The UK Housing solutions provider Mears Group (MER.L), on Thursday, issued a trading update for the financial year ended 31 December 2023 and its expectations for the current financial year FY24.
The company stated that the strong financial performance reported in the interim results on 4 August 2023 continued through the second half of FY23. The Board expects to report results for the full year that are slightly ahead of market expectations, with revenues and adjusted profit before tax exceeding £1,050 million and £43 million, respectively.
The Group demonstrated a robust conversion of EBITDA to operating cash flow, resulting in a net cash position of roughly £105 million as of December 31st, 2023. Additionally, the average daily net cash over the past 12 months was about £75 million, surpassing prior guidance. The net cash position including shareholder distributions was about £49 million during FY23, which consisted of both ordinary dividends and share purchases.
The momentum seen in 2023 is expected to continue into 2024 and, as a result, the Board's expectations for FY24 now sit materially ahead of market expectations. The Board continues to anticipate a reduction in management-led revenues as the elevated activity level seen across FY23 normalises.
However, adjusted profit before tax in FY24 is now expected to be of a similar quantum to FY23, reflecting continued margin progression. Further, the Board expects to see continued strong cash performance in FY24.
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