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Highlights

  • Mears Group reported a 10.4% YoY revenue growth in H1FY24, reaching GBP 580 million
  • Statutory diluted EPS jumped 64.1% YoY to GBX 2312, fueled by a 44% rise in profit before tax and a 12% reduction in shares outstanding
  • The company raised interim dividend by 28% to 4.75p per share
  • North Lanarkshire Council contract is expected to boost revenues, with the potential for future extensions

 Mears Group PLC (LSE:MER) is a UK-based housing solutions provider, serving both public and private sectors through Maintenance and Management segments.

In the first half of financial year 2024 (H1FY24), the company reported a 10.4% YoY revenue growth, reaching GBP 580.00 million, driven by organic expansion in Management-led activities, particularly in immigration-related services and contract wins, along with a good performance in the Maintenance-led segment.

Statutory diluted EPS increased by 64.1% YoY in 1HFY24, from GBX 14.09 in H1FY23 to GBX23.12, fueled by a 44% YoY rise in profit before tax and a 12% YoY reduction in shares outstanding due to the ongoing share buyback program.

Further, the company increased interim dividend by 28% YoY to 4.75p per share (H12023: 3.70p).

In H1FY24, the company had a higher EBITDA margin of 11.8% and a lower cash conversion cycle of 8.1 days compared to 9.7% and 11.6 days, respectively in H1FY23.

Company Outlook

As per the company, enhanced operational strategies are helping to offset potential revenue declines in FY25 by emphasising a balance between immediate contingencies and long-term residential solutions. The North Lanarkshire Council contract, awarded for eight years with potential extensions, is expected to more than double revenues from the previous contract.  The Strategic Plan, scheduled for H2FY24, will focus on capital allocation and shareholder returns, ensuring a disciplined approach to investment and financial management.

Top 10 Shareholders

The top 10 shareholders of Mears Group collectively hold approximately 72.20% of the total shares. Hauck & Aufhäuser Fund Services S.A. holds the largest stake at around 11.16%, closely followed by Fidelity Management & Research Company LLC with approximately 9.93%.

Stock Information

The stock has experienced a 0.27% increase over the past three months, while it has declined by 3.80% in the last six months. With a 52-week low of GBX 322.00 and a high of GBX 398.00, it is currently trading above the average of these two values. Its closing price is GBX 366.5 as of 28 February 2025.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 28 February 2025. The reference data in this report has been partly sourced from EODHD/Others.

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