Mears ends year in line with expectations

Social housing and care support services provider Mears updated the market on the year ended 31 December on Tuesday, reporting that its trading was in line with the board's expectations.

The London-listed firm said that performance was achieved in competitive trading environments in both housing and care, and included the bid costs on a number of large opportunities which were expensed as incurred.

Spending by customers in housing and care was said to have been broadly stable and, though budgets were constantly under pressure, Mears said most of its activities were “essential”.

The company continued to evolve its activities in response to customer requirements, the board added.

Following the acquisition of selected assets and contracts from Mitie Property Services in November, the integration of those into the group was on track, and progress to date with staff, customers and suppliers had reportedly been “positive”.

On 8 January, the group announced the award of three new contracts worth more than £1bn under the Asylum Accommodation and Support Services Contract, delivering estimated revenues of around £100m per year for the next 10 years.

The preliminary mobilisation of AASC had already started, and the contracts were set to be fully operational in the fourth quarter of 2019.

Mears said the group order book stood at £3.2bn, with revenues for 2019 flowing from firm and probable orders estimated at £1.03bn.

Average daily net debt during 2018 was £115m, which was “fractionally higher” than the target of £110m set at the start of the year, primarily due to the timing of certain development activities which would now mature in the first quarter of 2019.

“2018 was a year of very good progress for Mears,” said chief executive David Miles.

“We ended the year with an acquisition and, more recently, were awarded three large contract wins which, together, add over 20% to our revenue on an annualised basis.

“I am grateful for the support shown in our recent equity fund raising in connection with the MPS acquisition.”

Miles said the company expected to make further progress in 2019, helped by its continuing cost reduction programme and the long-term relationships with customers.

“The positive impact of the new work announced recently will come through fully in 2020 and beyond.”

Mears said it would issue its full year results for 2018 on 19 March.