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MER Mears Group Plc

369.00
2.00 (0.54%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Mears Group Plc LSE:MER London Ordinary Share GB0005630420 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  2.00 0.54% 369.00 368.50 369.00 371.00 362.50 368.00 311,442 16:35:23
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Bldg Clean & Maint Svc, Nec 959.61M 29M 0.2640 14.02 406.38M

Mears Group PLC Trading update (8247H)

08/12/2020 7:00am

UK Regulatory


Mears (LSE:MER)
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TIDMMER

RNS Number : 8247H

Mears Group PLC

08 December 2020

8 December 2020

Mears Group PLC

("Mears", the "Group", or "the Company")

Trading update

Mears (LSE: MER), the UK Housing solutions provider, today announces its scheduled trading update ahead of its financial year ending 31 December 2020.

Group performance

Trading performance continued in line with the Board's expectations and the Group has delivered an operating profit throughout the second half of the financial year. Accordingly, the Group is expecting to report total revenues of around GBP825m (H1: GBP407m) for the full year and a small profit before tax (H1: GBP5.8m loss).(1) Cash performance has been strong in the second half, with the Group's average daily net debt position for the 5 months to 30 November reducing to GBP88m (H1: GBP121m), also benefiting from a GBP16m VAT deferral from the March-20 quarter end. Completion of the Terraquest disposal is expected shortly and taking into account the initial cash proceeds, the Group is expected to be net cash positive at year end(2) .

Operations

In our social housing Maintenance contracts, work volumes strengthened steadily through the third quarter reaching 79%(3) in October (June 2020: 25%) as clients cautiously extended the scope of works permissible in people's homes but PPE/social-distancing protocols continued to reduce operative productivity. The Group did not see a significant impact on work volumes in November during the second national lock-down and this resilience provides the Board reassurance when looking forward to 2021. The Group's Central Government contracts, notably Key Worker and AASC, have continued to perform strongly through the second half, with the Group adapting well to changing service user needs and the higher work levels.

Strategic developments

The Group made excellent progress in the second half, completing its programme of strategic re-focussing with the sale of its Scottish Care business for up to GBP2.5m in September and the disposal of TerraQuest for up to GBP72m in December 2020.

In addition, as reported in our interim results, the Group took the strategic decision during H1 to withdraw from c. GBP50m of annualised Maintenance contract revenues which were either underperforming or where no financial support was forthcoming from clients through the first national lock down. The Group's central support functions have also been rationalised in proportion to the reduction in revenues. These closures and cost reductions are now complete and expensed during the year.

Outlook

With local and/or national Covid-related restrictions likely to persist well into Q1 2021, near term forecasting inevitably remains difficult. However, 2021 should see the Group transition back to our more normalised levels . Our central case is that work volumes in Maintenance remain at or near current levels (c. 80%) until spring. By contrast, continued Covid-related restrictions are likely to keep user numbers elevated within our Central Government contracts before returning to more normalised levels in H2 2021.

Notes :

1. Total revenues and profit before tax is stated inclusive of part-year contribution from the TerraQuest business which is due to complete on 9 December 2020 and will be treated as discontinued. Adjusted operating profit and profit before tax is normalised, before exceptional items and before the amortisation of acquired intangibles.

2. Includes anticipated Day-1 disposal proceeds of GBP56m before costs of GBP3m and the benefit of c. GBP16m of VAT deferred for 1 year from March-20.

3. Maintenance work volumes as measured by number of jobs relative to historical average.

David Miles, Chief Executive Officer of the Group, commented:

"In common with most businesses, 2020 has been a challenging year for the Group, but one the company and particularly its employees have risen to with great fortitude. We have also received great support from clients and customers. Despite the challenges, we have continued to provide the highest levels of service, plus made excellent progress on our strategic priorities. We exit the year as a singularly focussed Housing specialist and trusted partner to local and central government, bringing innovative solutions to help tackle many of the deep-rooted issues within the UK's social and affordable housing sectors.

With a portfolio of high-quality contracts focused on our core Housing services and the Group's strengthened balance sheet, we look to the future with confidence."

A conference call will be held for analysts and shareholders at 8.30am on 8 December 2020 hosted by David Miles, CEO and Andrew Smith, CFO. Joining instructions are below:

Dial-in: +44 20 3655 9505

Pin code: 1069383#

A recording of this call will be available in the Investor section of the Mears Group website later today.

For further information, contact:

 
 Mears Group PLC 
 David Miles, Chief Executive Officer   Tel: +44(0)7778 220 185 
 Andrew Smith, Finance Director         Tel: +44(0)7712 866 461 
 Alan Long, Executive Director          Tel: +44(0)7979 966 453 
 Joe Thompson, Investor Relations       Tel: +44(0)7980 844 580 
 www.mearsgroup.co.uk 
 

The person responsible for arranging the release of this announcement on behalf of Mears Group PLC is Ben Westran, Company Secretary.

About Mears

Mears currently employs around 6,000 people and provides services in every region of the UK. In partnership with our Housing clients, we maintain, repair and upgrade the homes of hundreds of thousands of people in communities from remote rural villages to large inner-city estates. Mears has extended its activities to provide broader housing solutions to solve the challenge posed by the lack of affordable housing and to provide accommodation and support for the most vulnerable.

We focus on long-term outcomes for people rather than short-term solutions and invest in innovations that have a positive impact on people's quality of life and on their communities' social, economic and environmental wellbeing. Our innovative approaches and market leading positions are intended to create value for our customers and the people they serve while also driving sustainable financial returns for our providers of capital, especially our shareholders.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

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(END) Dow Jones Newswires

December 08, 2020 02:00 ET (07:00 GMT)

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