Mears Group 2017 Final results
Group revenue of £900.2m (2016: £940.1m), impacted by both delays to the timing of planned workloads following the tragic events at Grenfell Tower and a slow period in securing new contract revenues in Housing, combined with the planned rationalisation of Care contracts.
Group profit before tax and before amortisation of acquisition intangibles reduced to £37.1m (2016: £40.1m), with the diluted EPS reducing by 8% to 28.05p (2016: 30.36p).
Housing operating margins reduced to 5.2% (2016: 5.6%), reflecting the revenue reduction and a resulting lower overhead recovery.
Service quality remains our key differentiator; the proportion of customers rating our service as 'excellent' showed further improvement at 92% (2016: 91%).
Care revenue decreased by 12% to £134.1m (2016: £152.6m), reflecting the restructuring of the Care contract portfolio following the closure of branches accounting for around 27% of Care revenues. The restructuring is now complete and our remaining Care contracts have a much improved mix of longevity, certainty of spend and price.
The Care division returned to profit as planned, delivering an operating profit for the full year of £0.5m (2016: loss £1.2m), representing an operating margin for the second half of 2.3%.
Exceptional loss of £16.5m reported in discontinued activities relating to the full provision against performance guarantees in the legacy M&E division.
EBITDA to cash conversion of 61% (2016: 70%) is below our historical norm reflecting the changing sales mix.
Reported net debt position of £25.8m (2016: £12.4m) at the year end. The average net debt over the year was £96.4m (2016: £85.0m), in part reflecting the changing sales mix and after funding of both the deferred consideration on earlier acquisitions and the cash outflow included within the loss on discontinued activities.
New separate debt facility of £30m to fund short-term purchase of properties as part of the Group's development of longer-term homelessness solutions.
Total dividend increased by 3% to 12.00p (2016: 11.70p), reflecting the Board's confidence in the underlying performance and the long term prospects of the Group.
Order book at £2.6 billion (2016: £3.1 billion). The current bidding pipeline is in excess of £2 billion for 2018, which is well in excess of normal bidding levels. The strategic evolution of Mears means greater access to opportunities previously out of our reach.