Mears notes strong trading, good order book

27 October 2009

Social housing repairs business Mears continues to experience strong trading across all divisions since announcing interim results in August.

The forecast full-year results are in line with management's expectations, according to an interim management statement for the period 1 July to date.

The group has announced new contract awards in excess of £450m since the annual results were published on 10 March. The order book stands at more than £1.7bn.

“The bid pipeline is strong and we are currently at advanced stages of negotiating further significant opportunities. We anticipate reporting a record year for growth in our order book,” the statement said.

Growth markets are social housing and domiciliary care, which account for nearly 90 per cent of group revenues. The spend is largely non discretionary and with 70 per cent of revenues generated with housing associations, housing trusts and arms length management organisations and with less than 15 per cent of revenues relating to Decent Homes, we do not expect this division to be significantly impacted by any cuts in public sector expenditure.

Mears suggested that there could be a merging of their social housing division and Careforce, the group’s domiciliary care division because of local authorities looking to buy services from fewer and fewer large care providers. “We are therefore well placed to take a leading position in the consolidation and evolution of the Domiciliary Care market where we continue to see a convergence between our Social Housing and Care businesses,” Mears said.

The M&E division was awarded a contract with Bovis Lend Lease to provide M&E infrastructure and fit out works on the Athletes Village for the 2012 London Games. “This contract award is valued at £9m and comprises the first phase of the village of approximately 300 apartments. In addition to this award, further material orders have been received which further enhance the visibility of revenues for 2010. This remains a sound and well managed business.”

“Our strong cash flow continues to give us significant financial flexibility to take advantage of any acquisition opportunities that may arise,” the statement concluded.

Mears Group employs more than 8,000 people to maintain, repair and upgrade hundreds of thousands of homes nationwide and provides in excess of 90,000 hours of domiciliary care to over 13,500 people each week.