For Immediate Release
19 May 2014
Mears Group PLC
("Mears" or "the Group" or "the Company")
Interim Management Statement
Mears Group PLC (LSE: MER), the provider of services to the Social Housing and Care sectors in the UK, today releases its Interim Management Statement ("IMS") for the period from 1 January 2014 to date.
Mears continues to deliver solid trading across both core divisions in line with management expectations.
Mears has secured new contract awards since 1 January 2014 of circa £110 million. The Group has now achieved 94% visibility of the £908 million consensus revenue forecast for 2014 and 72% visibility of the £960 million consensus revenue forecast for 2015. The order book stands at £3.8 billion with a bid pipeline of £3.0 billion.
We have continued to make solid progress in our Social Housing division having secured a 10 year contract with Medway Housing worth £40 million. In aggregate, Mears has secured new social housing contracts since 1 January 2014 amounting to £70 million. While the speed of new opportunities coming through has been slower than we anticipated, the bid pipeline remains unchanged at £3.0 billion.
Our Care business has progressed strongly. We have secured a number of important domiciliary care contracts, especially in Scotland on the back of our ILS acquisition, including a £20 million contract over four years with Stirling and Clackmannanshire and separate three year contracts with West Lothian and East Lothian worth £2.5 million each. In aggregate, Mears has secured new Care contracts since 1 January 2014 amounting to £40 million.
Developing our higher acuity offering
Complex care represents 14% of our total Care revenues, having doubled over the last three years. Since 1 January 2014, these activities have continued to make strong progress. We have made further investment in the structure of our higher acuity Nurseplus business and we will continue to target this area to drive growth. Particularly pleasing is that we have secured our first Nurseplus work in Southern England, through our Wiltshire County Council ('Wiltshire') contract. We have a strong pipeline of future higher acuity opportunities across the whole of the UK.
Developing the Care market
As previously reported, the award by Wiltshire of an innovative partnering contract to Mears represents one of our most important milestones since entering into the Care sector and an important development in the Care market in the UK. In a move away from traditional 'task and time' based contracts, Mears is paid by results, based upon meeting desired outcomes that have been agreed directly with service users. This change in commissioning is central to the Group's strategy and we are well positioned, as a high quality business focused upon service delivery, to benefit from this market change. We are pleased to report a number of opportunities in the pipeline are now following outcome based approaches similar to the stance taken by Wiltshire. The Wiltshire contract, which mobilised in September 2013, has continued to develop positively.
Mears continues to benefit from financial strength and the efficiency with which the Group manages working capital continues to be a focus of the business. The Group's revolving credit facility of £120 million is committed until July 2018 and provides sufficient headroom above our current working capital requirements to fund future potential in-fill acquisitions.
Commenting, David Miles, Chief Executive, Mears Group, said:
"I am pleased with the progress made by the Group in 2014. Both the Social Housing and Care divisions continue to deliver high quality customer services, which remain our key differentiator underpinning our success in bidding new contracts, and provide a strong visibility to revenues. Trading at this early stage in the year is in line with the Board's expectations."
For further information, contact:
Mears Group PLC
David Miles, Chief Executive Tel: +44(0)7778 220 185
Andrew Smith, Finance Director Tel: +44(0)7712 866 461
Bob Holt, Chairman Tel: +44(0)7778 798 816
Alan Long, Executive Director Tel: +44(0)7979 966 453
Richard Darby, Sophie McNulty, Sophie Cowles Tel: +44(0)20 7466 5000
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 care to over 20,000 service users.