REG - Mears Grp PLC - Trading Update

MearsAnnouncement

11/01/2024 07:00

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RNS Number : 2960Z  Mears Group PLC  11 January 2024

 

Mears Group PLC

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

 

Trading Update

 

Strong trading performance and cash generation

Significantly upgraded earnings expectations for FY24

 

Mears (LSE: MER), the UK Housing solutions provider, announces the following
update on trading for the financial year ended 31 December 2023 ('FY23') and
its expectations for the current financial year ('FY24').

The strong financial performance reported in the interim results on 4 August
2023 continued through the second half of FY23. The Board anticipates
reporting results for the full year that are modestly ahead of market
expectations(1) with revenues and adjusted profit before tax in excess of
£1,050m and £43m respectively.

The Group delivered a strong conversion of EBITDA to operating cash flow, with
net cash at 31 December 2023 of c.£105m and an average daily net cash over
the 12-month period of c.£75m, both of which are ahead of previous guidance.
The net cash position is reported after making shareholder distributions
during FY23 of c.£49m, comprising both ordinary dividend and share purchases.

 

The momentum seen in 2023 is expected to continue into 2024 and, as a result,
the Board's expectations for FY24 now sit materially ahead of market
expectations(1). The Board continues to anticipate a reduction in
management-led revenues as the elevated activity level seen across FY23
normalises. However, adjusted profit before tax in FY24 is now expected to be
of a similar quantum to FY23, reflecting continued margin progression.

 

The Board expects to see continued strong cash performance in FY24. With share
purchase authorities obtained at the June 2023 AGM having been utilised in
full in completing the buyback programmes in 2023, the Board intends to seek
shareholder approval for additional authority to purchase shares and expects
to issue a Notice of General Meeting in due course. This will provide the
Board with sufficient flexibility in delivering against its capital allocation
strategy.

 

 

Lucas Critchley, Chief Executive Officer, said:

"We are delighted to have achieved strong revenues, profits and cash
generation in 2023. This strong momentum is expected to continue into 2024 and
the Group continues to deliver well against its clearly defined strategy,
underpinned by our long track-record for operating excellence."

 

Note:

(1) The Board consider the current consensus analyst forecasts for FY23, prior
to this announcement, to be revenues of £1031m and adjusted profit before tax
of £40.9m. Adjusted profit before tax is reported before the amortisation of
acquisition intangibles. On the same basis, the Board considers market
expectations for FY24, prior to this announcement, to be revenues of £888m
and adjusted profit before tax of £ £33.9m respectively.

 

Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014)
("MAR") prior to its release as part of this announcement and is disclosed in
accordance with the Company's obligations under Article 17 of those
Regulations.

 For further information, contact:

 Mears Group PLC                     Tel: +44(0)1452 634 600
 Andrew Smith
 Lucas Critchley

 Deutsche Numis                      Tel: +44(0)207 260 1000
 Julian Cater
 Kevin Cruickshank

 Panmure Gordon                      Tel: +44(0)207 886 2500
 Tom Scrivens
 James Sinclair-Ford

 

About Mears

 

Mears is the 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 around 5,500 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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