Outsourcing group Mitie's shares drop 25% amid profit warning
Shares in outsourcing group Mitie tumbled by 25% in morning trading on Monday after the firm warned that full-year profits will come in "materially below" expectations as uncertainty caused by the EU referendum, lower growth and higher staff costs hit the firm.
The FTSE 250 company, whose clients include Rolls-Royce and the Home Office, said that it is facing "significant economic pressures".
"These include lower UK growth rates, changes to labour legislation and further public sector budget constraints, and uncertainty both pre and post the EU referendum," the firm said.
In May, the company said the Government's decision to hold the European Union poll on June 23 had caused a number of clients to either delay or cancel projects until after the referendum.
It added that the introduction of the national living wage in April would add to costs over the coming year.
In the first half of the year, Mitie expects revenue to be "modestly lower" and operating profit to be "very significantly lower" when compared with the same period last year.
"Operating profit for the full year is now expected to be materially below management's previous expectations as a result of a continuation of the pressures experienced in the first half and further one-off costs of organisational change associated with our cost efficiency programmes, which are expected to total up to £10 million in the year," the group added.