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Mears soars despite drop in m&e profits

Haydon M&E has seen revenue rise dramatically, but operating margins fall as parent group Mears announced strong growth and a record order book.

The interim result released by Mears for the first six months of the year showed group turnover was up 48.5 per cent to £203.3million compared to the same period last year, while operating profit was up 38.1 per cent to £9.9mill.

Mears said growth was driven by strong demand in social housing especially for repair and maintenance and Decent Homes schemes.

Meanwhile, the M&E division – which includes Haydon – saw turnover rise £10mill to £36.9mil, but, operating margins fell from 3.7 per cent to 2.1 per cent meaning operating profits dropped from £982,000 to £759,000.

Bob Holt, chairman and chief executive, was upbeat about Haydon’s prospects and promised operating margins would increase and there are plenty of opportunities in the education and health sectors. 

He said: “Haydon, our Mechanical and Engineering subsidiary, again made a significant contribution, both in terms of turnover and operating profit, to the Group’s first half results and is expected to improve further in the second half with increased margins.

'This is a sound and well managed business which has currently secured 100 per cent of consensus forecast revenues for 2008 and 68 per cent for 2009.

“The M&E margin is in line with expectations and consistent with the significant increase in turnover and the reduced ability to recognise profit on a number of projects in their early stages.”

Mr Holt said other highlights included securing new contract awards of £430mill, a forward order book of £1.7 billion and a “strong” forward bid pipeline.

He said: “Mears is in good shape to achieve further growth across all areas of business.”