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Interim Management Statement

16 May 2011 07:00

RNS Number : 6180G
Mears Group PLC
16 May 2011
 



 

16 May 2011

 

Mears Group PLC

("Mears" or "the Group")

 

Interim Management Statement

 

Mears today releases its Interim Management Statement ("IMS") for the period from 1 January 2011 to date.

 

Trading update

 

·; Mears continues to deliver solid trading across all divisions in line with management expectations.

·; £120 million of new contract awards since publication in March of the final results for the year to 31 December 2010, which include:

o  £52 million 10 year repair and maintenance contract with Bedfordshire Pilgrims Housing Association

o   Additional repair and maintenance contracts totalling £30 million over an average of 4 year terms, including Dover District Council and Leeds City Council

o   Mears awarded its first in-sourcing solutions contract with Epping Forest District Council to provide support to their Direct Labour Organisation

o  Several new Domiciliary Care contracts ranging from two to five years in duration with an estimated aggregate value of £37 million over their lifetime

o  A £4 million, three year contract for the Home Improvement Agency service provided by Gloucestershire County Council.

·; British Gas partnership developing well - environmental works already commenced across two Registered Social customers.

·; Roll-out of the Mears Care IT system commenced in April and remains on track.

·; Mears order book currently stands at £2.7 billion with secured revenues in excess of 93% of the £620 million consensus revenue forecast for the current year and in excess of 80% of the £667 million consensus revenue forecast for 2012.

 

 

Social Housing

 

Mears is pleased to have been awarded several contracts since the publication in March of its results for 2010 including:

 

·; A 10 year contract with Bedfordshire Pilgrims Housing Association ("BPHA"). The contract is valued at £52 million over the 10 year period to provide responsive repairs, void and planned maintenance services to approximately 5,200 properties in North Bedfordshire and Cambridgeshire. The award is subject to contract and leaseholder consultation.

 

·; A number of additional contracts including Dover District Council and Leeds City Council. The aggregate contract value of these awards amounts to in excess of £30 million with an average term of 4 years.

 

·; The award of our first in-sourcing solutions contract with a Local Authority; Epping Forest District Council to provide support to their Direct Labour Organisation ("DLO"). The existing DLO has a reputation for delivering a high quality of service to the tenants. This represents a new customer relationship for the Group.

 

We have continued to develop our partnership with British Gas to jointly address the challenges of energy efficiency within the social housing sector. We have commenced environmental works with our Cross Keys Homes and Family Mosaic clients and are at an advanced stage of tendering and negotiating for a number of significant opportunities that provide an extension to our Social Housing offering.

Care and Repair

 

Mears has completed the acquisition of a group of Home Improvement Agencies from Anchor Housing. Home Improvement Agencies play a vital role in helping people to reside in their own home for longer and are contracted by Local Authorities to provide primarily home adaptation and handyman services, to vulnerable owner occupiers in local communities. Their role is likely to expand in the future to cover a broader range of services that support independent living, including home safety and signposting of services such as Domiciliary Care, to an increasing number of Individual Budget Holders. Mears continues to focus on forging long-term relationships with Local Authorities with a view to providing integrated services; thus we see this acquisition as an important channel.

 

Since the acquisition, the Group has secured a three year contract for the Home Improvement Agency service provided by Gloucestershire County Council. The contract is anticipated to be worth £4 million over the three year period. There are five service elements; support for choice, repairs and improvements, major adaptations, handyperson services and working with health professionals on intervention and prevention. The contract was jointly procured by a partnership of Gloucestershire County Council, Gloucestershire Primary Care Trust and six District Councils. In addition, a number of other smaller Home Improvement Agency contracts have been secured.

 

 

Domiciliary Care

 

We are delighted to have secured a number of new Domiciliary Care contracts ranging from two to five years in duration and an estimated aggregate value of £37 million over their lifetime. We continue to achieve high win rates, reflecting our leadership position. The most significant single award has been with Wirral Council. The contract has an expected value of £14 million with a term of five years. Wirral Council is an existing Mears Care client and having retained our existing business we added further specialist services, which is representative of our strategy to increase work in the higher end care areas.

 

In April 2011, we commenced the roll out of our new Care Management IT system which has been developed internally and is progressing to plan. This is an important step in helping to modernise the administrative delivery of Care.

 

Financial position

 

The efficiency with which the Group manages working capital remains a cornerstone of our business and is of particular importance given this period of solid growth. Mears continues to benefit from a strong balance sheet.

 

 

Order book

 

The order book currently stands at £2.7 billion with secured revenues of 93% of consensus forecast for the current year and in excess of 80% for 2012. Mears is well positioned to benefit from an active contract bidding market and remains confident in the prospects for the future growth of the Group.

 

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

 

"We continue to see high levels of opportunity within the public sector. We believe that the demand and opportunity for our two growth markets will continue to be strong and that Mears is well placed to benefit.

 

"Our Social Housing division will continue to focus on further organic growth. The continuing consolidation in Registered Social Landlords ("RSLs"), the reforms to the Housing Finance system and changing demographics, all continue to provide increasing opportunities for Mears. The partnership with British Gas also demonstrates our leadership in providing solutions for our clients in the context of the Green Agenda.

 

"Mears Care is well placed to lead and consolidate the Domiciliary Care market place which is some 10 years behind the more developed Social Housing market. We can use the experience gained in Social Housing to enhance the market efficiencies in Domiciliary Care and share the benefits with our clients. We continue to target acquisitions that will broaden the diversity of Mears' Domiciliary Care offering along the services supply chain and expand the range of services provided to people in their homes.

 

"Most importantly, we have the right management team in place to take our business forward and capitalise on the many opportunities available in our growth markets."

 

ends.

 

About Mears

www.mearsgroup.co.uk

(tickers: MER.L MER.LN MER.PL)

 

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

 

Mears employs in excess of 12,000 people and provides maintenance and repairs services to in excess of 10% of the UK social housing stock. Mears also provides over 150,000 hours of domiciliary care to 20,000 service users each week.

 

Enquiries:

 

 

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

Joint Broker - Investec

Keith Anderson/Daniel Adams

Tel: +44(0)20 7597 5970

Joint Broker - Collins Stewart

Mark Dickenson/Ileana Antypas

Tel: +44(0)20 7523 8350

IR - Gable Communications

Tel: +44(0) 20 7193 7463

John Bick/Justine James

Tel: +44(0)7872 061 007

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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