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Company spotlight: Mears


LAST year some analysts talked of the maintenance market as being oversold, and Mears was one of the companies they had in mind. Yet the firm's share price has doubled in the past 12 months.

The company grew out of a mechanical and electrical business and expanded into fleet management.

At one stage, chairman Bob Holt talked about using the cash generated by M&E to drive greater expansion of the fleet management arm. But the opportunities in maintenance have proved too great to ignore.

Six years ago Mears, which floated on the Alternative Investment Market in 1996, turned over less than £20 million annually but in 2003 the company's workload soared by a quarter to £103.2 million.

This was slightly under the £108 million predicted by broker Arbuthnot, as were the pre-tax profits, which were forecast to come in at £5.1 million but were £300,000 short of this figure.

Part of the fall was due to writing down goodwill on three acquisitions made last year, including Grogan Decorating.

Mears has a market capitalisation of £90 million and a good following in the City for an AIM stock, with five out of the seven covering analysts positive on the shares.

With an order book of £550 million, which includes some work that will run for 15 years and an increasing amount invested in public housing, the prospects look good.