Since the time of the half year results on 12 August 2021, trading across the Grouphas continued to strengthen.
Based on the performance to date and with good visibility through to the end of the year, it is now expected that the Group will deliver revenues for the full financial year to 31 December 2021 of c.£850m slightly ahead of management expectations and adjusted profit before tax (*1) of c.£25m, towards the top end of its previously stated range (*2).
This improved trading performance has been driven by good demand in reactive maintenance as clients prioritise the clearance of repair backlogs and by continued elevated volumes within the Group's Management-led contracts.
As previously referenced planned maintenance revenues have been slower to return to pre-pandemic levels. Inflation in the supply chain and the availability of materials and labour costs have remained manageable.
Cash generation, debt reduction and working capital management remain key objectives for the Group. Average daily net debt for the 10 months to 31 October 2021 ofc.£5m is running significantly ahead of previous guidance for full year of £25m (*3).
Looking to FY2022, the expected normalisation of Management-led volumes and slowerrecovery in planned maintenance will impact revenues, partially offset by MOJ and other 2021 business wins, supplemented by indexation ratchets within contracts.
Further progress is still expected on operating margin improvements, despite industry-wide cost pressures within the supply chain, which are not expected to abate near term.
David Miles, Chief Executive Officer of the Group, commented:
"I am delighted at the strong financial performance of the Group and the business remains firmly on track to deliver revenues and adjusted profit before tax for the full financial year at the top end of our previous guidance.
We are trusted partners to our clients and our customer and colleague satisfaction data remain at the high levels we demand of ourselves, despite a challenging operating environment.
"With these fundamentals of our business in such good shape and the long-termchallenges 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."
Forfurther information, contact:
Mears Group PLC
DavidMiles, Chief Executive Officer
AndrewSmith, Finance Director
AlanLong, Executive Director
JoeThompson, Investor Relations Tel: +44(0)7980 844 580
The person responsible for arranging the release of this announcement on behalf of Mears Group PLC is Ben Westran, Company Secretary.
NOTES
*1. Adjusted profit before tax stated on continuing activities beforenon-underlying items and before the amortisation of acquired intangibles.
*2. FY2021 guidance provided on 12/08//21 of revenue of c.£840m and adjusted profit before tax in the range of £23.0-25.5m and average adjusted daily net debt ofc.£25m.
*3. Includes the benefit of £16m of VAT deferral re-paid in full in March 2021.
About Mears
Mears currently employs around 6,000 people and provides services in every region of the UK. In partnership with our Housing clients, we maintain, repair and upgrade the homes of hundreds of thousands of people in communities from remote rural villages to large inner-city estates.
Mears has extended its activities to provide broader housing solutions to solve the challenge posed by the lack of affordable housing and to provide accommodation and support for the most vulnerable.
We focus on long-term outcomes for people rather than short-term solutions and invest in innovations that have a positive impact on people's quality of life and on their communities' social, economic and environmental wellbeing.
Our innovative approaches and market leading positions are intended to create value for our customers and the people they serve while also driving sustainable financial returns for our providers of capital, especially our shareholders.
