5th Nov 2013 10:52
LONDON (Alliance News) - Mears Group PLC Tuesday said its current order book for the year-to-date stands at over GBP300 million, as it outlined plans to sell Haydon mechanical and Electrical Limited (HMEL), its subsidiary which provides mechanical and electrical engineering services.
Mears, which provides support services to the UK social housing and care sectors, said it has secured new contracts from its traditional social housing bidding pipeline worth GBP75 million, taking the value of the order book to over GBP300 million.
The firm said it remains on target to tender for GBP1.7 billion of new contract opportunities in 2013 which will underpin new contract news flow between now and April 2014.
However, the company said it plans to sell HMEL, which represented only 9% of its revenue in 2012 to Curzon 3003 Limited. The company is owned and controlled by key management personnel of HMEL.
For the year ended December 31, 2012, HMEL generated revenues of GBP62.3 million and a loss before tax of GBP1.8 million.
Under the terms of the proposed transaction, Mears is selling the entire issued share capital of HMEL for a consideration of GBP1.
In addition, 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.
Mears is also converting an existing intercompany loan into a GBP2 million interest bearing secured loan to be repaid after five years, and a GBP7 million unsecured loan, which is to be repaid out of sums received on certain existing contracts and a share of future profits generated.
The deal is subject to shareholder approval.
Overall, the firm said its other businesses have performed strongly, with its energy arm winning contracts worth GBP20 million, taking the division's order intake to GBP25 million for the current year.
The care division, which provides care for elderly and disabled people who want to remain in their own home rather than a nursing home, secured new contracts worth GBP40 million, taking the order intake for the current year to in excess of GBP60 million.
One of the new care contracts includes a providable deal with Wiltshire County Council valued at GBP20 million over a term of five years.
Financially, the group said its revolving credit facility of GBP120 million is committed until July 2016.
The stock was trading at 440.23 pence Tuesday morning, up 18.73 pence or 4.4%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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