Social housing and home care outsourcer Mears (MER) has its hands full turning around its acquisition of loss-making social housing competitor Morrison - restructuring costs are forecast to rise to £6m in the year ahead. Strip out £1.9m in restructuring and acquisition costs, and group adjusted pre-tax profit rose 7 per cent in 2012 to £33.6m - at the lower end of market expectations.
The social housing division did grow revenue 22 per cent to £504.7m, helped by robust growth in core maintenance contracts, while the order book jumped to £3.8bn - securing 88 per cent of current year revenue. The Morrison acquisition boosted revenues, too, but it also came with a £2.3m operating loss - dragging Mears' reported group operating margin down from 5.7 per cent to 4.6 per cent. Meanwhile, the mechanical and engineering business saw last year's £1.3m profit turned into a £1.6m loss amidst tough trading conditions - management plans to either sell the unit or turn it around within a year. The care business managed a modest 4 per cent growth in revenue (1 per cent on an organic basis) to £112.6m - although the operating margin there did rise from 8 per cent to 8.3 per cent.
Housebroker Canaccord Genuity expects adjusted pre-tax profit of £35m for 2013, giving EPS of 28p (26.1p in 2012).
|ORD PRICE:||374p||MARKET VALUE:||£344m|
|TOUCH:||373.8-374.3p||12-MONTH HIGH:||383p||LOW: 246p|
|DIVIDEND YIELD:||2.1%||PE RATIO:||17|
|NET ASSET VALUE:||184p*||NET DEBT:||7%|
|Year to 31 Dec||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 12 Jun
Payment: 2 Jul
*Includes intangible assets of £164m, or 178p a share