Pre-Close Trading Update

RNS Number : 5514X

Mears Group PLC

14 January 2014

 



Mears Group PLC

("Mears" or "the Group")

Pre-Close Trading Update

Trading Statement

Mears anticipates reporting results for the full year to 31 December 2013 in line with management expectations, coupled with strong cash performance.

The current order book stands at £3.8 billion and the bid pipeline remains at £3.0 billion. The Group has 90% visibility of consensus revenue forecast for 2014 from continuing operations of £911 million.

Integration of Morrison Facilities Services Limited ("Morrison")

Mears acquired Morrison in November 2012 and has previously reported that the speed of turnaround has exceeded management expectations and this continues. The integration of the support service functions was completed in the first half year and the migration to the Mears IT systems is substantially complete. Morrison has delivered a positive contribution in the year.  The key focus is now at an individual contract level to maintain the improved service delivery whilst continuing to resolve the remaining financial challenges.

Disposal of Mechanical and Electrical division ("Haydon")

Mears completed the disposal of Haydon in November 2013. The disposal has allowed the Board to focus fully upon its core and growing Social Housing and Care businesses. The division continued to generate losses up to its disposal which will be shown under Discontinued Activities in the full-year results.

Developing the Care market - Wiltshire County Council ('Wiltshire')

As previously announced, the award by Wiltshire of an innovative partnering contract to Mears represented our most important milestone since entering into Care and an important development in the Domiciliary Care market in the UK. In a move away from traditional "task and time" based contracts, Mears will be paid by results, which pays providers on meeting desired outcomes that have been agreed directly with service users. That Mears was awarded this landmark contract demonstrates Mears' leading position in the Domiciliary Care market.  The contract, which mobilised in September 2013, has started positively.

While still early days, there are indications now that a number of other Local Authorities are looking to follow the lead of Wiltshire. It will be particularly beneficial to Mears that Wiltshire is a strong reference site to support the Group securing other similar opportunities. 

ILS Group Limited ('ILS')

In April 2013, Mears announced the acquisition of ILS. One of the principal attractions of ILS was its greater proportion of work providing higher acuity services and which is now being delivered through the Mears Nurseplus brand. It is pleasing to report that we have continued to achieve strong growth in this area.

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 as evidenced by net debt being less than management expectations as at 31 December 2013. The Group has extended its existing revolving credit facility of £120 million by a further 2 years to July 2018.

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

"I am delighted with the progress Mears has made in 2013. Revenue visibility, order book and the bid pipeline all remain strong.

"The UK Care market is going through a period of significant change and I am proud of the robust business we have established.  Mears will continue to be at the forefront of change in the sector in 2014 and beyond.

"With Mears now focussed solely on Social Housing and Domiciliary Care, I am delighted to report that we continue to achieve high levels of service delivery and customer satisfaction. The quality of our service delivery continues to be our key differentiator and underpins our success in bidding new contracts in both of our core growth sectors."

The Group will be announcing its results for the year ended 31 December 2013 on 18 March 2014.

-ENDS-

For further information, contact:

Enquiries:            

Mears Group PLC              

David Miles, Chief Executive                                                             Tel: [phone]

Andrew Smith, Finance Director                                                       Tel: [phone]

Bob Holt, Chairman                                                                            Tel: [phone]

Notes for editors

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 15,000 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.

 

END

 

 

TSTDMGMMNFLGDZM