18th Mar 2014 09:30
LONDON (Alliance News) - Social housing repairs and maintenance business Mears Group PLC Tuesday reported an increase in profit and revenue for the full year, driven by acquisitions and a strong performance from its social housing division.
Gloucester-based Mears posted pretax profit of GBP21.7 million for 2013, up from GBP20.0 million in 2012, as revenue rose 32% to GBP898.2 million from GBP679.5 million a year earlier.
Pretax profit before amortisation of acquisition intangibles, exceptional costs and the initial losses in 2012 generated by Morrison Facilities Services Ltd following its acquisition amounted to GBP36.6 million, up from GBP29.0 million.
Morrison, which delivers services to social housing clients in the UK, was acquired by Mears in 2012 for GBP24 million. At the time Morrison was a loss-making business, but Mears said it was confident that it could turn its rival firm around.
The integration of the Morrison business is now complete, and Mears said it is exceeding expectations within its social housing division. The social housing division saw revenue rise 47% to GBP742.5 million from GBP504.7 million.
The social housing division, prior to the inclusion of Morrison, reported revenues of GBP507.5 million from GBP459.7 million, reflecting organic growth of 10%. Morrison itself delivered revenues in the year of around GBP235.0 million, up from GBP45.0 million, which was higher than anticipated, driven by a backlog of work that had accumulated in the period leading up to its acquisition.
Mears said its other division - care - also performed well during the year. It saw revenue rise 9% to GBP123.1 million from GBP112.6 million in 2012, driven by the acquisition of Scottish care business ILS for GBP22.5 million in April.
At the time, Mears said the acquisition would increase its experience of providing high acuity care for people who want to be cared for at home.
Mears said although its expects low growth for the care division in 2014, "we continue to anticipate this sector providing significant medium-term growth opportunities."
During the period the company disposed of its non-core Haydon Mechanical & Electrical (HMEL) business which the firm said "removed a significant financial challenge for the group and has allowed the senior team to refocus its attentions upon our two growth divisions".
The business was sold to Curzon 3003 Ltd for a token GBP1. Mears will receive deferred consideration of up to GBP7 million in the event that, after completion of the transaction, Curzon, HMEL or HMEL's business and assets are sold.
Overall, Mears said its group order book held steady at GBP3.8 million. It also said it has visibility of 92% of consensus forecast revenue for 2014 and 70% for 2015.
Looking ahead, the firm said it expects its social housing business to continue to grow through further contract wins, while for the care business it will look to small bolt-on acquisitions "to fill gaps in our capability".
Mears said it will pay a final dividend of 6.30 pence compared with 5.70 pence, making a full-year dividend of 8.80 pence, up from 8.00 pence.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Mears