With Grenfell-related market disruption firmly in the rearview mirror, management at Mears (MER) was likely hoping 2019 would be kinder. But a trading announcement has caused the shares to drop 6 per cent, just days after the group won a 10-year contract with the Home Office expected to be worth more than £1bn.
IC TIP:
Buy
at
325p
The group traded in line with expectations, despite competitive markets, but noted its average daily net debt was £115m during 2018, just off its target of £110m.
In spite of this, the order book stands at £3.2bn, up £100m on the same time last year. House broker Peel Hunt is waiting for clarity on contract flows before updating its estimates to reflect the Home Office contracts, but it expects upgrades to be “material”.
