Mears Regulatory News (MER)

For Immediate Release

15 December 2014

Mears Group PLC

("Mears" or "the Group")

Appointment as Preferred Bidder

Mears, the provider of support services to the Social Housing and Care sectors in the UK, is pleased to announce that it has been appointed preferred bidder by Torbay & Southern Devon NHS Trust ('Torbay' or 'the Trust') for Living Well@Home Services. It is anticipated that the contract will be awarded in January 2015 and will be for a minimum five year term with three possible one-year extensions. We understand this to be the first time that a contract of this type has been let to a single prime contractor in the UK.

The Trust has responsibility for all community NHS and Adult Social Care activities in the area. Mears will deliver a full range of community based services including personal care and more complex services such as health care at home, community support, mental health and learning disabilities support.  The Trust currently spends in excess of £10 million per annum on home care and support services.

As prime contractor, Mears will also be responsible for working in partnership with the Trust to integrate IT systems and drive future innovation in service development. The Trust specifically wanted a long term strategic partner who is able to demonstrate a commitment to integrated working and the development of services that push the boundaries of quality care and support. Outcome-based payments will be implemented as soon as possible within the contract period.

This new contract is expected to commence in April 2015. The contract is designed to provide the flexibility for other services such as sheltered housing and a seven day response service, to be considered in the future.

Commenting, David Miles, Chief Executive of Mears, said:

"We entered the Care market in 2007 with a clear strategic vision that the market would develop in a similar way to Social Housing. Notably, we expected to see a shift towards outcome-based contracts, where vendor payments are based on the quality of the outcome for the recipient rather than simply based on the time spent in delivering the service. We also expected to see customers move toward awarding contracts for longer terms to fewer providers, who could provide broader services and who could also assist in driving efficiencies within clients' cost bases. We have positioned ourselves as a high quality business focused upon service delivery in readiness for the market change. The speed of change has been slow however strong momentum has now built up which endorses our strategy.

"We absolutely share the vision for Torbay and recognise there is a lot of excellent care already delivered. A significant role within the contract is harmonising standards, integrating IT systems and achieving great quality for all clients. Local providers will continue to play a key role in the delivery of care and support in Torbay.

"The anticipated award of this Torbay contract is another crucial milestone for Mears and represents further strong development in the UK Care market. While still early days, there are indications now that a number of other Local Authorities are looking to follow the lead of Wiltshire County Council and now Torbay."

For further information, contact:

Mears Group PLC

David Miles, Chief Executive Tel: +44(0)7778 220 185

Andrew Smith, Finance Director Tel: +44(0)7712 866 461

Bob Holt, Chairman Tel: +44(0)7778 798 816

Alan Long, Executive Director Tel: +44(0)7979 966 453

www.mearsgroup.co.uk

Buchanan

Richard Darby/ Sophie McNulty/ Sophie Cowles Tel: +44(0)20 7466 5000

www.buchanan.uk.com

Notes for editors

Mears is a leading social housing repairs and maintenance service provider to Local Authorities and Registered Social Landlords in the UK and now commands a leading position in the UK Local Authorities' outsourced care market, providing personal care services to people in their own homes.

Mears employs in excess of 15,000 people and provides maintenance and repairs services to in excess of 10% of the UK social housing stock. Mears also provides care to over 20,000 service users.