Profit up 7% as firm wins 56% of social housing jobs it bids for
Social housing contractor Mears has announced half year pre-tax profit up 7% to £14.1m after successfully winning more than half the contracts it bids for.
The firm, which also runs a major business providing home care, said six month revenue to 30 June overall increased by 16% to £292.6m on the same period last year.
Revenues in its social housing business grew by 12% to £207.2m, with the operating margin growing to 5.5%. It picked up £268m of new social housing contracts in the period, 56% of the jobs it bid for.
David Miles, chief executive, said the firm had benefitted from the collapse of Rok and Connaught. He said: “The first half of the year has delivered excellent progress against our strategic objectives.
“We have secured significant work in the emerging environmental improvement space and in the bid room we have benefited from winning work previously held by Connaught and Rok. This has been achieved during a period of significant public sector change.”
The firm said its social housing pipeline now amounted to £3bn, with contracts from Barnet Homes, Notting Hilll Housing and Arun council worth a total of £87.5m flowing from the collapse of Connaught.
It has also picked up a £21m contract with Neath Port Talbot Homes through the former Rok businesses it acquired in Bristol in November.
However, the business said it had seen an £18m reduction in work through the Decent Homes programme in the past six months, as the government spending on improving social housing stock comes to an end. In total it said revenue from decent homes will fall by £30m both this year and next.
The firm said it saw no “significant margin pressure” on new contracts, despite the current speculation around the sector, but warned that new responsive maintenance work which was increasingly replacing Decent Homes jobs was inevitably at a lower margin “through their early stages.”