Mears Profit Down; Swings To Loss On Discontinued Care Operations

(Alliance News) - Mears Group PLC on Wednesday posted a reduced annual profit on continued operations, though swung to a loss when including its discontinued Care activities.

Shares in Mears were up 2.7% at 169.90 pence in London in late morning trading.

The housing sector services provider reported that pretax profit from continuing operations fell to GBP25.2 million in 2019, down 8.0% from GBP27.4 million the year before due in large part to exceptional costs and intangibles.

Pretax profit before exceptional costs and amortisation of acquisition intangibles was higher at GBP37.3 million in 2019 from GBP36.8 million previously.

Sales revenue rose 17% to GBP905.1 million from GBP771.9 million thanks to Mears's acquisition of MPS Housing as well as revenue from its Asylum Accommodation & Support contract.

Mears made the decision to move away from Care to focus on the housing sector, resulting in an GBP87.2 million loss from discontinued operations including the impairment of goodwill and fixed assets.

Thus the firm reported a total loss from continuing and discontinued operations after tax of GBP66.0 million, swinging from a GBP24.8 million profit the prior year.

No final dividend was declared for 2019, with Mears citing "the uncertainty surrounding Covid-19" as the reason for its decision.

Chief Executive David Miles said: "I am pleased with the progress of the group in 2019. We have achieved a solid set of results in a year of political and economic uncertainty, along with delivering a significant repositioning of the business into a more simplified structure as the UK's leading provider of housing solutions.

"2020 has brought challenges that were unforeseeable only a few weeks ago. Mears is committed to maintaining services to its clients and customers, sustaining its high level of employee skills, motivation and experience and being prudent in respect of cash management. The board will continue to navigate the current difficult circumstances with a concerted focus on short term operational and financial management but also with a determination to preserve sufficient resource with the requisite expertise for the company to prosper in the medium term when more normal economic conditions return."

By Anna Farley; annafarley@alliancenews.com

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