Strong financial and operational performance with positive trading outlook and £20m share buyback approved by the Board
Mears Group PLC, the leading provider of services to the Housing sector in the UK, announces its preliminary financial results for the year ended 31 December 2022 (“FY 2022”).
Financial Highlights
- Strong revenue recovery, Group revenues up 9% year-on-year to £959.6m (FY 2021: £878.4m)
- Adjusted profit before tax increased by 37% to £35.2m (FY 2021: £25.6m)
> Operating margins continue to strengthen to 3.8%2(FY 2021: 3.4%) - Exceptional cash performance with average daily adjusted net cash of £42.9m (FY 2021: £0.4m)
> Cash conversion at 122% of EBITDA (2020/2021 combined: 117%)
> Adjusted net cash at 31 December 2022 of £100.1m (2021: £54.6m) - Board is recommending a final dividend of 7.25p, bringing the full year dividend for 2022 to 10.50p (2021: 8.00p) reflecting continued strong cash performance and positive outlook
- £20m share buyback approved by the Board. Return of surplus capital,whilst maintaining a net cash position.
Operational Highlights
- Successful mitigation of most of the adverse impacts of inflation, skills shortages and supply chain issues that affected the wider industry in 2022
- Sustained high levels of both customer satisfaction, 88% (2021 86%) and employee engagement level
- Developed further the Mears approach to ESG, including the publication in May 2022 of the Group strategy for ESG and map to zero carbon (Scope 1&2) by 2030
- Positive momentum in bidding pipeline underpins organic growth strategy
> Awarded the Residential Living Accommodation Project (“RLAP”) contract providing a wide range of housing services to the Defence Infrastructure Organisation (“DIO” or “MOD”), valued at £250m over the initial 5 years.
> Mears worked with clients and submitted bids in the second wave of Social Housing Development Fund (SHDF), securing over £100m of potential work in the next 2 years.
> The Group is well placed in bidding new North Lanarkshire contract estimated to generate more than £1.5bn of revenues over 12 years. The new contract is due to commence in January 2024.
> Order book now stands at £2.9bn (2021: £2.4bn), reflecting the good progress on contract retentions and extensions.
Current trading and outlook
- Mears has made a positive start to 2023 with current trading in line with the Board’s expectations
David Miles, Chief Executive Officer of the Group, commented:
I am delighted with the strong performance of the Group, and these are a terrific set of financial results. Our market leading position, based on a clear strategy and resilient operating platform, has underpinned this performance, and positions the Group for further sustainable growth in the medium-term.
