Mears performance showing record highs

10 March 2010

Social housing repairs and maintenance contractor reports record results for year-end 31 December 2009.

Revenue for the group’s social housing division was £355.3m, up 26 per cent from £282m.

The domiciliary care division had revenues of £60.1m, a rise of 10 per cent on £54.6m in 2008.

Overall operating profit, pre-amortisation of acquisition intangibles, was up 18 per cent from £21m to £24.8m.

But the Operating margin of the group slipped back slightly to 5.2 per cent (2008: 5.6 per cent), although this was inline with management expectations following number of new contract mobilisations during the year.

Mears remains bullish in outlook, partly thanks to “unprecedented levels of opportunity in the public sector’, their statement said.

The order book is up at £2bn (2008: £1.6 billion). Also, they note an 88 per cent visibility of consensus forecast revenue for 2010 and 69 per cent for 2011.

Social housing’s bid pipeline is £3.9bn (2008: £2.8 billion) with a significant proportion of contract opportunities at an advanced stage of bidding. 
The domiciliary care division is “on track to operate under single Mears Care brand”.

Bob Holt, chairman of Mears Group, said the bid pipeline currently stands at its highest ever level of £3.9bn. “Importantly, our two growth markets social housing and domiciliary care, which account for close to 90 per cent of group revenue, are defensive sectors where spend is largely non-discretionary and is therefore unlikely to be affected by any public sector cutbacks. It should also be noted that a significant proportion of our social housing revenue is derived from Housing Associations who would be less affected by a reduction in public sector spending.”

Holt believes that budget constraints within the public sector “are more likely to encourage our local authority clients to consider more innovative and higher scale partnerships”. Reflecting the Board’s confidence in the future opportunities for our growth markets, the dividend is increased by 20 per cent.
 
“The group has a clear strategy of building market leading positions in each of its core businesses,” he said. “I have total confidence that, through the acquisition of Supporta, our shareholders will benefit significantly from our continuing investment into care.”

Mears, founded in 1988, has clients mainly local authorities and registered social housing landlords in the UK. It employs more than 11,000 people and provides maintenance and repairs services to 500,000 homes nationwide. Mears also provides over 150,000 hours of domiciliary care to 20,000 service users

Clients include Birmingham City Council, Cross Keys Homes, Ealing Homes, Lancashire County Council, London Borough of Greenwich, Richmond Housing Partnership, Wakefield District Housing and Your Homes Newcastle.