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Reporting mid-year, these stars reported earnings growth of +40%, +30%, +33%, +29% and +19% respectively. This is some going.
In contrast, Rentokil gave up £200m in profit over the period.
What appears to be going on here is that some companies are just better than others.
Obviously this is easier to say in a blog than an analyst presentation. But it does have implications for strategy.
Zoom chartMore effort is typically spent attending to a company’s positioning, than to its operations. This might be wrong.
In business and support services there appears to be as much to gain by having a delivery edge as there is in being in a hot sector. Mitie (see blog spot) epitomises this.
We also highlight the huge growth at Alfred McAlpine Business Services. This is another business, like Mitie, that takes pains to motivate its staff on the front line. To great effect.
Blog Spot
Monday, 27 November 2006
Here’s an insight: ‘in FM, some companies are just better than others.’
And so it proves with Mitie. We like this company, it keeps on performing. The interims are out today and the main numbers don’t disappoint: revenue +30%, EPS +33% and margin at 5%.
Mitie’s edge is its operating model – after all, they named the company after it. Its success is not about positioning itself in hot bits of the market, indeed Mitie’s efforts at this lack conviction: it dutifully reports the performance of its PFI division separately, with sales of under £5m in the half-year.
Abigail Cable is a Manager at Credo.
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