Social housing and care firm Mears Group says the acquisition of a major Scottish provider helped push the company to a strong first-half performance.
Gloucester-headquartered Mears snapped up Clackmannanshire-based ILS Group, which provides independent care services to more than 2,000 people on a daily basis, in a £22.5 million deal in April.
It employs more than 1,600 in Scotland, has a string of office locations including sites in Kirkcaldy and Perth, and works with more than 20 local authorities including councils across Tayside, Fife and the Central Belt.
In a half-year update to the markets, Mears said the spring-time move for ILS had immediately delivered an 8% revenue boost to its care division, taking turnover from £56.1m to £60.5m.
The company said the addition of ILS opened up new possibilities for Mears within higher acuity services a sector providing support for people with learning disabilities, autism, mental health and other complex conditions which accounts for 40% of ILS’s work.
Although ILS operates solely in Scotland, it has the appropriate licences to provide these higher-margin services throughout the rest of the UK.
Chief executive David Miles said the integration of ILS, based on Alva’s Hillfoots Business Park, provided a promising platform on which Mears would build.
“We remain very well placed strategically as the current changes in the market play out,” Mr Miles said.
“The long-term opportunities for Mears within care look encouraging. The ageing population and the fundamental desire of people to stay in their own homes remain the foundations for this sector.
“Economic necessity is, of course, the third driver, which has led to significant political activity.
“We will continue to move further up the acuity chain through acquisition and organic growth, building on the ILS acquisition and extending the Nurseplus model across our client base.”
Overall, Mears saw total revenues lift to a record £457.8m during the six months to June 30 a 49% improvement on the £307.2m posted in the previous year.
However, the company’s £3.98m pre-tax profit for the period was considerably lower than the £10.29m booked a year earlier, thanks to exceptional items totalling £6.47m in the period.
The extra costs were made up of a £6.36m outlay in relation to the restructuring of social housing group Morrison’s, which Mears had also acquired, and £113,000 in charges arising from the ILS transaction.
The firm said it had a solid pipeline of opportunities in the months ahead, with an order book which swelled to £3.8 billion from £2.7bn this time last year.
Mr Miles and chairman Bob Holt said Mears was looking to the future with confidence.
“We have had a good first half, delivering healthy organic growth and successfully integrating the two recent sizeable acquisitions of Morrison and ILS, and we look forward to bringing news of further success over the course of the second half year,” they said.