And an increasingly elderly and impoverished population, more dependent on social housing, will only make Mears' shareholders richer, the company says.
Chief executive David Miles said that the company would benefit from demand for improved energy efficiency of homes. 鈥淭he next decade will see a significant expenditure on increasing the energy efficiency of the Social Housing stock.鈥�
He added:鈥淒emographic trends are also positive for the sector as more people will rely on social housing through their retirement given obvious limitations in income from pensions and benefits.鈥�
Chairman Bob Holt said: 鈥淥ur order book stands at 拢2.7bn and the demand for our services continues to be very strong with a bid pipeline of 拢2.0bn.聽 We are well placed to benefit from these trends and are confident that the demand and opportunity for our two growth markets will continue to be strong. We enter the current year with visibility of 93% of the 拢625m consensus revenue forecast for 2011. We also have visibility of 80% of the 拢666m consensus revenue forecast for 2012.鈥�
While pre-tax profit was down 11% to 拢18.7m, operating profit before exceptional costs and the amortisation of acquisition intangibles increased by 26.5% to 拢31.3m (2009: 拢24.8m). The operating margin rose from 5.3% to 6.0%. This increase was attributed mainly to the January 2010 acquisition of the higher margin Supporta business.
During 2010 Mears had record contract wins, withnew social housing contracts valued in excess of 拢750m (拢1.2bn with extensions). These include:
London Borough of Lambeth:聽 A 7-year partnership contract to manage, maintain and repair 8,000 homes in the north of the borough. Contract is valued at 拢119m for the initial seven year period and also includes a performance option to extend to 10 years giving a value of in excess of 拢170m. Expected to start in April 2011.
Family Mosaic: A 10-year partnership contract worth 拢300m and started in August 2010, providing services to homes in London and the Home Counties and commenced in August 2010.聽 The contract includes a performance option to extend to 22 years giving a value of in excess of 拢660m.
Exeter City Council: The award of two contracts worth 拢13m (拢20m with extensions).聽 The first is a 5-year partnership to provide responsive repairs and voids services worth 拢7.5m.聽 There is an option to extend the contract for a further 5 years.聽 The second is also a 5 year contract to provide replacement heating systems valued at 拢5.5m over the period.
Homes for Islington: Mears is one of two contractors appointed to deliver works to up to 22,000 tenanted and 8,000 leasehold properties. Worth 拢48m for the initial 4-year period, with options to extend to 10 years, for a maximum contract value of 拢120m. 聽
Tower Hamlets: A five-year partnership contract to provide responsive repairs, void services, gas servicing and breakdown cover to 12,700 tenanted and 8,600 leasehold properties..聽 Worth 拢60m for the initial five years, with an option to extend for a further five years to make a total contract value of 拢120m.聽 Due to start in April 2011.
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