Interim Management Statement

RNS Number : 6157E

Mears Group PLC

14 May 2013

 



14 May 2013

Mears Group PLC

("Mears" or "the Group")

Interim Management Statement

Mears today releases its Interim Management Statement ("IMS") for the period from 1 January 2013 to date.

Mears continues to deliver solid trading across both core divisions in line with management expectations.

Our M&E business is also trading in line with expectations and management remains focussed on reshaping the business during the course of 2013.

Mears has secured new contract awards since 1 January 2013 of circa £125 million. In addition the Group has experienced strong spends from its existing customer base and has achieved 95% visibility of the £915m consensus revenue forecast for 2013 and 80% visibility of the £960m consensus revenue forecast for 2014. The order book stands at £3.8 billion and the bid pipeline remains at £3.0 billion.

Integration of Morrison Facilities Services

Mears acquired Morrison in November 2012. Prior to the acquisition, Morrison had encountered significant challenges having pursued an aggressive growth strategy at the expense of operating margin and service delivery. Since 1 January 2013 the Group has reached an advanced stage in the restructuring of the senior operational management and social housing support functions and we would anticipate that this element of the integration will be substantially complete by the half-year end.  We have commenced the migration of Morrison across to the Mears IT systems which has a target completion of December 2013.

We anticipate that the Morrison operations will deliver a break-even result for the half-year before the exceptional cost of integration. The speed of this turnaround is ahead of our original expectation.

Acquisition of ILS Group Limited

In April 2013, Mears announced that it had acquired the entire issued share capital of ILS, a leading homecare company for a total consideration of £22.5 million on a debt-free, cash-free basis.  ILS provides high quality community based care services to approximately 3,400 service users in Scotland and has contracts with 20 local authorities, employing over 1,600 staff. The acquisition is in line with Mears' strategic objective within its Care business to increase the level of work that it undertakes in higher acuity services. The short period since acquisition has seen an encouraging response from both ILS customers and employees and we look forward to reporting on further progress in due course.

Financial position

Mears continues to benefit from a strong balance sheet. The efficiency with which the Group manages working capital continues to be a cornerstone of the business.

Commenting, David Miles, Chief Executive, Mears Group, said:

"I am delighted with the progress made by the Group in recent months. The speed and quality of the integration of the Morrison business has exceeded my expectations and our Social Housing business is performing very well, delivering excellent visibility to revenues.

"The acquisition of ILS is an important achievement for the Group and I am pleased with the progress made in the short intervening period. The acquisition will provide Mears with the platform to provide higher acuity home services across the UK, complementing Mears' existing care capabilities and developing the capability to offer longer term continuing healthcare in the home, an area in which Mears does not currently operate."

Ends.

About Mears

www.mearsgroup.co.uk

(tickers: MER.L MER.LN  MER.PL)

Mears is a leading social housing repairs and maintenance service provider to Local Authorities and Registered Social Landlords in the UK and now commands a leading position in the UK Local Authorities' outsourced care market, providing personal care services to people in their own homes.

Mears employs in excess of 14,000 people and provides maintenance and repairs services to in excess of 10% of the UK social housing stock. Mears also provides circa 200,000 hours of care to over 20,000 service users each week.

Enquiries:
Mears Group PLC
David Miles, Chief Executive Andrew Smith, Finance Director Bob Holt, Chairman	Tel: [phone] Tel: [phone] Tel: [phone]
Joint Broker - Investec Keith Anderson/Daniel Adams	Tel: [phone]
Joint Broker - Canaccord Genuity Piers Coombs/Lucy Tilley	Tel: [phone]
Gable Communications              John Bick/Justine James           [e-mail]	Tel: [phone] Tel: [phone]

 

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