Mears Group Full Year 2024 Earnings: In Line With Expectations

Mears Group PLC (LSE:MRS) has delivered a set of results that align with market expectations while signaling strategic momentum. Revenue grew 4% to £1.13 billion, driven by robust contract wins and operational efficiency. Profit before tax surged 37% to £64.1 million, reflecting strong cash conversion and disciplined cost management. The Board’s confidence is evident in a 23% dividend hike and continued share buybacks. With an order book now at £3.0 billion, Mears reinforces its position as a leader in UK housing services.

Financial Highlights: Revenue Growth and Profitability Surge

Mears’ top-line growth, while modest in percentage terms, is notable given sector-wide headwinds. The £1.13 billion revenue reflects a £43.2 million increase from FY23, with both Maintenance (£555.8 million) and Management (£576.7 million) segments contributing. Profit before tax jumped 37%, reaching £64.1 million, a clear win for margin expansion. Basic EPS rose 53% to 50.3p, amplified by share buybacks. shows a trajectory outperforming peers, particularly in 2024.

Operational Strength: Contract Wins and Order Book Expansion

The Group’s contract pipeline remains robust. A landmark £125 million annual deal with North Lanarkshire Council, covering 37,000 homes and 1,200 buildings, strengthens its Local Government footprint. Central Government wins, including Ministry of Defence housing for Afghan refugees, highlight diversification. New contracts added £220 million (excluding North Lanarkshire) at a 41% bid conversion rate, lifting the order book to £3.0 billion.

Strategic Vision: Five-Year Plan and Decarbonization

Mears’ five-year strategy targets Local Government dominance, high-margin organic growth, and compliance asset management. The decarbonization push, leveraging £85 million in Social Housing Decarbonisation Fund grants, positions it as a sustainability leader. Plans to build a Net Zero team for ECO funding opportunities underscore long-term ambition.

Capital Allocation: Buybacks and Dividends

The Board returned £40 million to shareholders via buybacks in FY24, reducing shares outstanding by 25% since FY23. The full-year dividend rose 23% to 16.00p, supported by a conservative 2.0–2.5x cover ratio. reveals a competitive edge in shareholder returns.

Challenges Ahead: Contract Volatility and Margin Pressures

Risks include the pending Milton Keynes contract rebid and potential normalization of Management-led revenues (e.g., asylum seeker accommodation). Cash conversion dipped to 101% (from 123% in FY23), signaling tighter working capital management.

Conclusion: A Resilient Player with Long-Term Potential

Mears’ FY2024 results confirm its resilience in a challenging market. With an order book of £3.0 billion, strategic initiatives aligned with decarbonization and government priorities, and a strong balance sheet, the Group is positioned for sustained growth. FY2025 guidance—projecting £1.05 billion revenue and £50 million profit—exceeds prior forecasts, signaling confidence. While near-term risks exist, Mears’ blend of defensive cash flows and growth catalysts makes it a compelling long-term holding in a fragmented sector. Investors should monitor contract renewals and margin trends, but the strategic roadmap and robust financial metrics suggest a disciplined operator poised to capitalize on UK housing and infrastructure needs.