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Mears Group to review social care services business - source
November 22, 2017 / 12:54 PM / 22 days ago

Mears Group to review social care services business - source

* Rothschild to report views back to board -source

* At least one investor urging Mears to sell care business -source

By Maiya Keidan and Noor Zainab Hussain

LONDON, Nov 22 (Reuters) - Mears Group, the British social housing maintenance and repair services provider, is working with an investment bank to decide what to do with its loss-making social care services business, a source with direct knowledge of the matter said.

Mears Group has appointed Rothschild to review the care business and to report back to the board, according to the source.

At least one investor is urging the company to sell the business, which reported an operating loss of 1 million pounds ($1.32 million) in the first half of 2017, said the source.

However, asked about the bank’s appointment and whether management was considering a sale of the care division, a spokeswoman for the firm said: “Mears does not comment on market rumours. The company remains very committed to its Care business and is delighted with the progress it has made recently”.

Rothschild did not immediately respond to requests for comment.

The Care business accounts for 15 percent of Mears’s revenue and the firm scaled back some “unsustainable” care provison contracts last year.

In August Mears reported a 10 percent drop in half-year revenues to 68.7 million pounds for its Care division but said despite continuing to find the market challenging, “we have made good ongoing progress in this area and our order book is significantly improved with a portfolio of good quality contracts at clear, sustainable margins”.

Chairman Bob Holt had also told Reuters in April that the company remained committed to the Care business at a time when the British government was looking at ways to increase the provision of such services as the population ages.

“Home care is a real, real ticking timebomb as the government have realised,” he said.

“Mears have invested a lot of money in getting it into a market leading position, but they are sticking with it.” ($1=0.7549 pounds) (Noor Zainab Hussain and Esha Vaish contributed to the reporting from Bengalaru, Editing by Greg Mahlich)

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