MEARS, the social housing support services group, yesterday unveiled a 15 per cent jump in first-half profits, despite spending £6.4m on restructuring costs after acquiring the Morrison social housing business.
The firm’s adjusted pre-tax profit rose to £15.5m and revenues rose 49 per cent to £457.8m. The Morrison business boosted revenues by £128m over the half-year and is forecast to contribute revenues of around £240m for the full year.
“Prior to the acquisition, Morrison had encountered significant challenges having pursued an aggressive growth strategy at the expense of operating margin and service delivery,” said the firm’s statement. “The initial priority following acquisition was to address a number of service delivery failures before seeking resolution to the financial challenges.”
Chief executive David Miles said that the integration of the Morrison business is now complete, which broker Canaccord Genuity said was one of the most positive elements of the statement. Revenues from Mears’ social housing division rose by 76 per cent to £378.9m, but its profit margin was diluted by the acquisition and fell from five per cent to 3.7 per cent.
“I am delighted at the progress made by the group in the first half of 2013 and a continued strong performance,” said Miles.