Mears swings to losses as it continues restructure and staff reductions

Mears Group

Gloucester-based Mears Group, which provides services to the UK’s housing sector, has reported that it expects to make losses of around £6 million for the first half of the year, down from £16.7 million profit last year.

It reported revenues for the first half of the year at around £405 million, down from £439 million last year. 

The Group said it expects to see a recovery in activity levels during the second half of the year, assuming that infection levels remain relatively low, as working arrangements in its core maintenance business return towards more normal levels by the end of the year. 

However, Mears has also warned that it is looking to reduce staff numbers, which it says are not wholly a result of Covid but as part of an ongoing restructure of the business. The company also said that while Covid-19 will inevitably have a lasting impact on the Company, it has allowed Mears to adopt more remote working ways of working and greater use of hubs to coordinate services across several branches. Action has also been taken to exit contracts which, both pre and during Covid, did not fit with Mears  way of working. 

Mears originally expected this year to be a particularly important period for contract renewals, with around one-third of the Group’s maintenance business, by value, coming up for re-bid. The impact of Covid-19 has resulted in a number of these existing contracts being extended, with tender processes deferred in the short-term. Some new bidding opportunities have seen delays.    

David Miles, Chief Executive Officer of the Group, said: “The Group has made excellent progress and is continuing to take the necessary steps to address current challenges. Whilst it has been essential for the Group to maintain a sharp focus on short term operational and financial management, it is pleasing that the Group has also taken positive and considered actions during this period to drive improvements which will deliver better value to the business over the longer-term and that will ensure that the Group is stronger and well positioned once the UK sees a return towards normality.

“I am very confident as to the financial stability and the long-term wellbeing of the Group. I am extremely proud of the professionalism and hard work shown by the Mears team in the most challenging of circumstances.”

Mears will announce its interim results on Tuesday 18 August 2020.