LONDON: Mitie Group has been awarded an extension to its contract to provide integrated facilities management (IFM) services to Lloyds Banking Group (LBG).
Mitie has been delivering IFM services to LBG since 2012 under a transformational partnership and this agreement extends the partnership through to the end of 2024.
The extended contract represents a step change from a traditional input-based service model, to an output-based model, where the payments received by Mitie Group are determined by the outcomes delivered (i.e. payment-by-results), thereby ensuring that the interests of both Mitie and Lloyds Banking Group are completely aligned.
The extended contract is expected to generate revenues of approximately £170 million per annum.
The extension covers 30 service lines (including engineering, security, cleaning, catering and data centre services), which will continue to be delivered across LBG’s nationwide branch network and office estate.
The extension of this significant contract with one of Mitie’s major customers had been factored into guidance on revenue growth and operating profit in FY 19/20 provided to the market at full-year results publication in June 2019.
Phil Bentley, Mitie’s Chief Executive Officer, commented: “I’m delighted that we have agreed to extend our contract with LBG, our largest client, until 2024 and that we have done so under a breakthrough ‘payment by results’ structure which will ensure that all LBG’s branches and facilities are maintained to the very highest levels.”
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