Mears Group sees strong financial performance in 2022

Mears Group has reported strong financial and operational results for FY 2022. 

The contractor saw exceptional cash performance in the last financial year and an order book that reached almost £3 billion.  

Having watched its revenues leap 9 per cent on the previous year to nearly £960 million, and with current trading in 2023 already in line with Board expectations, the company recently announced returns of up to £20 million in surplus capital to its shareholders, through a new share buyback programme.  

Financial – key takeaways 

• Revenue: +9 per cent to £959.6 million (FY 2021: £878.4 million).  
• Adjusted profit before tax: +37 per cent to £35.2 million (FY 2021: £25.6 million).
  > Operating margins: 3.8 per cent (FY 2021: 3.4 per cent) 
• Cash performance (average daily adjusted net cash): £42.9 million (FY 2021: £0.4 million)
  > Cash conversion: 122 per cent of EBITDA (FY 2020/21 combined: 117 per cent)
  > Adjusted net cash FY 2022: £100.1 million (FY 2021: £54.6 million) 

Its board of directors recommended a final dividend (distribution of profits to shareholders) of 7.25 pence, bringing the full year dividend for FY 2022 to 10.50 pence (FY 2021: 8.00 pence). 

The company will therefore return up to £20 million in surplus capital to its shareholders via a share buyback scheme. 

Operational – key takeaways 

Mears Group said it managed to mitigate much of the negative impact that inflation, skills shortages, and supply chain issues had had on industry in FY 2022. 

It saw sustained, high levels of customer satisfaction (88 per cent. FY 2021: 86 per cent), as well as among its own workforce.  

Mears also expanded on its environmental, social, and corporate governance (ESG) Group Strategy and roadmap to zero carbon by 2030. 

Pipeline 

• £250 million of housing services for the Defence Infrastructure Organisation (or MoD) over five years. 
• More than £100 million of potential works in the next two years under the Social Housing Development Fund (SHDF). 
• Bids in for North Lanarkshire contract forecasting £1.5 billion in revenues over 12 years. 
• Order book stands at £2.9 billion (FY 2021: £2.4 billion), reflecting good contract retentions and extensions. 

“I am delighted with the strong performance of the Group, and these are a terrific set of financial results,” said David Miles, Group CEO. “Our market leading position, based on a clear strategy and resilient operating platform, has underpinned this performance, and positions the Group for further sustainable growth in the medium-term.” 

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