Last checked at 12 Jan 2016 07:00
12 January 2016
Mears Group PLC
("Mears" or "the Group")
Pre-Close Trading Update
Mears, the provider of support services to the Housing and Care sectors in the UK, today issues a pre-close trading update ahead of its preliminary results for the year ended 31 December 2015, which will be released on 15 March 2016.
Mears continues to deliver a solid trading performance and anticipates reporting results for the full year in line with management expectations. The Group has 94% visibility of the market consensus revenue forecast for 2016 of £975 million (2015: 92%). This is ahead of recent years, reflecting the strong progress made in new contract bidding.
The Group continues to see a strong performance in its Housing division, which accounts for 80% of Group revenues, compared with the more challenging environment within the Care division. Strong working capital management continues to benefit the Group with a net cash position anticipated as at 31 December 2015.
2015 has been a record year for Mears in terms of new orders, with a contract value of circa £1 billion being secured, including:
· Milton Keynes - Mears has been selected to form a long-term joint venture partnership with Milton Keynes Council to deliver a Total Asset Management service to the Council's Social Housing portfolio, and to deliver regeneration and development opportunities across the Borough's priority estates. The award is subject to successful conclusion of contractual matters and the associated standstill period. This joint venture partnership will represent one of the single largest contracts ever awarded to Mears.
· Key Worker Housing - Mears has been awarded an integrated Housing contract, servicing circa 4,000 properties throughout the UK and providing a full Housing Management service; this includes sourcing properties, managing the application and allocation process as well as the subsequent day to day administration. The contract, which is for an initial three year term plus an opportunity for a two year extension, is valued at circa £50 million per annum.
The Care business continues to find the current market conditions challenging. There is a significant disparity between the short and long-term Care opportunity. Mears is focusing on two key areas. Firstly, improving carer recruitment and retention rates which is the most significant constraint to progress; and secondly, targeting those clients who recognise that more innovative, outcome based working practices, are key to sustainability. In the long-term, Mears continues to see significant opportunity in the Care sector and remains confident that it has the right strategy.
Commenting, David Miles, Chief Executive of Mears, said:
"Our housing business has delivered a strong performance and I continue to be pleased with the progress being made. The speed of development of our housing management business is particularly exciting and the outlook here is excellent. I am delighted that we have secured both our primary bidding targets in 2015, neither of which could have been secured without our housing management expertise.
"Our Care business continues to find the current market conditions challenging. However in the long-term we see significant opportunity in the Care sector and remain confident that we have the right strategy.
"I am pleased with the overall progress of Mears in 2015. The Group is well positioned to take advantage of future opportunities and we look forward to updating the market with further successes."
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
About Mears
Mears is a leading provider to Local Authorities, Registered Social Landlords and the NHS. We deliver repairs and maintenance services and personal care services directly into communities and people's own homes.
Increasingly our growth is coming from Housing management services, that help reduce homelessness and more complex and integrated care solutions to the NHS that enable people to stay in their own homes for longer.
Mears employs in excess of 17,000 people and provides maintenance and repairs services to circa 15% of the UK social housing stock. Mears also provides care, on a daily basis, to over 30,000 service users.