Mears Group Six-Month Pre-Tax Profit Declines

8/18/2009 5:43 AM ET

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Mears Group Says Forecast Full Year Results Are In Line With Management's Expectations - Quick Facts

(RTTNews) - Social housing and personal care provider Mears Group PLC (MER.L: News ) Tuesday posted lower pre-tax profit for the half year ended June 30, despite an increase in revenues. The results reflected the effect of amortisation and acquisition.

Pre-tax profit declined to GBP 7.3 million from GBP 7.65 million for the fist half of 2008.

Profit attributable to equity holders of the parent was GBP 4.9 million compared with GBP 5.2 million in the prior-year period.

Adjusted profit attributable to shareholders increased to GBP 7.38 million from GBP 6.18 million last year. Normalised earnings per share increased to 8.55 pence from 8.15 pence
in 2008.

Revenue increased 14% to GBP 232.7 million from GBP 203.3 million in the year-ago period.

Chief Executive Bob Holt said, "These results demonstrate our commitment to continued growth as well as underlining the defensive qualities of the business. Our order book stands at £1.8 billion and the demand for our services continues to be strong."

Segmentwise, Social Housing revenue increased to GBP 176.0 million from GBP 134.9 million in 2008, recording a growth of 30%, including an organic growth of 23%.

Domiciliary Care revenue rose up 11% to GBP 29.1 million from GBP 26.3 million in 2008. The business successfully converted a high proportion of tender opportunities into new contract awards, the company said.

The Mechanical & Electrical division exceeded initial expectations by reporting revenue of GBP 27.6 million, decreasing by 25% on GBP 36.9 million generated in 2008. Notwithstanding the reduction in top line, this division has had a tremendous first half year, the company said.

Looking ahead, Holt said, "We have close to full visibility as to consensus forecast revenue for the current year. In addition, we have already secured in excess of 70% of our forecast revenue for 2010. With a number of particularly exciting opportunities within the bid pipeline, I have significant confidence for the future."

The company said the board declared an interim dividend of 1.60 pence per share, up 19% from 1.35 pence per share in 2008, payable on November 3, to shareholders on the register at the close of business on October 16.

MER.L is currently trading at pence 272.75 on the LSE, up 1.75 pence or 0.65%.