Mears Group revenues £30m below target after Grenfell Tower tragedy
Shares in housing contractor Mears Group have fallen by 11% after it warned revenues will be £30m below target as a result of the Grenfell Tower fire.
The company said the fire meant its social housing clients would be working on making sure their properties were safe and compliant with rules, which would delay plans for work orders.
It said this would cut the revenue it had expected to make this year from housing by £30m, to £800m.
David Miles, chief executive of Mears Group said: “The group has made solid progress in the period and I remain confident and optimistic for the future. In Housing, Mears is increasingly being asked by customers and other stakeholders to take greater involvement in helping customers deliver appropriate housing outcomes for a range of tenants and utilising a broader range of services. Consequently, the Mears addressable market is becoming much larger than it was previously and more complex. Our strategy to broaden our service offering has created a significant sustainable competitive advantage for Mears.
“Despite continuing to find the Care market challenging, we have made good ongoing progress in this area and our order book is significantly improved with a portfolio of good quality contracts at clear, sustainable margins. Given the scale of the reductions in the portfolio in the last twelve months, the revenue performance of Care in the period is encouraging. We remain confident we have the right strategy and the business is best placed to take advantage of industry evolution as it happens.”
He added: “Whilst the likely revenue shortfall for the full year is frustrating, it is entirely understandable in the circumstances and the group will be working closely with its partners and clients at this time to address their immediate priorities.”