Mears Group shares tumble 10 per cent on lacklustre financial results
Shares in housing and social care provider the Mears Group fell 10 per cent this morning after it missed targets for profit and its revenue fell.
Earnings per share rose 3.6 per cent to 29p, below market expectations.
Broker Liberum said earnings per share was six per cent lower than its estimate and said it was cutting its earnings per share estimate for 2019 by 21 per cent.
Read more: Mears Group shares down on reports of under-pressure budgets
Chief executive David Miles said: "Notwithstanding the progress made to ensure that Mears is well placed to benefit as our markets develop, I equally realise that the financial benefits have taken longer to come through than expected and that shareholders would like to see active steps taken to address this, particularly in respect of net debt, capital allocation and cash generation.
“Whilst we will never lose our long-term approach, the board is considering how Mears can ensure that it retains its competitive advantage, as well as placing greater emphasis on working capital requirements and implications for the group balance sheet. I expect further progress in 2019."
Net debt increased by £40.1m over the year to hit £65.9m.
Read more: Mears shares fall as it buys up Mitie's social housing business
Average daily net debt for the year was £113.2m, below the target of £110m set at the start of the year.
The company said working capital tied up in development had contributed to the spike in debt.
The board recommended a final dividend of 8.85p per share, giving 12.4p per share for the year as a whole, representing a 3.3 per cent increase on the previous year.
Shares fell 10 per cent to 261p in early trading.