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Mears bags £156m social housing contracts

Mears Group has secured new social housing contracts worth £156 million in the last two months, according to a pre-close trading update released today.

The group’s social Housing business has been awarded a three year deal with Gateshead Borough Council to provide responsive repairs, void services, gas servicing, cyclical maintenance and adaptations services.

The initial three year period is worth £60m with a two year option to extend which brings the potential value to £100m.

It covers 21,000 properties and is due to commence in April.

Tamworth Borough Council has also appointed Mears to a five-year deal to provide responsive repairs and void maintenance.

The contract is worth £40m initially, with potential two year extensions taking it to £56m.

It covers 4,500 properties.

The social housing business has now achieved a 44 per cent success rate by value in contract bids over the last nine months, with the total volume of work secured in excess of £550m.

Mears’ domiciliary care business has also performed strongly with a 69 per cent bid success rate and an additional £60m of contracts secured in the last nine months.

In the last two months contract have been secured with Warwickshire County Council – a two year deal worth £2.7m – and Sandwell Metropolitan Borough Council – also two years and worth £2.8m.

The division also retained work with Rotherham Metropolitan Borough Council with a successful rebid for a three year contract worth £5.8m and a two year deal with Sunderland City Council worth £1.9m.

Mears also secured its first specialist care contract for people with complex needs in the period.

Under the contract the company will provide services on behalf of Hartlepool Borough Council for three years, a deal worth £1m.

The win comes on the back of the acquisition of Choices last year and Mears expects to replicate the success over 2012.

The group’s overall trading and cash for the year eneded 31 December were in line with management expectations and the total order book now stands at £2.8bn.

Forward visibility of forecast revenues is 93 per cent for 2012 and 78 per cent for 2013.

The total bid pipeline is in excess of £3bn and the immediate bidding opportunity for contracts due to start in 2012 is £1.1bn.

Mears chief executive David Miles said:  “”Our social housing division has experienced a particularly strong period in contract tendering, securing new orders to the value of £550m over the last nine months that has further strengthened our market leading position. 

“The first quarter of 2012 will see the most intense period of new contract mobilisation in our history with five significant new contracts due to start on or around 1 April 2012 with an annual value of £50 million. 

“Since my appointment as chief executive, I have focussed upon enhancing the senior management structure and the group’s operating capability which is key to ensuring these new contracts are brought on line with robust financial controls whilst maintaining service excellence.

“The Care market is going through a period of significant change and I am proud of the robust business we have established. We will continue to be at the forefront of change in the sector in 2012, helped in part by the development and roll-out of our new Care IT system. We will also target further acquisitions to broaden the diversity of Mears’ Care offering along the services supply chain and to expand the range of services provided to people in their homes.

 The group will be announcing its preliminary results for the year ended 31 December 2011 on Tuesday, 20 March 2011.

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