Mears Share Discussion Threads

[beerbandit] 02/11/2010 09:57

It is also explicitly stated thus :-

Since 1 July 2010 there have been an exceptional number of opportunities to both
strengthen and extend our position in both core growth markets. It has always
been our strategy to invest in our operational structure and to expend overhead
to put this in place before it is required. The validity of this strategy has
never been better demonstrated than by the position we are now in and has
allowed us to maximise the benefits from the large number of opportunities now
available. In short, this has been a transformational year for the Group and
whilst this investment comes as a cost in the short term the rewards are
demonstrable in the revenue visibility for 2011 and 2012. We have never been
better placed to exploit our market leading positions.

Mears typically anticipates a low margin from new contracts in the first year
following mobilisation. At mobilisation, the primary focus is to ensure that
robust processes are put in place for the delivery of excellent customer
service. Mears has never capitalised any of these initial inefficiencies and the
losses associated with new mobilisations are fully expensed in the period. Given
the proximity of these latest new contract awards and associated mobilisations
to the Group's year end, and given that we have achieved these further successes
on the back of what has already been an intense period of new contract
mobilisations, it is anticipated that costs for the period to 31 December 2010
in the region of GBP0.6 million will be incurred and expensed on these
contracts. It is anticipated that all contracts mobilised during 2010 will make
a positive contribution to 2011 and beyond.

In other words the £0.6 million is to take advantage of Connaughts demise which will greatly increase profits for 2011.
Please do not try and dress this up as a profit warning without giving the full facts.

[phillis] 02/11/2010 09:47

Yes - and it is v explicitly stated

"the anticipated outcome for the full year results remains in line with management's expectations before taking account of the impact of a number of new contract mobilisations. As a result of the award of the additional contracts close to our financial year end there is likely to be costs of £0.6 million for mobilisation"

[foxeye2] 02/11/2010 09:17

Phillis

Can you explain what you mean by, 'profit warning however dressed up'. I am not being sarcastic, but regard the IMS to be very good and positive. Have I therefore missed something?

[phillis] 02/11/2010 08:27

profit warning however dressed up

[parttime] 02/11/2010 08:17

From the interims:


Government Spending Review is positive for Mears.


The bid pipeline remains in excess of GBP3.0 billion. The order book stands at
GBP2.6 billion, with secured revenues of 95% of consensus forecast for 2010 and
for future years currently approaching an unprecedented 90% for 2011 and 75% for
2012.

[cnx] 29/10/2010 04:35

it would be helpful for the company to comment on spending review as affects them

[mdrans1] 28/10/2010 10:25

Today's Shares magazine feature on the spending review has Galliford and Mears among the winners.

[turborock] 20/10/2010 09:44

oddly i timed my exit right too got 298 I think, and I took up your omi info as well, so far so good. Cheers :)

[rivaldo] 19/10/2010 14:33

Hmmm...I may just have timed my exit here rather well for a change. Hope someone took notice of my plug for OMI - it's up (I think) almost 100% since I mentioned it.

GNG and PIM next to rise amongst the small caps hopefully!

[dnfa1975] 19/10/2010 07:59

BBC
Social housing budget 'to be cut in half'

Ministers are expected to introduce a "flexible tenancy"
The social housing budget in England is to be cut by more than 50% in the Spending Review, the BBC understands.

Council housing "for life" will also be phased out, with the needs of new council tenants assessed over time.

Despite the cuts, ministers are likely to set a target of building 150,000 affordable homes, changing the way councils charge rent to finance them.

Tenants will be charged nearer the going market rate, to release cash for the building programme.

[turborock] 11/10/2010 11:25

cheers everyone

[cnx] 09/10/2010 03:46

turborock

look at CNY but up +35% since early sept and discount reduced

[rivaldo] 08/10/2010 13:46

Hi turborock. I'm also in AEX and AST for my sins, but reckon both'll be substantially higher at some point.

As for other ISAble gold stocks, have you looked at OMI? Crazy valuation - with gold at these prices it'll have cash flow equating to it's ENTIRE m/cap in one year! Plus there's all sorts of developments going on with blue sky potential, and it's in politically stable environments. There's also been some director share buying. Read the OMI thread, particularly any recent posts by "adam".

MIRL is also worth a look with existing production plus lots of prospects, and AAAM could be a multibagger. Plus MML looks the best play of all in terms of solid production with room for expansion.

I also have oil stocks like SMDR, CEO and IAE, which all have solid production and will soon be on low P/E's, but which all have transformational potential.

[turborock] 08/10/2010 12:37

yup I agree, just going to see where it goes for the next few days. Know any good resource ones that are isable? i'm in cey, aex and caza at the mo.

[rivaldo] 06/10/2010 14:51

Had a change of heart and sold today. Primarily, there may be some upside here, but there are other ISAble opportunities with much bigger upside. And having talked to a number of people in the public sector, you just would not believe what is happening there with the level of cuts being made. I don't believe MER will be seriously affected, but there may be "some" effect which neutralises growth.

Good luck all. The resource sector is going gangbusters, and that's where the money's being made at present.

[melody9999] 02/10/2010 22:55

It seems that MER must have been fairly busy when CNT unwound what with B Gas and Jackson Lloyd. My guess is that we will get some CNT related business. But until the i s are dotted and the t s crossed - meaning we have done the due diligence on any contracts that we take over - then there will be no news.

I like the way these guys do business - rather than diving in like Morgan Sindall - lets take our time - it feels good to me and it should attract new investors too.

[rivaldo] 02/10/2010 17:55

Nice mention in the Mail today - I think analysts' targets may be lifted after the next set of results.

Looks like a nice break above 300p:



"Thriving Mears Group rose 6.5p further to 305.75p after analysts gave the thumbs up to its £4.8m acquisition of Jackson-Lloyd, a social housing maintenance provider, which operates 15 social housing contracts from three locations in the North of England. Guy Hewett, at Investec, says JL broadens Mears's footprint in the North West of England and has an order book in excess of £80m. His target price is 332p."

[cambium] 01/10/2010 10:32

Barnet has gone to Lovells too

[rivaldo] 01/10/2010 10:31

I particularly like the deferred consideration element of today's acqusiition, dependent on performance.

Yoyoy, from the press it seems MER and others are still finalising the arrangements in taking over the CNT contracts - I gather there's a legal issue in that clients may not be able to simply novate contracts from CNT to another supplier without those contracts going up for public tender. I'd guess that all bases are being covered before MER (or anyone else) announces that they have formally won the contracts.

I have read however that Lambeth has decided to split its contracts between Mears and Morrison. I'd assume that the hiatus will have to be settled one way or another fairly quickly, otherwise services wil start to suffer.

[turborock] 01/10/2010 08:38

nope, nothing

[yoyoy] 01/10/2010 07:47

nothing further on the ex-Connaught businesses acquired or have I missed it?

[rivaldo] 01/10/2010 07:36

Another earnings-enhancing acquisition....



"Acquisition of Jackson Lloyd Limited ("JL")

Summary of Acquisition
· JL operates social housing maintenance contracts in the North West of England
· Mears will integrate the business immediately and is expected to generate significant cost and efficiency savings
· The acquisition is expected to be earnings enhancing for the year ending 31 December 2011 following the costs of reorganisation incurred in 2010
· Mears has acquired JL for £2.7m in cash and the repayment of £2.1m of net debt. Additional deferred consideration of up to a maximum of £1.0m is subject to performance criteria. Consideration is being satisfied from the Company's existing debt facilities
· JL has an order book of in excess of £80m

Mears is pleased to announce that it has acquired the entire share capital of JL for an initial cash consideration of £2.7m. JL operates maintenance contracts with customers predominantly in the North West of England. An additional deferred consideration is payable up to a maximum of £1.0m, subject to the achievement of performance criteria linked to contract retention and profitability. The consideration is being satisfied from the Company's existing debt facilities.

For the 15 month period ended 31 March 2010, the unaudited accounts for JL report that the business generated revenues of £38.6m and a loss before tax of £3.8m. The last audited accounts, for the 12 month period to 31 December 2008, reported revenues of £31.5m and a loss before tax of £0.4m. Gross assets as at 31 December 2008 were £8.6m. The business has recently gone through a restructuring whereby overheads have been significantly reduced together with an increased focus on underlying operating margin. The completion balance sheet reports net liabilities in the region of £1.4m including a net debt of £2.1m which was repaid immediately upon acquisition from the Group's existing banking facility.

Mears expects to generate further significant cost and efficiency savings. The Company will focus on delivering a quality service and maximising customer satisfaction which is typically key to enhancing profitability and ensuring contract longevity. The principal benefits of the acquisition are anticipated to arise in 2011 and beyond; it is expected to be earnings neutral for the year ending 31 December 2010 (before the costs of restructure) and earnings enhancing for the year ending 31 December 2011. The Group treats an acquisition with the same level of detailed focus as when mobilising new contracts and this process commences with immediate effect. In addition, the Group's operational support functions will be incorporated into the existing structures of JL. It is anticipated that the mobilisation and restructure will be completed before 31 December 2010 with an anticipated cost of £1.0m.

Commenting, Bob Holt, Chairman of Mears, said:

"The acquisition of the JL business fits comfortably into our social housing division and broadens our footprint in the North West of England. I am delighted to welcome a further 450 employees into the Group. We continue to seek to acquire businesses with the potential to meet the strategic objectives of the Group.""

[rivaldo] 28/9/2010 08:21

Good coverage in the Daily Mail too:



"Mears in green British Gas deal
Daily Mail

Social housing group Mears has landed a contract with British Gas that could see green energy systems installed in tens of thousands of council homes.

The company (up 9.5p at 290p) is aiming to tap into the government's £350m Community Energy Savings Programme (CESP) to provide insulation, energy saving boilers and solar panelling to the 500,000 social homes it maintains.
Under the scheme, tenants and landlords can apply for government grants to help them make their homes more fuel efficient."

[beerbandit] 27/9/2010 23:13

Ho Ho Ho sede

[rivaldo] 27/9/2010 18:26

Closed above 300p - hopefully a meaningful sign which will be built upon this week back up to 320p or more.