Construction News

Tue November 24 2020

Related Information

Mears takes £87m hit on repositioning

27 May Housing maintenance group Mears made a pre-tax loss of £62.0m in 2019, which the chief executive described as “a solid set of results”.

The loss was caused by an £87.2m loss from the discontinued domiciliary care business.

Mears grew its revenues in the year to 31st December 2019 by 13% to £982.6m (2018: £869.8m) driven by the acquisition of MPS Housing, a maintenance business that added £119m to revenue,  and the start of three government contracts to house asylum seekers, together work £1bn in revenue over 10 years.

However, administrative costs outstripped gross profit, to leave an operating loss for the year of £53.7m (2018: operating profit of £30.7m).

Adding in finance costs and tax bills left Mears with a bottom line loss for the year of more than £66m (2018: £24.8m profit).

The red ink was caused by a repositioning of the company, quitting the domestic care business that it thought a good idea to move into just a few years ago.

Care activities have now been accounted for as discontinued, resulting in Mears showing an aggregate loss before tax on discontinued activities, including the impairment of goodwill and fixed assets, of £87.2m.

Ignoring all the bad stuff, profit on continuing activities before tax, exceptional costs and the amortisation of acquisition intangibles increased to £37.3m (2018: £36.8m).

This prompted chief executive David Miles to comment: "I am pleased with the progress of the group in 2019. We have achieved a solid set of results in a year of political and economic uncertainty, along with delivering a significant repositioning of the business into a more simplified structure as the UK's leading provider of housing solutions.”

Got a story? Email news@theconstructionindex.co.uk

MPU

Click here to view more construction news »