Mears Share Discussion Threads

[rivaldo] 10/8/2010 12:37

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 12:31

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 12:00

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

[dnfa1975] 10/8/2010 11:43

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 11:24

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 11:11

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 09:31

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 12:19

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

[ddav] 09/8/2010 10:14

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

[cambium] 09/8/2010 10:04

they were 9 this morning

[turborock] 09/8/2010 10:01

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 07:54

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?

[tom.b] 06/8/2010 15:25

I agree 100% Rivaldo....happy times for MER shareholders... next week will reveal everything promised in June...

[rivaldo] 06/8/2010 13:28

I repeat - as you've said yourself, MER has stated that all is well and any problems are CNT's alone.

IMO CNT's problems will be seen to be internal, and any effect on MER will be minimal. In the meantime the positive effect of CNT's downfall could be MASSIVE for MER.

[dnfa1975] 06/8/2010 13:13

yes but investors will be sceptical imho and that will imho cause the shares to derate
and the government are consciously going round screwing things to the floor, to do a deal holt will prob issue a wadge of new shares, possibly at a discount, dont think he will want to borrow the money.


long long long term 5+ year horizon i am positive

results are soon and any hint of poo will be problematic

[rivaldo] 06/8/2010 13:12

Exactly - and as you've said yourself MER has stated that all is well and any problems are CNT's alone.

IMO CNT's problems will be seen to be internal, and any effect on MER will be minimal. In the meantime the positive effect of CNT's downfall could be MASSIVE for MER.

[dnfa1975] 06/8/2010 13:01

yes but look at whats going DOWN at CNT rivaldo. it aint pretty

[rivaldo] 06/8/2010 12:38

MER's business is ring-fenced by the Housing Revenue Account AFAIK. And with over 90% revenue visibility, plus MER's biggest competitor unable to win new business and likely to lose big clients, the question is - how much will MER benefit?

This is interesting too:

dnfa1975 - 26 Jul'10 - 12:30 - 1480 of 1535

The problem CNT have is that they have a load of contracts with tiny authorities. Mears took their big ones like lambeth from them and these keep on working.

dnfa1975 - 26 Jul'10 - 15:41 - 1483 of 1535

bet hes licking his lips as we speak - your biggest competitor goes pear shaped and you are gonna eat their dinner, lunch and breakfast

but imagine new contracts and the big chance of margin enhancement...mmmm

[dnfa1975] 06/8/2010 12:08

Some of the bog roll from CNT is going to adhere to MER
I can see Cameroony really taking a knife to social housing, hes already chopping benefits, etc

[rivaldo] 06/8/2010 11:31

RNS just out - CNT is sinking further into the mire.

Better and better for MER.

[rivaldo] 06/8/2010 07:25

Moving upwards more quickly now - realisation of CNT's troubles benefiting MER finally sinking in?

[dnfa1975] 06/8/2010 06:14

The coalition government announced the Communities and Local Government department will be facing a budget cut of £780 million during the 2010/11 financial year while Labour's £1.5 billion housing pledge will be reduced by £180 million.

[tom.b] 05/8/2010 21:23

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
� GBP2.5 billion order book and GBP3 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."

ends.

The news due on 17th August will bear this out and meantime I suspect they are going to see a huge increase in business as a result of Connaught's woe's .......DYOR.. but these are good value at these prices....

[dnfa1975] 05/8/2010 16:22

David Cameron warns public sector cuts will be permanent
Prime minister tells an audience in Birmingham that cuts need to be 'sustainable' and that funding will not be restored once budget deficit is under control