Mears has blamed “challenging market conditions” for cutting care business branches by around 20 per cent
In a trading update ahead of its results for the six months to 30 June 2017, the housing and social care provider said it had cut around 20 per cent of its care branches in the last quarter of 2016, predominantly in its northern operations.
Mears also revealed it had closed further branches in the Midlands and in London during the first half of 2017.
The firm said it expected the care business to report a loss in the first half of its financial year but expected a profit in the second half.
Mears chief executive David Miles said: “While we continue to find the care market challenging, we have made good progress in this area and our order book is significantly improved with a portfolio of good quality contracts at clear, sustainable margins.”
In its housing business, the firm said it would continue to diversify to offer new-build projects to clients, with the group pointing to “significant new opportunities” in housing management.
It added it would fall slightly short of its revenue forecast for H1, having achieved 96 per cent of its target revenue, but operating margins were in line with management expectations.
On the housing business, Mr Miles added: “We anticipated the increasingly complex challenges that would face our housing clients and we have broadened our offering accordingly.
“I am delighted with the size of the opportunities that are available to us and we are working hard to ensure we convert a number of these.”
Last year, Mears won a deal to build 29 affordable rented homes on a brownfield site for its client Welwyn and Hatfield Council, for whom it provides long-term maintenance services.
The project is valued at £5.6m and the contract is due to complete at the end of 2017. Mears will then take over the long-term maintenance of the homes.
The firm has also been picked to build 80 affordable homes across seven infill sites for Milton Keynes Council, under a contract worth around £11m.