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Mears reassures after Grenfell-related delays
Housing contractor Mears (MERS) is being hit with delays to its contracts following the Grenfell Tower tragedy in June. This has brought expected revenue for 2017 down to £800m from £830m while analysts at Liberum have revised the company’s order book down to £2.8bn from £3.1bn.
The company’s chief executive David Miles tells Shares, ‘the order book is unaffected, work is not being taken away from us and given to another contractor’. The delays are due to clients of the company including registered social landlords (RSL) being ‘extra careful’ in Miles’ words when it comes to safety.
For instance residents of the Ledbury estate in Southwark, South-east London were moved out earlier this month due to gas safety fears. As Southwark is one of Mears’ clients, it’s unlikely that maintenance work will be done while the building remains empty.
Miles also says the government has told RSLs that in the next 13 weeks, which he expects to be extended to six months, to declare every one of their properties is safe. If they can’t deliver safe accommodation they may be forced to outsource or sell housing stock.
The company hiked its dividend by 5% to 3.45p a share in the six months to 30 June. ‘You may lose a bit of turnover or profit but we’re still putting the dividend up by 5%. I hope it’s clear message, I haven’t lost the work, it’s just delayed,’says Miles.