mitie group plc annual report 2004 mitie group plc
is a unique organisation because of its motivational culture
of share ownership and the range of its services
01 financial highlights
02 chairman’s statement
04 chief executive’s statement
07 review of operations
12 finance director’s review
16 corporate  social responsibility
19 board of directors
20 directors’ report
22 directors’remuneration report
27 corporate governance
31 independent auditors’ report
32 group profit and loss account
33 reconciliation of movements in
shareholders’ funds
33 note of historical cost profits and losses
34 group balance sheet
35 company balance sheet
36 group cash flow statement
37 accounting policies
39 notes to the accounts
60 fiveyear summary
61 notice of meeting
63 shareholder information the business of outsourcing services and working in partnership is a given in today’s
marketplace – but the key to achieving success through it is to respond quicker than
anyone else in a tailored costefficient way
mitie provides an unrivalled flexible range of services it’s because we can quickly 
switch from managing a fitout project to providing single bundled or managed
support services that our customers are able to realise the true benefit of outsourcing
working together
our work knowing that their projects and services are in trusted hands gives our customers the
opportunity to focus fully on their core business their reputation is our responsibility
it’s why our work is not done until our customers’ goals are achieved
our customers’ goals
mitie succeeds because it creates the conditions that
enable its management to support their customers the
management team is motivated by the chance to manage
their own business which they are incentivised to grow
they are rewarded in proportion to their ability to do so
this reward may come from converting founding equity in one of our traditional startup
companies into mitie shares or it may be in the form of performance incentives and
career opportunity the opportunity to succeed is available to all
crown copyrightmod mitie group plc annual report 2004 01
“mitie has continued to make good progress and i am pleased that
we have produced a good set of results this year the prospects for
the future are promising”
ian r stewart  chief executive
turnover £ 6945m £5658m up 23
profit before tax – £403m £341m up 18
pregoodwill
profit before tax – £382m £318m up 20
earnings per share – 83p 73p up 14
pregoodwill
earnings per share 76p 65p up 17
dividend per share 25p 19p up 32
turnover £m financial highlights 2004 2003
2004 £6945m
£5658m 2003
profit before tax – pregoodwill £m
2004 £403m
£341m 2003
profit before tax
2004 £382m
£318m 2003
earnings per share – pregoodwill pence
2004 83
73 2003
earnings per share pence
2004 76
65 2003
dividend per share pence
2004 25
19 2003
see group profit and loss account 
see note 7 for reconciliation of basic earnings per share chairman’s statement
02 mitie group plc annual report 2004
“the board is confident that mitie is
well placed for the future”
mitie group plc “mitie” has had a
successful year it has been a year
of change but it has also been a
year of progress the company
continues to achieve a good rate
of growth and is consolidating its
position as a leader in the provision
of building and support services
david c ord
chairman
working together as a team mitie group plc annual report 2004 03
results
turnover rose to £6945 million an increase of 227 and
profit before tax goodwill amortisation and impairment
rose by 183 to £403 million profit before tax rose by
201 to £382 million headline earnings per share rose by
141 to 83p note 7 
see group profit and loss account
dividend
the board is recommending a final dividend of 14p per
share making a total of 25p for the year an increase of
316 we will continue to review our dividend policy on a
regular basis
share buyback programme
the board today announces that it intends to make market
purchases of shares in the company pursuant to the
authority granted to it by shareholders at the last annual
general meeting of up to 30 million shares 
board changes
mitie’s founding chairman david telling died on 31
october 2003 after a long struggle with cancer david was
the inspiration behind mitie and it was his drive and
personal philosophy that created the conditions for mitie’s
success david was passionate about providing opportunities
for people to realise their full potential the ‘management
incentive through investment equity’ business model
enabled mitie to grow rapidly he attracted a large number
of the high calibre people into mitie and they have grown
the business into a major uk support services group
i was appointed to succeed david as your nonexecutive
chairman on 25 september 2003 i was delighted to accept
this challenge and i am determined to reinforce his vision
and values while taking mitie forward i believe that there
is still considerable potential in the mitie model and we have
continued to initiate new startups this will be accompanied
by select strategic acquisitions where appropriate
people
in the past six months i have had the privilege of meeting
many members of the mitie management team and i have
been impressed with their commitment and enthusiasm
they are united by a determination to grow the business i
am confident that they have the vision that will enable
mitie to continue to achieve its growth targets
mitie employees are passionate about providing quality
services to their customers and this attitude is apparent at all
levels of the group 
i would like to thank each and every employee for their
considerable efforts during the past year i also owe a debt to
my nonexecutive colleagues sir john jennings manish
chande and cullum mcalpine and thank each of them for
their support during the year donald macpherson our
senior independent nonexecutive director retired after 11
years’ service donald brought immense experience to the
mitie board and i would like to thank him for his valuable
contribution to the company during its formative years
corporate governance
an effective system of corporate governance is fundamental
to fulfilling the group’s corporate responsibilities by its
statements and actions the board emphasises a culture of
integrity competence fairness and responsibility the
policy of the board of mitie is to manage its affairs in
accordance with the principles of good governance and the
code provisions set out in section 1 of the combined code
on corporate governance incorporated into the uk listing
authority listing rules issued by the financial services
authority 
outlook
mitie has thrived on a spirit of entrepreneurial energy that
spirit burns brightly throughout the group we have a team
of directors who bring considerable experience knowledge
and skill to the decision making process
we will continue to expand the business by making further
strategic acquisitions and by maintaining the culture of
starting new businesses to provide opportunities for quality
people
the board is confident that mitie is well placed for the future
david c ord chairman chief executive’s statement
04 mitie group plc annual report 2004
“we have made good progress”
mitie has continued to make good
progress and i am pleased that we
have produced a good set of
results this year the prospects for
the future are promising
working in partnership with rollsroyce mitie
provides a full range of facilities services to its
aerospace manufacturing and maintenance
operations across the uk it is a bundled service
with seven mitie disciplines working together to
provide a flexible responsive service that
includes infrastructure maintenance catering
security cleaning and business services
rollsroyce
ian r stewart
chief executive
working together for business success mitie group plc annual report 2004 05
contract highlights
our approach has always been to focus on our customers
identify their goals and work together with our colleagues to
deliver quality services i am delighted that we are seeing
some excellent examples of our success in doing that 
our contract with rollsroyce goes from strength to strength
we have continued to expand the range of services that we
are providing to them this contract is an example of our
bundled service offering in january 2004 we started work
on another bundled services contract with nissan motor
manufacturing united kingdom “nissan” at their
sunderland plant this is a further case of mitie working
together to support the customer’s sole focus which in this
case is on the production of cars
we have also secured a further extension to our contract
with land securities trillium the contract covers the
department for work and pensions and runs until 2018 
i look forward to seeing this partnership develop further
the mci contract is another good example of mitie
providing many of our services to one customer since our
acquisition of executive holdings ltd we now provide
engineering maintenance security grounds maintenance
and business services to their reading facility
we have also recently started a facilities contract for the
office of the deputy prime minister “odpm” in
whitehall the estate covers 55837 square metres and we
will be providing cleaning catering security facilities
management and business services the mission statement
of the odpm is ‘creating sustainable communities’ this is
a goal with which mitie readily identifies as our aim is to
have a positive impact on the communities in which we all
live and work
progress
our markets are always changing whether we are operating
in support or building services our customers are looking to
reduce costs and improve efficiency streamlined supply
chains partnerships framework agreements and onestop
shops are the order of the day to ensure mitie’s share of
this market a more flexible and integrated approach to our
customers was needed
we therefore announced in march 2004 that we would be
reshaping support services to ensure that it is able to
continue its rapid progress as markets change the trend
towards customers wanting combinations of our services or
bundled services is increasing and this has led us to appoint
colin hale as head of support services to ensure that we are
positioned to meet this demand 
we have recognised that in order to keep pace with the
market we must constantly review the way in which we sell
mitie at the highest corporate level in addition we must
make strategic acquisitions as well as continuing with our
startup model in order to give these objectives a higher
profile roger goodman was recently appointed group
corporate development director
acquisitions and new companies
the progress of support services was boosted by three
strategic acquisitions during the year
on 2 july 2003 we acquired trident safeguards ltd
“trident” and on 3 july 2003 eagle pest control services
uk ltd “eagle” on 4 november 2003 we acquired
executive holdings ltd “executive”
the acquisitions of trident and executive have enabled us
to increase significantly our presence in the manned
guarding market giving us wider geographical cover
executive also operates in several niche cleaning markets and
these operations have been incorporated into our existing
cleaning business this has enabled us to enter new markets
eagle is a national pest control business and will provide
significant opportunities for growth in this fragmented market
i am particularly pleased with the way in which the staff in
these acquired companies are embracing the mitie culture
the mitie model continues to flourish we started five new
companies during the year under review and three more
since the yearend startups include two niche cleaning
businesses which will concentrate on the retail and
transportation sectors together with an industrial cleaning
company and a landscape business in addition
engineering has expanded its national coverage with three
new startups and we have also established a new catering
company in london  06 mitie group plc annual report 2004
strategy
as i stated last year we continue to review our strategy to
ensure that the solutions we offer meet the needs of existing
and potential clients this year has seen more emphasis
placed on the development of our niche businesses and our
ability to work together across disciplines
niche businesses we are finding that many of our
customers require a service that is specifically tailored to the
sector in which they operate and where we need to
demonstrate an understanding of their culture we are
seeing good levels of success in the niche businesses that we
have started in areas such as retail transport and
technology where previously we have not operated
working together bundled services forecasts indicate
that customers will be buying more than 25 of their
services in a bundle by 2006 compared with 10 today
this is a significant change in the contract highlights
section i have given some examples of where we are
working well across our disciplines this is now gathering
momentum and is presenting us with a number of
interesting opportunities
single service there are still opportunities to develop all of
our existing businesses in their traditional markets on a
single service basis 
overseas increasingly our customers are asking for us to be
involved in overseas contracts we have established an
arrangement with providers across europe to provide similar
services 
startup businesses startup businesses have been the
foundation of our growth model and we will continue to
start businesses with quality management teams that are
complementary to our existing operations
all these services will be underpinned by the mitie
philosophy of focusing on the customer and providing a
quality service the changes we have made in the support
services division will provide a greater degree of operational
clarity and customer responsiveness to assist in this process
we are continuing to locate our companies in the same
buildings wherever possible we now have six regional centres
second generation equity in cleaning
mitie cleaning started in 1987 as one company after the
company ‘earned out’ cleaning was structured regionally
apart from mitie cleaning midlands ltd there have been
no additional cleaning companies started on the mitie
model since its formation cleaning has grown rapidly and
we have recruited management at all levels who have never
had any equity participation in order to give this new
management the opportunity to share in mitie equity the
board have agreed in principle and subject to all the
necessary professional advice to launch a second
generation equity plan this makes available additional
equity in mitie cleaning allowing minority shareholders
to share in the additional value they create
revenue visibility
we see increased visibility of our future earnings we feel that
this is an appropriate mix of shortterm and longterm work
working together to achieve your goals
mitie has performed an extensive
makeover of arcadia’s oxford circus
headquarters over a tenmonth period 
we transformed the pr showroom that 
is used to entertain the media to stage
fashion shows and to display the latest
styles we have consolidated reception
areas and improved the building’s open
plan offices the projects have created 
a crisp and modern head office
environment with clean edges light
colourings and comfort cooling 
arcadia group
percentage of revenue secured
at 31march 2003
2004 64 36
33 67 2005
at 31march 2004
2005 67 33
42 58 2006


Summary:
 mitie group plc annual report 2004 01
“mitie has continued to make good progress and i am pleased that
we have produced a good set of results this year the prospects for
the future are promising”
ian r stewart  chief executive
turnover £ 6945m £5658m up 23
profit before tax – £403m £341m up 18
pregoodwill
profit before tax – £382m £318m up 20
earnings per share – 83p 73p up 14
pregoodwill
earnings per share 76p 65p up 17
dividend per share 25p 19p up 32
turnover £m financial highlights 2004 2003
2004 £6945m
£5658m 2003
profit before tax – pregoodwill £m
2004 £403m
£341m 2003
profit before tax
2004 £382m
£318m 2003
earnings per share – pregoodwill pence
2004 83
73 2003
earnings per share pence
2004 76
65 2003
dividend per share pence
2004 25
19 2003
see group profit and loss account 
see note 7 for reconciliation of basic earnings per share