Mears Group Plc (MER) AI Stock Analysis

• Market Cap: £295.95M
• Dividend Yield: 4.76%
• Average Volume (3M): 162.47K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.58
• Revenue Growth: -2.79%
• EPS Growth: 37.33%
• Country: UK
• Employees: 5,500
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): 0.28
• Shares Outstanding: 86,474,625
• 10 Day Avg. Volume: 185,388
• 30 Day Avg. Volume: 162,471
• PEG Ratio: 0.11
• Price to Book (P/B): 1.73
• Price to Sales (P/S): 0.28
• P/FCF Ratio: 3.55
• 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: £471.67
• Price Target Upside: 33.24% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: 397.00p ▲(12.15% Upside)

Mears Group Plc's stock is supported by strong financial performance and attractive valuation. The company's solid revenue growth and profitability are complemented by a low P/E ratio and high dividend yield. However, technical indicators suggest caution due to overbought conditions, and the high leverage poses a risk to financial stability.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a robust business model and strong market demand, supporting long-term financial health.

Cash Generation

Strong cash generation enhances financial flexibility, enabling strategic investments and debt management, supporting sustainable growth.

Profitability

Improved profitability through efficient cost management strengthens the company's competitive position and financial resilience.

Negative Factors

High Leverage

High leverage can strain financial resources and limit strategic flexibility, posing a risk to long-term stability if not managed.

Free Cash Flow Decline

A decline in free cash flow may impact the ability to fund operations and investments, necessitating careful capital management.

EBIT Margin

Lower EBIT margin indicates potential inefficiencies, highlighting the need for operational enhancements to boost profitability.

Mears Group Plc Business Overview & Revenue Model

Company Description

Mears Group Plc (MER) is a leading provider of housing and care services in the United Kingdom, focusing on delivering essential services to local authorities and housing associations. The company operates primarily in two sectors: housing management and care services. Mears offers a range of services including property maintenance, repairs, and refurbishment, as well as domiciliary care and supported living services for vulnerable individuals. By leveraging its expertise in these sectors, Mears aims to enhance the quality of housing and care for communities across the UK.

How the Company Makes Money

Mears Group Plc generates revenue through various streams primarily based on contracts with local authorities and housing associations. The housing management segment contributes significantly to its earnings by providing property maintenance and management services, often secured through long-term contracts. In addition, the care services division generates income by delivering support and care solutions to individuals in need, funded through public sector contracts and private pay arrangements. Mears also benefits from partnerships with local government bodies and other organizations, which can enhance its service offerings and expand its market reach. Overall, the company's revenue model is centered around delivering high-quality services that meet the needs of its clients while ensuring operational efficiency.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.11B	1.13B	1.09B	959.61M	878.42M	805.82M
Gross Profit	249.38M	251.01M	218.77M	195.69M	180.49M	156.29M
EBITDA	151.53M	148.15M	117.70M	96.19M	82.65M	52.95M
Net Income	47.55M	46.53M	35.20M	28.31M	14.12M	44.52M
Balance Sheet
Total Assets	734.31M	701.35M	700.01M	630.87M	633.92M	676.09M
Cash, Cash Equivalents and Short-Term Investments	81.14M	91.40M	145.85M	100.10M	54.63M	96.22M
Total Debt	299.97M	297.50M	291.14M	225.42M	216.89M	248.42M
Total Liabilities	546.62M	513.88M	499.55M	417.04M	432.88M	520.04M
Stockholders Equity	184.46M	184.11M	197.51M	212.33M	200.24M	155.39M
Cash Flow
Free Cash Flow	83.23M	89.76M	110.05M	101.52M	47.90M	99.01M
Operating Cash Flow	120.14M	119.58M	135.89M	110.93M	56.67M	105.79M
Investing Cash Flow	-21.59M	-3.56M	-25.65M	-5.91M	-6.20M	52.56M
Financing Cash Flow	-119.16M	-147.14M	-95.08M	-61.52M	-92.06M	-135.19M

Mears Group Plc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 354.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 354 is below the 20-day moving average (MA) of 356.13, above the 50-day MA of 341.51, and below the 200-day MA of 360.59, indicating a neutral trend. The MACD of 3.30 indicates Positive momentum. The RSI at 52.24 is Neutral, neither overbought nor oversold. The STOCH value of 46.77 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
ABDP	75 Outperform	£290.37M	27.31	8.85%	0.62%	3.10%	23.59%
MER	72 Outperform	£295.95M	6.15	25.63%	4.76%	-2.79%	37.33%
GLE	64 Neutral	£207.24M	13.09	5.23%	2.53%	5.93%	-18.26%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DOCS	59 Neutral	£744.09M	48.13	4.61%	3.46%	-2.59%	-46.13%
MUL	45 Neutral	£63.14M	-1.91	―	―	-15.13%	48.56%
CRST	42 Neutral	£418.11M	-5.69	-9.56%	1.74%	-3.50%	-176.18%

Mears Group Plc Corporate Events

Mears Group Expands Compliance Services with Pennington Choices Acquisition

Mears Group PLC has acquired Pennington Choices Group Limited for £9.5 million, aiming to enhance its Compliance and Asset Management services. This acquisition aligns with Mears’ strategy to expand in the fragmented housing compliance market, leveraging Pennington Choices’ expertise to strengthen its service offerings and accelerate growth. The acquisition is expected to be earnings accretive in its first year, with anticipated revenue and adjusted EBITDA of £17.0 million and £1.5 million, respectively.

The most recent analyst rating on (GB:MER) stock is a Buy with a £431.00 price target. To see the full list of analyst forecasts on Mears Group Plc stock, see the GB:MER Stock Forecast page.

Mears Group Chairman Increases Stake in Company

Mears Group PLC announced that its Chairman, Jim Clarke, has purchased 10,000 ordinary shares in the company, increasing his total shareholding to 40,000 shares, which represents approximately 0.05% of the company’s voting share capital. This move indicates confidence in the company’s future prospects and may positively influence stakeholder perceptions, reinforcing Mears’ stable position in the housing services industry.

The most recent analyst rating on (GB:MER) stock is a Buy with a £431.00 price target. To see the full list of analyst forecasts on Mears Group Plc stock, see the GB:MER Stock Forecast page.

Mears Group CFO Increases Stake in Company Shares

Mears Group PLC announced that its Chief Financial Officer, Andrew Smith, has purchased 6,500 ordinary shares of the company at an average price of 382.45 pence per share. This transaction increases Mr. Smith’s total shareholding to 500,039 shares, representing approximately 0.58% of the company’s voting share capital. This move could be interpreted as a sign of confidence in the company’s future prospects by a key executive, potentially impacting stakeholder perceptions and market positioning.

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 Reports Strong Interim Results and Strategic Progress

Mears Group PLC reported strong financial and operational performance for the first half of 2025, with a 5% increase in profit before tax despite a 4% decline in revenue. The company achieved an 8% growth in Maintenance-led activities and maintained a 100% contract retention rate, securing new orders worth approximately £1.5 billion. Mears’ strategic focus on compliance and asset management, along with investments in technology and key account management, positions the company well for future growth. The Board expects adjusted profit before tax for the full year to exceed market expectations, reflecting confidence in the company’s growth momentum.

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.