Mears Group expects ‘modest’ operating losses during lockdown
Housing services group Mears said it believes operating losses during the lockdown will be “modest”, despite moving to an “emergency only” service.
The company, which specialises in housing maintenance, said it has made “excellent progress” in mitigating the financial impact of the virus.
Nevertheless, it said it has agreed to extend its existing lending facilities by around £22.6 million to increase its financial headroom.
It said it believes its existing lending facilities, worth around £170 million, will provide sufficient liquidity but thought it would be “prudent” to agree the expansion.
Mears said its average net debt during the final quarter of 2019 was £126.1 million and said it believes this has been at a similar level for the first four months of 2020.
It added that cash flow was positive in April, “reflecting our clients’ commitment to pay efficiently during this period”.
The group said it has taken advantage of a number of Government reliefs during the crisis and has furloughed some staff.
Housing maintenance work, which typically accounts for around two-thirds of group revenues, has been impacted by the pandemic, with the company agreeing with housing associations to defer work and operate on an emergency-only basis.
David Miles, chief executive of the group, said: “The group has made excellent progress in taking the necessary steps to address these current challenges.
“Whilst it is not possible to predict the future with certainty, I am confident as to the financial stability and the long-term wellbeing of the group.
“I am extremely proud of the professionalism and hard work shown by the Mears team in the most challenging of circumstances.”