Mears Group PLC Pre-close trading update (4101T)
25 March 2021 - 6:00PM
UK Regulatory
TIDMMER
RNS Number : 4101T
Mears Group PLC
25 March 2021
25 March 2021
Mears Group PLC
("Mears", the "Group", or "the Company")
Pre-close trading update
Mears (LSE: MER), the UK Housing solutions provider, today
announces its pre-close trading update for the financial year
ending 31 December 2020 ("FY2020") and the year to date.
Financial results for the period ended 31 December 2020
The Group is expecting to announce results consistent with the
trading update released on 8 December 2020(1) . On a Continuing
basis, excluding revenues and profits from the Domiciliary Care and
Terraquest businesses disposed of in the period, the Group should
deliver second half revenues of c. GBP413m (H1: GBP398m) and a
second half profit before tax of c. GBP4.7m (H1 loss: GBP8.2m).
Accordingly, the Group expects to report full year FY2020
Continuing revenues of c. GBP811m (2019: GBP884m) and a full year
Continuing normalised loss before tax of c. GBP3.5m (2019: GBP31.8m
profit)(2) .
Cash performance has also been strong, delivering quarter on
quarter improvement across 2020. The Group expects to report an
adjusted(3) net cash position as at 31 December 2020 of GBP56.9m
(2019 net debt: GBP51.0m). This reflects net cash proceeds (after
transaction costs) of c. GBP52.5m from the disposal of Terraquest
in December 2020, and a number of Covid-19 related deferrals and
payments received on account which will unwind in the first half of
FY2021(3) . Average adjusted daily net debt for the year to 31
December 2020 was GBP97.3m (2019: GBP114.4m). The Group estimates
that its underlying average daily net debt at the year-end to be in
the region of GBP65m.(3)
Current trading
The Board is pleased with the resilient trading and liquidity
performance of the Group during the first quarter of FY2021 and is
confident of a full recovery as lockdown restrictions are lifted.
During the first national lockdown, the Group adapted quickly to
new ways of working safely and effectively. The Group has seen a
continuation of these working practices and methods through the
first quarter of 2021. Our clients and service users have also
adapted to the changing environment and as such, the Group has seen
a lesser impact on work volumes during the third lockdown compared
to the first, whilst focus has once again been towards the delivery
of essential and priority services to our vulnerable service
users.
David Miles, Chief Executive Officer of the Group,
commented:
" I am extremely proud of the resilience shown by the Group
during a year which has seen unprecedented challenges.
Notwithstanding the fact that much of the energy and focus in 2020
was expended in reacting to the operational challenges brought by
Covid-19, it is pleasing that the Group made strong progress
against all its key strategic objectives. These were to refocus on
housing activities, significantly to reduce indebtedness and to
improve the returns which we obtain on our invested capital.
Notwithstanding the headwind of a third national lockdown, I am
delighted at how well the Group has started the new year."
Notes :
1.Trading update released on 8 December 2020 referred to
expected FY2020 trading numbers inclusive of the activities of
Terraquest, comprising revenues of circa GBP20m and an operating
profit of circa GBP5m. The disposal of Terraquest has subsequently
completed and its financials will be included in discontinued in
FY2020 results.
2. 'Normalised' profit/loss before tax is before exceptional
items and amortisation of acquired intangibles
3. Adjusted net cash / (debt) excludes lease obligations.
One-off cash items includes VAT deferral, client payments received
on account and cost accruals relating to lump sum contracts,
aggregating to a circa GBP40m benefit to the reported spot 31
December 2020 net cash position.
For further information, contact:
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
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.
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