Mears Group PLC, the Gloucester-based provider of services to the housing sector in the UK, has said that it will step up to meet the challenge faced by the communities it supports.
Mears provides vital front-line services, in many cases to vulnerable people and can play a significant role in supporting the national effort in navigating through the emerging situation. The Group says its primary focus at the current time is to ensure continuity of service as far as possible. Working practices are evolving so as to minimise the spread of the virus. Where its workforce is not engaged in essential maintenance, they may be available to provide other services to local communities.
David Miles, Chief Executive Officer of the Group, said: “The rapidly-evolving public health emergency created by Covid-19 will place increased demands on the Group’s services, its people and its finances. We are taking all the necessary steps to overcome these challenges. I am confident that our staff will rise to the challenge of effective delivery in these difficult circumstances and that the Group will come through well. I thank all of our stakeholders for their forbearance and their support in these uniquely challenging times.
“The Group is well placed to battle through these short term challenges. Our long-term goal continues to be delivering controlled growth, improved profitability and reduced indebtedness.”
An element of the Group’s housing activities are regarded by central government as essential services. It also provides emergency maintenance services.
Other housing services will be classified as lower priority in the current environment. These services are largely non-discretionary and in normal circumstance provide a consistent and highly visible revenue stream. However in the current climate, local authorities may choose to defer these works at least for the period of the emergency and Mears expects to see a reduction in these activities in the short term.
Given the uncertainty and rapidly changing nature of the situation, Mears is actively focused on cash conservation and cost management.
The Government has given all public sector contracting authorities a clear directive to put in place the most appropriate payment measures to support supplier cash flow. Where services are paid ‘per activity’, which accounts for around half of Group revenues, the Group is holding discussions with its Local Authority customers to agree alternative pricing mechanisms which would allow Mears to retain those employees engaged on those activities and more broadly support the local supply chain. This key mitigating action would provide the greatest protection to revenue, profit and cash.
More than 90 per cent of Mears’ debtors are with public bodies, and the Government has made a clear commitment that invoices will be settled quickly to maintain cash flow to the supply chain and to protect jobs.