Mears profits soar as margins rise to 5.8%

Aaron Morby 14 years ago

Social housing specialist Mears has shrugged off the troubles seen by some of its rivals to deliver interim pre-tax profits up 42% at £13.2m.

Announcing half-year results, chairman Bob Holt said the financial crisis at Connaught would offer Mears even greater opportunities going forward.

He also predicted the Government’s proposed changes to housing benefit would drive more people into social housing in coming years.

Holt said : “Once again I can confirm that Mears is not experiencing, nor do we anticipate, any downward pressure on either our social housing or domiciliary care revenues.

“The well publicised problems in the sector provide a great opportunity for Mears as market leader.

“We continue to be highly selective on our bidding approach looking to only work on long term partnership situations,” stressed Holt.

In the six months to June, Mears revenues grew 9% to £253m with strong profit growth pushing margins from 4.2% a year ago to 5.8%.

Holt said: “Our order book is solid and stands at £2.6bn with a sales pipeline of £3bn and operating cash conversion at 94% of profit.”

Divisions at a glance

  • Social Housing: Revenue £185m (£176m); Op profit £10m (£8.2m)
  • Domiciliary Care: Revenue £47.8m (£29.1m); Op profit £3.6m (£1.6m)
  • Other Services: Revenue £20.1m (£27.6m); Op profit £1.3m (£0.7m)

Holt said the opportunities for Mears, which has delivered 15 years of successive growth, have never looked better.

He said: “The proposed changes to the system for housing benefit will in our opinion promote the migration away from private dwellings towards social housing.

“The changes to the housing finance system will also provide local authorities opportunities for further investment in their housing stock which can only be positive for a leading provider like Mears.”

He also believed changes to the housing finance system will give local authorities opportunities to further invest in their housing stock.

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