Social housing firm Mears expects to expand its revenue and workforce by 10% over the next year after picking up more than £100m of contracts from collapsed rival Connaught, writes David Matthews.
Chairman Bob Holt (pictured) said the Comprehensive Spending Review was “positive” for the social housing firm because it would increase local authority outsourcing. He expected
revenue to grow despite cuts of 70% to the housing and regeneration budget.
“We’ve got about 12,000 employees at the moment, and that should increase by at least 10% by next year,” he said.
He predicted an equivalent 10% rise in revenue over the next 12 months and further growth after that. “We expect revenue to increase this year and next,” he said.
But in an interim management statement to the City on Tuesday, Mears admitted that revenue growth in social housing for the current year would be “marginally below” previous expectations.
It said it had picked up four former Connaught contracts potentially worth more than £100m.
We’ve got 12,000 employees at the moment, and that should increase 10% next year
Bob Holt, Chairman, Mears
These include a £48m contract for capital and cyclical works with Homes for Islington, a decent homes contract for the London borough of Lambeth, and two contracts with Exeter council worth up to £20.5m.
Mears, which is based in Gloucester, took on an undisclosed number of Connaught’s contracts for a nominal sum following its collapse in September The four-year Homes for Islington job could beextended to a decade, a move that would increase its value to £120m.
Mears added that mobilisation costs for the extra work would come to about £600,000.
The company said it remained in discussion with a number of other former customers of Connaught.
It also announced a £300m,10-year job for housing association Family Mosaic to provide a 24-hour call centre, as well as responsive repairs and estate management services.
Mears said it had a bid pipeline “in excess” of £3bn, and an order book of £2.6bn.