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A social housing contractor has blamed factors including delays to work in the aftermath of the Grenfell Tower disaster for falling revenue and profits last year.
Mears Group today reported a drop in revenue from £940.1m to £900.2m and a fall in profit before tax from £40.1m to £37.1m for 2017.
The company, which provides repairs and maintenance services to many social landlords across the UK, said the dip was due to “delays to the timing of planned workloads following the tragic events at Grenfell Tower”, among other factors.
It had previously warned investors in December and August that the fallout from Grenfell was likely to affect its business for the year.
The company’s share price dropped 5% in the early trading this morning following the news.
David Miles, chief executive at Mears, said: “Whilst 2017 proved to be a challenging year, we have made solid operational progress. The decline in housing revenues following the tragic events at Grenfell Tower has stabilised, although there still remains some uncertainty as to the speed at which these revenues will recover.”
Mears also referred to “a slow period in securing new contract revenues in housing” and “the planned rationalisation of care contracts” as reasons for the dip.
The company made £766.1m of its revenue from housing contracts, down 3%, and £134.1m from care, down 12%.
The company said the latter dip reflected the restructuring of the care contract portfolio following the closure of branches accounting for around 27% of revenues.
It added: “The restructuring is now complete and our remaining care contracts have a much-improved mix of longevity, certainty of spend and price.”
The care division delivered an operating profit for the year of £0.5m, compared to a loss of £1.2m last year representing an operating margin for the second half of 2.3%.
Mr Miles added: “On a positive note, the current pipeline of opportunities for Mears has never been greater. We anticipate competitively bidding contract values in excess of £2bn during the course of 2018. The strategic evolution of our business means we are gaining access to opportunities that previously would have been out of our reach.”