Mears hails first-half profit rise, notes 'uncertain' contract revenue
Mears Group PLC on Thursday reported higher profit in the first half and backed a full-year profit outlook ‘modestly ahead of market expectations’.
The Gloucester, England-based provider of housing and social care posted £32.0 million in pretax profit for the six months that ended June 30, 4.9% above £30.5 million a year ago, and raised its interim dividend per share to 5.60 pence from 4.75p on-year.
Still, revenue decreased 4% over the first half to £559.24 million from £580.0 million, as a £42,700 decline in Management revenue offset a £22,100 rise from Maintenance.
The slowdown in Management activities was partly attributed to an asylum support & accommodation contract with the UK government. Mears said the timing of revenue normalisation related to the contract was ‘uncertain’, with ‘clear political drive to see all hotel accommodation exited during 2026’.
‘The government has commenced preliminary market engagement to validate the strategy for future asylum procurement and the replacement of AASC...with the new contract currently estimated to start in September 2029. The group considers itself to be well-placed to play a role in the long-term provision of services to this vulnerable service user group,’ Mears said.
A fifth round of share buybacks was completed in the first half, as Mears repurchased 4.3 million shares at an average 371p each for an estimated total of £16 million.
Mears reiterated guidance for full-year adjusted pretax profit ‘modestly ahead of market expectations’. Back in June, the firm set a minimum target of £54 million, compared to company-cited consensus of £50.9 million.
The company’s shares traded 0.1% lower at 384.50p on Thursday afternoon in London.
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