British social housing maintenance company Mears cuts annual revenue forecast
Aug 15 (Reuters) - British social housing maintenance and care provider Mears Group forecast lower full-year revenues on Tuesday, saying landlords were delaying new contracts as they reviewed safety measures following the deadly Grenfell Tower blaze in London.
The company, which does repair and maintenance work for properties belonging to local authorities and other social housing landlords, said on Tuesday that some authorities were holding off on signing new contracts while they conducted safety checks in the wake of the Grenfell Tower fire in June, in which 80 people died.
Mears said it now expected full-year revenues from its housing division of about 800 million pounds ($1 billion), against an original expectation of 830 million pounds. It said that would result in a lower than previously expected annual profit, although it has not disclosed its profit forecast.
Britain is reviewing building and fire safety rules after police said they believe cladding panels added during a refurbishment of Grenfell Tower may have contributed to the rapid spread of the fire.
Mears, which was not directly involved in work on Grenfell Tower, said the delays in procurement decisions by housing clients were expected to be temporary and would not impact its order book.
"Whilst the likely revenue shortfall for the full year is frustrating... the group will be working closely with its partners and clients at this time to address their immediate priorities," Chief Executive David Miles said in a statement.
Analysts at Liberum said in a note that they were cutting their full-year 2017 fully diluted earnings per share estimate for Mears to 30.8 pence from 33.8 pence but continued to assume double-digit EPS growth in 2018 and 2019. ($1 = 0.7713 pounds) (Reporting by Esha Vaish in Bengaluru; Editing by Susan Fenton)