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- Pre-Close Trading Update
10th January 2012
10 January 2012
Mears Group PLC
("Mears" or "the Group")
Pre-Close Trading Update
Mears can confirm that trading and cash for the year ended 31 December 2011 was in line with management expectations.
New contract successes have increased the Group's order book to 2.8 billion providing forward visibility of consensus forecast revenues of 93% for 2012 and 78% for 2013. Our bid pipeline remains robust at in excess of 3.0 billion with the immediate bidding opportunity for further contracts due to start over the course of2012 at 1.1 billion.
The Group will be announcing its preliminary results for the year ended 31 December 2011 on Tuesday, 20 March 2011.
Social Housing contract awards
The Group has continued to experience significant success in tendering new contract opportunities. In social housing we have won 44% by value of all contracts bid in the last nine months, with a total value in excess of 550 million. Since the interim management statement released on 10 November 2011, the Group has won new contract awards valued at 156 million (including extensions) as detailed below:
Gateshead Borough Council
Gateshead have notified the Group of its intention to award a 3-year partnership contract to provide responsive repairs, void services, gas servicing, cyclical maintenance and adaptations services. The contract is valued at 60 million for the initial 3-year period, with an option to extend for a further 2 years giving a total contract value of 100 million including extensions. We are to be appointed as sole partner to deliver these services to 21,000 properties. The contract, which is due to commence in April 2012, is subject to the satisfactory conclusion of the normal standstill period.
Tamworth Borough Council
A 5-year contract to provide responsive repairs and void maintenance, together with a range of reinvestment works. The contract is valued at 40 million over the initial five-year period and includes an option to extend for a further 2 years, giving a total contract value of 56 million including extensions. We have been appointed as sole partner to deliver these services to 4,500 properties
Domiciliary Care contract awards
In Domiciliary Care, our new contract bidding success rate (by value) is 69% of all contracts bid for in the last nine month period amounting to a total value of 60 million. Since the interim management statement released on 10 November 2011, the Group has been successful in winning a 2-year contract as a main provider to Warwickshire County Council valued in the region of 2.7 million and Sandwell Metropolitan Borough Council that is anticipated to be worth in the region of 2.8 million over a 2-year period.
We have also seen a positive period of contract retention on rebid including a 3-year contract with Rotherham Metropolitan Borough Council valued at 5.8 million and a 2-year contract with Sunderland City Council valued at 1.9 million.
We are particularly pleased to have won our first Specialist Care contract for people with complex needs. This contract, with Hartlepool Borough Council, was secured on the back of our acquisition of Choices and is valued at 1.0 million over a 3 year period. We are confident that we will now secure more contract wins in this area in 2012.
Commenting, David Miles, Chief Executive of Mears, said:
"Our Social Housing division has experienced a particularly strong period in contract tendering, securing new orders to the value of 550 million over the last nine months that has further strengthened our market leading position. The first quarter of 2012 will see the most intense period of new contract mobilisation in our history with five significant new contracts due to start on or around 1 April 2012 with an annual value of 50 million. Since my appointment as Chief Executive, I have focussed upon enhancing the senior management structure and the Group's operating capability which is key to ensuring these new contracts are brought on line with robust financial controls whilst maintaining service excellence.
"The Care market is going through a period of significant change and I am proud of the robust business we have established. We will continue to be at the forefront of change in the sector in 2012, helped in part by the development and roll-out of our new Care IT system. We will also target further acquisitions to broaden the diversity of Mears' Care offering along the services supply chain and to expand the range of services provided to people in their homes.
"I am delighted that we continue to achieve high levels of service delivery and customer satisfaction. The quality of our service delivery continues to be our key differentiator and underpins our new contract bidding success in both our core growth sectors."
Mears Group PLC
David Miles, Chief Executive
Tel: +44(0)7778 220 185
Andrew Smith, Finance Director
Tel: +44(0)7712 866 461
Bob Holt, Chairman
Tel: +44(0)7778 798 816
Joint Broker - Investec
Keith Anderson/Daniel Adams
Tel: +44(0)20 7597 5970
Joint Broker - Collins Stewart
Tel: +44(0)20 7523 8350
IR - Gable Communications
Tel: +44(0) 20 7193 7463
John Bick/Justine James
Tel: +44(0)7872 061 007
(tickers: MER.L MER.LN MERG.L MER.PL)
Mears is a leading social housing repairs and maintenance service provider to Local Authorities and Registered Social Landlords in the UK and, following the acquisitions of Supporta and Choices Care, now commands a leading position in the UK Local Authorities' outsourced care market, providing personal care services to people in their own homes.
Mears employs in excess of 12,000 people and provides maintenance and repairs services to in excess of 10% of the UK social housing stock. Mears also provides care to over 20,000 service users each week.
This information is provided by RNS