TIDMMER
RNS Number : 0432C
Mears Group PLC
10 April 2017
10 April 2017
Mears Group PLC
("Mears" or "the Group" or "the Company")
2016 Annual Financial Report and Notice of 2017 AGM
The following documents have today been posted or otherwise made
available to shareholders:
-- Annual Financial Report for the year ended 31 December 2016 (the "2016 Annual Report")
-- Notice of the Annual General Meeting ("AGM") and a circular
with explanatory notes for shareholders about the resolutions to be
proposed at the AGM ("AGM Circular and Notice")
-- Form of Proxy for the 2017 AGM
In accordance with Listing Rule 9.6.1 copies of the above
documents, along with the Form of Proxy for the Company's 2017
Annual General Meeting, have been uploaded to the National Storage
Mechanism and will be available for viewing shortly at
www.morningstar.co.uk/uk/NSM.
The 2016 Annual Report and AGM Circular and Notice are also
available on the Company's website at www.mearsgroup.co.uk.
The AGM will be held at 9.30am on Wednesday 7 June 2017 at the
offices of Buchanan, 107 Cheapside, London, EC2V 6DN.
In accordance with DTR 6.3.5, this announcement contains in the
attached appendix information on the principal risk factors, a
responsibility statement and details of related party transactions
which has been extracted in full unedited text from the 2015 Annual
Report. This information is included herein solely for the purpose
of complying with DTR 6.3.5 and the requirement it imposes on the
Company as to how it makes public its annual financial report.
These extracts should be read in conjunction with the full 2016
Annual Report and is not a substitute for reading the full 2016
Annual Report. A condensed set of financial statements were
appended to Mears' final results announcement on 21 March 2017
together with a management report. The statutory accounts for the
year ended 31 December 2016 have been approved by the Board and
will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
For further information, contact:
Mears Group PLC
David Miles, Chief Executive Tel: +44(0)7778 220 185
Andrew Smith, Finance Tel: +44(0)7712 866 461
Director
Alan Long, Executive Tel: +44(0)7979 966 453
Director
www.mearsgroup.co.uk
Buchanan
Richard Darby/Sophie Cowles Tel: +44(0)20 7466 5000
www.buchanan.uk.com
About Mears
Mears today employs over 15,000 people, providing 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. Our Care teams provide support to around 20,000
people a year, enabling older and disabled people to continue
living in their own homes.
We focus on long-term outcomes for people rather than short-term
solutions, and invest in innovations that make a positive impact on
people's quality of life and on their communities' social, economic
and environmental wellbeing.
Appendix
Unedited extract from Annual Financial Report for the year
2016
Principal Risks
Risks are identified as principal based on the likelihood of
occurrence and the potential impact on the Group. The Group's
principal risks are identified below, together with how we mitigate
those risks.
Each principal risk is considered in the context of how it
relates to achievement of the Group's strategic objectives. The
risk discussion includes assessment of gross risk and net risk.
Gross risk reflects the exposure and risk landscape before
considering the mitigations in place, with net risk being the
residual risk after mitigations. The gross risk movement from the
prior year for each principal risk has been assessed and is
presented below:
Mitigations in place supporting the management of the risk to a
net risk position are also described for each principal risk.
Reputation
------------------------------------ -------------------------------------------------------------
Definition Mitigation
We recognise that significant
commercial value is attributable * In-house IT system developed to provide operational
to the Mears brand. management with a real-time dashboard of service
Poor service delivery would delivery indicators.
damage our reputation. Both
our housing and care markets
are close-knit communities * Internal auditing of KPI reporting including 'mystery
where examples of poor performance shoppers'.
are quickly communicated
widely.
Furthermore, in Care we * Strict process in place for vetting and approval of
deliver services to people subcontractors.
who are elderly and vulnerable.
A service delivery failure
within our Care division * We drive a culture of putting our customers first;
could result in the physical this is continually reinforced within internal
harm or, in the most extreme communications.
cases, death of a service
user.
In the environment of caring * Well communicated policy for dealing with press
for vulnerable people, there enquiries and incident management.
is a risk of isolated incidents
of abuse and neglect which
rightly receive significant * Care risk plans for dealing with vulnerable
press coverage with the customers.
inevitable reputational
damage.
* Compliance management of bribery and corruption
legislation and whistleblowing policy.
* We induct and train all new starters. This induction
ensures that all employees understand our values and
it reinforces the Group's culture.
* We ensure that staff are properly trained for their
roles. We ensure that we deliver relevant training
and implement best practice.
------------------------------------ -------------------------------------------------------------
People
------------------------------------ -------------------------------------------------------------
Definition Mitigation
The Group employs over 15,000
employees who are critical * We induct and train all new starters. This induction
to the success of our contract ensures that all new employees understand our
performance. Attracting strategy, vision and values. All Care staff have
and maintaining good relations access to NVQ training.
with employees and the investment
in their training and development
is essential to the efficiency * We regularly review and benchmark our remuneration
and sustainability of the packages to ensure that they remain competitive.
Group's operations. Delivery
of strategic objectives
increases our ability to * In Care, we are investing in an innovative
attract, motivate and retain recruitment process to ensure an increase in the
talent. volume and quality of carers. Local Care branches are
In addition, the Care division targeted on a monthly basis in the areas of
is facing a challenging recruitment and retention.
environment where the ability
to recruit and retain carers
is restricting performance * At the senior end of the business, we have increased
our focus on succession planning and increased our
investment in senior management development. Our
Senior Leadership programme has identified a
cross-section of the Group's brightest talent that we
would envisage will play central roles in our future
business.
* The investment in an in-house dedicated training
division to provide a range of employee development
services through two academies in Rotherham and
Brentwood.
* An annual appraisal process is completed for all
employees to ensure that all people receive feedback
in respect of their performance and to identify
future training and development requirements. We hold
a national accreditation as an Investor in People.
* We are continually looking to improve our position as
an employer of choice by improving the level of
engagement with our employees through formal
communications, awards to recognise success, local
events and family fun days.
* We are continually monitoring our future skills
requirements.
* We regularly undertake employee surveys to gauge
employee satisfaction and engagement, and any
barriers to high level performance.
------------------------------------ -------------------------------------------------------------
Health and safety
------------------------------------ -------------------------------------------------------------
Definition Mitigation
Prevention of injury or
loss of life for both employees * Significant investment in the centralised health,
and customers is of utmost safety and environment (HSE) function to maintain
importance. In addition, consistency and quality.
it is vital to maintaining
the confidence our customers
and clients have in our * We have comprehensive safe systems of work which are
business. well communicated through a robust and coordinated
internal training regime.
* We have robust processes for inducting new staff to
ensure importance of health and safety is emphasised
together with detailed method statements for working
safely.
* Regular HSE training and updates are held,
predominantly delivered by the internal function.
* Independent review of health and safety cases by
insurers where recommendations of change are
implemented.
* Internal Health and Safety auditing takes place using
third party validation.
* Annual Group Health and Safety strategy and plan are
produced.
------------------------------------ -------------------------------------------------------------
IT and data
------------------------------------ -------------------------------------------------------------
Definition Mitigation
A major incident or catastrophic
event could impact on the * The Business Continuity Plan is constantly reviewed
Group's ability to trade. and frequently tested to ensure it is fit for
In addition, it is essential purpose.
that the security of customer,
employee and Company confidential
data is maintained. A major * Business continuity and IT disaster recovery
breach of information security management resource is convened at short notice to
could have a major negative manage the response and any associated risk to the
financial and reputational Group.
impact on the business.
The risk landscape of IT
and data is constantly increasing * Various information security policies and standards
with deliberate acts of are in place with a focus on network security, access
cyber crime becoming more controls, encryption, system security, data
sophisticated and frequent protection and information handling.
across all markets.
* Information security penetration is externally tested
to identify improvement recommendations which are
then implemented.
* Data Security Committee in place to monitor and
review both physical data security and IT data
security.
------------------------------------ -------------------------------------------------------------
Unedited extract from Annual Financial Report for the year 2016
(continued)
Statement of Directors' responsibilities
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare Group financial statements in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union and have elected to prepare the Company
financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice including FRS 102 'The Financial
Reporting Standard Applicable in the UK and the Republic of
Ireland' (United Kingdom Accounting Standards and Applicable Law).
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs and profit or loss of the Group and
the Company for that period. In preparing these financial
statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and the Company and enable
them to ensure that the financial statements and Remuneration
Report comply with the Companies Act 2006 and Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors confirm that:
-- so far as each Director is aware there is no relevant audit
information of which the Company's auditor is unaware; and
-- the Directors have taken all the steps that they ought to
have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the auditor is
aware of that information.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
To the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Annual Report includes a fair review of the development
and performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
The Directors are responsible for preparing the Annual Report in
accordance with applicable law and regulations. The Board considers
the Annual Report and Accounts, taken as a whole, as fair, balanced
and understandable and that it provides the information necessary
for shareholders to assess the Company's performance, business
model and strategy.
Going concern
We principally operate in robust defensive markets, Social
Housing and Care, where spend is largely non-discretionary and our
contracts tend to be long-term partnerships.
The Group had net debt of GBP12.4m at 31 December 2016. The core
debt required to satisfy the day-to-day requirements of the
business is in the region of GBP85m. This represents significant
headroom against the GBP140m unsecured revolving credit facility,
with an additional accordion mechanism allowing the facility to be
increased to a maximum of GBP200m, maturing in July 2020.
After reviewing the Group's and Company's budget for the next
financial year and longer-term plans, the Directors consider that,
as at the date of approving the financial statements, it is
appropriate to adopt the going concern basis in preparing the
financial statements.
Unedited extract from Annual Financial Report for the year 2016
(continued)
Related Party Transactions and Remuneration of key management
personnel
Identity of related parties
The Group has a related party relationship with its pension
schemes, its subsidiaries and its Directors.
Pension schemes
Details of contributions to pension schemes are set out in note
24 to the financial statements.
Subsidiaries
The Group has a central treasury arrangement in which all
subsidiaries participate. The Directors do not consider it
meaningful to set out details of transfers made in respect of this
treasury arrangement between companies, nor do they consider it
meaningful to set out details of interest or dividend payments made
within the Group.
Transactions with key management personnel
The Group has identified key management personnel as the
Directors of Mears Group PLC.
Key management personnel held the following percentage of voting
shares in Mears Group PLC:
2016 2015
% %
----------- ----- -----
Directors 0.4 0.4
----------- ----- -----
Key management personnel's compensation is as follows:
2016 2015
GBP'000 GBP'000
------------------------------------------------------- -------- --------
Salaries including social security costs 1,762 1,513
Contributions to defined contribution pension schemes 195 195
Share-based payments 150 150
------------------------------------------------------- -------- --------
2,107 1,858
------------------------------------------------------- -------- --------
Further details of Directors' remuneration are disclosed within
the Remuneration Report.
Transactions with other related parties
During the year the Group made a loan to YourMK LLP, an entity
in which the Group is a 50% member, totaling GBP0.2m (2015:
GBPnil). At 31 December 2016, the Group was owed GBP0.2m (2015:
GBPnil) by YourMK LLP.
This information is provided by RNS
The company news service from the London Stock Exchange
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