Grenfell Tower Disaster To Have Impact On Profits For Mears Group

Grenfell Tower Disaster To Have Impact On Profits For Mears Group

The Grenfell Tower tragedy will hit profits at social housing and support services provider Mears Group this year as clients delay new projects.

The firm said the fire in West London has meant clients' attentions have "naturally been diverted towards ensuring their housing portfolios are safe and fully compliant", rather than on beginning new work.

"The recent tragic events at Grenfell Tower will impact the housing division later this year as clients review the commissioning and safety practices at their properties.

"These unexpected events will inevitably impact the timing of our planned workloads as clients' attentions have naturally been diverted towards ensuring their housing portfolios are safe and fully compliant," the group said.

As a result, Mears said delays in planned works orders will see housing revenues of circa £800 million in 2017 versus an original expectation of £830 million, with a resulting "loss of profit and lower overhead recovery".

Mears had no involvement in the Grenfell disaster, but does provide cladding for tower blocks.

However, the company expects the delays in procurement decisions to be temporary, adding the housing order book is not affected.

Mears made the announcement alongside half year results, which saw revenue and profit broadly flat at £470.8 million and £12.7 million respectively.

Shares in Mears tanked more than 8% in morning trading to 445p.

Russ Mould, investment director at AJ Bell, said: "Delays to social housing contracts in the wake of the Grenfell Tower disaster mean that Mears will miss its budgets for the year and add to a litany of woe for the support services sector, where firms such as Aggreko, G4S, Interserve, Carillion, Serco and Mitie have already badly disappointed, albeit for a wide range of different reasons."

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