Mears Share Discussion Threads

[rivaldo] 01/8/2009 10:36

Good comment in today's Independent:



"Holt runs another portfolio constituent, the rather more successful Mears, which is engaged mainly in social housing and domiciliary care and is seemingly in a strong position to resist recessionary damage. Its profit record is encouraging and another strong performance is expected this year. Interim figures are due later this month.

The only drag could be the small mechanical and electrical division that mostly serves the private housing market. Yet, in its April trading update, Mears referred to the division's niche appeal and seemed confident about its prospects. The social housing and home care operations are sheltered by long-term contracts with a range of local authorities and other public bodies.

Care is a relatively new activity. Holt believes it could develop as impressively as social housing as more and more organisations are forced to outsource their requirements in the battle to shave costs.

Mears has been particularly active on the housing front. It recently clinched a £200m, 10-year deal with Brighton and Hove City Council, which lifted this year's total order intake to approaching £400m. In April the group had already accumulated 92 per cent of this year's forecast revenue."

[rivaldo] 31/7/2009 14:55

Nice Buy rec in today's Scotsman:



"ONE TO WATCH

Mears Group

247p -3p

Scotsman says BUY

MEARS is one of the UK's leading providers of social housing and domiciliary care services. Its social housing division, which accounts for 77 per cent of earnings, provides maintenance, refurbishment and estate management services for social homes.

The domiciliary care division provides care at home to the elderly and disabled and accounts for about 14 per cent of profits.

The company has very good visibility underpinned by a strong forward order book. Mears has won more than £400 million of work from existing clients in the year to date, leading to 95 per cent visibility for 2009 revenues and 65 per cent for 2010. This compares with £460m of contracts won for the whole of 2008.

Clients are looking to consolidate their supply chain, which should bode well for future tenders.

The bid pipeline remains strong and there are a number of tender opportunities worth £100m plus, two of these being with existing clients so it is probable that Mears will win further large-scale contracts.

The shares have under-performed the FTSE All-Share by 8 per cent over the past year over fears about Mears entering the domiciliary care market. Domiciliary care is an industry characterised by budget pressures, high staff turnover, supplier fragmentation and poor levels of service delivery. Mears has performed well in this often challenging market and seems to be slowly building a quality franchise.

At present, Mears is trading on a 2009E P/E of 11.1x falling to 9.5x 2010E and yields 2.2 per cent, rising to 2.6 per cent in 2010. In addition to this, the company has a strong balance sheet with an estimated net cash position of £20m at the end of 2009."

[nellie1973] 28/7/2009 08:10

3 weeks of a nice steady uptrend ahead.

[rivaldo] 28/7/2009 07:34

RNS out - results to be announced on 18th August. Given the strong trading as per the IMS and then AGM statement we can expect them to be good:



Only 3 weeks to go....

[nellie1973] 27/7/2009 17:12

Yes nice day again on build up to results!

[rivaldo] 27/7/2009 09:48

Nice start again - going above recent highs.

[rivaldo] 26/7/2009 07:37

There is a brief summary of the MER tip on the IC web site FYI:



"Join Mears' bonus bonanza
Created: 23 July 2009 Written by: Algy Hall
BULL POINTS:

■ Strong order book
■ Defensive end markets
■ Long-term growth opportunities
■ Strong balance sheet

BEAR POINTS:

■ Corporate governance issues
■ Weakness of mechanical and electrical division"

[rivaldo] 24/7/2009 11:18

No probs. Gathering speed now.

[cwa1] 24/7/2009 08:42

Thanks for all the input guys. It is appreciated

[rivaldo] 24/7/2009 08:29

Two in two days - MER is tipped as a main Buy in today's IC. Let's see if we get some decent buying as a result.

[rivaldo] 23/7/2009 11:39

Many thx pbracken - 340p would be about right.

MER also got tipped by Shares Mag this morning as one of ten "summer sizzlers" to watch!

"Mears (MER) 235p
This year's earnings growth: 32%
Next year's earning growth: 14%
Yield: 2.4%
The social housing repairs and maintenance provider is benefiting from
clients' desire to work with fewer suppliers.

Judging by the recent strong run of contract wins with existing clients,
Mears is proving to be one of the preferred service suppliers. It has good
earnings visibility with around 95% of 2009 forecast revenues secured and
65% for 2010, according to house broker Collins Stewart. Growth is also
being driven by the domiciliary care market, which Mears entered in 2007
through the acquisition of Careforce.

Both social housing and care services are defensive sectors with largely nondiscretionary spend, underpinning Mears' strong growth prospects. (DC)"

[pbracken] 23/7/2009 10:14

Mears
�� Significant contract wins – Mears has announced contract wins totalling c£270m
since the beginning of July and takes current year new contract wins to c£400m.
�� Bid pipeline strong – Confident tone to accompanying statement and "significant
pipeline of contract bids" underlines the group's high quality of earnings.
�� Strong earnings growth - EPS is projected to rise at a CAGR of 12% over the
next three years; above the median of flat earnings for the wider sector.
�� Price target of 340p – The group trades at a PER of 11.5x 2009E and 10.1x
2010E and on a multiple of 6x 2010E EV/EBITDA, thereby pricing minimal premium
(c5% on forward earnings) for above sector average forecast earnings growth.

[pbracken] 23/7/2009 10:12

From Charles Stanley today:

Demand for cost savings
We are buyers of the outsourcers that offer significant cost savings and
continue to benefit from ongoing demand from both the private and public
sectors. By contrast, the distributors, recruiters, rental providers and
construction facing companies have reported weaker conditions in Q2 compared
to Q1 and we anticipate further difficulties in H2 09.
�� Key recommendations:
�� Connaught (Buy) – Defensive growth, with excellent earnings visibility. Social housing bid pipeline remains strong, potential market share gains in compliance.
�� Mears (Buy) – Strong bid pipeline in both social housing and domiciliary care. Valued in line with the wider sector yet offers superior earnings growth.
�� Robert Walters (Sell) – Loss making in 2009E and difficult outlook for 2010. Trades on significant premium to wider sector pricing in a strong macro recovery.
�� VT Group (Buy) – Attractive valuation, good visibility, large order book, strong balance sheet. Ability to provide significant cost savings to the government.

[sruthan] 21/7/2009 14:32

mmmmm......112k sold and only 53k bought but price edging up at last. still plenty of buy orders on L2 so looking good.

[nellie1973] 20/7/2009 16:44

At last we have cracked 240!!!

[hosede] 18/7/2009 18:56

IMO while both are very well run Cos., MER is fairly valued and CNT significantly overvalued. Remember, at the bottom of bear markets even the strongest Cos. come down to PEs in the 5-8 range, and if you are crazy enough to think we've seen the bottom, then consider that the SP500 (probably the West's most representative index) is currently on a PE 0f 23.3 with earnings falling - at previous market bottoms its PE has sunk similarly into the 5-7 range OUCH!

[essentialinvestor] 18/7/2009 14:11

Mears have a contract with this council

[ezodisy] 17/7/2009 10:34

It does, though it doesn't take into account sellers or MM madness :)

[rivaldo] 17/7/2009 10:12

Ta ezodisy - looks promising.

[ezodisy] 17/7/2009 09:23

Chart-wise on closed prices we broke above minor resistance and have next at around 248. A break there and a move towards 300p will be on.

[volvo] 17/7/2009 09:21

More contract news next week is a strong possibility(unquote).Please dyor though.

[peterboroughmatt] 16/7/2009 16:46

A good day at last long may they continue

Matt

[nellie1973] 16/7/2009 13:36

I was in a while ago at 211 and sold out at 242. This company has won some serious contracts in the past two months and has dropped off prompting me to re enter at 220. I think we are all expecting good results in less than a month. A safe part of my portfolio!

[rivaldo] 16/7/2009 11:49

Nice 25k buy at 238.5p. Looking good for more with the likelihood of further news flow soon.