LONDON (ShareCast) - (Sharecast News) - Housing services provider Mears Group saw its first half revenue slide to £407m from £439.2m, it reported on Tuesday, as it swung to an operating loss of £6.7m, from a profit of £18.1m a year earlier.
The London-listed firm said its adjusted operating loss for the six months ended 30 June came in at £1m, compared to a profit of £22.7m 12 months prior, as it reported statutory diluted losses per share of 8.98p, from earnings of 8.78p in the first half of 2019.

Normalised diluted losses per share were 4.28p, plunging from earnings of 11.99p, as the board declared no interim dividend, compared to the distribution of 3.65p per share a year ago.

Average daily net debt stood at £121.2m at period-end, rising from £110.7m at the 2019 interim.

On the operational front, the board said the company had adapted quickly to new methods for managing the business amid the Covid-19 pandemic, benefiting from investment in people, customer relationships and IT systems in prior years.

It said it saw "good" operational and service-level performance in the first six months under challenging conditions.

The coronavirus pandemic and lockdown required many of Mears' maintenance contracts to move to an emergency-only basis, resulting in short-term reduction in volumes, revenues and profits.

Interim customer arrangements reduced much of the financial risk, however, and provided consistency of contract cash flows.

The tendering process for new maintenance contracts was impacted by Covid-19, although new contracts were secured to the value of £120m, a win rate by value of over 80%.

Mears said the group order book stood at £2.7bn at the end of the first half, in line with where it was a year ago, and reflecting a number of new contract extensions.

It completed the disposal of the England and Wales domiciliary care business during the period, in line with its stated strategy, and increased its facilities to £192.7m from £170.0m as a precaution during the pandemic.

Headroom remained "satisfactory", the board said.

The directors added that they believed it "inappropriate" to declare an interim dividend, although it intended to return to a progressive dividend policy once it was confident that activity and working practices had returned to normal.

"The Mears business has acted with a great sense of responsibility and professionalism during the Covid-19 pandemic, both in terms of ensuring the ongoing resilience of our operations and supporting the communities where we work," said chief executive officer David Miles.

"Inevitably, the Covid-19 crisis has impacted short-term financial performance in these results, particularly as maintenance contract volumes reduced to emergency-only to protect the safety of staff and service users alike."

Miles said activity levels were returning to "normal", adding that he was "very confident" as to the financial stability and the long-term wellbeing of the firm.

"The group has taken positive and considered actions during the Covid-19 period to ensure that the group is stronger than ever and well positioned once the UK sees a return towards normality."

At 0852 BST, shares in Mears Group were up 8.45% at 125.26p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE