Mears Group reports lower revenues, but wins £120 million worth of contracts

Mears

Gloucester-headquartered Mears Group, which provides services to the UK’s housing sector, has reported lower revenues of £407 million for the six months to June 2020, down from £432 million in the same period last year. The company has reported an operating loss of £6.7 million, compared to a profit of £18.1 million last year.

In a statement, Mears said that Covid-19 required many maintenance contracts to move to an emergency-only basis resulting in short-term reduction in volumes, revenues and profits however interim customer arrangements reduced much of the financial risk and provided consistency of contract cashflows.

Tendering processes for new maintenance contracts were impacted by Covid-19, however new contracts were secured to the value of £120 million, a win rate (by value) of more than 80 per cent.

A recovery in activity levels is expected during the second half, as working arrangements progressively return towards more normal levels.

David Miles, Chief Executive Officer of the Group, said:“The Mears’ business has acted with a great sense of responsibility and professionalism during the Covid-19 pandemic, both in terms of ensuring the ongoing resilience of our operations and supporting the Communities where we work. Our people have performed valiantly in the most challenging of circumstances. Service quality levels to our local and central government clients, and to our many vulnerable service users, have remained at their traditionally high levels throughout the period. Inevitably, the Covid-19 crisis has impacted short-term financial performance in these results, particularly as Maintenance contract volumes reduced to emergency-only to protect the safety of staff and service users alike.

“Activity levels are returning to normal, and I am very confident as to the financial stability and the long-term wellbeing of the Group. The Group has taken positive and considered actions during the Covid-19 period to ensure that the Group is stronger than ever and well positioned once the UK sees a return towards normality.”

The company said that revenues were largely unaffected by Covid-19 and increased 54 per cent driven by the new AASC contract. Group order book stands at £2.7 billion (2019: £2.7bn), reflecting a number of new contract extensions. The company said it had completed disposal of its England and Wales Domiciliary Care business, in line with the stated strategy and is progressing well with its planned disposal of its the Scotland Domiciliary Care business and expects to complete the disposal during 2020.