Mears (MER) ditched its Haydon mechanical and electrical business last year to focus purely on social housing and care. That disposal, together with the bedding down of the November 2012 acquisition of social housing maintenance company Morrison, made 2013 something of a transition year.
The statutory figures shown in our table were hit by £18.8m of exceptional costs from discontinued operations and £6.5m of one-off restructuring and integration costs relating to Morrison. On a cleaner, adjusted basis, earnings per share rose 10 per cent to 28.1p, as underlying operating profit from social housing leapt 42 per cent to £33.5m. On the same basis, broker Liberum expects adjusted EPS of 32.6p this year.
Chief executive David Miles believes both the care and social housing markets in which Mears now operates are "underpinned by long-term trends" such as increased outsourcing, the social housing shortage and an ageing population. Following over £500m of new contract wins in 2013, the group's order book stands at a chunky £3.8bn. Although flat year on year, that order book continues to give excellent visibility over future revenues. Mears has 92 per cent of consensus forecast revenue for 2014 already in the bag and 70 per cent of 2015 forecast revenue.
| MEARS (MER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 492p | MARKET VALUE: | £496m | |
| TOUCH: | 492-494p | 12-MONTH HIGH: | 525p | LOW: 317p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 179p* | NET DEBT: | £0.5m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 470 | 18.4 | 18.8 | 5.7 |
| 2010 | 524 | 16.4 | 17.7 | 6.75 |
| 2011 | 589 | 20.6 | 19.9 | 7.5 |
| 2012 | 617 | 20.0 | 19.6 | 8 |
| 2013 | 866 | 21.7 | -1.2 | 8.8 |
| % change | +40 | +9 | - | +10 |
Ex-div: 11 Jun Payment: 3 Jul *Includes intangible assets of £194m, or a 192p share | ||||
