04/02/2008
Mears, led by indefatigable chairman and chief executive Bob Holt, has kept up its recent run of contracts with some new long-term wins in its care division.
Its Careforce business has successfully secured future work in two areas (Rotherham and Hertfordshire) where existing contracts were up for re-tender – in both cases it has won higher volumes of work outsourced by local authorities ‘at similar or increased billing rates’. This means that the combined sales value of these new contracts is roughly £34m, rising to £52m if options to extend the deal are taken up.
Chairman Bob Holt said the wins provided ‘further evidence of the consolidation taking place in the domiciliary care market’, which is trending towards the placing of outsourced services with a smaller number of larger providers.
Mears has also been blazing a trail in its social housing business, having secured three significant contracts with new customers – Birmingham City Council, Sedgefield Borough Council and Midland Heart Housing Association – with a total value of £204m since announcing its interim figures in August.
Even more impressively, since unveiling strong 2006 results, contracts worth £500m have been won across the group as a whole, swelling the order book to a record £1.4bn and creating terrific visibility for investors.
Based on forecast profits of £16.9m and earnings of 16.3p for December 2007 – results are expected in March – Mears, well managed with a tremendous track record, trades on an undemanding price-to-earnings ratio of 16.7 times. We remain enthusiasts. Strong buy.
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| Market cap: | £199.2m |
| PE Forecast: | 16.7 |
| Share price: | 272p |
| LSE | £171.23m |
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| Other company articles: |
| 19/08/2008 |
| 28/04/2008 |
| 04/02/2008 |
| 09/01/2008 |
| 14/12/2007 |
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