TIDMMER
RNS Number : 9545I
Mears Group PLC
08 December 2022
Mears Group PLC
("Mears", the "Group", or "the Company")
Trading Update and Board Changes
Trading Update
Mears (LSE: MER), the UK Housing solutions provider, today
provides an update on current trading and the outlook for its
financial year to 31 December 2022.
Since the half year results which were announced on 4 August
2022, the Group has continued to experience strong trading. Based
on the performance to date, and with good visibility through to the
end of the year, the Board now expects that the Group will deliver
revenues for the full financial year to 31 December 2022 of
c.GBP950m and adjusted profit before tax of c.GBP33.5m, both above
the current range of market expectations. This better-than-expected
trading performance has been driven by the continued elevated
volumes within the Group's Management-led contracts. Average daily
net cash for the 11 months to 30 November 2022 of c.GBP40m is also
ahead of previous guidance.
The Group has been bidding several material contract
opportunities during the second half and is pleased to have been
short-listed in respect of the re-tender of the North Lanarkshire
Future Integrated Housing Service contract, estimated at GBP1.8bn
over 15 years . The anticipated commencement date for the new
contract is January 2024. In addition, the Group is awaiting the
outcome of the Community Accommodation Services (CAS3) tender to
the MoJ. Mears currently delivers services within two pilot areas
in the UK, and the new bid relates to a national roll-out. Mears
bid on 8 of the 10 areas, with an aggregate annual contract value
of more than GBP20m.
The Board is confident in the outlook for 2023 and is focused on
continuing to improve the operating margin and delivering strong
cash generation.
Board Changes
Chairman succession
Kieran Murphy joined the Board as Chairman in January 2019, led
the Board through a very challenging period, and oversaw a
strategic transformation of the business that resulted in the
simplification of the Group, the disposal and closure of non-core
businesses, and a very significant strengthening of cash flow
generation and the balance sheet. With this achieved, Kieran has
indicated to the Board that he wishes to pursue new opportunities
elsewhere and to step down from his role as Chairman. Accordingly,
he will not seek re-election at the Group's AGM in May 2023.
Consequently, Chris Loughlin, Senior Independent Director, will
become Chairman following the 2023 AGM. Chris has been a
Non-Executive Director at Mears since September 2019.
CEO succession
Lucas Critchley will be appointed to the Board as Executive
Director on 1 January 2023. Lucas joined the Group in 2004 and has
held senior roles across the Group. He possesses significant
experience in the delivery of contracts to Local and Central
Government clients, and shares Mears' commitment to partnering and
excellence in Customer Service. The appointment of Lucas is in line
with our previous announcement on the 27 May 2022, relating to the
planned succession to the current Chief Executive Officer, David
Miles. David will work towards his planned retirement from the PLC
board after 27 years. This transition is well under way, and it is
intended that Lucas will become CEO during 2023.
Other changes
Alan Long has indicated that it is his intention to retire from
Mears and resign his position as Executive Director of Mears on 31
December 2022. The Board, and senior management team, conveys its
thanks for the significant contribution that Alan has made over a
period of 17 years and offers Alan its best wishes for the
future.
Claire Gibbard, Employee Director, having reached the end of her
term in office, will resign as Director at the year end. The Board
would like to thank Claire for her input and support. The Board is
pleased to announce the appointment of Hema Nar as the new Employee
Director. Hema, who will be appointed as a Director on 1 January
2023, has been employed by the Group since 2020, working as a Bid
Manager within the Business Development function. The Board
recognises the potential for improving the quality of
decision-making through effective engagement with employees. The
Employee Director appointment has created another mechanism to help
the Board to receive insight from and promote effective
communication with our colleagues across the country.
David Miles, Chief Executive Officer, commented:
"I am delighted with the strong financial performance of the
Group and the business remains firmly on track to deliver revenues
and profit before tax for the full financial year above our
previous guidance. Our market leading position, based on a clear
strategy and resilient operating platform, is underpinning current
momentum and positions the Group for further sustainable growth in
the medium-term.
"It is with some sadness that we wish Alan Long farewell, and we
wish him a long and healthy retirement. I would personally like to
put on record my thanks for his dedication, support and loyalty
shown over many years."
Chris Loughlin, Senior Independent Director commented:
"Kieran has presided over a period of tremendous change at Mears
and successfully guided the Group to its current strong position.
He will leave the Group in an excellent position to capitalise on
the opportunities which are available to it. On behalf of the
Board, I would like to express our gratitude for his leadership and
the contribution which he has made. I am delighted to succeed him
as Chairman, and I welcome the opportunity to work with the
Executive Team to continue the Group's success in its core
markets."
Kieran Murphy, Chairman, commented:
"Given Mears' transformation, I consider it an opportune time
for me to hand over the reins. I give my best wishes to Chris,
David, and Lucas as they look to continue the Group's success."
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
David Miles Tel: +44(0)7778 220 185
Lucas Critchley Tel: +44(0)7843 366 446
Andrew Smith Tel: +44(0)7712 866 461
www.mearsgroup.co.uk
About Mears
Mears is the leading provider of services to the Affordable
Housing sector in the UK: responsible for the maintenance of c.10%
of the UK's social housing stock; and managing over 10,000 homes
for local and central government.
Mears currently employs around 5,500 people and provides
services in every region of the UK. In partnership with our Housing
clients, we maintain, repair, and upgrade the homes of hundreds of
thousands of people in communities from remote rural villages to
large inner-city estates. 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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