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Major housing contractor plans redundancies as it posts losses in first half of year
Major contractor Mears Group has said it will be making redundancies later this year after coronavirus-related losses in the first six months.
In a stock market update, the contractor, which provides repairs and maintenance services to many social landlords, said it expects to report a loss of £6m for the first half of 2020, down from a profit of £16.7m in the same period last year.
These losses include costs and inefficiencies associated with the COVID-19 pandemic, the group said.
Mears added: “The group will be completing restructuring through the second half year that will lead to some reduction in staff numbers.
“These developments are not wholly a result of COVID-19 but also through the ongoing drive for continuous improvement and ensuring the group’s longer-term success.”
Mears’ revenues fell from £439m to £405m in the six months to 30 June 2020 – a drop of 7%.
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In an earlier statement, Mears outlined its plan to navigate coronavirus uncertainty by cancelling dividend payments and deferring “low-priority work” such as upgrades and improvements to housing stock.
The group said it had expected 2020 to be an important year for contract renewals, with around a third of the group’s maintenance business, by value, coming up for re-bid.
But the organisation said: “The impact of COVID-19 has resulted in a number of these existing contracts being extended, with tender processes deferred in the short term.
“Similarly, a number of new bidding opportunities have seen delays. The group therefore expects new order intake for the current year to be low.”
David Miles, chief executive of Mears, said the contractor has taken “positive and considered actions” during the year to drive improvements that will ensure the group is “well positioned once the UK sees a return towards normality”.
He added: “I am very confident as to the financial stability and the long-term well-being of the group. I am extremely proud of the professionalism and hard work shown by the Mears team in the most challenging of circumstances.”
