Mears Group Plc (MER) AI Stock Analysis

• Market Cap: £324.33M
• Dividend Yield: 289.57%
• Average Volume (3M): 120.46K
• Price to Earnings (P/E): 7.4
• Beta (1Y): 0.61
• Revenue Growth: 3.96%
• EPS Growth: 62.25%
• Country: UK
• Employees: 5,500
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Personal Products & Services
• EPS (TTM): 0.28
• Shares Outstanding: 86,474,625
• 10 Day Avg. Volume: 143,440
• 30 Day Avg. Volume: 120,461
• PEG Ratio: 0.08
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.27
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £500.00
• Price Target Upside: 28.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 77 Outperform
• Price Target: 438.00p ▲(12.74%Upside)

Mears Group scores well due to its attractive valuation and positive corporate events, reflecting strong growth and strategic positioning. However, technical indicators suggest cautious market momentum, and financial performance is hampered by high leverage risk, which slightly moderates the overall score.

Mears Group Plc Business Overview & Revenue Model

Company Description

Mears Group plc, through its subsidiaries, provides a range of outsourced services to the public and private sectors in the United Kingdom. It offers rapid-response and planned maintenance services to local authorities; gas and repair services; and maintenance and repairs, capital works, energy investment, and regeneration solutions for public buildings, as well as grounds maintenance services. The company also provides housing management services, which include supply of affordable homes to public and private sectors, emergency and temporary accommodation services, affordable housing services, housing with care services, and housing services to government departments. In addition, it offers house building services; and facilities management services to the public and private sectors, including defense estates, education, healthcare, public buildings, and commercial office accommodation. The company was founded in 1988 and is headquartered in Gloucester, the United Kingdom.

How the Company Makes Money

Mears Group Plc generates revenue through long-term contracts with local authorities, housing associations, and private clients. Its key revenue streams are divided into two main sectors: housing and social care. In the housing sector, the company earns money by providing maintenance, repair, and refurbishment services for social housing units. This includes regular upkeep and emergency repairs, often under multi-year contracts. In the social care sector, Mears Group provides domiciliary care services, assisting clients with daily living activities. These services are typically funded by local governments, healthcare organizations, or private individuals. Significant partnerships with local councils and housing associations contribute to Mears Group's earnings by ensuring a steady demand for its services, thus stabilizing its revenue base.

Mears Group Plc Financial Statement Overview

Summary

Mears Group Plc demonstrates solid growth and profitability in its income statement, supported by strong cash generation. However, the high leverage indicated in the balance sheet poses a potential risk. Overall, the company is performing well but needs to address its debt levels to enhance financial stability.

Income Statement

The company has shown consistent revenue growth, with a strong revenue increase of 4% from 2023 to 2024. The gross profit margin improved to 22.16% in 2024, indicating efficient cost management. The net profit margin also increased to 4.11%, reflecting enhanced profitability. However, the EBIT margin of 6.43% and EBITDA margin of 13.08% suggest there is room for further operational improvement.

Balance Sheet

The debt-to-equity ratio remains elevated at 1.62, indicating high leverage, which could pose a risk if not managed carefully. Conversely, the equity ratio stands at a stable 26.25%, and the return on equity improved to 25.27% in 2024, suggesting effective use of shareholder capital.

Cash Flow

Operating cash flow to net income ratio is robust at 2.57, highlighting strong cash generation relative to profits. The free cash flow to net income ratio is also strong at 1.93, indicating efficient cash management. However, free cash flow decreased by 18.49% from 2023 to 2024, suggesting a need to monitor capital expenditures.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.13B	1.09B	959.61M	878.42M	805.82M
Gross Profit	251.01M	218.77M	195.69M	180.49M	156.29M
EBITDA	148.15M	117.70M	96.19M	82.65M	52.95M
Net Income	46.53M	35.20M	28.31M	14.12M	-12.01M
Balance Sheet
Total Assets	701.35M	700.01M	630.87M	633.92M	676.09M
Cash, Cash Equivalents and Short-Term Investments	91.40M	145.85M	100.10M	54.63M	96.22M
Total Debt	297.50M	291.14M	225.42M	216.89M	248.42M
Total Liabilities	513.88M	499.55M	417.04M	432.88M	520.04M
Stockholders Equity	184.11M	197.51M	212.33M	200.24M	155.39M
Cash Flow
Free Cash Flow	89.76M	110.05M	101.52M	47.90M	99.01M
Operating Cash Flow	119.58M	135.89M	110.93M	56.67M	105.79M
Investing Cash Flow	-7.59M	-29.82M	-5.91M	-6.20M	52.56M
Financing Cash Flow	-133.88M	-95.08M	-61.52M	-92.06M	-135.19M

Mears Group Plc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 388.50
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MER, the sentiment is Neutral. The current price of 388.5 is above the 20-day moving average (MA) of 386.05, below the 50-day MA of 390.54, and above the 200-day MA of 367.43, indicating a neutral trend. The MACD of 0.86 indicates Negative momentum. The RSI at 49.80 is Neutral, neither overbought nor oversold. The STOCH value of 48.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:MER.

Mears Group Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MER	77 Outperform	£324.33M	7.38	24.38%	289.57%	3.96%	62.25%
GLE	68 Neutral	£216.58M	13.09	5.65%	219.16%	13.91%	-2.75%
DOCS	68 Neutral	£797.73M	175.74	1.23%	219.57%	-10.20%	-93.32%
Sector *	64 Neutral	£1.74B	10.51	6.12%	256.36%	0.55%	-33.64%
ABDP	64 Neutral	£335.14M	31.52	8.09%	55.48%	12.52%	-22.03%
CRST	51 Neutral	£487.03M	―	-9.56%	117.77%	-3.50%	-176.18%
MUL	43 Neutral	£64.80M	―	-410.43%	―	-15.07%	-1078.90%

Mears Group Plc Corporate Events

Mears Group Reports Strong First Half Trading in 2025

Mears Group PLC has reported strong trading performance in the first half of 2025, with profit before tax expected to be modestly ahead of the previous year. The company has seen solid growth in its maintenance-led activities, supported by regulatory market drivers and 100% contract retention. Operating margins have strengthened, and the company anticipates full-year results to exceed current market expectations, with revenues and adjusted profit before tax projected at no less than £1,055m and £54m, respectively. This positive momentum reflects Mears’ strategic focus on expanding maintenance activities, compliance, and asset management, as well as delivering additional housing services to the Central Government.

The most recent analyst rating on (GB:MER) stock is a Buy with a £4.35 price target. To see the full list of analyst forecasts on Mears Group Plc stock, see the GB:MER Stock Forecast page.

Mears Group Plc Announces Block Listing of Ordinary Shares

Mears Group Plc has applied for the listing of 105,290 ordinary shares on the London Stock Exchange, under an extension to an existing block listing. These shares, resulting from the exercise of share options, are expected to be admitted on 23 June 2025, and will rank equally with existing shares. This move reflects Mears’ ongoing efforts to enhance its financial structure and support its strategic objectives in the housing sector.

The most recent analyst rating on (GB:MER) stock is a Buy with a £4.35 price target. To see the full list of analyst forecasts on Mears Group Plc stock, see the GB:MER Stock Forecast page.

Mears Group PLC AGM Results: All Resolutions Passed

Mears Group PLC successfully held its Annual General Meeting, where all proposed resolutions were passed. Key outcomes included the approval of the audited accounts for 2024, reappointment of PricewaterhouseCoopers as auditors, and the declaration of a final dividend. The re-election of directors and authorizations for share allotment and market purchases were also confirmed, reflecting strong shareholder support and positioning the company for continued stability and growth.

The most recent analyst rating on (GB:MER) stock is a Buy with a £4.80 price target. To see the full list of analyst forecasts on Mears Group Plc stock, see the GB:MER Stock Forecast page.

Mears Group PLC Announces Total Voting Rights

Mears Group PLC announced its total voting rights, stating that the company’s issued share capital consists of 86,474,628 ordinary shares, each with one voting right. This information is crucial for shareholders to determine their interest in the company’s share capital under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:MER) stock is a Buy with a £4.35 price target. To see the full list of analyst forecasts on Mears Group Plc stock, see the GB:MER Stock Forecast page.

Mears Group Executives Exercise Share Options and Sell Shares

Mears Group PLC announced that its Chief Financial Officer, Andrew Smith, and Operations Director, David Miles, exercised share options over 484,671 ordinary shares as part of the company’s Long Term Incentive Plan and Deferred Share Bonus Plan. Following the exercise, both executives sold a portion of their shares to cover tax liabilities, with Smith selling 108,411 shares and Miles selling 162,348 shares at an average price of 393 pence per share. This transaction reflects the company’s ongoing commitment to aligning executive compensation with long-term shareholder value creation.

Mears Group Secures Major Housing Contract with Milton Keynes City Council

Mears Group PLC has secured a significant contract with Milton Keynes City Council for housing repairs and maintenance, valued at £230 million over five years, with an option to extend to £475 million over ten years. This contract retention highlights Mears’ high-quality service and strategic success, reinforcing the company’s market position and supporting its growth expectations.

Mears Group Releases 2024 Annual Report and Announces 2025 AGM

Mears Group PLC has released its Annual Financial Report for 2024 and announced the Notice of its Annual General Meeting for 2025, which will be held on June 4, 2025, in London. The documents are available on the company’s website and will be submitted to the National Storage Mechanism. This release underscores Mears’ commitment to transparency and governance, providing stakeholders with insights into its financial health and strategic direction.