Mears H1 profit seen 'modestly ahead' of expectations

(Sharecast News) - Mears Group said on Tuesday that first-half profits are set to be "modestly ahead" of the prior year and consensus expectations following strong trading. Given the "positive trends" seen in the first half, the company - which provides services to the UK housing sector - now expects revenues and adjusted pre-tax profit of not less than £1.06bn and £54m, respectively. Consensus expectations are for £1.06bn and £50.9m, respectively.

Mears pointed to solid growth in its maintenance-led activities in the first half, driven by regulatory market drivers increasing spend from the group's registered provider clients and further underpinned by the 100% contract retention reported over the last 12 months.

As expected, management-led activities have continued to normalise as asylum related contingent solutions are replaced with long-term residential accommodation, it said. "This transition continues to be managed well," Mears added.

The company said operating margins have continued to strengthen and profits have again been underpinned by strong operating cash flows.

Chief executive Lucas Critchley said: "Trading in the first half has been excellent across the group.

"We have continued to make progress against each of our key strategic goals; delivering growth in maintenance activities, developing a full compliance and asset management offer, and positioning the group to deliver additional housing services to Central Government."

At 1000 BST, the shares were up 2.8% at 398.50p.