The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No 596/2014). Upon the publication of this announcement via the
Mears Group PLC
("Mears" or "the Group" or "the Company")
Full Year Trading Update, planned disposal of standalone Domiciliary Care activities
and Notice of Results
Mears (LSE: MER), the provider of support services to the
Mears expects to report underlying profit before tax on continuing activities in line with Board expectations and with a strong closing cash performance. The Board has reached an advanced stage in the sale of the
The Board expects to report revenues, on continuing activities which excludes the Group's standalone Domiciliary Care activities, of more than
The Group is expected to report a closing net debt of circa
The Group continues to target a pre-IFRS 16 average net debt to EBITDA of 1x.
The order book, adjusted to reflect continuing activities only, stands at
Asylum Accommodation and Support Contract
The Board is pleased to report that the AASC mobilisation has been executed successfully and is now fully operational. The contract has delivered revenues in the year of approximately
As previously advised, the Group intends to reduce its exposure to Development. The Company continues to withdraw from this activity through a controlled unwinding of revenue whilst keeping working capital under tight control.
Also, as previously indicated, the property acquisition facility, which was introduced in 2017 to enable the Group to acquire and build portfolios of properties prior to their disposal to long term funding partners, was paid down and has been cancelled.
Planned disposal of standalone Domiciliary Care activities
As indicated previously, the Group has considered opportunities to accelerate an exit from standalone care. The Group has continued to progress this since indicating this intention within the 2019 half year statement.
The Group announces that it is at an advanced stage in the sale of the
In addition, during the fourth quarter of 2019, the Group completed the closure of a small number of
The Board expects to complete the disposal of its Scotland Domiciliary Care business during 2020. The Scottish business generated revenues of circa
The standalone Domiciliary Care activities as a whole will be reported as discontinuing in the 2019 results and the associated intangible asset will be written down to reflect this. This impairment review will be concluded before the 2019 results are reported but it is estimated that the goodwill impairment will be approximately
Importantly, as a result of the Domiciliary Care disposal, a number of personnel from a range of support functions also transfer with the business. This will provide the Group an opportunity to further rationalise its support functions in due course.
Capital Markets Event and Notice of Results
The Group is today hosting a number of institutional investors with a presentation on the Asylum Accommodation and Support Contract. The presentation will be made available on the Company's website.
Mears will issue its full year results for FY2019 on Tuesday
The numbers in this update remain subject to final close procedures and the full year audit.
"2019 was a very busy year for Mears. A significant amount of time and focused effort has been directed towards the integration of MPS and the mobilisation of the asylum housing contract. I am confident that we are well placed to benefit from this upfront investment in our core business.
"Our exit from standalone Domiciliary Care will enable us to focus our efforts where we can deliver superior returns for shareholders. In line with this, we also continue to make progress unwinding our exposure to Development activities.
"We continue to see a good pipeline of opportunities providing Housing with Care, in the majority of cases to provide, manage and maintain accommodation and to care for the service users.
"Our deep understanding of the challenges faced by service users and proven ability to support vulnerable customers, many of whom have a care requirement, has been central to our success in Housing, and most recently in securing the asylum housing contract. This bespoke skillset is key to our future success."
For further information, contact:
Tel: +44(0)7778 220 185
Tel: +44(0)7712 866 461
Tel: +44(0)7979 966 453
Mears currently employs around 9,000 people and provides services in every region of the
We focus on long-term outcomes for people rather than short-term solutions, and invest in innovations that have a positive impact on people's quality of life and on their communities' social, economic and environmental wellbeing. Our innovative approaches and market leading positions are intended to create value for our customers and the people they serve while also driving sustainable financial returns for our providers of capital, especially our shareholders.
This information is provided by RNS, the news service of the