Mears Group (MER) Trading update summary

Trading performance and revenue

• Maintenance-led revenues for FY25 expected to exceed £610m, reflecting about 10% organic growth and strong contract renewals, including new contracts with North Lanarkshire Council and Moat Homes.

• Management-led revenues for FY25 expected to be over £500m, down from £577m in 2024, due to reduced Asylum Accommodation contract revenues, with further decreases anticipated in 2026.

• Adjusted profit before tax for FY25 anticipated at no less than £62.5m, at the top end of market guidance, with operating margin (pre-IFRS 16) broadly consistent with the prior year at 5.6%.

Contract wins and business development

• Nearly 100% contract retention achieved, highlighted by a new £250m, 10-year contract with Cross Keys Homes for repairs, compliance, and maintenance.

• Acquisition of Pennington Choices Limited in September 2025 has expanded compliance capabilities and created new client opportunities.

Balance sheet and cash flow

• Average daily net cash position during FY25 was £52.8m, with year-end adjusted net cash expected to exceed £50.0m.

• EBITDA to operating cash conversion was around 80%, reflecting normalized working capital.

• Sale and leaseback of 199 properties completed for £24.6m, generating £18.0m in cash and a 25% equity interest in the investment vehicle.

• Revolving Credit Facility extended to December 2029 with improved pricing.