REG - Mears Grp PLC - Pre-Close Trading Update

MearsAnnouncement

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RNS Number : 8395P  Mears Group PLC  22 January 2026

Mears Group PLC

("Mears" or the "Group" or the "Company")

Pre-Close Trading Update

Significant progress against all key strategic goals

 

Mears Group PLC, the leading provider of housing services to the public and
regulated sectors in the UK,

today announces a trading update for its financial year ended 31 December 2025
('FY25'), in advance of announcing its final results on 26 March 2026.

 

Trading highlights

 

·      On 8 December 2025, the Group referenced strong trading in the
second half of 2025 and stated that adjusted profit before tax for FY25 would
be at the top end of previous market guidance 1 .

 

·      Mears expects to report Maintenance-led revenues for FY25 in
excess of £610m (2024: £556m), reflecting organic growth of c.10%. This
growth includes the full year impact of new contracts secured with North
Lanarkshire Council and Moat Homes, underpinned by an outstanding period of
contract renewals which has seen a near-100% retention rate.

 

·      Mears expects to report Management-led revenues for FY25 in
excess of £500m (2024: £577m), reflecting the reduction in Asylum
Accommodation contract ('AASC') revenues. A further decrease in AASC revenues
continues to be expected during 2026, although the speed of this reduction
remains difficult to predict.

 

·      The Company expects to report a FY25 Operating Margin (pre-IFRS
16) at levels broadly consistent with the prior year (2024: 5.6%), having
absorbed additional investment in business development and IT capability, and
adjusted profit before tax of no less than £62.5m (2024: £64.1m).

 

Business Development

 

·      In September 2025, the Group announced the acquisition of
Pennington Choices Limited (PCL). The integration of this business is on
track. Since the acquisition, the business has enjoyed a strong period of
securing orders with new clients. In addition, the Group has seen new
opportunities created by the acquisition with both existing Mears and PCL
clients, as a result of the increased scope of the Group's compliance
capabilities and an enlarged customer list.

 

·      The strong period of contract retentions has included the award
of a new contract with Cross Keys Homes. ('CKH'). The contract will see the
Group continue to deliver responsive and void repairs, gas compliance and
planned maintenance, creating a strategic asset management partnership. CKH is
one of the Group's longest standing relationships, and this new contract is
valued at £250m over the initial 10-year term.

 

Balance Sheet

 

·      Mears maintained an average daily net cash position during FY25
of £52.8m (2024: £59.6m) and expects to report a year end adjusted net cash
position in excess of £50.0m (2024: £91.4m).

 

·      During the year, EBITDA to Operating Cash conversion was around
80%, in line with previous guidance and reflecting a reversion to a more
normalised working capital position at the close of FY25.

 

·      The Company has utilised its balance sheet strength to fund
property acquisitions to support its management-led activities. In December
2025, the Group completed a sale and leaseback on 199 properties, purchased
for a cash cost of circa £24.6m. This transaction has seen the Group receive
£18.0m in cash on completion, with the balance taking the form of an
interest-bearing loan, combined with a continuing 25% equity interest in this
investment vehicle.

 

·      The Group has completed an amend and extend to its Revolving
Credit Facility with Barclays and HSBC, which sees the £70m facility extended
to December 2029, on improved pricing.

 

 

Note

1.     Following the release of the Trading Update on 8 December 2025,
market expectations for revenue and adjusted profit before tax increased to
£1,106m and £60.6m respectively.

 

 

Lucas Critchley, Chief Executive Officer, commented:

 

"FY25 was a period of significant progress against all of the Group's key
strategic goals. Delivering strong growth in our traditional Maintenance-led
activities is a key achievement which continues to be underpinned by strong
contract retention. We have extended the scope of our compliance offer both
organically, and through acquisition; the addition of PCL in the second half
of the year has been a particular highlight. We continue to maintain a robust
and disciplined operational approach which drives both service excellence and
strong commercial performance."

 

 

For further information, contact:

 

Mears Group
PLC
Tel: +44(0)1452 634 600

Lucas Critchley

Andrew Smith

 

Deutsche Numis
 
Tel: +44(0)207 260 1000

Julian Cater

Kevin Cruickshank

 

Panmure Liberum
 
                       Tel: +44(0)207 886 2500

Tom Scrivens

James Sinclair-Ford

 

About Mears

 

Mears is a leading provider of services to the Affordable Housing sector,
providing a range of services to individuals within their homes. We manage and
maintain around 450,000 homes across the UK and work predominantly with
Central Government and Local Government, typically through long-term
contracts. We equally consider the residents of the homes that we manage and
maintain to be our customers, and we take pride in the high levels of customer
satisfaction that we achieve.

 

Mears currently employs over 5,000 people and provides services in every
region of the UK. In partnership with our Housing clients, we provide property
management and maintenance services. Mears has extended its activities to
provide broader housing solutions to solve the challenge posed by the lack of
affordable housing and to provide accommodation and support for the most
vulnerable.

 

We focus on long-term outcomes for people rather than short-term solutions and
invest in innovations that have a positive impact on people's quality of life
and on their communities' social, economic, and environmental wellbeing. Our
innovative approaches and market leading positions are intended to create
value for our customers and the people they serve while also driving
sustainable financial returns for our providers of capital, especially our
shareholders.

 

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