MEARS is continuing to turn around the Morrison business it acquired for £24m last November with a string of loss-making contracts reports Construction Enquirer
The social housing giant enjoyed the most successful year in its 17-year history in 2012 as pre-tax profits edged-up to £31.7m from £31.5m on turnover up to £679.5m from £589m.
The Morrison acquisition boosted sales but dragged-down profits.
Chief executive officer David Miles said: “Morrison had encountered significant operational challenges having pursued an aggressive growth strategy at the expense of operating margin and service delivery.
“Whilst in aggregate the Morrison contracts that we acquired are currently generating an operating loss, we are making good progress in moving towards extracting value from these contracts.
“Mears has a strong track record of turning around, integrating and extracting substantial value from acquired businesses, along with an excellent track record in terms of service delivery and profitability.
“Mears identified significant strategic and operational synergy benefits from the acquisition of Morrison.
“The period since acquisition has seen a positive reaction to the transaction across the Morrison client base.
“We are now at an advanced stage in restructuring the senior operational management and social housing support functions.
“Whilst this has, as anticipated, realised significant financial synergies, it has also provided an opportunity to combine the strengths of both organisations and enhance operational delivery and control.”
Mears has set aside £8m in restructuring costs in the wake of the Morrison deal.