Mears Group (MER.L) said it expects maintenance-led revenues for the year ended December 2025 to exceed £610 million, driven by organic growth of about 10 percent and a near 100 percent contract retention rate.
The performance reflects a strong second half, with the company indicating that adjusted profit before tax will come in at the top end of market expectations.
Growth was supported by the full-year impact of new contracts with North Lanarkshire Council and Moat Homes, alongside a solid renewal cycle. Management-led revenues are expected to exceed £500 million, down from the prior year, largely due to the ongoing reduction in asylum accommodation contract revenues, a decline that is set to continue into 2026.
Operating margins are expected to remain broadly in line with the previous year, despite increased investment in business development and IT. Adjusted profit before tax for FY 2025 is forecast to be no less than £62.5 million.
The group reported progress on business development following the acquisition of Pennington Choices in September, with integration on track and new client wins already secured. Contract momentum also included a new 10-year, £250 million agreement with Cross Keys Homes, extending one of Mears' longest-standing partnerships.
Mears ended the year with a strong balance sheet, maintaining an average net cash of £52.8 million and expecting year-end adjusted net cash above £50 million. Cash conversion remained close to 80 percent, and the group continued to use its balance sheet to support property investments. It also extended its £70 million revolving credit facility to December 2029 on improved terms.
Management said FY 2025 marked meaningful progress across strategic priorities, highlighting resilient maintenance growth, disciplined operations, and expanded compliance capabilities as key drivers of performance.
MER.L currently trades at £357.5 or 2.58% higher on the LSE.
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