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Interim Results

Mears to lose profits after Grenfell Tower fire

15 August 2017 07:38

Housing and social care provider Mears said its housing revenues will be £30 million lower than previously expected this year, resulting in a loss of profit and lower overhead recovery.

It warned that the recent tragic events at Grenfell Tower will impact the housing division as clients review the commissioning and safety practices at their properties.

"These unexpected events will inevitably impact the timing of our planned workloads as clients' attentions have naturally been diverted towards ensuring that their housing portfolios are safe and fully compliant," the company said.

It expects housing revenues of around £800m in 2017, compared with its previous expectation of £830m.

Housing margins will be between 5.3% and 5.5% rather than the previous expectation of 5.6% to 5.8%.

In the first half, Mears' revenue increased by 1% to £470.8m, with adjusted profit before tax up 1% to £18.3m.

The housing division, which accounts for 85% of group revenues, reported revenues of £402.1m, representing organic growth of 3%.

The care division saw revenues decline by 10% to £68.7m, which the company said reflects significant progress in securing new contracts to replace the lost revenues following the closure of sub-optimal branches.

The company declared an interim dividend of 3.45p, an increase of 5% year-on-year.

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