Mears housing division recovers as Grenfell spending pause ends
Mears has secured new contract wins worth around £70 million and said its pipeline of new housing work bids was ‘considerable’.
Social housing and support services provider Mears Group said sales in its housing division have stabilised as clients restart projects in the wake of the Grenfell Tower tragedy.
In an update ahead of its first-half results, the group said clients have now completed the assessment of their housing portfolios, with an increased focus on safety and compliance.
Mears has secured contract wins worth around £70 million and said its pipeline of new housing work bids was “considerable”, including two “very significant” opportunities.
The group had warned last August that the Grenfell fire – just over a year ago – would lead to a profits hit in 2016-17 as housing clients delayed new projects while reviewing the commissioning and safety practices at their properties.
With these safety and compliance checks now complete, firms have been putting work out to tender again, with Mears picking up a number of projects, including a £62 million contract to deliver repairs and maintenance services to Riverside Housing Association.
The five-year contract covers more than 11,500 homes across the Midlands, East Anglia and South of England, and there is the option for it to be extended for another five years.
Mears said its care division also had a good first half, “reflecting a successful restructuring of the business and a balance of better quality contracts”.
David Miles, chief executive of Mears, said: “The current pipeline of opportunities is particularly exciting.
“The strategic evolution of our business means we are gaining access to opportunities that previously would have been out of our reach and the senior team is very focused on converting these into secured orders.”
Shares lifted 3% after the update.
Analyst Andrew Nussey at Peel Hunt said: “Overall, the statement should provide investors with further reassurance that Mears continues to make both operational and strategic progress.”