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on my BUY back in March. Onwards and upwards. Must be doing something right - I saw 2 of their white vans today. I reckon things are picking up.
So did I. This was clearly a silly reaction. The company doesn't appear to be in any financial difficulty or hiding any skeletons in the cupboard as far as I can tell. Totally different business to CLLN or IRV.
With outsourcing companies like Carillion and Interserve going belly up not surprising the SP has dropped for Mears. The results show good progress being made, future focus on most profitable areas and revenue set to increase and debt to be lowered. Mears is positioning itself for a big turnaround in next 2 years. I have bought in today.
why these are down 21% in 3 weeks from 372p to 295p. Anyone know WTF is going on?
Trading Update due on 15th Jan. This will tell us if the board's optimism for 2018 was justified. I expect a decent rebound on current SP, some positive statements and some significant improvements. I do not want to see the word "challenging" anywhere.
What's the difference between this in the FTSE and the NEX Exchange ?
Companies Announcing Final Results for Week Ahead
Share Talk look at the companies announcing final results in the week commencing 19 Mar 2017, our article contains quick links to London South East where you may further investigate the reporting companies.
i knew someone would have to spoil it
after 4 - 5 hours trying to sell in one go! or not at all, there gone! what a rush,biggest trade of the day so far, which is a first for me,happy day''s GLA
KEL IS FIT
N+1 Singer kept its "buy" stance on social housing company Mears (MER) with an increase in target price from 345p to 390p. The broker cites the acquisition of a "sizeable competitor", Morrison Facilities Services, for 24 million pounds as justification of the increase in its target. Although the company is currently loss making, the broker believes that management will turn the business around and deliver medium-term earnings. The shares remained flat at 302.25p.
The Group is continuing to experience solid trading in both its core divisions of Social Housing and Care and, excluding the impact of the acquisition of Morrison, the anticipated outcome for the full year results remains in line with management's expectations.
The first half of 2012 saw the most intense period of new contract mobilisation in our history, with seven significant new contracts commencing in this period with an annual value of in excess of £50 million. As we reported in our interim results on 14 August 2012, the quality of the mobilisations and the subsequent service delivery had exceeded our high expectations, however, the large volume of new works had resulted in a dilution of the social housing operating margin in the first half, as mobilisation costs are expensed upfront. Since 1 July 2012, the newly mobilised contracts have bedded down further, and in line with our expectations, we are seeing an improvement in the operating margin of those contracts.
Commenting, David Miles, Chief Executive, Mears Group, said:
"I am delighted with the progress Mears has made in recent months. The acquisition of Morrison will further consolidate our market leading position and contract profile in Social Housing. Group revenue visibility stands at 99% and our order book and pipeline are particularly strong.
"The new contract success with Cambridgeshire County Council is extremely positive. We expect this strategic partnership to develop in a way similar to many of our housing contracts, with a focus on achieving a range of life enhancing outcomes for our clients rather than just the traditional task and time approach that is common within care services today. Cambridgeshire County Council has shown real vision by recognising that the best way to meet some of the most difficult challenges within health and social care is through working closely together in partnership. This is an important milestone for us and I remain positive in our ability to shape and prosper in this market."
Social Housing Division:
· April mobilisations now bedded down with a positive impact on H2 margins.
· New contracts awarded to the Social Housing division in the last 3 months with a value of £107m.
· Successful mobilisations of new contracts with Southwark Council and Notting Hill Housing Trust.
· Our on-going commitment to provide energy solutions to address fuel poverty has given rise to a number of opportunities with existing clients.
· New contracts awarded to the Care division in the last 3 months with a value of £19m.
· Notable new contract success with Cambridgeshire County Council under a Strategic Partnership arrangement.
Interim Management Statement
Mears releases its Interim Management Statement ("IMS") for the period from 1 July 2012 to date.
Mears today also announces the acquisition of Morrison Facilities Services Limited ("Morrison"). The information included in this IMS Statement does not reflect the impact of this acquisition.
Summary of Key Highlights
· Today separately announces the acquisition of Morrison.
· The Group is continuing to experience solid trading in both its core divisions of Social Housing and Care.
· Group order book of £2.6 billion with secured revenues of 99% of current consensus forecast revenues for 2012, 86% for 2013.
· Bid pipeline remains in excess of £3.0 billion, with an immediate bidding opportunity of £1.1 billion, underpinning the Board's continuing confidence in the future.
Mears is well-placed, but the shares don't reflect this. They trade on a multiple of just under 10 times underlying forecast earnings for 2012, which is well below the support services average of 12 times. True, we won't see a return to the heady days of a 25 times earnings multiple. But steady workflow and assured revenues translating into strong cash flow and progressive dividends mean the shares are a solid growth stock.
Mears has other plus points. Back in 2010, lack of cash did for Rok and Connaught, but cash flow is moving in the right direction at Mears. Cash generated from operating activities in the first-half improved from £7.5m a year ago to £12m, which allowed net debt to be halved from £13.4m to £6.2m in the first six months of 2012.
The care business is also forging ahead. Sales were up 8 per cent to £56m, with operating profits up 17 per cent to £4.5m. But City analysts were expecting faster growth. The slow progress is in part due to the government dragging its heels on the white paper on health and social care, but also down to a dearth of acquisitions. There could be progress on both fronts in the next six months. Mr Miles says he is looking to acquire a couple of care-at-home businesses in the third or fourth quarter, and the government should clarify support for domestic care in the next session of parliament. There are risks inherent in this, though. Pressure on public spending will remain intense and the backlash against outsourcing after the G4S debacle could stall decisions, especially as social care for the elderly leaves so much to be desired.
After suffering from government cutbacks and a fractious relationship with the City, shares in social housing and care provider Mears have drifted down to ratings last seen 10 years ago. But the company has just reported record levels of activity, it is generating plenty of cash and, in the past five years, has doubled its sales and improved its earnings, yet the share price has gone sideways. Add in assured revenues and the potential for growth in its home-care business and we reckon the shares are worth buying.
During the years of Blairite public-spending profligacy, social housing maintenance was a wonderful place to be. By late 2006, Mears' shares were touching 350p, trading on a multiple of over 25 times earnings. Then came the demise of Connaught and Rok, companies occupying a similar space to Mears. As a result, investors fled. Yet throughout this Mears weathered the storm, increasing its dividend every year. It has now emerged with less competition, more business, and a better outlook.
Mears' first-half results for 2012 were encouraging, with revenue up 5 per cent to £307m and adjusted pre-tax profit up 2 per cent to £14.3m. The order book was flat at £2.7bn, yet provides for 99 per cent of 2012's expected revenues and 85 per cent of next year's.
The numbers were all the more impressive because Mears mobilised a record number of new contracts in the period, whose annual revenues will top £50m. As chief executive David Miles explains, when Mears begins a new contract its takes in start-up costs, such as buying new vans and employing staff, upfront. As a result, contracts tend to lose money in the first six months, break even in the next six; then they move into profit, hitting peak profitability around the 18-month mark. Understandably, the social housing unit, which took on all this work, reported operating profit margins down from 5.5 per cent to 5 per cent, on sales up 4 per cent to £215m.
Mears continues to benefit from a strong balance sheet. The efficiency with which the Group manages working capital has always been a cornerstone of our business, which is of particular importance during the current period of strong organic growth.
Commenting, David Miles, Chief Executive, Mears Group, said:
"I am delighted at the progress made by the Group in recent months. We have demonstrated our ability to embrace change and adapt to the challenges that the current economic environment continues to present. Mears' positive momentum positions us well to benefit from an active contract bidding market. I remain confident in the prospects for the future growth of the Group.
"Our Social Housing business has long been recognised as the market leader in terms of operational performance and tenant satisfaction. Our differentiated offering focussed on quality of service is providing now, more than ever, opportunities to further reinforce our position as the partner of choice for customers seeking solutions to important and significant underlying needs.
"I am proud of our achievements in the care sector and our ability to offer vulnerable people high quality services. Moreover, we are achieving strong margins in what remains a complex politically-led market. We continue to seek acquisitions to broaden our care offerings where appropriate. The well documented challenges in the care market are likely to accelerate in 2012, and Mears continues to be at the forefront of seeking pragmatic solutions to these challenges and I remain very positive of our future role in the care market. It is disappointing that the Social Care white paper has once again been delayed. It would appear that the challenge for the long term funding of Care is unlikely to now be addressed in legislation before the back end of 2013. The political debate cannot be one of simply mindlessly reducing spend and ignoring new sources of funding, but rather one which seeks to deliver long term joined-up good value services to an increasingly important section of society."
Interim Management Statement
97% visibility of consensus forecast revenues for 2012 and
80% visibility for 2013
Mears today releases its Interim Management Statement ("IMS") for the period from 1 January 2012 to date.
Mears continues to deliver solid trading across all divisions in line with management expectations.
We have now achieved 100% visibility of forecast consensus revenues in Social Housing for the current year. For the Group as a whole, we have visibility of 97% of consensus forecast revenues for the current year and have in excess of 80% visibility of Group forecast consensus revenues for 2013. The order book currently stands at £2.8 billion and the bid pipeline remains in excess of £3.0 billion with the immediate bidding opportunity for new contracts due to start on or before April 2013 at approximately £2.0 billion.
he company announced earlier this week that it had beat profit forecasts for 2011 as it sought to grow its care homes business.
Turnover came in at £589m slightly below the consensus forecast of £598m but still 12% ahead of 2010.
Profits before tax beat expectations, totalling £31.5m versus a forecast of £31.2m. The figure was 9% up on 2010
Bob Holt, Chairman of Mears, a social housing maintenance firm, has exercised share options for over 1,500,000 ordinary shares and subsequently sold two million shares - his entire holding of ordinary shares in the firm.
He sold the shares for 250p each for a total of £0.5m.
56-year-old Holt has retained an interest in share options under the Special Incentive Plan over one million ordinary shares.
Mears are making me redundant next summer, so i hope that by then the share price has gone up a bit to soften the blow!