Mears chases £2bn bid pipeline after profits weaken

Aaron Morby 1 year ago
Share

Housing maintenance and care home specialist Mears saw profits and revenue slide after a challenging year caused by a hiatus in planned maintenance work in the wake of the Grenfell disaster.

CEO David Miles is confident about the year ahead

The firm also blamed aggressive pricing from competitors for a slowdown in securing new contracts, which it had expected to make up the shortfall in ongoing activity with clients.

Overall group revenue slipped 4% to £900m with pre-tax profit from ongoing operations also down 10% to £26.5m, as housing maintenance operating margins slipped from 5.6% to 5.2%.

The group’s full pre-tax profits slumped to £8.8m after Mears took a hit of £16.5m from offloading its mechanical and electrical division, which included a legacy issues from a business operating in the United Arab Emirates. The exceptional write-off covers liabilities from performance guarantees as contracts reach completion.

David Miles, Chief Executive Officer of Mears, said that the tragic events of Grenfell Tower caused unforeseen delays in the timing of  planned workload as clients’ attention was diverted towards ensuring that their housing portfolios were safe and fully compliant. 

He said: “While 2017 proved to be a challenging year, we have made solid operational progress.

“The decline in housing revenues following the tragic events at Grenfell Tower has stabilised although there still remains some uncertainty as to the speed at which these revenues will recover.

“The performance of the Care division has been a highlight, returning to profitability as planned following a period of restructuring, putting the Care division on a stable footing.”

Miles added: “On a positive note, the current pipeline of opportunities for Mears has never been greater.

“We anticipate competitively bidding contract values in excess of £2bn during the course of 2018.”

He added that Mears would continue to focus on bidding only at sustainable pricing levels but was confident of major project wins based on its 33% bid conversion rate.

Miles said: “The strategic evolution of our business means we are gaining access to opportunities that previously would have been out of our reach.

“While the board has decided to adopt a more conservative approach in how it guides the market on its expectations, the Mears operation is performing very well and I am encouraged that our excellent service delivery is putting us in a good position to secure new opportunities.

 

Latest news

Burst pipe causes flash flood at Battersea Power Station site

Video: Watch dramatic footage of water pouring through major London project
11 hours ago

Wates trumpets record order book despite Brexit slowdown

9% fall in construction revenue offset by rise in residential and property services
3 hours ago

Vinci bags £100m UCL East student blocks deal

Firm secures Olympic Park twin student buildings
2 hours ago

Persimmon launches retention scheme for home buyers

New home owners can withhold cash until any build faults are sorted out
3 hours ago

Subcontractors wanted for South Coast sites

Work opportunities up for grabs at Meet the Buyer event: Register now
2 hours ago

Griffiths to restart Dawnus £14m Swansea road job

Welsh civils firm to take on Kingsway city centre scheme
21 hours ago

Hunt for £6bn Meridian Water phase 2 developer

Up to 250 affordable homes to be built in Meridian Two scheme
1 day ago

BBC construction skills blasted over EastEnders set woes

Lack of project management skills leads to £27m cost over-run and five-year delay
1 day ago

Boost your online presence – join the Enquirer Directory

New site for suppliers and buyers showcases products, services and latest stories
11 months ago

Kier slumps to £35.5m loss as problem contracts continue

Workloads wobbling in highways, utilities and housing maintenance markets
1 day ago

Go-ahead for £175m Cumbrian deep coal mine

Plans advance for Britain's first deep coal mine for 30 years
1 day ago

Hi Vis site wear launched for pregnant women

Clothing designed to make life safer and more comfortable "from bump to baby"
1 day ago

Speedy buys powered access hirer for £9.6m

Lifterz deal allows Speedy to offer nationwide powered access equipment hire
1 day ago

Build to rent specialist plans Bolton urban village

Placefirst to use in-house contractor for £27.5m scheme
1 day ago

Water winners revealed for £2bn Severn Trent spend

More contractors win first lots on AMP7 as client revamps working practices
2 days ago

Stranded Carillion chief takes helm at Kier

Andrew Davies named new Kier chief executive
2 days ago

Interserve £170m prison project to be rebid

Ministry of Justice confirms Glen Parva to be tendered as a publicly funded project
2 days ago

Cabinet Office promises Interserve subbies will get paid

Parliamentary Secretary makes pledge in House of Commons debate
2 days ago

Sir Robert McAlpine commercial director exits

Martin Pitt steps down from board after four years at group
2 days ago

Lakehouse subbies plan showdown with Sureserve bosses

Suppliers owed millions to demand answers at company AGM
3 days ago

Tolent to build first homes at £400m Leeds scheme

Builder gets foot in the door with prototype homes for Kirkstall Forge
2 days ago

Interserve subcontractors told it’s business as usual

Outsourcers circle Interserve support services division
3 days ago

Morgan Sindall wins 20-year Sellafield civils deal

Four teams named for Sellafield decommissioning project partnership
3 days ago

Hunt for quartet to deliver £700m Birmingham Uni pipeline

University is preparing to deliver phase two of its estate masterplan
3 days ago

Stepnell wins £14m Northampton Vulcan works redevelopment

Historic factory to be refurbished for business start-ups
3 days ago

Hunt starts for developer on £200m South Shields scheme

South Tyneside Council looking for housing partner and remediation specialist
3 days ago

Revamp plans for Birmingham Moor Street station unveiled

Transfer deck across the top of station will connect to all platforms
3 days ago

Interserve workers told to report for work as usual

Interserve subsidiaries to trade solvently as PLC business pre-packed
6 days ago

Interserve to file for administration as rescue rejected

Shareholders vote down rescue plan
6 days ago

Dawnus Group goes into administration

Grant Thornton now in charge of contractor which employed 700 staff
6 days ago

Contractor services