Mears Group trading “in line with expectations” as it reports small profit

Mears Group

Gloucester-based Mears Group PLC, which provides services to the UK’s housing sector, has reported an operating profit throughout the second half of its financial year.

The Group is expecting to report total revenues of around £825 million for the full year and a small profit before tax.

The Group said it made excellent progress in the second half, completing its programme of re-focussing with the sale of its Scottish Care business for up to £2.5 million in September and the disposal of TerraQuest for up to £72 million this month.

David Miles, Chief Executive Officer of the Group, said: “In common with most businesses, 2020 has been a challenging year for the Group, but one the company and particularly its employees have risen to with great fortitude. We have also received great support from clients and customers. Despite the challenges, we have continued to provide the highest levels of service, plus made excellent progress on our strategic priorities. We exit the year as a singularly focussed housing specialist and trusted partner to local and central government, bringing innovative solutions to help tackle many of the deep-rooted issues within the UK’s social and affordable housing sectors.

“With a portfolio of high-quality contracts focused on our core Housing services and the Group’s strengthened balance sheet, we look to the future with confidence.”

In its social housing maintenance contracts, work volumes strengthened steadily through the third quarter as clients cautiously extended the scope of works permissible in people’s homes, but PPE/social-distancing protocols continued to reduce operative productivity. The Group did not see a significant impact on work volumes in November during the second national lock-down and this resilience has given the Board reassurance when looking forward to 2021. The Group’s Central Government contracts, notably Key Worker and AASC, have continued to perform strongly through the second half.

During the first half of the year Mears withdrew from  around £50m of annualised maintenance contract revenues which were either underperforming or where no financial support was forthcoming from clients through the first national lock down. The Group’s central support functions have also been rationalised in proportion to the reduction in revenues. 

Mears currently employs around 6,000 people and provides services in every region of the UK. It maintains, repairs and upgrades 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.