Mitie Group has been awarded an extension to its contract to provide integrated facilities management (IFM) services to Lloyds Banking Group.
Mitie has delivered IFM services to the bank since 2012 under a transformational partnership and this agreement extends the partnership through to the end of 2024. The extended deal represents a step change from a traditional input-based service model to an output-based model, in which the payments received by Mitie are determined by the outcomes (payment by results), thereby ensuring that the interests of both parties are aligned.
The renewed contract is expected to generate revenues of about £170 million a year.
The works cover 30 service lines (including engineering, security, cleaning, catering and data centre services), which will continue to be delivered across the bank's nationwide branch network and office estate.
The extension of this deal 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, chief executive officer at Mitie, said: "I'm delighted that we have agreed to extend our contract with Lloyds Banking Group, our largest client, until 2024 and that we have done so under a breakthrough 'payment by results' structure which will ensure that all the bank 's branches and facilities are maintained to the very highest levels."