of investments in subsidiaries.
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
continued
1. Basis of preparation and material accounting policies continued
(c) Critical accounting judgements and significant sources of estimation uncertainty
The preparation of the financial statements under FRS 101 requires management to make judgements, estimates and assumptions that affect amounts
recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the reporting period. Actual results
may differ from these judgements, estimates and assumptions.
There were no critical judgements that had significant effects on the amounts recognised in the financial statements and there were no significant sources
of estimation uncertainty at the statement of financial position date that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities in the next financial year.
2. Staff numbers and costs
There were no persons employed by the Company (including Directors) during the years ended 31 March 2025 and 31 March 2024. Information about
the Directors’ remuneration has been disclosed in Note 6 of the consolidated financial statements.
3. Auditor’s remuneration
The auditor’s remuneration for audit services to the Company has been disclosed in Note 5 of the consolidated financial statements.
4. Investments in subsidiaries
£m
Net book value
At 1 April 2024
652.5
Capital contribution with respect to share-based payments
9.2
Impairment charge for the year
(0.5)
At 31 March 2025
661.2
Cost
At 1 April 2023
721.8
At 31 March 2024
735.0
At 31 March 2025
737.0
Impairment
At 1 April 2023
82.5
At 31 March 2024
82.5
At 31 March 2025
75.8
Details of the Company’s subsidiary undertakings have been disclosed in Note 35 of the consolidated financial statements.
The carrying amount of the Company’s investments in subsidiary undertakings has been tested for impairment in accordance with IAS 36 –
Impairment
of Assets
. The carrying amount was compared to the asset’s recoverable amount and assessed by reference to value-in-use if required. The value-in-use
has been calculated based upon a discounted cash flow methodology using the most recent forecasts prepared by management. These forecasts cover
the next five years with a terminal value using a long-term growth assumption of 2.0% (2024: 2.0%) and are consistent with those used for the Group’s
goodwill impairment assessment. The key assumptions for the value-in-use calculation are forecast revenue, direct costs, expectations of future changes
in the market, operating model and cost base, and discount rates. The pre-tax discount rates used to assess the forecast cash flows, ranging from 9.5% to
10.2%, have been derived from the Company’s post-tax weighted average cost of capital, which was 7.1% at 31 March 2025 (2024: 7.7%). These rates are
reviewed annually by external advisors and adjusted for the risks specific to the business being assessed and the market in which it operates.
During the year, Source Eight Limited (a subsidiary of the Company) was placed into voluntary liquidation. As a result, the investment held by the Company
in Source Eight Limited has been impaired by £0.5m (2024: £nil). All other investments had significant headroom and required no impairment. In addition,
£7.2m of cost, along with an equivalent amount of accumulated impairment, has been disposed of in relation to investments that have a nil net book value.
Reasonably possible changes to the key assumptions would not have resulted in an additional impairment in the Company’s investments in subsidiary
undertakings (2024: £nil).
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Financial statements
5. Trade and other receivables
2025
£m
2024
£m
Amounts owed by subsidiaries
220.3
163.0
Prepayments
8.7
7.3
Other receivables
1
31.6
25.6
Total
260.6
195.9
Current
260.4
195.7
Non-current
0.2
0.2
Total
260.6
195.9
Note:
1.
Includes £27.2m (2024: £23.1m) of VAT payments on account made on behalf of other Group entities and £0.6m (2024: £0.6m) of VAT owed by tax authorities.
Amounts owed by subsidiaries are generally repayable on demand. The Directors consider that the carrying amount of trade and other receivables
approximates their fair value.
6. Deferred tax assets
Accelerated
capital
allowances
£m
Share
options
£m
Short-term
timing
differences
£m
Total
£m
At 1 April 2023
0.5
5.1
–
5.6
(Charge)/credit to income statement
(0.1)
0.9
0.4
1.2
Credit to equity
–
2.6
–
2.6
At 31 March 2024
0.4
8.6
0.4
9.4
Credit to income statement
–
0.3
1.0
1.3
Credit to equity
–
0.4
–
0.4
At 31 March 2025
0.4
9.3
1.4
11.1
7. Current tax receivable
As at 31 March 2025, the Company held a current tax receivable of £13.1m (2024: £36.5m), comprising amounts owed by subsidiaries in relation to Group
relief of £1.3m (2024: £5.7m) and £11.8m (2024: £29.1m) of tax payments made on behalf of other Group entities. In 2024 the receivable also included
£1.7m owed by tax authorities.
8. Trade and other payables
2025
£m
2024
£m
Trade payables
2.7
1.4
Amounts owed to subsidiaries
41.8
73.9
Other taxes and social security
6.3
5.8
Accruals
12.1
13.6
Other payables
4.0
4.6
Total
66.9
99.3
Amounts owed to subsidiaries are repayable on demand. The Directors consider that the carrying amount of trade and other payables approximates
their fair value. Included within amounts owed to subsidiaries above is £20.7m (2024: £70.7m) relating to interest-bearing loans at 5% per annum (2024:
5% per annum).
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
continued
9. Provisions
£m
At 1 April 2024
15.5
Additional provisions
9.5
Utilised
(9.1)
At 31 March 2025
15.9
Current
5.7
Non-current
10.2
Total
15.9
Provisions were in respect of the insurance reserve. The Company retains a portion of the exposure in relation to insurance policies for employer liabilities
and motor and fleet liabilities. The provision includes claims incurred but not yet reported and is based on information available at the statement of financial
position date using advice from third-party actuarial experts. The provision is expected to be utilised over five years.
10. Equity
Details of the Company’s share capital, share premium, merger reserve, own shares reserve, share-based payments reserve and capital redemption
reserve have been disclosed in Notes 27 and 28 of the consolidated financial statements. Retained profits comprise the earnings and losses of the
Company less amounts distributed to the Company’s shareholders.
11. Dividends
Dividends recognised have been disclosed in Note 9 of the consolidated financial statements.
12. Contingent liabilities
As disclosed in Note 35 of the consolidated financial statements, certain subsidiaries have taken advantage of the audit exemption under Section 479A of
the Companies Act 2006 for the year ended 31 March 2025. A parent company guarantee has been provided for these companies under Section 479C
of the Companies Act 2006.
13. Share-based payments
The Company has certain equity-settled share schemes as described in Note 30 of the consolidated financial statements.
14. Related party transactions
Details of the related party transactions have been disclosed in Note 33 of the consolidated financial statements.
The Directors are remunerated for their services to the Group as a whole. No remuneration was paid to the Directors specifically in respect of their
services to the Company for the years ended 31 March 2025 or 31 March 2024. Detailed disclosures of Directors’ remuneration and share interests are
given in the Directors’ remuneration report on pages 124 to 137.
Under FRS 101, the Company is exempt from disclosing key management personnel compensation and transactions with other companies wholly owned
by the Group. The Company had no other related party transactions during the year ended 31 March 2025 (2024: £nil).
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Financial statements
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES
The Group presents various Alternative Performance Measures (APMs) as management believes that these are useful for users of the consolidated
financial statements in helping to provide a balanced view of, and relevant information on, the Group’s financial performance.
In assessing its performance, the Group has adopted certain non-statutory measures which, unlike its statutory measures, cannot be derived directly from
its consolidated financial statements. During the year, the APM in relation to performance excluding Covid-related contracts has been removed as is not
applicable for the year ended 31 March 2025 or the comparative year. The Group commonly uses the following measures to assess its performance:
Performance before Other items
The Group adjusts the statutory income statement for Other items which, in management’s judgement, need to be disclosed separately by virtue of their
nature, size and incidence in order for users of the consolidated financial statements to obtain a proper understanding of the financial information and the
underlying performance of the business.
These Other items include acquisition- and disposal-related costs such as amortisation of acquisition-related intangible assets and charges with respect to
employment-linked earnouts, impairment of goodwill, gain or loss on business disposals, as well as cost of restructuring programmes, charges arising on exit
of pension schemes and other exceptional items.
Further details of these Other items are provided in Note 4.
Operating profit
2025
£m
2024
£m
Operating profit from continuing operations
Statutory measures
161.6
165.7
Adjust for: restructure costs
Note 4
16.6
20.4
Adjust for: acquisition- and disposal-related costs
Note 4
43.1
38.3
Adjust for: other exceptional items
Note 4
12.8
3.7
Adjust for: fair value gain on Landmarc acquisition
Note 4
–
(17.9)
Operating profit before Other items
Performance measures
234.1
210.2
Reconciliations are provided below to show how the Group’s segmental reported results are adjusted to exclude Other items.
Operating profit/(loss)
2025
2024 (restated
1
)
Reported
results
£m
Adjust for:
Other items
(Note 4)
£m
Performance
measures
£m
Reported
results
£m
Adjust for:
Other items
(Note 4)
£m
Performance
measures
£m
Segment
Business Services
154.6
8.4
163.0
146.5
3.3
149.8
Technical Services
68.0
11.0
79.0
82.6
(7.7)
74.9
Communities
43.8
3.7
47.5
34.8
1.3
36.1
Corporate Centre
(104.8)
49.4
(55.4)
(98.2)
47.6
(50.6)
Total Group
161.6
72.5
234.1
165.7
44.5
210.2
Note:
1.
The comparatives for the year ended 31 March 2024 have been restated for the change in composition of reportable segments (See Note 3).
In line with the Group’s measurement of profit from operations before Other items, the Group also presents its basic earnings per share before
Other items. The table below reconciles this to the statutory basic earnings per share.
Earnings per share
2025
pence
2024
pence
Statutory basic earnings per share
Statutory measures
8.2
9.8
Adjust for: Other items per share
4.5
2.5
Basic earnings per share before Other items
Performance measures
12.7
12.3
214
Mitie Group plc
Annual Report and Accounts 2025
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES
continued
Net debt
Net debt is defined as the difference between total borrowings and cash and cash equivalents. It is a measure that provides additional information on the
Group’s financial position. Restricted cash which is subject to constraints on the Group’s ability to utilise these balances, has been excluded from the net
debt measure.
Total financial obligations (TFO) are defined as the Group’s net debt and the net retirement benefit assets/liabilities. TFO represents all debt-like financing
items the Group has made use of at the year end.
A reconciliation from reported figures is presented below:
Net debt
2025
£m
2024
£m
Cash and cash equivalents
Statutory measures
180.4
244.9
Adjusted for: restricted cash
Note 22
(4.3)
(4.2)
Financing liabilities
Note 23
(375.1)
(321.5)
Net debt
Performance measures
(199.0)
(80.8)
Net retirement benefit assets/(liabilities)
Note 31
13.9
(0.8)
TFO
Performance measures
(185.1)
(81.6)
The Group uses an average net debt measure as this reflects its financing requirements throughout the period. The Group calculates its average net debt
based on the daily closing figures. This measure showed average daily net debt of £264.0m for the year ended 31 March 2025, compared with £160.7m for
the year ended 31 March 2024.
Free cash flow
Free cash flow is a measure representing the cash that the Group generates after accounting for cash flows to support operations and maintain its capital
assets. It is a measure that provides additional information on the Group’s financial performance as it highlights the cash that is available to the Group after
operating and capital expenditure requirements are met. The table below reconciles net cash generated from operating activities to free cash inflow.
Free cash flow
2025
£m
2024
£m
Net cash generated from operating activities
Statutory measures
220.0
197.7
Add: net (increase)/decrease in restricted cash
Note 22
(0.1)
2.2
Interest received
3.0
3.6
Dividends received from joint ventures and associates
Note 14
–
8.4
Employment-linked earnouts
1
7.0
0.7
Purchase of property, plant and equipment
Note 13
(24.0)
(11.5)
Purchase of other intangible assets
Note 12
(7.6)
(8.4)
Disposal of property, plant and equipment
0.6
0.2
Lease incentives received
–
5.7
Capital element of lease rentals paid
Note 25
(56.1)
(41.0)
Free cash inflow
Performance measures
142.8
157.6
Note:
1. During the year ended 31 March 2025, payments totalling £7.0m (2024: £0.7m) have been made to the former owners of certain acquired businesses with respect to earnout
payments, which are conditional on the owners remaining employed with the Group as well as the underlying performance of the acquired business. The costs related to
performance-based employment-linked earnouts are charged to the consolidated income statement and classified as Other items (see Note 4).
215
Mitie Group plc
Annual Report and Accounts 2025
Strategic report
Governance
Financial statements
Earnings before interest, tax, depreciation and amortisation
Earnings from continuing operations before interest, tax, depreciation and amortisation (EBITDA) is a measure of the Group’s profitability. EBITDA is
measured as profit/(loss) before tax from continuing operations excluding the impact of net finance costs, Other items, depreciation of property, plant
and equipment, amortisation and impairment of non-current assets and amortisation of contract assets. Other companies may define EBITDA on a
different basis.
EBITDA
2025
£m
2024
£m
Profit before tax
Statutory measures
145.4
156.3
Add: net finance costs
Note 7
16.2
9.4
Operating profit
161.6
165.7
Add: Other items
Note 4
72.5
44.5
Operating profit before Other items
234.1
210.2
Add:
Depreciation of property, plant and equipment
Note 13, 25
67.9
48.2
Amortisation of non-current assets
1
Note 12
8.5
8.2
Amortisation of contract assets
Note 16
0.4
1.4
Impairment of non-current assets
Note 12
–
0.1
EBITDA
Performance measures
310.9
268.1
Note:
1. Excludes amounts classified in the consolidated income statement as Other items. See Note 4.
Return on invested capital
Return on invested capital (ROIC) is a measure of how efficiently the Group utilises its invested capital to generate profits. The table below reconciles the
Group’s net assets to invested capital and summarises how the ROIC is derived.
2025
£m
2024
£m
Net assets
Statutory measures
428.0
473.7
Add:
Non-current liabilities
445.2
327.6
Current provisions
Note 20
37.4
66.5
Current private placement notes
Note 23
–
30.0
Deduct:
Non-current deferred tax assets
Note 21
–
(7.9)
Cash and cash equivalents
Note 22
(180.4)
(244.9)
Invested capital
Performance measures
730.2
645.0
Operating profit before Other items
234.1
210.2
Tax
1
(55.5)
(39.7)
Operating profit before Other items after tax
178.6
170.5
ROIC %
Performance measures
24.5%
26.4%
Notes:
1.
Tax charge has been calculated at the effective tax rate for the year on pre-tax profits before Other items for continuing operations of 23.7% (2024: 18.9%).
216
Mitie Group plc
Annual Report and Accounts 2025
Overview
Interim results for H1 FY26
20 November 2025
Dividends
FY25 interim dividend (1.3p paid)
4 February 2025
FY25 final dividend (3.0p proposed)
Ex-dividend date
19 June 2025
Record date
20 June 2025
Last date for receipt/revocation of Dividend
Re-investment Plan (DRIP) mandate
7 July 2025
Payment date
4 August 2025
Annual General Meeting
2025 Annual General Meeting
22 July 2025
Registered office
Mitie Group plc
35 Duchess Road
Rutherglen
Glasgow
G73 1AU
Telephone: 0117 322 1322
Email: [email protected]
Website: www.mitie.com
Registered in Scotland under company number: SC019230
Registrars
MUFG Corporate Markets
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Telephone: 0371 664 0300
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Mitie Group plc
Registered Office
35 Duchess Road
Rutherglen
Glasgow
G73 1AU
UK
Head Office
The Shard
Level 12
32 London Bridge Street
London
SE1 9SG
UK
T:
+44 (0) 330 678 0710
E:
Registration number: SC019230