Mears Group upgrades expectations after strong 2023

11th Jan 2024 10:41

(Sharecast News) - Mears Group said in a full-year trading update on Thursday that through the second half of 2023, it maintained its strong financial performance, surpassing market expectations.

The London-listed firms aid revenues and adjusted profit before tax were expected to exceed £1.05bbn and £43m, respectively, for the full year.

It reported robust conversion of EBITDA to operating cash flow, resulting in a net cash position of £105m on 31 December, and average daily net cash of about £75m over the 12 months.

Those figures also exceeded previous guidance, even after making shareholder distributions of around £49m during the year, including ordinary dividends and share purchases.

Looking ahead, Mears Group said the momentum from 2023 was continuing, as the board's expectations for 2024 now exceeded market expectations.

Although there was an anticipation of reduced management-led revenues as the elevated activity levels seen in 2023 normalised, adjusted profit before tax for 2024 was projected to be similar to 2023, reflecting ongoing margin progression.

Mears said it also planned to maintain strong cash performance in 2024.

After using share purchase authorities obtained at the June annual general meeting (AGM) to complete buyback programmes in 2023, the directors said they intended to seek shareholder approval for additional authority to purchase shares.

"We are delighted to have achieved strong revenues, profits and cash generation in 2023," said chief executive officer Lucas Critchley.

"This strong momentum is expected to continue into 2024 and the group continues to deliver well against its clearly defined strategy, underpinned by our long track-record for operating excellence."

At 1021 GMT, shares in Mears Group were up 7.7% at 337.11p.

Reporting by Josh White for Sharecast.com.