17th Nov 2015 09:05
LONDON (Alliance News) - Social housing and care sector support services company Mears Group PLC on Tuesday said trading remains solid across the business, with its social housing arm offsetting tougher conditions for its Care business.
Mears said its earnings, before exceptional items, are set to be in line with its expectations for 2015. The group currently has 97% revenue visibility for the full year, slightly lower than anticipated, though any shortfall should be compensated for by better margins in the social housing business.
Within the Social Housing business, the positive momentum seen in the first half of 2015 has continued into the second, with a positive shift in its revenue mix towards higher margin housing management services.
"Our Social Housing business has delivered a strong performance. The number of new bidding opportunities has continued to accelerate, and I am pleased our conversion rate has strengthened," said David Miles, Mears' chief executive.
Trading conditions for the Care business remain challenging, however, as the group continues to face problems with care retention and recruitment, which it is seeking to remedy. The group said it remains confident it will be able to mitigate any cost pressures coming from the introduction of the National Living Wage in the UK by increasing its charge rates.
"The current state of Social Care Funding is in the news on an almost daily basis and our Care business, in common with the rest of the industry, continues to find the current market conditions challenging," Miles added.
"There is a significant disparity between the short and long-term Care opportunity. In the short-term, the position appears negative although I believe the business has underperformed in terms of recruitment and retention and it is an area on which I am placing significant focus," he said.
Shares in Mears were up 1.2% to 445.3438 pence on Tuesday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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