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Mears Group (MER) investor relations material
Mears Group H1 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Executive summary
Revenue declined 4% year-over-year to £559.4m, but statutory profit before tax rose 5% to £32.0m and adjusted operating margin improved to 5.6% from 5.2%.
Statutory diluted EPS increased 20% to 27.68p; interim dividend per share up 18% to 5.60p, reflecting board confidence.
Achieved 100% contract retention in maintenance-led activities and secured new orders approaching £1.5bn, including flagship contracts.
Continued investment in people and technology to expand compliance and asset management capabilities and support new market opportunities.
Successfully mobilized new contracts, including Milton Keynes City Council and Moat Homes.
Financial highlights
Operating profit rose 8% year-over-year to £36.9m; operating margin increased 70bps to 6.6%.
Profit before tax up 5% to £32.0m; adjusted operating margin (pre-IFRS 16) at 5.6%.
EBITDA to cash conversion at 105%, though down from 119% in H1 2024.
Average daily net cash at £66.7m; adjusted net cash at 30 June 2025 was £81.1m.
Dividend and share buybacks totaled £26.5m, with £16m returned via buyback and 4.3m shares cancelled.
Outlook and guidance
Maintenance-led revenue expected to grow 8-9% in FY25; management-led revenue to decline by £100m due to AASC normalization.
Adjusted operating margin guidance (pre-IFRS 16) of 5.3-5.6% for FY25, with medium-term target range of 5.0-6.0%.
Board expects adjusted profit before tax for the full year to be modestly ahead of market expectations.
Continued investment in people and technology to support organic growth and new service offerings.
Working capital unwind anticipated in H2 2025; employer's National Insurance changes to add £5m annual payroll cost.
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