Mears Share Discussion Threads

[rivaldo] 17/8/2010 07:32

And then there's the superb visibility going forward two years:

"Group Outlook:

· Unprecedented levels of opportunity in the public sector

· Order book of £2.6 billion (2009: £1.8 billion)

· 92% visibility of consensus forecast revenue for 2010 and 81% for 2011

· Social Housing - bid pipeline £3.0 billion (2009: £2.9 billion)

· New maintenance contracts being mobilised during the second half of the year will take the total order value of contracts mobilised in 2010 to in excess of £1 billion"

[rivaldo] 17/8/2010 07:30

Bizarre that you missed all these long references to MER's outlook being strong, spending being non-discretionary, Housing Associations being less affected....

"The demand for our services continues to be strong. Our two growth markets, Social Housing and Domiciliary Care, are defensive sectors where spend is largely non-discretionary. We have a number of opportunities with existing and prospective customers to unlock significant additional revenue."

"The significant majority of our Social Housing revenues are non-discretionary spend for services which our clients have a legal obligation to provide. The proposed changes to the system for housing benefit will in our opinion promote the migration away from private dwellings towards social housing. The changes to the housing finance system will provide local authorities opportunities to invest further in their housing stock which can only be positive for a leading provider like Mears. In addition, a significant proportion of our Social Housing revenue is derived from Housing Associations who are less affected by any reduction in public sector spending. Our order book is solid and stands at £2.6 billion with a sales pipeline of £3.0 billion. The well publicised problems in the sector provide a great opportunity for Mears as market leader. We continue to be highly selective on our bidding approach looking to only work on long term partnership situations."

[dnfa1975] 17/8/2010 07:19

isnt it a bit disingenuous not to mention the very poor public sector spending outlook or have i missed that in the statement

[rivaldo] 17/8/2010 07:13

Excellent results today. EPS up 15% - and the divi up 19%!



Brilliant cash conversion at 94%.

And the outlook could not be more bullish - particularly given CNT's internal problems and MER being the market leader:

"Bob Holt, Chairman, said:

"The opportunity for Mears has never been better. Our order book is solid and stands at £2.6 billion with a sales pipeline of £3.0 billion and operating cash conversion at 94% of profit. Mears continues to build on that same long term platform for profitable growth which has been the cornerstone of our success.

"We are market leader in Social Housing where the significant majority of our revenues are non-discretionary spend for services which our clients have a legal obligation to provide. The proposed changes to the system for housing benefit will in our opinion promote the migration away from private dwellings towards social housing. The changes to the housing finance system will also provide local authorities opportunities for further investment in their housing stock which can only be positive for a leading provider like Mears. In addition, the majority of our Social Housing revenue is derived from Housing Associations who are less affected by any reduction in public sector spending.

"The Group has a clear strategy of building market leader positions in each of its core businesses. We consider it to be of paramount importance to be recognised as the leading provider of quality services. The quality of the management team acquired with Supporta has exceeded our expectations and we now have the structure in place to continue to build our Domiciliary Care business model.""

[tom.b] 16/8/2010 13:13

The news for tomorrow must be good and already available to a few... watch it go from here....good luck and congrats to all who hold...DYOR

[pstubbs50] 13/8/2010 09:31

I'm always nervous! But very very comfortable with Mears - been with them since the 25p days in AIM. They are so consistent in delivering great results.

I'm surprised anyone is out tbh - Mears have floated between 220-350 for too long. Finally the Connaught situation gives a real chance for a major push.

[rivaldo] 13/8/2010 09:27

Let's remind ourselves of the very strong trading statement issued only a month ago - next week's results should reiterate this bullish outlook:



"Following the brief statement made by Mears after the market closed on Friday 25 June the Company is pleased to reiterate that it is continuing to deliver strong trading across all divisions and is not experiencing any downward pressure on spend in its social housing business. Current trading and strong cash conversion for the year are in line with management expectations.

In summary:

· Continuing to deliver strong trading across all divisions

· No evidence or experience of downward pressure in spending in social housing which remains a largely secure and non-discretionary spend

· £2.5 billion order book and £3 billion bid pipeline

· Winning longer term agreements with Local Authorities and RSLs

· Secured revenues of 91% of consensus forecast for the current year

· Strong focus on cash conversion.

Commenting, Bob Holt, Chairman of Mears Group, said:

"I believe that Mears will now be considered market leader in social housing repair and maintenance which will add further to an already unprecedented level of opportunity within the public sector. Local Authority clients continue to consider more innovative and higher scale partnerships which is already evidenced this year with major contract wins.

"The quality of our operational delivery and our people underpins our strategy and continues to give us clear competitive advantage as evidenced by our enhanced reputation both in terms of the winning of new business and the recruitment and retention of key personnel. These factors are central in maintaining a robust revenue stream with our existing client base whilst providing significant opportunity within our bid pipeline.""

[dnfa1975] 13/8/2010 09:15

im surprised neither of you is Very nervous

[rivaldo] 12/8/2010 17:19

Agreed about the 300p price target and excellent prospects.

It does occur to me that although the results are expected on Tuesday, the reason MER haven't notified the market is because there may be developments going on with regard to CNT's social housing division....

Exciting times coming soon, potentially anyway. And if no deal, the results should be enough to get the market going imho.

[pstubbs50] 12/8/2010 11:47

"the fact that they havent announced the results date to the market like they usually do is a bit suspect. Im out for the moment."

Maybe, but I have faith in Mears - a great record of notifying shareholders, and of results. I am optimistic about Tuesday. 300p target over the next month or so for me.

[dnfa1975] 12/8/2010 10:25

the fact that they havent announced the results date to the market like they usually do is a bit suspect. Im out for the moment.

[tom.b] 12/8/2010 09:51

Well there is no telling what the market does... here is a great company who has everything Connaught needs and a positive announcemnet for next tuesday that should bring them over £3.00 ..and it's down nearly 2% ..crazy..

[rivaldo] 10/8/2010 13:37

Excellent news from today's Times - it seems that CNT's local authority and social housing customers are making enquiries with their rivals about taking on CNT's contracts :o))



"Rival poised to take on Connaught contractsSpeculation now centres on a possible debt-for-equity swap
Leon Neal
Last updated August 10 2010 12:01AM

One of Connaught's biggest rivals said yesterday that some of the beleaguered social housing group's customers had started approaching it about taking over contracts.

John Morgan, executive chairman of Morgan Sindall, said local authorities and housing associations that have contracts with Connaught had been making inquiries about the ability of his company, as well as others, to take over work should the company collapse...."

[hosede] 10/8/2010 13:31

The chief executive of Coventry also today said he expects to cut 10,000 jobs - IN COVENTRY ALONE. Multiply that up and you get some idea of the scale of cut-backs - up to 40% in non-essential services and a lot of Mears work will certainly be regarded as non-essential. All public outsource Cos. will also be required to trim their margins - it's going to be a very tough five years - If Labour had been in power the cuts would have been less but the pound would have gone the way of the Argentine Peso!
On the other hand I certainly wouldn't short MER. Compared to some stocks it is not massively overvalued, and it will certauinly survive (unlike CNT) but any idea that it can continue to grow in this environment are IMO wildly optimistic

[rivaldo] 10/8/2010 13:00

As I posted only two hours ago (!), the Mail reported today that the results will be out next Tuesday.

[dnfa1975] 10/8/2010 12:43

wonder why they havent put out the results date yet - they always do this = are they going to sneak them outs?

[rivaldo] 10/8/2010 12:24

Better if you use the correct EPS figures methinks. Here we go - actually, using the normalised basic EPS figures they're even better than I thought:

2006 - 14.53p EPS
2007 - 16.99p EPS
2008 - 19.60p EPS
2009 - 22.67p EPS

56% EPS growth over 4 years is pretty damn good.

I would expect MER to pick up substantial business from CNT over the next few months.

And for clarity from the May trading statement:

"Since publication of our final results on 9 March 2010 for the year to 31 December 2009, we have announced contract wins of over £500 million in Social Housing and a bid pipeline which still remains in excess of £3 billion. The order book currently stands at £2.5 billion with secured revenues of 91% of consensus forecast for the current year and 77% for 2011."

[hosede] 10/8/2010 12:11

Rivaldo
According to the AFN figures (which I agree are not always correct) EPS figures for 2006-2009 have been 17.05,15.65, 17.38, and 18.81 and diluted 15.99 15.65 16.82 and 17.94. They may say they have 80% work booked but that can and IMO will be dramatically cut back as councils simply RUN OUT OF MONEY!

[rivaldo] 10/8/2010 10:31

Today's Daily Mail reports that the broker Liberum say MER's interim results next Tuesday will be pleasing, and that CNT's problems are a big opportunity for MER to increase their market share (couldn't find a link online yet).

[rivaldo] 09/8/2010 13:19

Yep - up to 2.5m shares traded today now. Interesting!

[ddav] 09/8/2010 11:14

Over 1.755 Mil. buys this AM! --- Nice!

[cambium] 09/8/2010 11:04

they were 9 this morning

[turborock] 09/8/2010 11:01

well, I'm back in. Got out on the previous fall and back in hopefully for this next leg upwards.

CNT are down to 12p now...

[rivaldo] 09/8/2010 08:54

Nice start again today.

Tom.B, I see last year's results were announced 18th August. I can't see a date for this year's, but they can't be more than a week or two away. I'm looking forward to them.

EDIT - up on almost 1m shares traded already today. Something happening?