Amenities administration mammoth Mitie Group (LSE: MTO) launched full-year outcomes in the present day. Might the replace push the FTSE 250 incumbent to new heights? Maybe, however I can see that the Mitie share price has already been doing properly in latest months.

Let’s dig deeper!

Flying excessive

There’s an excellent probability you’ve skilled the services administration prowess of Mitie when utilizing a public service throughout the UK. This contains buildings equivalent to hospitals, to offer one instance.

At a time when public funds are below scrutiny as a result of financial pressures, and with a common election coming up, Mitie shares have been doing very properly.

Over a 12-month interval, the shares are up 26% from 94p presently final 12 months, to present ranges of 119p.

FY outcomes dissected

In the present day’s replace made for distinctive studying, for my part. The subheading atop the assertion learn “A record year of delivery”. A bullish begin if ever there was one. The arrogance and excellent news continued to move.

Breaking down my important takeaways, Mitie stated that every one medium time period targets have been met, or considerably exceeded. Income elevated by 11% in comparison with the identical interval final 12 months. The identical may very well be stated for working revenue and working margins, up by 30% and 4.7%, respectively.

Shifting on, the enterprise confirmed it had secured contract renewals at a degree not seen earlier than. Plus, Mitie confirmed its stability sheet is in a robust place. This has allowed a ultimate dividend of 3p per share. Moreover, a share purchase again scheme price £50m is underway too.

The one blot on the replace for me was the truth that debt ranges elevated from £44m to £81m. That is in all probability the most important threat from an funding perspective for me transferring ahead. Debt is costlier to service and pay down throughout occasions of upper rates of interest, like now. There’s an opportunity that investor confidence and returns may very well be harm.

What I’m doing now

The opposite bearish issue is that competitors within the services administration trade is intense. One of many causes for that is doubtlessly profitable authorities contracts, in addition to low obstacles of entry. If Mitie have been to lose a few key contracts to rivals, earnings and returns may very well be harm.

Shifting to the bull case, I’m buoyed by Mitie’s replace. The enterprise appears to be like prefer it’s on monetary footing, and is rewarding shareholders too. A dividend yield of two.7% is first rate. Nevertheless, I do perceive that dividends are by no means assured. Plus, the shares look first rate worth for cash on a price-to-earnings ratio of 15. If this degree of efficiency continues, I can see Mitie shares heading upwards.

General, I believe Mitie shares appear to be alternative at present ranges. Coming off the again of nice efficiency, and doubtlessly good occasions forward primarily based on contract renewals, I’d be keen to purchase some shares after I subsequent can.