Chelsea Flower Show caterer Mitie hit by Brexit uncertainty

The company providing catering at this week’s Chelsea Flower Show has blamed uncertainty over Britain’s future in the EU for a dip in sales.

Outsourcing giant Mitie, whose services range from office cleaning to pest control, said its financial year to the end of March had twice been hit by economic uncertainty.

It was affected first by last year’s general election and then by the upcoming EU referendum.

“Together, these factors combined to cause a number of our clients to either delay or cancel projects until after the referendum,” it said as it revealed a 1.8% dip in revenue to £2.2 billion.

Mitie, which warned in March that full-year revenues would fall short of expectations, said it had postponed or scrapped some of its own work and reduced discretionary expenditure as a result.

Boss Ruby McGregor-Smith described Mitie as resilient and said the situation was merely a quarterly trend as a fresh wave of contracts with Ladbrokes and Deloitte has been secured.

Mitie’s profits before tax more than doubled to £96.8 million from £41.5 million a year earlier.

The dividend rises for the 27th consecutive year by 3.4% to 12.1p.

Shares in the FTSE 250 firm edged up 1.2p to 274.8p.

The group also revealed a £20 million share buyback programme, which McGregor-Smith told the Standard was partly prompted by a lack of opportunities for large acquisitions. The Indian-born chief, who has led the company for almost a decade, said growth over the next year would remain “modest” due to the macroeconomic uncertainty.

However, the introduction of the National Living Wage — which in April bumped up minimum pay for over-25s to £7.20 an hour — could create opportunities for the firm.

“Our clients have to work out how to absorb [the extra cost] and we may well see the only way in which to handle it year on year is to move towards more outsourcing.”