Mears confident on outlook but sees delays to bids

Mears Group said it had an order book of £2.5bn and was confident about its outlook though Covid-19 could cause delays to contract bids in the current year.

Posting annual results the housing services company said its order book fell from £2.9bn but this was expected after a large increase a year earlier.

Pretax profit for the year to the end of December fell 8% to £25.2m as revenue rose 13% to £982.6m. Pretax profit from continuing activities before exceptional costs and amortisation rose 1% to 37.3m as revenue from continuing operations rose 17% to £905.1m.

As announced in March, the company paid no final dividend for 2019 to conserve cash during the Covid-19 crisis.

"It remains the board's intention to adopt a progressive dividend policy once it is confident that activity levels and the group's financial position make it prudent so to do," Chairman Kieran Murphy said.

Mears said it expected the housing market to continue growing because of the shortage of property to live in. The company said it had new orders with a value of £220m though total bidding activity of £570m was lower than expectations and the norm of about £1bn. It said the contract value of bids and rebids in 2020 would be about £1bn, of which 65% is rebids, playing to its strength in resecuring work.

Chief Executive David Miles said the timing of bids and rebids may be affected by the Covid-19 crisis.

Miles said: I am pleased with the progress of the Group in 2019. We have achieved a solid set of results in a year of political and economic uncertainty … 2020 has brought challenges that were unforeseeable only a few weeks ago.

"The board will continue to navigate the current difficult circumstances with a concerted focus on short term operational and financial management but also with a determination to preserve sufficient resource with the requisite expertise for the Company to prosper in the medium term when more normal economic conditions return."