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Profit collapse drives Mitie out of homecare market

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Outsourcing firm Mitie is to withdraw from the home healthcare market after a collapse in profits.

Its move affects almost 6,000 people who use its service.

Mitie recorded a £100.4m loss in the six months to 30 September, against a £45.1m profit in the same period in 2015.

A company statement said: “Downward pressure on homecare charge rates and a reduction in care volumes has resulted in increased healthcare losses.”

It added: “Our healthcare businesses will continue to fulfil all obligations but there will be no investment in new areas of this market.

“Mitie will manage its withdrawal in an orderly and responsible manner. The board has changed its long-term view of this market. All healthcare goodwill and intangibles have been written off.”

A Mitie spokeswoman said it had 5,800 homecare service users and employed 3,700 people.

The statement said Mitie’s property business had also been affected as “local government and housing association funding constraints have delayed contract awards in property management causing revenue and profit decline”.

In its September 2016 trading update, Mitie noted “deterioration in the trading performance of our local government facing healthcare and property management businesses”.

Mitie was formed in 1986 and lists 28 service areas in which it operates, ranging from document management to landscaping and pest control.

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