Social housing and support services group Mears has seen its operations ‘stabilise’ a year after the Grenfell Tower fire tragedy.
While Mears was not involved in the Grenfell tragedy, the fire triggered delays to the company’s work schedule as authorities wanted to make sure all the properties in its portfolio were safe and compliant.
With these safety and compliance checks now complete, firms have been putting work out to tender again, with Mears picking up a number of projects, including a £62million contract to deliver repairs and maintenance services to Riverside Housing Association.
Social housing and support services group Mears has seen its operations ‘stabilise’ a year after the Grenfell Tower fire tragedy
The five-year contract covers more than 11,500 homes across the Midlands, East Anglia and South of England, and there is the option for it to be extended for another five years.
Shares in Mears are up 3.03 per cent or 9.5p to 323.5p.
In a trading update published ahead of its interim results for the six months to 30 June, Mears said it had secured contract wins worth around £70million, adding that its pipeline of new housing work bids was ‘considerable, including two ‘very significant’ opportunities.
Mears said its care division also had a good first half, ‘reflecting a successful restructuring of the business and a balance of better quality contracts.’
David Miles, chief executive of Mears, said: ‘The current pipeline of opportunities is particularly exciting.
‘The strategic evolution of our business means we are gaining access to opportunities that previously would have been out of our reach and the senior team is very focused on converting these into secured orders.’
Last August, Mears warned that the Grenfell fire could lead to a profits hit in 2016-17 as housing clients delayed new projects while reviewing the commissioning and safety practices at their properties.
Andrew Nussey, an analyst at Peel Hunt, said: ‘Overall, the statement should provide investors with further reassurance that Mears continues to make both operational and strategic progress.’
Analysts at Liberum maintained a ‘buy’ rating and target price of 450p on Mears’ stock after what it called a ‘reassuring statement’.
The broker expects earnings to be 44 per cent weighted to the first half with an estimated FD EPS of 14.7p. The second half will benefit from cost savings, Liberum added.
‘Restructuring should save money and improve efficiency and bidding. We continue to expect FY average net debt of £112m, with a seasonal peak in H1, Liberum said.