Social housing and repairs and maintenance provider Mears has published its annual report, saying the group has “made progress” despite “unprecedented challenges”.
It states that its order book remains robust and management is in the process of identifying new areas for growth.
Revenues were ‘resilient overall’, down 9 per cent on a continuing basis to £805.8 million (2019: £881.5 million). Maintenance-led revenues of £536.9 million (2019: £660.7 million) were down 19 per cent, affected by reduced activity during the pandemic.
Management-led revenues of £253.8 million (2019: £181.3 million) were up 40 per cent owing to the full-year effect of the government’s Asylum Accommodation and Support Contract, which began in September 2019. The group returned to profitability during the second half, delivering a £4.8 million adjusted profit before tax (H1: £8.2 million loss). The full-year adjusted loss before tax on continuing items was £3.4 million (2019: £32.4 million profit).
Significant transformation in group indebtedness driven by strategic disposals resulted in net cash at 31 December of £56.9 million (2019: £51 million net debt) and average daily net debt of £97.3 million (2019: £114.4 million). The group says its order book stands at £2.6 billion (2019: £2.5 billion), following extensions of several contracts.
Mears states that in common with all UK businesses, the past year has been “dominated by the Covid-19 pandemic and our response to the complex operational and financial challenges it presented to our business, our staff and our customers”.
“However, the quality of our relationships with our clients has ensured that almost all of them have continued to support the company financially through the pandemic, ensuring that our infrastructure has remained intact and our financial future has not at any time been in question.
Mears said it has completed a transition to a low capital-intensity housing specialist and significantly strengthened the balance sheet and made strong progress against all its key strategic objectives of:
- Completing the exit from standalone domiciliary care;
- Completing the disposal of its planning solutions business Terraquest, generating an upfront cash inflow of ￡56.9 million;
- Continued to make progress in managing the controlled closure of the development activities to unlock working capital absorbed in that area; and
- Made significant reduction in its indebtedness.
David Miles, group CEO, said: “Mears has undertaken a strategic review looking at our markets and possible returns in the next five years. We remain the dominant force in repairs and maintenance – and the national leader in reactive works.
“There is a huge opportunity to help to fulfil the UK’s carbon targets and we have ensured that we have the right expertise in place. We are a large private provider of temporary accommodation in the UK and there is a massive market where we have the opportunity to grow.”
Kieran Murphy, chairman, said: “2020 was a challenging year, and for many of our people a difficult one. The success of the vaccination programme is opening up hope that the economy, Mears’ position within it, and our lives generally, can progressively move back towards normality. The actions which Mears has taken during the pandemic will stand it in very good stead for the recovery.”