Mears Share Discussion Threads

[turborock] 31/3/2010 10:11

yet down we go...

[rivaldo] 23/3/2010 15:08

MER are featured today on T.M.F as one of only five shares to meet the folowing investment criteria:



"This Recovery Is Gonna Make Me Rich
By Motley Fool Staff

Published in Investing Strategy on 23 March 2010"

"It was easy finding great companies that fit this criterion after the Internet bubble burst. But from 2005 to late 2008 it was increasingly difficult finding many high quality growth shares trading cheaply. Until now...

Even after the stock market recovery of the last year, some shares still offer investors the chance to buy good companies on the cheap. Running a share screener in search of growth share bargains, several likely suspects popped right up. I looked for net gearing of less than 60%, a P/E ratio of less than 15, a PEG of less than 1 and a market value of over £40m."

[rivaldo] 22/3/2010 07:43

Yep - looks like new highs chart-wise. A great week last week, let's hope for another one and a move towards a more realistic 335p-350p.

[chrisfoster] 19/3/2010 17:38

Well, we did it. Just about. Now if we can just stay over 300.

[chrisfoster] 19/3/2010 08:47

Hope so Rivaldo. We were so close last time!

[rivaldo] 18/3/2010 18:53

Rising on terrific volumes again, which is an excellent sign. Maybe tomorrow will see a successful assault on 300p....

I got sent this today - a little late, but still very relevant. It reads rather well:



"Mears performance showing record highs
10 March 2010

Social housing repairs and maintenance contractor reports record results for year-end 31 December 2009.

Revenue for the group's social housing division was £355.3m, up 26 per cent from £282m.

The domiciliary care division had revenues of £60.1m, a rise of 10 per cent on £54.6m in 2008.

Overall operating profit, pre-amortisation of acquisition intangibles, was up 18 per cent from £21m to £24.8m.

But the Operating margin of the group slipped back slightly to 5.2 per cent (2008: 5.6 per cent), although this was inline with management expectations following number of new contract mobilisations during the year.

Mears remains bullish in outlook, partly thanks to "unprecedented levels of opportunity in the public sector', their statement said.

The order book is up at £2bn (2008: £1.6 billion). Also, they note an 88 per cent visibility of consensus forecast revenue for 2010 and 69 per cent for 2011.

Social housing's bid pipeline is £3.9bn (2008: £2.8 billion) with a significant proportion of contract opportunities at an advanced stage of bidding. 
The domiciliary care division is "on track to operate under single Mears Care brand".

Bob Holt, chairman of Mears Group, said the bid pipeline currently stands at its highest ever level of £3.9bn. "Importantly, our two growth markets social housing and domiciliary care, which account for close to 90 per cent of group revenue, are defensive sectors where spend is largely non-discretionary and is therefore unlikely to be affected by any public sector cutbacks. It should also be noted that a significant proportion of our social housing revenue is derived from Housing Associations who would be less affected by a reduction in public sector spending."

Holt believes that budget constraints within the public sector "are more likely to encourage our local authority clients to consider more innovative and higher scale partnerships". Reflecting the Board's confidence in the future opportunities for our growth markets, the dividend is increased by 20 per cent.

"The group has a clear strategy of building market leading positions in each of its core businesses," he said. "I have total confidence that, through the acquisition of Supporta, our shareholders will benefit significantly from our continuing investment into care."

Mears, founded in 1988, has clients mainly local authorities and registered social housing landlords in the UK. It employs more than 11,000 people and provides maintenance and repairs services to 500,000 homes nationwide. Mears also provides over 150,000 hours of domiciliary care to 20,000 service users

Clients include Birmingham City Council, Cross Keys Homes, Ealing Homes, Lancashire County Council, London Borough of Greenwich, Richmond Housing Partnership, Wakefield District Housing and Your Homes Newcastle."

[turborock] 18/3/2010 15:27

Lots of big buys going through.... several 250ks at £3 each. Someone has deep pockets.

edit: again, rising in the afternoon ater a fairly quiet morning.

[turborock] 17/3/2010 14:52

yeah another decent day. Again, pretty decent volume for this security. As you said, perhaps we'll actaully end up somewhere enar the brokers valuation. Considering we were at 330 about 18 months ago, I see no reason for it to be less than that now.

[rivaldo] 17/3/2010 13:55

Still advancing - perhaps this time we'll see a run up past 300p and somewhere a bit nearer all the broker valuations of 350p or so.

[turborock] 15/3/2010 13:16

Lots of volume today.

[rivaldo] 15/3/2010 09:19

Collins Stewart say Buy this morning:



"MEARS GROUP
Collins Stewart recommends investors buy Mears Group after it recorded solid profits growth and excellent cash generation at its preliminary results. Group revenues grew 12 per cent to £470m, with social housing growing organically by 18 per cent. The broker forecasts 9-10 per cent organic sales growth by 2009-12."

[rivaldo] 11/3/2010 08:44

Terrific results out - yet again - whilst I was on holiday.

MER is just much undervalued imo (and ISAble too). Brokers' valuations of around 330p-350p give an easy 30% upside from here with no sleepless nights.

There's an interview with Bob Mears here:



Salient points:

- MER have 90% revenue visibility this year and 70% next year!
- 2009 earnings were higher than forecast
- MER are bidding on £4 billion of contracts
- there remains 40% of social housing and domiciliary care performed in-house still to be outsourced
- MER expect 15% growth in revenues and earnings year on year (prior to acquisitions etc)

Onwards and upwards.

[pbracken] 10/3/2010 12:17

Mkt cap is a function of share price x the number of shares in issue. Supporta is a small acquisition. It'll help (assuming it performs) but there is a bigger issue at stake - namely the perceived earnings risk post the election.

CNT is probably better value just now.

[jimmerandloz] 10/3/2010 11:15

I am still relatively new to the stock market, so please excuse what may be a stupid question.

I would assume that the market cap of Mears will only increase with the acquisition of Supporta – therefore is it more likely to attract the attention of fund managers dealing in larger trades?

I completely agree that the share price undervalues such a strong company with consistent growth, profits and contract wins. I'm certainly holding to see what happens over the next few months.

[rcktmn] 10/3/2010 10:28

bought some more this morning..hoping for a 30% gradual re-rating in the share price from here in the coming months. (imho)

[melody9999] 09/3/2010 22:45

no surprises then. great results and the share price tanks. its a long term hold for me....you have to believe the market will buy in at somepoint

[pbracken] 09/3/2010 17:35

1310 GMT [Dow Jones] Mears's (MER.LN) '09 results are strong, Investec Securities says. Says EPS growth of 14% is backed by strong cash flow and reckons the significant pipeline supports the potential to repeat this performance going forward. Notes the dividend has been raised by 20% to 5.7p. Says Mears is an "outsourcing-led growth story, where the valuation multiples look very attractive." Keeps at buy with 332p price target. Shares +0.1% at 264p. ([e-mail])

[pauliewonder] 09/3/2010 16:14

Just bought in.

Solid results.

Some good broker recommendations recently too.



LONDON (SHARECAST) - Results from social housing maintenance specialist Mears held few surprises, according to KBC Peel Hunt, but 'the outlook statement remains positive across the key operations,' the broker said.

'As a consequence of these strong underlying results we remain comfortable with our earnings projections and believe the market opportunity remains significant and robust across the key areas of operations,' KBC analyst Andrew Nussey said.

'Furthermore, the continuing order book intake and pipeline has mitigated one of the lingering concerns albeit we would like to see increased wins from new relationships. Therefore, with 20% average EPS [earnings per share] growth projected for FY 2010 [fiscal 2010] and FY 2011 [fiscal 2011], upside potential from the acquisition of Supporta and the shares trading on 9.8x FY 2010E [estimates fiscal 2010] earnings, we reiterate our BUY,' Nussey added.

KBC Peel Hunt has a target price of 325p for the stock.

Charles Stanley is also a fan of the stock. 'In our view, Mears is in an excellent position to benefit from further outsourcing opportunities, and a 25% discount to the wider sector is unwarranted,' the broker maintains.

'The group has a strong order book, is exposed to defensive markets with growth opportunities, and has an excellent pipeline of bidding opportunities,' Charles Stanley analyst Matthew Earl notes. The broker has a 358p target price for the stock.

Also in the Mears fan club is Panmure Gordon, though its price target is lower than Charles Stanley's at 330p, based on a sum of the parts valuation.

[brownie69] 09/3/2010 13:59

Good results. Not sure why the dip. Buying opportunity?

[turborock] 09/3/2010 11:32

not good enough for the market apparently.

[volvo] 09/3/2010 09:10

Great results. These companies ie Mears, Connaught etc are going to be the great gainers in all this yet trade on low pe.