Mears hit by disposal of domiciliary care business

Housing services provider and maintenance group Mears has reported a pre-tax loss of £62 million in 2019 as it continues its exit from the domiciliary care business.

Mears hit by disposal of domiciliary care business

The England and Wales domiciliary care business was offloaded to Cera Care Operations for £5m in February, and the group is looking to sell its Scottish unit “in the coming months”.

The repositioning to date has cost the firm £87.2m.

Elsewhere, the group was awarded three of the seven regional Asylum Accommodation and Support contracts, being Scotland, Northern Ireland and the North East of England, with a total contract value estimated at £1 billion over a ten year term.

The mobilisation of the work commenced in January 2019 and all three contracts were fully operational by September 2019.

The company said: “Mears has made an immediate impact, transitioning an inherited housing portfolio which included some unresolved legacy issues, towards an improving mix of quality and longevity.  Mears has a clear plan to continue this migration over the next two years.

“Early indications are that volumes may exceed tendered assumptions, which is positive for Mears. The mobilisation has proceeded well. This remains an area of intensive focus. Mears remains on-track to deliver in line with its original plan.”

These contracts, added to the acquisition of maintenance business MPS Housing, saw Mears increase its revenues in the year to 31st December 2019 by 13% to £982.6m (2018: £869.8m).

However, accounting for administrative costs, operating loss for the year totalled £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).

Chief executive David Miles said: “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.”

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