The trend towards integrated services is a long-term one, says contract firm MITIE. What is different now, the firm says in its preliminary results for the year to March 2012, is the speed of change and the scale of contracts.
The contractor reported revenue growth of 5.9 per cent to £2,002.5m, of which 5.4pc is organic. Profit before tax was £94.5m. The firm said that it was ‘very well positioned to capitalise on the momentum in growth we have seen over the past year. There are exciting opportunities in our markets as organisations look for greater operating and energy efficiencies. As companies continue to seek cost reductions to compete in tough market conditions, they are focusing on the further out-sourcing of non-core services. Increased demand is being driven by integrated facilities management (FM) and energy services.’
According to the company, the majority of financial and retail sector clients operate with single-service contracts and we anticipate that the next phase of outsourcing is likely to see a shift towards integrated property and energy management. MITIE hailed its contract with Lloyds Bank for five years plus a one-year option to be worth from £775m to £930m, described as ‘a transformational contract to deliver integrated facilities and energy management, providing services across the bank’s entire UK branch and office estate’. Services to be delivered include catering, reception, reprographics, engineering maintenance, cleaning, security, minor capital reactive works and office space management. Other clients include Rolls-Royce, Vodafone and Diageo; BT Group, Channel 4 and Worldpay; and Greenwich and Coventry University.
The FM division is responsible for delivering the following specialist single services, either individually or in multi-service, bundled contracts: Security; Cleaning; Catering; Document management and reprographics; Reception and front of house; Waste management; Environmental services; Landscaping; Pest control; Disabled access consulting and auditing.
The firm said: “We have continued to win new business and have improved our client retention rate to a very strong 94 per cent. We have performed particularly well in the financial services, transport and retail sectors, where we see significant opportunities. Our investments in customer service remain a key differentiator. In our cleaning and environmental services business, we have a Lean Six Sigma team which is helping to make our processes more efficient. Our Total Security Management business has added new service lines such as employee screening, electronic locking and unlocking and lone worker monitoring and protection. Having successfully positioned the business as a risk-based security provider, we are increasingly working with our clients to consult on their enterprise wide security risk – incorporating technology, remote monitoring and manned guarding into a holistic solution. We are differentiated by our ability to self-deliver the majority of FM services, and always look at adding new services to our portfolio and develop our existing businesses. Our size, scale, high street and national presence and broad range of services enables us to deliver substantial cost savings and sustainable, innovative solutions to organisations of all sizes.”
In the public sector, the firm pointed to outsourcing opportunities, although in January 2012, the City of Edinburgh Council recommended MITIE as the preferred bidder for its integrated facilities management contract, a proposed seven year partnership with according to the contractor of guaranteed savings of between £51m and £114m. Members of the City of Edinburgh Council voted not to approve the proposed contract. MITIE described the outcome as disappointing.
