Mears Group PLC Pre-Close Trading Update (2063J)
27 June 2017 - 4:00PM
UK Regulatory
TIDMMER
RNS Number : 2063J
Mears Group PLC
27 June 2017
27 June 2017
Mears Group PLC
("Mears" or "the Group")
Pre-Close Trading Update
Mears Group PLC (LSE: MER), the provider of support services to
the Housing and Care sectors in the UK, today issues a pre-close
trading update ahead of its interim results for the six months to
30 June 2017.
Mears continues to make solid progress in both its core
divisions.
Housing
In Housing, which accounts for circa 83% of Group revenues, the
Group continues to perform well.
The Housing division has achieved 96% visibility of consensus
revenue forecast for 2017 which falls a little short of the revenue
target at the half year stage. Operating margins are expected to be
in-line with management expectations.
The extension of our services from maintenance to a wider
housing offering remains our key focus and much of the first half
year has been focussed on developing further opportunities in this
area, particularly through Mears' own social housing Registered
Providers and through the development of alternative funding lines.
We continue to see significant new opportunities for the Group in
housing management and the Group will provide more detail around
the progress made in this key area at its half year statement.
Care
The Care business, which accounts for circa 17% of Group
revenues continues to find market conditions challenging although
underlying trading has shown improvement month on month through the
first half year and management expect this trajectory to
continue.
We have continued to place significant emphasis on maintaining a
portfolio of contracts that can provide clear and sustainable
margins. The division saw a reduction of around 20% of its branches
during the last quarter of 2016, the majority of which arose within
our North region. Further closures have been triggered during the
first half of 2017, predominantly in the Midlands and London region
covering 10% of revenues, improving further the quality of our care
contract portfolio.
During the first half, the Care division has secured solid price
increases from existing contracts to match increases in its cost
base driven by the National Living Wage and Apprentice Levy, and
has enjoyed a successful period of new contract bidding, securing
work at substantially improved pricing.
Management expects the Care division to report a loss in the
first half but anticipates a profitable second half year.
Commenting, David Miles, Chief Executive, Mears Group, said:
"I am pleased with the solid progress made in the first half of
2017 in terms of both service delivery and the progress we have
made in developing our broader service offering.
"We anticipated the increasingly complex challenges that would
face our Housing clients and we have broadened our offering
accordingly. I am delighted with the size of the opportunities that
are available to us and we are working hard to ensure we convert a
number of these.
"Whilst we continue to find the Care market challenging, we have
made good progress in this area and our order book is significantly
improved with a portfolio of good quality contracts at clear,
sustainable margins.
"We continue to achieve high levels of service delivery and
customer satisfaction. The quality of our service delivery
continues to be our key differentiator and underpins our
success."
Mears will be announcing its interim results on Tuesday 15
August 2017.
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 Director Tel: +44(0)7979 966 453
www.mearsgroup.co.uk
Buchanan Tel: +44(0)20 7466 5000
Richard Darby/Sophie Cowles
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTGMGZVVVGGNZM
(END) Dow Jones Newswires
June 27, 2017 02:00 ET (06:00 GMT)
Mears (LSE:MER)
Historical Stock Chart
From Apr 2024 to May 2024
Mears (LSE:MER)
Historical Stock Chart
From May 2023 to May 2024