20th Mar 2018 10:34
LONDON (Alliance News) - Mears Group PLC on Tuesday said 2017 was "challenging" as revenue and profit reduced on the planned rationalisation of care contracts.
Shares in Mears were trading down 2.7% at 355.00 pence per share on Tuesday.
The social housing and care services provider said its revenue dropped 4.0% in 2017 to GBP900.2 million from GBP940.1 million, impacted by slow period in securing new contract revenues in its housing division combined with the planned restructuring of the care contract portfolio.
Mears' Housing revenue was down 3.0% to GBP766.1 million from GBP787.5 million the prior year, while care revenue declined significantly by 12% to GBP134.1 million from GBP152.6 million, after the closure of 27% of branches in the division.
As a result, pretax profit fell 7.0% to GBP37.1 million from GBP40.1 million in 2016.
However, Mears said the restructuring is now completed and the care division returned to profit, delivering an operating profit for the full year of GBP500,000, compared with GBP1.2 million loss the year before, in line with expectations.
The group declared a total dividend of 12.00 pence per share, up 3.0% from 11.70p the prior year.
Mears Chief Executive Officer David Miles said: "Whilst 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."
"On a positive note, the current pipeline of opportunities for Mears has never been greater," Miles added. "We anticipate competitively bidding contract values in excess of GBP2.0 billion during the course of 2018. 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."
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