UK's Mears Group H1 revenue rises 2%, EPS down 9%
UK's Mears Group H1 revenue rises 2%, EPS down 9%
Overview
UK housing services provider's H1 revenue rose 2%, driven by maintenance-led activity growth
Adjusted diluted EPS for H1 fell 9% due to lower profit and reduced share count
Company launched £20 mln share buyback and raised interim dividend by 11%
Outlook
Mears confirms FY26 guidance for revenue of £1,038 mln and adj PBT of £50.7 mln
Company expects Maintenance-led revenue growth of 8-9% in FY26
Mears sees FY26 adjusted operating margin at 5.0-5.2% (pre-IFRS 16)
Result Drivers
MAINTENANCE-LED GROWTH - Revenue growth driven by strong contract retention and new contract wins in maintenance activities, with both organic and acquired growth contributing
NEW CONTRACT START-UP COSTS - Operating margin declined due to intensive period of new contract commencements, which initially generate lower profits
MANAGEMENT-LED REVENUE DECLINE - Management-led revenues fell, mainly due to lower volumes in Asylum Accommodation and Support contract and conclusion of MOD-related work
Company press release: ID:nRSF4706Pa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue |
| GBP 560 mln |
|
H1 Adjusted EPS |
| GBP 0.25 |
|
H1 EPS |
| GBP 0.36 |
|
H1 Adjusted Operating Profit |
| GBP 29.20 mln |
|
H1 Adjusted Pretax Profit |
| GBP 28.90 mln |
|
H1 Dividend |
| GBP 0.06 |
|
H1 Operating Profit |
| GBP 34.60 mln |
|
H1 Pretax Profit |
| GBP 38 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 6 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the business support services peer group is "buy."
Wall Street's median 12-month price target for Mears Group PLC is GBp509.50, about 18.4% above its August 5 closing price of GBp430.50
The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 9 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)