Mears Group (MER) Trading Update summary

Trading performance and outlook

• Trading remained strong through FY24, with operating margins in core housing activities improving and management-led activity volumes declining slower than expected.

• Results for FY24 are now expected to be marginally ahead of current market expectations, with increased confidence for FY25 performance.

• The new North Lanarkshire Council contract, covering 37,000 homes and 1,200 buildings, is performing well early in its mobilisation, despite initial margin dilution.

Contract wins and retention

• Achieved 100% retention on contracts subject to re-bid in FY24, with only one material contract pending re-bid for FY25.

• Secured new long-term contracts with Thanet, Folkestone and Hythe, and Dover councils, maintaining long-standing client relationships.

• Awarded a new 18-month, £12m contract with Moat Homes, resuming a partnership after a previous unsuccessful bid.

Strategic initiatives and capital allocation

• Completed a sale and leaseback of 221 residential properties, receiving £16.3m in cash and retaining a 25% equity interest.

• Continued property acquisitions to support the Asylum Accommodation contract, with further sale and leaseback planned for FY25.

• Share buybacks over two years reduced share count by 23.1m shares (21% of issued capital), costing £73.2m; EBT purchased an additional 5.1m shares.