As it published its latest unaudited trading update, Mears, the Gloucester based listed business which provides support services to the UK Housing sector has also revealed that it is at an advanced stage in the sale and exit from its standalone domiciliary care operation.
The Board expects to report revenues (excluding the Group’s standalone Domiciliary Care activities), of more than £900 million (2018 adjusted: £773 million). The revenue growth of around 16 per cent is predominantly driven by the acquisition of MPS, which delivered revenues of circa £115m.
Mears bought the housing-related activities of Mitie PLC in November 2018, renaming the business MPS Housing Limited.
Mears Group is expected to report a closing net debt of around £52 million (2018: £65.9m) which reflects conversion of EBITDA to operating cash in excess of 100 per cent. Average daily net debt during 2019 was £114 million, which was impacted by the working capital absorbed during the mobilisation of the Asylum Accommodation and Support Contract.
The AASC delivered revenues in the year of approximately £45 million.
David Miles, Chief Executive Officer of the Group, said: “2019 was a very busy year for Mears. A significant amount of time and focused effort has been directed towards the integration of MPS and the mobilisation of the asylum housing contract. I am confident that we are well placed to benefit from this upfront investment in our core business.
“Our exit from standalone Domiciliary Care will enable us to focus our efforts where we can deliver superior returns for shareholders. In line with this, we also continue to make progress unwinding our exposure to Development activities.
“We continue to see a good pipeline of opportunities providing Housing with Care, in the majority of cases to provide, manage and maintain accommodation and to care for the service users.
“Our deep understanding of the challenges faced by service users and proven ability to support vulnerable customers, many of whom have a care requirement, has been central to our success in Housing, and most recently in securing the asylum housing contract. This bespoke skillset is key to our future success.”
Mears will issue its full year results for FY2019 on Tuesday 24 March 2020.