Mitie sells home healthcare business for £2

Image source, Science Photo Library
Image caption, Mitie is exiting the home healthcare market

Outsourcing firm Mitie, which has issued three profit warnings in the past year, is selling its home healthcare business for just £2.

The buyer is private equity firm Apposite Capital, which will also receive £9.45m from Mitie to fund the business's trading losses.

It will also write off £36.8m in costs.

In November, Mitie's half-year results showed a £100m loss, compared with a £45m profit a year earlier, which it blamed on "changing market conditions".

It said at the time that it was withdrawing from the home healthcare market and had put its healthcare unit "under strategic review".

Shares in Mitie jumped almost 10% in morning trading to 227.2p following news of the deal, which covers the firm's Enara and Complete Care brands.

Dual squeeze

Enara, trading as MiHomecare, provides care at home for people who require help and support because of illness, infirmity or disability.

Complete Care is describes as providing "nurse-led, complex care solutions in the home".

The home healthcare market has been facing a dual squeeze from rising staff costs and local council spending cuts, putting intense pressure on margins.

Mitie's exit from the healthcare market follows a similar move by fellow outsourcer Mears.

In December, Ruby McGregor-Smith stepped down as chief executive of Mitie and was replaced by former British Gas boss Phil Bentley.

Mitie's latest move comes amid reports that the firm is considering appointing an employee representative to its board, as part of reforms drawn up by Mr Bentley.

However, the company has declined to comment on the report in The Times that was published on Tuesday.

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