Mears Group
Interim results for the 6 months ended 30 June 2021
12August 2021
EXECUTIVE
SUMMARY
"The Group has performed well and traded resiliently
through another lock-down
impacted reporting period.
The business is in good shape and with the long-term challenges of affordable
housing, public health and
climate change high on the political agenda at local and central Government, we look forward to the future with confidence."
Key themes
Financial highlights
Operating highlights
Key messages
- Good revenue recovery as Covid-restrictions eased
- Group revenues £443.7m +11.8% (yoy)
- Maintenance-led+7.3%
- Management-led+15.1%
- Profitability strengthened towards normalised levels
- Adjusted operating profit (pre-IFRS 16) £13.7m (3.1% margin)1
- Adjusted profit before tax of £11.1m (H1 2020: £8.1m loss)1
- Cash conversion remains high
- Average daily net debt £8.2m (FY 2020: £97.3m)
- Restoration of dividends and updated guidance for FY 2021
- Successful transition back to normal commercial mechanisms
- MoJ contract win - Mears seen as a trusted housing specialist by central Government
- Solid pipeline conversion with > £150m of contract wins year-to-date
- 60% success rate in Maintenance year-to-date
1.Adjusted profit / (loss) measures on continuing activities before non-underlying items, the amortisation of acquired | 2 |
intangibles but inclusive of share of profit from associates. |
OPERATIONAL DELIVERY
Customers | Clients |
Workforce
"The 'Mears Operating Model' is responding very
well to client, customer and
Customer service levels remained high
- Internal and external (NPS) customer satisfaction scores remain above benchmarks
Successful transition back to normal operating and commercial mechanisms across the Group
• Almost all Maintenance |
contracts are back to normal |
Mears self-delivery model and high employee engagement helping to mitigate impact of labour shortages across the sector
• Retained Sunday Times "Top |
employee needs through this difficult period of unlocking."
80%
70%
60%
50%
40%
30%
20%
NPS (Last 12 months)
Sector group - high1
Sector group - average1
commercial mechanisms | |
• | R&M volumes returning to |
normal levels, but planned | |
works building more slowly | |
• | Good pipeline conversion |
25 Best Big Companies in the | |
UK to Work For" accreditation | |
• | Mental health awareness |
training | |
• Retained Social Mobility and | |
Diversity accreditations | |
• | Employee turnover remains |
low |
Return to the office going well
retaining the 'best of both worlds'
• Covid-related innovations in |
remote working and |
10% | Sector group - low1 |
0%
communication |
• Face-to-face service delivery |
1. Sector group high, low and average, based on research performed by SMOKE Customer Intelligence (www.smokeci.com), taking into account over 35,000 responses to | 3 |
the NPS (Recommend) question from different "services" companies they work with. 2. The Mears customer engagement forum (inde pendently supported and verified by the |
Centre for Governance and Scrutiny a national charity specialist in all aspects of governance).
HIGH QUALITY ORDERBOOK AND EXCELLENT PIPELINE CONVERSION
"£2.5bn high quality orderbook and pipeline building."
Commentary
£2.5bn orderbook as 30 June 2021
- Benefitted from good conversion
- Improved orderbook quality and visibility
- H1 2021 order intake > £150m (> £250m incl. extensions) (Redbridge, Angus (new), Leeds, Lambeth Gas)
- Win rate c. 60% by value (Maintenance)
-
Other live bids: > £360m (>£580m incl. extensions) (Moat, Tower Hamlets, but excluding North Lanarkshire
- see next slide and RLAP) - Still awaiting RLAP (Retention) decision
Ministry of Justice
Client:
- Ministry of Justice, HMPPS
Services provided:
- Housing property management, maintenance and welfare support
- Supporting low and medium risk released prisoners from initial accommodation into a settled home
Opportunity:
- Current contract is a good fit in terms of scale, scope, and core competencies required
- Partnering approach with another central Government department
- Opportunity to develop longevity and scale of relationship
Regions:
- North East and North West
Key terms:
- No void risk
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NORTH
LANARKSHIRE -
INTEGRATED
CONTRACT
OPPORTUNITY
"An initial bid has been submitted for North Lanarkshire's integrated housing services contract,
which would represent one
of the largest local authority contracts ever tendered."
Current Repairs &
Maintenance
contract
£55m pa
(since 2012)
New contract(s)
Other FM &
Infrastructure
Services
£50-150m pa
(20 years)
Future
Integrated
Housing
Services
Contract
£120-150m pa
(20 years)
Mears tender process
- Mears bid submitted June 2021
- Very positive feedback on quality of submission
- Will progress to next round
- Client sticking to its initial principles:
- 80/20 Quality/Pricing approach
- Longevity of relationship
- An integrated partnering led approach
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Disclaimer
Mears Group plc published this content on 12 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2021 08:30:03 UTC.