REG - Mears Grp PLC - Interim Results
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RNS Number : 3126U Mears Group PLC 07 August 2025
Mears Group PLC
("Mears" or the "Group" or the "Company")
Interim Results for the 6 months ended 30 June 2025
Excellent first half performance; solid growth in Maintenance activities
and strengthening operating margin
Mears Group PLC, the leading provider of housing services to the public and
regulated sectors in the UK, announces its interim financial results for the
six months ended 30 June 2025 ("H1 2025").
Financial Highlights
· Revenues reduced by 4% year-on-year to £559.4m (2024: £580.0m),
with some normalisation in the Group's Management-led activities, partially
offset by good revenue growth of 8% in Maintenance-led activities
· Profit before tax increased by 5% to £32.0m (2024: £30.5m)
· Operating margin (pre-IFRS 16) continued to strengthen to 5.6%
(2024: 5.2%)
· Strong conversion of EBITDA to Operating cash reflecting cash
generative business model and quality of earnings
· Cash conversion at 105% of EBITDA (2024: 119%)
· Average daily net cash of £66.7m (2024: £66.4m)
· Diluted EPS up 20% to 27.68p (2024: 23.12p) driven by profit
growth and share count reduction
· Interim dividend of 5.60p (2024: 4.75p), an increase of 18%,
reflecting continued strong earnings and cash performance and Board's
confidence.
· Completed fifth share buyback programme; £16.0m cash
consideration, 4.3m shares at an average price of 371p per share
H1 2025 H1 2024 Change %
Revenue £559.4m £580.0m -4%
Statutory profit before tax £32.0m £30.5m +5%
Adjusted operating margin (pre-IFRS 16) 5.6% 5.2% 40bps
Diluted EPS 27.68p 23.12p +20%
Interim dividend per share 5.60p 4.75p +18%
Average daily net cash* £67.7m £66.4m +2%
* - see Alternative Performance Measures for definitions and reconciliation to
statutory measures
Operational and Strategic Highlights
· 100% contract retention over the last 12-month period through
which the Group has secured new orders to a value approaching £1.5bn. Award
of the new contract with Milton Keynes City Council concluded this abnormally
busy period for contract rebids
· Contract retention success rate is evidence of the strength of
the Group's service delivery and customer relationships
· Successful mobilisation of a contract with Moat Homes, covering
c.22,000 properties in the South of England
· New works secured with London Borough of Brent and Aberdeenshire
Council
· Additional investment in people and technology as key enablers to
expand our capabilities to service and support the new emerging market
opportunities in Compliance and Asset Management
· Investment in key account management to ensure that we are well
positioned when the existing AASC work comes up for re-procurement
Current trading and outlook
· The business has continued to perform strongly. Increasing
confidence in growth momentum of Maintenance-led activities
· The precise timing of the normalisation of AASC revenues remains
uncertain, but there is a clear political drive to see all hotel accommodation
exited during 2026, reflected in today's guidance
· The Board expects adjusted profit before tax for the full year to
be modestly ahead of market expectations. This positive performance also gives
the Board increasing confidence in its expectations for the next financial
year
Dividend
· Interim dividend of 5.60p will be payable on 2 October 2025 to
shareholders on the register of members at the close of business on 12
September 2025. The shares will go ex-dividend on 11 September 2025.
Lucas Critchley, Chief Executive Officer of the Group, commented:
"I am delighted to report a period of strong operational, financial and
strategic performance. We have continued to make progress against each of our
key strategic goals; delivering growth in maintenance activities, developing a
full compliance and asset management offer, and positioning the Group to
deliver additional housing services to Central Government. Importantly, we
have continued to do the basics well, which underpins our drive for both
service excellence and strengthening commercial performance."
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
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.
BUSINESS REVIEW
The Board is delighted to report a period of strong operational, financial and
strategic progress.
Mears' strong customer centric approach, combined with a granular operational
focus, that is underpinned by our proprietary IT operating platform, remain
our key differentiators. The first half saw a continued drive for operational
excellence through further enhancements to our robust branch performance
review process which, as well as delivering further service improvements, has
also been a key driver of strengthening commercial performance and risk
management. A particular focus in the first half has been ensuring that the
strict disciplines demanded when self-delivering works are replicated when
services are delivered using our broader supply chain.
Our strong performance is underpinned by the quality of our employees who
continually demonstrate diligence, empathy and a dedication to deliver a great
service user experience, in an often-challenging work environment.
We have made good progress in the last 12 months on the delivery of our new
strategic plan (FY24 to FY28). This plan reinforced the Group's ambition to be
the leading provider of housing services to the public and regulated sectors
and identified significant untapped opportunities in those existing markets.
The Group has performed well against its key strategic goals. Key areas of
progress in the period have included:
· The Group has reported 8% growth in our Maintenance-led
activities, reflecting the strong regulatory market drivers and underpinned by
a 100% contract retention over the last 12-month period. Our business plan
recognised the importance of contract retention, particularly during 2024/25
during which one third of the Group's maintenance activities were subject to a
re-procurement. The award of the new contract with Milton Keynes City Council
concluded this abnormally busy period of contract rebids, against which the
Group has secured new orders at a value approaching £1.5bn. The 100% contract
retention success rate is evidence of the strength of the Group's service
delivery and customer relationships.
The first half saw the mobilisation of a contract with Moat Homes, covering
c.22,000 properties in the South of England. This new contract is for a period
of 18 months, with an estimated contract value of £12m, under which Mears
will deliver responsive and voids maintenance services. The contract has
started strongly, with a marked improvement across a number of key operational
performance measures. The procurement for the long-term contract opportunity
has commenced.
In addition, the Group secured new works with London Borough of Brent and
Aberdeenshire Council, which is covered in greater detail below.
· A key component of the Group's strategy is developing its
Compliance and Asset Management service offering. The building compliance
market is a significant opportunity, comprising six well-defined areas (gas,
asbestos, fire, electrical, water hygiene, lifts), plus increasing regulation
driving the development of a number of new tangible services (addressing damp,
mould & condensation). The market is complex, relatively fragmented and
largely single service led. The challenge and the opportunity to Mears, is to
provide a joined up, unified compliance model and to demonstrate the clear
benefits of this model to our customers. Compliance data needs to be combined
with broader asset management data, to enable a forward-thinking approach to
stock investment. Mears aims to be in a position to deliver to this broader
strategic requirement. During the first half, we have applied additional
investment in people and technology to develop this offer.
· We place emphasis on ensuring that we are performing at a high
level and understanding the developing needs and requirements of Central
Government. It is important that our positive contribution is known and
understood by stakeholders. We have the ambition to deliver additional
housing, welfare and wraparound services to this key client group and we have
continued to invest in key account management to ensure that we are well
positioned when our existing work comes up for re-procurement.
The business plan recognised the need to make further investment in people and
technology as key enablers to deliver an accelerated program of IT development
and expand our capabilities to service and support the new and emerging market
opportunities.
OPERATIONAL REVIEW
H1 2025 H1 2024 FY 2024
£m £m £m
Revenue
Maintenance-led 302.2 280.1 555.8
Management-led 257.2 299.9 576.7
Total 559.4 580.0 1,132.5
Operating profit measures:
Statutory operating profit 36.9 34.2 72.6
Adjusted operating profit (pre-IFRS 16)(*) 31.6 30.3 63.6
Operating profit margin (pre-IFRS 16)(*) 5.6% 5.2% 5.6%
Profit before tax measures:
Statutory profit before tax 32.0 30.5 64.1
* - see Alternative Performance Measures for definitions and reconciliation to
statutory measures
Group revenues reduced by 4% year-on-year to £559.4m (2024: £580.0m).
However, Maintenance-led activities delivered 8% growth, with regulatory
market drivers increasing spend from the Group's Registered Provider clients
and further underpinned by the 100% contract retention achieved over the last
12 months. As anticipated, Management-led activities reduced by 14%, owing to
the continued normalisation of revenues relating to the Asylum Accommodation
and Support Contract. ('AASC') which reduced by some 20%. The other
Management-led activities delivered modest growth, predominantly from a
short-term contract to support the Afghan Relocation and Assistance Policy
('ARAP'), delivered for the MoD, which went live in January 2024 and is due to
conclude in November 2025.
Profit before tax increased by 5% to £32.0m (2024: £30.5m). The Group has
used a pure, unadjusted figure as its headline profit measure reflecting the
steady state of the business, and quality of the earnings.
The Group operating margin increased to 5.6% (2024: 5.2%). As detailed
previously, the reinvigorated branch performance review process has been a key
factor in the improved operating margins, challenging operational performance
and demanding strict adherence to business systems and processes. Whilst the
primary focus of these reviews is not financial, the impact upon margin and
working capital has been particularly pleasing. The Group has continued to
apply a disciplined approach to pricing, and this robust approach has also
been reinforced during recent contract re-bids.
Notwithstanding the strong progress on operating margins, April 2025 saw the
introduction of the increased rate to employer's National Insurance and a
reduction in the associated threshold, which is particularly significant in
respect of employees at the lower end of the pay scale. This change will
increase the Group's annual payroll cost by c.£5 million and the full-period
impact will be felt in the second half. Whilst this tax increase naturally
applies additional cost pressure, the increasing focus on branch performance
has created efficiency improvements to provide some margin protection.
OUR PEOPLE
Underpinning our strong performance is a motivated and engaged workforce.
Our levels of staff retention continue to strengthen, and we are committed to
growing our own talent and providing opportunities for internal progression.
We have invested in new technology to aid training and development which will
ensure we provide the opportunities for staff to develop the required
knowledge, skills and behaviour.
We continue to be future focused in our work with apprenticeships. We have
increased our apprentice intake year on year, with 97% of those completing
their apprenticeship in the last 12 months achieving full time roles within
the Group.
Many of our apprentices come from disadvantaged backgrounds as we focus on
recruitment from our local communities, creating opportunities to improve
social mobility. This year we have increased our work with schools,
delivering outreach programmes and initiatives aimed at improving
opportunities for young people. Our success in improving social mobility was
demonstrated in the Social Mobility Employer Index as we are now ranked in
19th place.
An increased focus and approach to supporting fairness and inclusion has
resulted in the implementation of a Recruitment Diversity Dashboard and
investment in employee networks to support key issues such as mental health.
BUSINESS DEVELOPMENT
During the first half, the Group secured new orders of £280m (excluding
extensions) with a bid success rate, by value, of over 80% (FY 2024: 41%
excluding North Lanarkshire). The Group's order book has been maintained at
£3.0bn; more importantly, the strong period of contract retention has
improved the near-term revenue visibility.
A key highlight in the first half was the successful retention of the new
Housing Repairs and Maintenance Works and Services Contract with Milton Keynes
City Council ('MKCC'). The MKCC partnership has been a flagship contract for
Mears since it was originally secured in 2016, and the award of the new
contract reflects the high-quality service that Mears has provided to the
residents of Milton Keynes for almost a decade. The new contract, which will
commence during August 2025, is valued at £230m over the initial period of
five years and will see the Group deliver both planned and reactive repairs
and maintenance works across the Council's housing stock. There is an option
for the Council to extend the contract for a further five years which would
increase the total contract value to an estimated £475m.
The Group secured a significant contract award with the London Borough of
Brent, a new customer relationship. The contract is for the provision of
responsive repairs and planned works to the client's housing stock of over
8,000 units and is valued at £39m for an initial period of five years, with
extension options for a further five years. The new contract will commence in
October 2025.
Mears' increased focus and ambition to develop and extend its standalone
capital works and retrofit capability was a key output from the strategic
review. This has resulted in the award of a contract with Aberdeenshire
Council which is valued at £30m over the initial four-year period, with an
option of an additional year extension. There is an active bid pipeline in
this area, and additional resource has been applied to increase capacity for
bidding and estimating. The Group is adopting a highly selective approach,
focusing on work opportunities that are more technical in nature and where
there is a lower weighting towards price.
The Social Housing Decarbonisation Fund ('SHDF') Wave 3 saw Mears submit
applications on behalf of clients that have secured £30m of grant funding,
contributing to over £60m of total works value to be delivered over the
course of 2026 and 2027. It is the grant funded element that represents new
value to the Group's order book as the remainder will be funded from existing
client budgets. There will be additional opportunities for the Group in Wave 4
of the SHDF funding applications.
The Government has commenced preliminary market engagement to validate the
strategy for future asylum procurement and the replacement of AASC. The timing
of any procurement and the precise structure for the future contract mechanism
is subject to change, with the new contract currently estimated to start in
September 2029. The Group considers itself to be well placed to play a role in
the long-term provision of services to this vulnerable service user group.
CASH FLOW AND WORKING CAPITAL MANAGEMENT
The Group has continued to deliver strong cash performance, with conversion of
EBITDA to operating cash in the first six months of 105% (2024: 119%). The
Group reported an adjusted net cash position at 30 June 2025 of £81.1m (2024:
£107.3m). Of greater significance is the day-to-day performance, with average
daily adjusted net cash for the first six months of £66.7m (2024: £66.4m).
EARNINGS PER SHARE ('EPS'), DIVIDEND AND CAPITAL ALLOCATION
Diluted EPS increased by 20% to 27.68p (2024: 23.12p). This improvement was
driven by a combination of an increase in profit (5%), a reduction in the
weighted average number of shares as a result of the share buyback programme
(13%), and a decrease in the non-controlling interest as a result of the new
North Lanarkshire contract sitting within a wholly-owned subsidiary (2%).
Positively, the business model carries a low capital expenditure and working
capital requirement. Notwithstanding the Group's balance sheet strength, the
Board recognises that maintaining a modest net cash position provides
reassurance to our key stakeholders.
Mears recognises the importance of supporting our Home Office client in
securing long-term residential accommodation to replace the use of short-term
contingent solutions. Whilst property leasing remains the Group's preferred
solution for sourcing properties, the Board has approved the allocation of
capital to support the requirements of the AASC and to ensure that good
quality property can be sourced across a wider dispersal area. During the
first half, the Group purchased £23.8m of property and expects to expend a
similar sum during the second half. On completion of this latest tranche, the
Executive team intends to complete a sale and leaseback whilst securing these
properties for the remainder of the AASC term.
Given the excellent trading performance of the Group, the continued strong
cash performance and the positive outlook, the Board is pleased to propose an
interim dividend of 5.60p per share (2024: 4.75p). The Board continues to
believe that a capital allocation policy combining a progressively growing
dividend within a cover range of 2.0-2.5x, with the return of any excess
capital via on-market buyback purchases of shares, remains appropriate. In the
short term, the Board may allow dividend cover to increase beyond the range
outlined above, aligning to profits trajectory.
During the first half, the Board approved a return of surplus capital of £16m
to shareholders, implemented through a buyback programme of on-market
purchases. This resulted in the purchase and cancellation of 4.3m ordinary
shares of 1p each at an average price of 371p. Over the last two years,
buybacks have reduced the Group's ordinary share count by 27.4m shares at an
average price of 325p and a total cash cost of £89m. In addition, the
Employee Benefit Trust ('EBT') holds 4.1m shares.
Our capital allocation policy remains consistent and prioritises the
allocation of capital to support our organic growth strategy, augmented by
modest strategic bolt-on acquisitions to further enhance our service offering
and accelerate the delivery of our plan. The allocation of capital for the
acquisition of properties to support the requirements of AASC, and the
anticipated unwind of contract liabilities referenced below, will absorb some
of the surplus cash. The strong cash generation underpins a progressive
dividend and other routes for returning surplus funds to shareholders remain
in focus.
OUTLOOK AND GUIDANCE
The business has continued to report strong performance. The Board is
increasingly confident in the growth momentum within its Maintenance-led
activities. The precise timing of the normalisation of AASC revenues remains
uncertain, but there is a clear political drive to see all hotel accommodation
exited during 2026 which is reflected in our guidance below.
FY25 Medium term
Revenue · Maintenance revenue growth of c.8-9% · Maintenance revenue growth of c.5-9%
· Management revenue reduction by £100m on FY24 (linked to AASC) · Management revenue reduction by £125m in FY26 (on FY25) and
£50m in FY27 (on FY26) (linked to AASC and ARAP)
Operating margin · 5.3-5.6% (pre-IFRS 16). Post-IFRS 16 margins c.90bps higher · 5.0-6.0% (pre IFRS 16).
· Guidance absorbs additional investment in people and technology · Post-IFRS 16 margins c.70-90bps higher.
· Reduction in overhead recovery as AASC revenues normalise,
mitigated by efficiency improvements
Profit before Tax · Range of outcomes derived from revenue and margin guidance above · Range of outcomes derived from revenue and margin guidance above
· Finance income (pre-IFRS 16), c.£4m · Finance income (pre-IFRS 16); expected to reduce from FY25 level.
Linked to net cash balance.
· PBT impact from IFRS 16, c.£4m charge
· PBT impact from IFRS 16, c.£4.0m charge
EBITDA to operating cash conversion · c.80% · 100%
· Anticipating unwind from elevated contract liabilities
The Group is well placed to deliver upper single digit percentage growth in
its Maintenance-led activities. The strong period of contract retention has
increased confidence further in this area. The new North Lanarkshire Council
contract is showing an upward trajectory which will continue into FY26. The
increased bid activity in respect of standalone capital works will augment
growth in this segment. The Group has four material contracts, with total
annual revenues of c.£75m, expiring in FY26 which are all subject to current
re-procurement. The Group feels well positioned on each re-bid.
In the short term, we are likely to see a reduction in revenues in the
Management-led division owing to some normalisation in AASC revenues and the
conclusion of works relating to ARAP. The primary focus within Asylum remains
on securing sufficient good quality, long-term residential property to remove
the requirement for short-term contingent solutions. The number of hotels in
use at 30 June has reduced to less than half the peak level, and further
hotels are expected to be exited during the third quarter. The Executive team
anticipates that Asylum revenues will continue to normalise through to the end
of FY26. The precise timing remains uncertain.
The strategic plan recognised the need to make further investment to expand
our capabilities to service and support the new and emerging market
opportunities. Investment in headcount will ensure that the Group has the
required range of capabilities to develop its Compliance and Asset Management
offer (35 heads, £1.8m), extend its contract bidding capabilities (5 heads,
£0.4m), and deliver an accelerated program of IT development (28 heads,
£1.7m). This is a relatively modest additional investment to support the
Group's organic growth. Given the timing of the new appointments, this
investment had little impact on the cost base in the first half. It is
anticipated that these positions will be fully onboarded by the end of 2025
and are already absorbed within market guidance for 2026.
The Board has previously indicated an ambition to maintain an operating margin
(on a pre-IFRS 16 basis) in the 5.0-6.0% range. Whilst the Group has stated
its desire to deliver top-line growth, the business remains highly selective
and disciplined in its approach, and operating margin remains a key metric.
The Executive team is mindful that the elevated Management-led revenues have
delivered additional economies of scale and an increased level of overhead
recovery, which has been a further factor behind an increasing operating
margin across recent periods. The Executive team is confident that, as the
elevated Management-led revenues normalise, and some of this increased
overhead recovery diminishes, that this can be partly mitigated by efficiency
improvements within the business.
Whilst the strong operating cash generation over recent periods reflects the
high quality of earnings, combined with strong working capital management, the
Group has enjoyed a timing benefit in respect of certain contractual
mechanisms linked to payments on account and gainshares which are reflected in
an elevated contract liabilities balance. This working capital benefit, which
has accrued over prior periods, is anticipated to materially unwind during the
second half of FY25, whilst the business is expected to continue to deliver
strong underlying cash generation.
ALTERNATIVE PERFORMANCE MEASURES ('APM')
The Interim Report includes both statutory and adjusted performance measures.
APMs are considered useful to stakeholders in assessing the underlying
performance of the business, adjusting for items that could distort the
understanding of performance in the year and between periods, and when
comparing the financial outputs to those of our peers. The APMs have been set
considering the requirements and views of the Group's investors and debt
funders, among other stakeholders. The APMs and KPIs are aligned to the
Group's strategy.
Reflecting the steady state of the business and the quality of the earnings,
the Group has used unadjusted profit before tax and earnings per share as its
headline profit measures. The Group makes regular reference throughout the
Interim Report to an adjusted operating profit, measured before the impact of
IFRS 16, and stated both in pounds (£) and as a percentage margin (%). This
adjusted measure is a key metric for the senior executive team when assessing
new contract opportunities and existing branch performance.
The Group also uses an adjusted net cash measure which excludes IFRS 16 lease
obligations from the statutory net debt measure. This is referenced in both a
spot measure (on 30 June and 31 December) and in a daily average.
These APMs should not be considered as a substitute for or superior to
International Financial Reporting Standards (IFRS) measures, and the Board has
reported both statutory and alternative measures with equal prominence
throughout the Interim Report.
The method of calculation and a reconciliation between each APM and the
relevant statutory measure are detailed below, together with an explanation as
to why management considers the APM to be useful in helping users to have a
better understanding of the Group's underlying performance. This section of
the Interim Report also provides additional analysis to give the user an
easier route to understand underlying performance and deriving their own
profit and EBITDA measures.
H1 2025 H1 2024 FY 2024
£'000 £'000 £'000
Profit before tax 32,046 30,507 64,141
IFRS 16 profit impact 1,631 1,911 3,744
Finance income (non-IFRS 16) (2,107) (2,085) (4,275)
Adjusted operating profit pre-IFRS 161 31,570 30,333 63,610
Amortisation of software and acquisition intangibles 1,136 1,165 2,244
Depreciation and loss on disposal (non-IFRS 16)2 3,415 4,627 7,574
EBITDA pre-IFRS 161 36,121 36,125 73,428
IFRS 16 profit impact (1,631) (1,911) (3,744)
Finance costs (IFRS 16) 6,922 5,808 12,693
Depreciation, loss on disposal and impairment (IFRS 16)3 33,422 29,391 62,733
EBITDA post-IFRS 161 74,834 69,413 145,110
Amortisation of software and acquisition intangibles (1,136) (1,165) (2,244)
Depreciation, loss on disposal and impairment (IFRS 16)3 (33,422) (29,391) (62,733)
Depreciation and loss on disposal (non-IFRS 16)2 (3,415) (4,627) (7,574)
Operating profit post-IFRS 161 36,861 34,230 72,559
1 Operating profit and EBITDA measures include share of profits of
associates.
2 Includes loss on disposal of £749,000 (H1 2024: £262,000, FY 2024:
£508,000). The FY 2024 figure also includes loss on sale and leaseback of
£283,000.
3 Includes profit on disposal of £43,000 (H1 2024: £nil, FY 2024:
£150,000) and impairment of £nil (H1 2024: £nil, FY 2024: £633,000).
The Directors use the Operating profit pre-IFRS 16 measure to generate the
Group's headline operating margin. Whilst this generates a lower operating
margin, it reflects how the underlying contracts have been tendered, how the
senior executive team assess performance, and is also more aligned to the
underlying cash generation. In addition, this measure is also used for the
purposes of assessing the Group's compliance with its banking covenants, which
utilise pre-IFRS 16 measures.
H1 2025 H1 2024 FY 2024
£'000 £'000 £'000
Revenue 559,384 580,043 1,132,510
Operating profit1 36,861 34,230 72,559
Operating profit margin % 6.6% 5.9% 6.4%
Adjusted operating profit pre IFRS 161 31,571 30,333 63,610
Adjusted operating margin % 5.6% 5.2% 5.6%
1 Operating profit includes share of profits of associates.
IFRS 16 impact upon profit before tax
The profit impact in respect of IFRS 16, which was included within the APM
analysis above, is detailed below:
H1 2025 H1 2024 2024
£'000 £'000 £'000
Charge to income statement on a post-IFRS 16 basis (40,344) (34,399) (74,793)
Charge to income statement on a pre-IFRS 16 basis (38,713) (33,288) (71,682)
Profit impact from the application of IFRS 16 and before impairment (1,631) (1,111) (3,111)
Impairment of right of use assets - (800) (633)
Profit impact from the application of IFRS 16 (1,631) (1,911) (3,744)
Adjusted net cash
The Group excludes the financial impact of IFRS 16 from its adjusted net cash
measure. This adjusted net cash measure has been introduced to align the net
borrowing definition to the Group's banking covenants, which are required to
be stated before the impact of IFRS 16.
The Group does not recognise lease obligations as traditional debt instruments
given a significant proportion of these leases have break provisions which
allow the Group to cancel the associated lease obligation with minimal
associated cost. A reconciliation between the net debt and the adjusted
measure is detailed below:
H1 2025 H1 2024 FY 2024
£'000 £'000 £'000
Adjusted net cash (being cash and cash equivalents) 81,138 107,264 91,404
Lease liabilities (current) (67,125) (51,416) (66,861)
Lease liabilities (non-current) (232,844) (209,634) (230,641)
Net debt (including IFRS 16 lease obligations) (218,831) (153,786) (206,098)
In addition to the average daily net cash measure, the Group also measures the
cash inflow from operating activities as a proportion of EBITDA and this cash
conversion percentage is a key performance measure, reflecting the Group's
ability to convert profit into cash. The Board targets a measure of more than
90%, and performance that is greater than 100% is considered outstanding. The
strength of the Group's operating cash flows reflects both the underlying
quality of the earnings, and the Group's operating systems which underpin a
strong cash culture.
H1 2025 H1 2024 FY 2024
£'000 £'000 £'000
EBITDA 74,834 69,411 145,110
Cash inflow from operating activities 78,821 82,489 146,208
Cash conversion % 105% 119% 101%
Statutory profit before tax
The Board believes that the statutory Profit before tax measure is a true
reflection of the underlying performance of the business, and no alternative
measure is considered necessary or appropriate. The Board recognises that any
reported profit will include singular components which, in isolation, may be
considered unusual, infrequent, non-recurring or non-underlying. Additional
detail is disclosed separately within the notes to the financial statements,
and these provide a better understanding as to the underlying performance in
the period.
H1 2025 H1 2024 FY 2024
£'000 £'000 £'000
Impairment of right of use assets - - (633)
Amortisation of acquired intangibles (122) (122) (245)
Loss on sale and leaseback transaction - - (283)
Increase in fair value of other investments 650 - 785
Onerous contract provisions (provided in period less amounts released unused) - - (759)
Legal provisions (provided in period less amounts released unused) - (850) (4,792)
Settlements on exiting LGPS pension schemes - - 2,413
Half-year condensed consolidated statement of profit or loss
For the six months ended 30 June 2025
Note Six months ended 30 June 2025 (unaudited) £'000 Six months ended 30 June 2024 (unaudited) Year
£'000
ended 31 December 2024
(audited)
£'000
Sales revenue 3 559,384 580,043 1,132,510
Cost of sales (429,567) (447,310) (879,257)
Gross profit 129,817 132,733 253,253
Administrative expenses (93,411) (99,137) (181,708)
Operating profit 36,406 33,596 71,545
Share of profits of associates 455 633 1,014
Finance income 5 2,491 2,526 5,367
Finance costs 5 (7,306) (6,248) (13,785)
Profit for the period before tax 32,046 30,507 64,141
Tax expense 6 (8,421) (7,358) (17,205)
Profit for the period from continuing operations 23,625 23,149 46,936
Attributable to:
Owners of Mears Group PLC 23,754 22,725 46,526
Non-controlling interest (129) 424 410
Profit for the period 23,625 23,149 46,936
Earnings per share
Basic 8 28.62p 23.63p 50.27p
Diluted 8 27.68p 23.12p 48.86p
All results are in respect of continuing operations.
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Half-year condensed consolidated statement of comprehensive income
For the six months ended 30 June 2025
Note Six months ended 30 June 2025 Six months ended 30 June 2024 Year
(unaudited) £'000 (unaudited) ended 31 December 2024
£'000
(audited)
£'000
Profit for the period 23,625 23,149 46,936
Other comprehensive income:
Which will not be subsequently reclassified to the Consolidated Statement of
Profit or Loss:
Actuarial gain/(loss) on defined benefit pension scheme 831 411 2,665
Pension guarantee asset movements in respect of actuarial gain (183) - (516)
(Decrease)/increase in deferred tax asset in respect of defined benefit (162) (103) (537)
pension schemes
Other comprehensive income for the period 486 308 1,612
Total comprehensive income for the period 24,111 23,457 48,548
Attributable to:
Owners of Mears Group PLC 24,240 23,033 48,138
Non-controlling interest (129) 424 410
Total comprehensive income for the period 24,111 23,457 48,548
All results are in respect of continuing operations.
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Half-year condensed consolidated balance sheet
As at 30 June 2025
Note As at 30 As at 30 As at 31 December 2024 (audited)
£'000
June 2025 (unaudited) £'000 June 2024 (unaudited) £'000
Assets
Non-current
Goodwill 121,868 121,868 121,868
Intangible assets 5,873 6,552 6,244
Property, plant and equipment 61,757 51,930 38,836
Right of use assets 273,619 237,868 272,171
Investments 3,380 1,108 2,274
Loan notes 10,414 4,669 10,195
Pension and other employee benefits 15 24,504 21,577 23,245
501,415 445,572 474,833
Current
Inventories 1,452 792 1,173
Trade and other receivables 9 149,803 133,190 133,205
Current tax assets 502 - 730
Cash and cash equivalents 81,138 107,264 91,404
232,895 241,246 226,512
Total assets 734,310 686,818 701,345
Equity
Equity attributable to the shareholders of Mears Group PLC
Called up share capital 13 865 961 908
Share premium account 2,641 2,537 2,581
Share-based payment reserve 3,611 2,184 3,604
Treasury shares (13,897) (9,517) (14,985)
Merger reserve 7,971 7,971 7,971
Retained earnings 183,267 182,467 184,028
Total equity attributable to the shareholders of Mears Group PLC 184,458 186,603 184,107
Non-controlling interest 3,229 3,372 3,358
Total equity 187,687 189,975 187,465
Liabilities
Non-current
Pension and other employee benefits 15 - 52 -
Deferred tax liabilities 3,662 3,340 3,518
Lease liabilities 232,844 209,634 230,641
Non-current provisions 11 9,529 7,713 9,765
246,035 220,739 243,924
Current
Trade and other payables 10 226,734 214,377 192,278
Lease liabilities 67,125 51,416 66,861
Provisions 11 6,729 9,368 10,817
Current tax liabilities - 943 -
Current liabilities 300,588 276,104 269,956
Total liabilities 546,623 496,843 513,880
Total equity and liabilities 734,310 686,818 701,345
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Half-year condensed consolidated cash flow statement
For the six months ended 30 June 2025
Note Six months ended 30 June 2025 (unaudited) £'000 Six months ended 30 June 2024 (unaudited) Year ended 31 December 2024
£'000
(audited)
£'000
Operating activities
Result for the period before tax 32,046 30,507 64,141
Adjustments 14 42,849 39,032 81,247
Change in inventories (278) 671 290
Change in trade and other receivables (16,758) (6,887) (7,021)
Change in trade, other payables and provisions 20,962 19,166 7,551
Cash inflow from operating activities before taxation 78,821 82,489 146,208
Taxes paid (6,800) (6,775) (17,407)
Net cash inflow from operating activities 72,021 75,714 128,801
Investing activities
Additions to property, plant and equipment (26,590) (19,497) (29,816)
Additions to other intangible assets (765) (792) (1,442)
Proceeds from disposals of property, plant and equipment 162 - 141
Proceeds from sale and leaseback of residential property - - 16,285
Distributions from associates - 147 147
Movement in short-term cash deposits held for investment purposes - 7,090 7,090
Interest received 1,688 2,126 4,036
Net cash outflow from investing activities (25,505) (10,926) (3,559)
Financing activities
Proceeds from share issue 60 206 251
Proceeds from distribution of shares from treasury 6 6 6
Purchase of own shares (17,793) (26,261) (52,050)
Proceeds from disposal of own shares 553 - -
Net cash flow from other credit facilities - (11,244) (11,244)
Discharge of lease liabilities (32,403) (27,001) (57,907)
Interest paid (7,205) (6,531) (13,262)
Dividends paid - Mears Group shareholders - - (12,933)
Net cash outflow from financing activities (56,782) (70,825) (147,139)
Cash and cash equivalents, beginning of period 91,404 113,301 113,301
Net increase/(decrease) in cash and cash equivalents (10,266) (6,037) (21,897)
Cash and cash equivalents, end of period 81,138 107,264 91,404
All results are in respect of continuing operations.
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Half-year condensed consolidated statement of changes in equity
For the six months ended 30 June 2025 (unaudited)
Attributable to equity shareholders of the Company
Share Share Share- Treasury shares Merger Retained Non- Total
capital
premium
based
reserve
earnings
controlling
equity
account
payment £'000
interest
£'000
reserve £'000 £'000
£'000
£'000
£'000
£'000
At 1 January 2024 1,016 2,332 1,883 (5,122) 7,971 189,428 2,948 200,456
Net result for the period - - - - - 22,725 424 23,149
Other comprehensive income - - - - - 308 - 308
Total comprehensive income for the period - - - - - 23,033 424 23,457
Issue of shares 1 205 - - - - - 206
Purchase of treasury shares - - - (6,265) - - - (6,265)
Cancellation of shares (56) - - - - (19,940) - (19,996)
Share options - value of employee services - - 1,050 - - - - 1,050
Share options - exercised or lapsed - - (749) 1,870 - (1,115) - 6
Dividends - - - - (8,939) - (8,939)
At 30 June 2024 961 2,537 2,184 (9,517) 7,971 182,467 3,372 189,975
At 1 January 2025 908 2,581 3,604 (14,985) 7,971 184,028 3,358 187,465
Net result for the period - - - - - 23,754 (129) 23,625
Other comprehensive income - - - - - 486 - 486
Total comprehensive income for the period - - - - - 24,240 (129) 24,111
Tax credit on share-based payments - - - - - 1,410 - 1,410
Issue of shares - 60 - - - - - 60
Purchase of treasury shares - - - (1,619) - - - (1,619)
Disposal of treasury shares - - - 553 - - - 553
Cancellation of shares (43) - - - - (16,130) - (16,173)
Share options - value of employee services - - 1,145 - - - - 1,045
Share options - exercised or lapsed - - (1,138) 2,154 - (1,010) - 6
Dividends - - - - (9,271) - (9,271)
At 30 June 2025 865 2,641 3,611 (13,897) 7,971 183,267 3,229 187,687
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Notes to the half-year condensed consolidated financial statements
For the six months ended 30 June 2025
1. Corporate information
Mears Group PLC is a public limited company incorporated in England and Wales
whose shares are publicly traded. The half-year condensed consolidated
financial statements of the Company and its subsidiaries for the six months
ended 30 June 2025 were authorised for issue in accordance with a resolution
of the Directors on 6 August 2025.
2. Basis of preparation and accounting principles
(a) Basis of preparation
The financial information comprises the unaudited results for the six months
ended 30 June 2025 and 30 June 2024, together with the audited results for the
year ended 31 December 2024. The half-year condensed consolidated financial
statements for the six months ended 30 June 2025 have been prepared in
accordance with the Disclosure and Transparency Rules of the Financial Conduct
Authority, with IAS 34 'Interim Financial Reporting', as contained in
UK-adopted international accounting standards. The half-year condensed
consolidated financial statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Group's annual financial statements as at 31 December
2024, which have been prepared in accordance with United Kingdom adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
This half-year condensed consolidated financial information does not comprise
statutory accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2024 were approved by
the Board of Directors on 9 April 2025. Those accounts, which contained an
unqualified audit report under Section 495 of the Companies Act 2006, have
been delivered to the Registrar of Companies in accordance with Section 441 of
the Companies Act 2006.
The half-year condensed consolidated financial statements for the six months
ended 30 June 2025 have not been audited or reviewed by an auditor pursuant to
the Auditing Practices Board guidance on the Review of Interim Financial
Information.
There have been no significant changes to estimates of amounts reported in
prior financial years.
Going concern
The Directors consider that, as at the date of approving the interim financial
statements, there is a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the period to at
least 30 September 2026. When making this assessment, management considers
whether the Group will be able to maintain adequate liquidity headroom above
the level of its borrowing facilities and to operate within the financial
covenants applicable to those facilities which will be measured at 31 December
2025 and 30 June 2026. As at 30 June 2025 and 6 August 2025, the Group had
£70m of committed borrowing facilities of which none was drawn. The principal
borrowing facilities are subject to covenants as detailed on page 54 of the
2024 Annual Report. The nature of the principal risks and uncertainties faced
by the Group has not changed significantly from those set out on pages 63 to
65 of the 2024 Annual Report and is not expected to change over the next 12
months. The Group has modelled its cash flow outlook for the period to 30
September 2026 and the forecasts indicate significant liquidity headroom will
be maintained above the Group's borrowing facilities and that financial
covenants will be met throughout the period.
The Directors have a reasonable expectation that the Company and its
subsidiaries have adequate resources to continue in operational existence
until 30 September 2026. Accordingly, they continue to adopt the going concern
basis in preparing the interim statement.
Tax
A tax charge of £8.4m (2024: £7.4m) is recognised for the period. This tax
charge is recognised based on the best estimate of the average effective
income tax rate on profit before tax for the full financial year.
(b) Significant accounting policies
The accounting policies adopted in the preparation of the half-year condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 31
December 2024.
3. Revenue
The Group's revenue disaggregated by pattern of revenue recognition is as
follows:
Six months ended 30
June 2025 Six months ended 30
(unaudited) June 2024
£'000
(unaudited)
£'000
Revenue from contracts with customers
Repairs and maintenance 268,274 234,772
Contracting 22,616 34,446
Property income 245,714 286,809
Care services 10,864 10,684
Other 440 358
547,908 567,069
Lease income 11,476 12,974
559,384 580,043
4. Segment reporting
Segment information is presented in respect of the Group's operating segments
based on the format that the Group reports to its chief operating decision
maker for the purpose of allocating resources and assessing performance.
Six months ended 30 June 2025 Six months ended 30 June 2024
Maintenance Management Total Maintenance Management Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 302,194 257,190 559,384 280,077 299,966 580,043
Cost of sales (228,549) (201,018) (429,567) (210,053) (237,257) (447,310)
Gross profit 73,645 56,172 129,817 70,024 62,709 132,733
Administrative costs (60,334) (33,077) (93,411) (62,887) (36,250) (99,137)
Share of profits of associates 428 27 455 633 - 633
Net finance income/(costs) 954 (5,769) (4,815) 1,446 (5,168) (3,722)
Profit before tax 14,693 17,353 32,046 9,216 21,291 30,507
Tax expense (8,421) (7,358)
Profit for the period 23,625 23,149
5. Finance income and finance costs
Six months ended 30 Six months ended 30
June 2025 June 2024
(unaudited)
(unaudited)
£'000
£'000
Interest charge on overdrafts and loans (320) (343)
Interest on lease obligations (6,922) (5,808)
Other interest expense (64) (92)
Finance costs on bank loans, overdrafts and leases (7,306) (6,243)
Interest charge on net defined benefit scheme obligations - (5)
Total finance costs (7,306) (6,248)
Interest income resulting from short-term bank deposits 1,514 1,850
Interest income resulting from net defined benefit scheme assets 632 463
Other interest income 345 213
Finance income 2,491 2,526
Net finance charge (4,815) (3,722)
6. Tax expense
Tax recognised in the Consolidated Statement of Profit or Loss:
Six months ended 30 Six months ended 30
June 2025 June 2024
(unaudited) (unaudited)
£'000
£'000
United Kingdom corporation tax 8,479 7,606
Adjustment in respect of previous periods - -
Total current tax charge recognised in Consolidated Statement of Profit 8,479 7,606
or Loss
Total deferred taxation recognised in Consolidated Statement of Profit or Loss (58) (248)
Total tax charge recognised in Consolidated Statement of Profit or Loss 8,421 7,358
7. Dividends
Six months ended 30 Six months ended 30
June 2025 June 2024
(unaudited) (unaudited)
£'000
£'000
Final 2024 dividend of 11.25p per share 9,271 8,939
The dividend disclosed within the half year condensed consolidated statement
of changes in equity represents the final 2024 dividend of 11.25p per share
proposed in the 31 December 2024 financial statements and approved at the
Group's Annual General Meeting on 4 June 2025. This was paid on 10 July 2025.
The Board has declared an interim dividend of 5.60p (2024: 4.75p) per share.
This is not recognised as a liability at 30 June 2025 and will be payable on 2
October 2025 to shareholders on the register of members at the close of
business on 12 September 2025. The shares will go ex-dividend on 11 September
2025.
8. Earnings per share
Six months ended 30 Six months ended 30
June 2025 June 2024
(unaudited) (unaudited)
p p
Basic earnings per share 28.62 23.63
Diluted earnings per share 27.68 23.12
All results relate to continuing activities. The calculation of EPS is based
on a weighted average of ordinary shares in issue during the period. The
diluted EPS is based on a weighted average of ordinary shares calculated in
accordance with IAS 33 'Earnings per Share', which assumes that all dilutive
options will be exercised. IAS 33 defines dilutive options as those whose
exercise would decrease earnings per share or increase loss per share from
continuing operations.
Six months ended 30 Six months ended 30
June 2025 June 2024
(unaudited) (unaudited)
Million Million
Weighted average number of shares in issue: 82.99 96.16
· Dilutive effect of share options 2.83 2.15
Weighted average number of shares for calculating diluted earnings per share 85.82 98.31
9. Trade and other receivables
As at 30 As at 30 As at 31 December
June 2025 June 2024 2024
(unaudited) (unaudited) (audited)
£'000
£'000
£'000
Trade receivables 28,625 19,915 20,940
Contract assets 88,952 80,983 84,335
Contract fulfilment costs - 164 148
Prepayments and accrued income 29,252 28,702 24,468
Other debtors 2,974 3,426 3,314
Total trade and other receivables 149,803 133,190 133,205
10. Trade and other payables
As at 30 As at 30 As at 31 December
June 2025 June 2024 2024
(unaudited) (unaudited) (audited)
£'000
£'000
£'000
Trade payables 59,748 67,149 51,723
Accruals 55,839 50,991 48,355
Social security and other taxes 32,170 30,675 27,734
Contract liabilities 68,315 51,244 61,976
Other creditors 1,391 5,379 2,490
Dividends payable 9,271 8,939 -
226,734 214,377 192,278
11. Provisions
A summary of the movement in provisions during the period is shown below:
Onerous contract provisions £'000 Property provisions £'000 Insurance provisions £'000 Legal and Total
£'000
other provisions
£'000
At 1 January 2025 8,202 1,842 4,138 6,400 20,582
Provided during the period - - 1,215 500 1,715
Utilised during the period (259) - (1,080) (4,200) (5,539)
Unused amounts reversed - - - (500) (500)
At 30 June 2025 7,943 1,842 4,273 2,200 16,258
At the start of 2025, the Group carried various provisions relating to
expected outflows of uncertain timing or amount. Further details of these
provisions as they stood at 31 December 2024 can be found in the 2024 Annual
Report.
The utilisation of the onerous contract provision has been in line with
expectations at 31 December 2024. One legal provision has been settled during
the period, also in line with expectations. There has been a modest increase
in the amount provided in respect of one legal provision.
12. Financial instruments
Categories of financial instruments
As at 30 As at 30 As at 31 December
June 2025 June 2024 2024
(unaudited) (unaudited) (audited)
£'000
£'000
£'000
Non-current assets
Fair value (level 3)
Investments - other investments 1,500 65 850
Amortised cost
Loan notes 10,414 4,669 10,195
Current assets
Amortised cost
Trade receivables 28,625 19,915 20,940
Other debtors 2,974 3,426 3,314
Cash at bank and in hand 81,138 107,264 91,404
112,737 130,605 115,658
Non-current liabilities
Amortised cost
Lease liabilities (232,844) (209,634) (230,641)
Current liabilities
Fair value (level 3)
Contingent consideration - (595) -
Amortised cost
Trade payables (59,748) (67,149) (51,723)
Lease liabilities (67,125) (51,416) (66,861)
Other creditors (1,391) (4,526) (2,490)
Deferred consideration - (258) -
Dividends payable (9,271) (8,939) -
(137,535) (132,288) (121,074)
(245,728) (207,178) (225,012)
The IFRS 13 hierarchy level categorisation relates to the extent the fair
value can be determined by reference to comparable market values. The
classifications range from level 1, where instruments are quoted on an active
market, through to level 3, where the assumptions used to arrive at fair value
do not have comparable market data.
The fair values of investments in unlisted equity instruments are determined
by reference to an assessment of the fair value of the entity to which they
relate. This is typically based on a multiple of earnings of the underlying
business (level 3).
There have been no transfers between levels during the period.
Fair value information
The fair value of the Group's financial assets and liabilities approximates to
the book value, as disclosed above.
13. Share capital and reserves
2025 2024
Share capital £'000 £'000
Allotted, called up and fully paid
At 1 January 90,764,444 (2024: 101,551,082) ordinary shares of 1p each 908 1,016
(audited)
Issue of 30,003 (2024:138,880) shares on exercise of share options - 1
Cancellation of 4,319,819 (2024: 5,575,561) shares following purchase by the (43) (56)
Group
At 30 June 86,474,628 (2024: 96,114,401) ordinary shares of 1p each 865 961
(unaudited)
During the period 30,003 (2024:138,880) ordinary 1p shares were issued in
respect of share options exercised. In addition, 4,319,819 (2024: 5,575,561)
ordinary 1p shares were repurchased by the Group and cancelled.
Treasury shares
Thousands £'000
At 1 January 2025 4,461 14,985
Acquired by the EBT 400 1,619
Disposed of by the EBT (150) (553)
Distributed to employees by the EBT (644) (2,154)
At 30 June 2025 4,067 13,897
14. Notes to the Consolidated Cash Flow Statement
The following non-operating cash flow adjustments have been made to the result
for the period before tax:
Six months ended 30 Six months ended 30 Year ended
June 2025 June 2024 31 December
(unaudited) (unaudited) 2024
£'000
£'000 (audited)
£'000
Depreciation 36,088 33,481 69,032
Impairment of right of use assets - 800 633
Loss/(profit) on disposal of assets 749 (262) 358
Loss on sale and leaseback transaction - - 283
Amortisation 1,136 1,287 2,244
Share-based payment charge 1,145 1,050 2,622
IAS 19 pension movement 21 (413) (544)
Movement in fair value of investments (650) - (785)
Share of profits of associates (455) (633) (1,014)
Finance income (2,491) (2,526) (5,367)
Finance cost 7,306 6,248 13,785
Total 42,849 39,032 81,247
15. Pensions
The Group contributes to defined benefit schemes which require contributions
to be made to separately administered funds. The assets of the schemes are
administered by trustees in funds independent from the assets of the Group.
In certain cases, the Group will participate under Admitted Body status in
Local Government Pension Schemes. The Group will contribute for a finite
period up until the end of the particular contract. The Group is required to
pay regular contributions as detailed in the scheme's schedule of
contributions. In some cases, these contributions are capped, and any excess
can be recovered from the body from which the employees originally
transferred. Where the Group has a contractual right to recover the costs of
making good any deficit in the scheme from the Group's client, the fair value
of that asset has been recognised as a separate pension guarantee asset.
For all schemes included within Other schemes, the Group does not have an
unconditional right to benefit from any surplus and therefore, where such
schemes are in a surplus position, the surplus is not recognised.
For the purposes of the interim financial statements management has estimated
the movements in pension liabilities by reference to the changes in principal
assumptions since 31 December 2024, using the sensitivities to movements in
these assumptions calculated at that time. The movements in pension assets
have been estimated either by reference to preliminary asset valuations at 30
June 2025 or to market index returns over the period for different asset
classes in line with the asset portfolios held at 31 December 2024.
The principal actuarial assumptions that have changed since 31 December 2024
are as follows:
As at 30 As at 31 December 2024
June 2025 (audited)
(unaudited)
Discount rate 5.65% 5.50%
Retail prices inflation 2.90% 3.05%
Consumer prices inflation 2.50% 2.65%
Rate of increase of salaries 2.90% 3.05%
The amounts recognised in the Consolidated Balance Sheet and major categories
of plan assets are:
30 June 2025 31 December 2024
(unaudited) (audited)
Group Other Total Group Other Total
schemes schemes £'000 schemes schemes £'000
£'000 £'000 £'000 £'000
Group's estimated asset share 116,966 122,735 239,701 118,879 115,431 234,310
Present value of funded scheme liabilities (93,703) (73,364) (167,067) (97,210) (76,705) (173,915)
Funded status 23,263 49,371 72,634 21,669 38,726 60,395
Scheme surpluses not recognised as assets - (48,130) (48,130) - (37,150) (37,150)
Pension asset/(liability) 23,263 1,241 24,504 21,669 1,576 23,245
The Group's defined benefit obligation is sensitive to changes in certain key
assumptions. A 0.1% reduction in the net discount rate (the base discount rate
less the rate of inflation) would result in an increase in the present value
of the defined benefit obligation of approximately 2.3%, although an element
of the increase would be mitigated by an increase in the pension guarantee
assets or a reduction in the unrecognised surplus, as described above.
16. Half-year condensed consolidated financial statements
Further copies of the Interim Report are available from the registered office
of Mears Group PLC at 2nd Floor, 5220 Valiant Court, Gloucester Business Park,
Brockworth, Gloucester, GL3 4FE or www.mearsgroup.co.uk.
17. Principal risks and uncertainties
The nature of the principal risks and uncertainties faced by the Group has not
changed significantly from those set out on pages 63 to 65 of the 2024 Annual
Report and Accounts and is not expected to change over the next six months.
18. Forward-looking statements
This report contains certain forward-looking statements with respect to the
financial condition, results of operations and businesses of Mears Group PLC.
These statements involve risk and uncertainty because they relate to events
and depend upon circumstances that will occur in the future. There are a
number of factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements.
The Directors confirm, to the best of their knowledge, that this condensed set
of financial statements has been prepared in accordance with IAS 34 as adopted
by the European Union and that the Interim Report includes a fair review of
the information required by Rules 4.2.4, 4.2.7 and 4.2.8 of the Disclosure and
Transparency Rules of the UK Financial Conduct Authority.
By order of the Board
L J Critchley
A C M Smith
Chief Executive Officer Chief
Finance Officer
lucas.critchley@mearsgroup.co.uk
andrew.smith@mearsgroup.co.uk
6 August 2025
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. END IR UPUPCRUPAGMQRecent news on Mears
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