Social housing specialist posts improved results and warns rivals hold 鈥渦nsustainable鈥� contracts
Social housing specialist Mears Group has posted a 36% jump in pre-tax profit to 拢29.7m for 2014, up from 拢21.7m the previous year, the company has said.
Revenue was down at 拢838.7m from 拢865.6m, but the operating margin in its social housing work increased to 4.8% from 4.5%, which Mears said was driven primarily by improving margins generated from the former Morrison business, which it .
Mears also said it had won new contracts worth more than 拢300m, split between 拢170m in social housing and 拢130m in its care homes business.
The company argued its acquisition last October of will help it win work in the sector by enabling it to package up these services with its existing construction and maintenance offer.
Mears鈥� order book at stood at 拢3.3bn, against 拢3.8bn at the end of 2013, but the company said it had a 鈥渟olid pipeline of new opportunities鈥�.
Chief executive David Miles warned that some of Mears鈥� rivals hold unsustainable housing maintenance contracts.
Miles said: 鈥淲e have become more aware this year of a material number of contracts held by competitors that are unsustainable either in terms of service delivery, financial viability or both.
鈥淲e are confident that, over the next 18 months, our patience will be rewarded and our differentiated model vindicated, as these contracts reach breaking point.鈥�
Commenting on market opportunities for Mears, Miles said: 鈥淚 believe the opportunities for us in social housing remain very strong as our clients seek broader solutions to their increasingly complex housing challenges.
鈥淥ur core maintenance business is performing well and I believe we can deliver solid growth in that area through providing 鈥榤ore of the same鈥�.
鈥淲e have been focused over the last twelve months on providing a broader housing offering to our customers, mirroring our clients鈥� changing needs. For instance, our investment in housing management and our development of new forms of partnering arrangements are key highlights.鈥�
Miles said the care business continued to see 鈥渁 positive move in the structure of tendered opportunities with new contracts being awarded to fewer providers but with increasing contract lengths鈥�.
He added: 鈥淲e are confident that further opportunities in care will grow from health and social care outsourcing and the implementation of new localised commissioning models.鈥�
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