LONDON (ShareCast) - (ShareCast News) - Mears Group cut its full-year revenue forecast from Housing as a result of the Grenfell Tower Fire in June, saying that clients would delay planned work orders as they went about "ensuring their housing portfolios are safe."
The social housing support service firm expected those delays to cost it somewhere in the vicinity of £30m in lost sales, cutting its projected annual revenues from Housing down to about £800m.

David Miles, chief executive, of Mears, said, "Whilst the likely revenue shortfall for the full year is frustrating, it is entirely understandable in the circumstances and the group will be working closely with its partners and clients at this time to address their immediate priorities."

Management indicated that a review had found that none of the facade systems it had installed over the past five years employed Aluminium Composite Material, the cladding that was thought to be responsible for the speed at which the fire had spread at Grenfell.

Furthermore, the work delays were only expected to be temporary.

Financials were flat across the board for the six months to 30 June, £470.8m in total revenue was reported, a 1% increase on the £466.2m achieved in the comparable period one year before.

Within that, Housing revenue increased 3% on an organic basis while sales at its Care Division fell by 10% to £68.7m.

Pre-tax profit was even year-on-year at £12.7m and the company's operating margin dropped to 4.1% from the 4.2% it had reported at the same time last year.

Meanwhile, statutory diluted earnings per share were down 1% to 9.86p.

Net debt rose from £14.1m to £19.6m reflecting increased working capital needs to suppotr new contract mobilisations in 2016.

In turn, that saw cash conversion slip to 70% of EBITDA from continuing operations over the past 12 months, but on a full-year basis it was expected to revert to the historic range of between 90% to 100%.

Mears upped its interim payout by 5% to 3.45p.

"Our order book remains strong and the Board remains confident in the Group's future prospects."

As of 1245 BST, shares had dropped 24.70p to 453.23p.

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