Mears reports profits boost on back of contract wins
Mears has won more than half of the contracts it has bid for since January, with profits jumping by seven per cent as a result.
The social housing and care support services specialist said it has benefited from winning work previously held by the collapsed Connaught and Rok.
The company reported a 16 per cent rise in revenue, from £252.6 million to £292.6m in the six months to 30 June 2011, along with a 7 per cent increase in adjusted pre-tax profit from £13.2m to £14.1m.
Mears said it had experienced “unprecedented levels of opportunity in the public sector” and reported an order book totalling £2.7 billion (2010: £2.6bn).
Chief executive David Miles said he took “great comfort” in the fact the company is increasing its market share. “I think a lot of people last year said it would be very tough in housing and care.
“I said, ‘Look, it will be tough, but with our long-term response maintenance contracts and our long-term relationships, I don’t see for one moment that they will come under margin,’ so I’m delighted that what I predicted has turned out to be absolutely correct,” he said.
Mr Miles described the win rate, which is usually at around one in three, as a ‘purple patch’.
He said: “If you asked me the same question in six months’ time and it has stayed at one in two, then I could answer it, but at the moment it seems like a purple patch.
“The key is not going for quantity; it is going for contracts that you genuinely believe you have a chance of winning.”
Mr Miles said some clients are looking to mitigate risk by taking on more than one provider, while others are pursuing more robust checks.
While there are no plans for acquisitions on the housing side, the company is looking at two or three large businesses to boost its care provision and enable it to offer a wider service.
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