Mears Group delivers a robust operational performance underpinned by a growing £3bn order book

In the year ended 31 December, Mears Group profit margin improved from 3.2 per cent to 4.1 per cent, aided by increased revenue and operational efficiency.

The contractor, which provides services to the housing sector, saw its pre-tax profit increase 36.6 per cent from £46.6 million in 2023 to £64.1 million in 2024, driven by an improved adjusted operating margin of 5.6 per cent (FY2023: 4.7 per cent).

The group secured orders of £220 million in the year, with a North Lanarkshire Council eight year contract worth £125 million covering a range of housing maintenance services for the council’s 36,700 homes and more than 1,000 public buildings.

Meanwhile its order book stands at £3 billion (FY2023: £2.5 billion).

The group, which completed a strategic update, including new senior roles, as well as Lucas Critchley’s promotion to CEO, in the year to address further opportunities, continued to deliver strong cash generation, with operating cash conversion at 101 per cent of EBITDA.

It said previous approaches to change and project management had not been as effective as it had liked, however, the formation of a change management steering group with a newly appointed role to help spearhead it would potentially turn this around and cascade down to local level.

It said it would consider M&A opportunities that would increase “operational scale or augment the group’s service offering” but that its current cash position of £91.4 million and its total assets worth £701.3 million would provide organic growth regardless.

Its earnings per share (EPS) climbed from £0.33 to £0.50, aligning with market forecasts, while a surplus capital of £40 million was returned to shareholders.

Mears Group chairman, Jim Clarke said he was delighted with its robust operational and commercial progress.

“It is particularly pleasing that the group reported good progress across both strands of its housing business,” he said.

“The group is recognised by central government as a housing specialist, and we are increasingly seeing opportunities to extend our service offering in this area which bodes well for the future.”

Looking ahead, it said it had seen a “strong start” to FY2025 with solid growth in its local government maintenance work, following a strong period of contract retention augmented  by additional compliance services that would extend its focus to planned and retrofit activities.

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