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Market Cap

UK£210.6m

Last Updated

2021/05/08 01:56 UTC

Data Sources

Company Financials +

Executive Summary

Mears Group PLC, through its subsidiaries, provides a range of outsourced services to the public and private sectors in the United Kingdom. More Details


Snowflake Analysis

Moderate growth potential with imperfect balance sheet.

Share Price & News

How has Mears Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MER is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: MER's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-2.6%

MER

-0.5%

GB Commercial Services

2.1%

GB Market


1 Year Return

9.5%

MER

24.4%

GB Commercial Services

26.6%

GB Market

Return vs Industry: MER underperformed the UK Commercial Services industry which returned 23.3% over the past year.

Return vs Market: MER underperformed the UK Market which returned 25.5% over the past year.


Shareholder returns

MERIndustryMarket
7 Day-2.6%-0.5%2.1%
30 Day-1.6%-1.9%3.6%
90 Day24.2%4.3%9.6%
1 Year9.5%9.5%28.5%24.4%32.1%26.6%
3 Year-36.2%-41.5%21.5%8.9%12.8%-0.2%
5 Year-45.9%-53.1%65.3%33.6%51.8%23.0%

Long-Term Price Volatility Vs. Market

How volatile is Mears Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mears Group undervalued compared to its fair value and its price relative to the market?

172.65x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MER (£1.9) is trading above our estimate of fair value (£1.38)

Significantly Below Fair Value: MER is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MER is poor value based on its PE Ratio (172.6x) compared to the GB Commercial Services industry average (37.8x).

PE vs Market: MER is poor value based on its PE Ratio (172.6x) compared to the UK market (25.9x).


Price to Earnings Growth Ratio

PEG Ratio: MER is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: MER is good value based on its PB Ratio (2.1x) compared to the GB Commercial Services industry average (2.5x).


Future Growth

How is Mears Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

76.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MER's forecast earnings growth (76% per year) is above the savings rate (0.9%).

Earnings vs Market: MER's earnings (76% per year) are forecast to grow faster than the UK market (17.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MER's revenue (2.7% per year) is forecast to grow slower than the UK market (5.3% per year).

High Growth Revenue: MER's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MER's Return on Equity is forecast to be low in 3 years time (15.6%).


Past Performance

How has Mears Group performed over the past 5 years?

-10.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MER has a large one-off loss of £2.0M impacting its June 30 2020 financial results.

Growing Profit Margin: MER's current net profit margins (0.1%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: MER's earnings have declined by 10.2% per year over the past 5 years.

Accelerating Growth: MER's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MER had negative earnings growth (-94.4%) over the past year, making it difficult to compare to the Commercial Services industry average (-12.7%).


Return on Equity

High ROE: MER's Return on Equity (1.2%) is considered low.


Financial Health

How is Mears Group's financial position?


Financial Position Analysis

Short Term Liabilities: MER's short term assets (£229.1M) exceed its short term liabilities (£202.5M).

Long Term Liabilities: MER's short term assets (£229.1M) do not cover its long term liabilities (£441.6M).


Debt to Equity History and Analysis

Debt Level: MER's debt to equity ratio (127.2%) is considered high.

Reducing Debt: MER's debt to equity ratio has increased from 33.8% to 127.2% over the past 5 years.

Debt Coverage: MER's debt is well covered by operating cash flow (56.2%).

Interest Coverage: MER's interest payments on its debt are not well covered by EBIT (1.3x coverage).


Balance Sheet


Dividend

What is Mears Group current dividend yield, its reliability and sustainability?

4.18%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate MER's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate MER's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MER's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MER's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: MER is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MER's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.5yrs

Average management tenure


CEO

David Miles (54 yo)

10.5yrs

Tenure

UK£469,000

Compensation

Mr. David J. Miles has been Chief Executive Officer of Mears Group plc since November 25, 2010 and served as its Chief Operating Officer since August 2009. Mr. Miles served as a Managing Director of Mears ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD656.03K) is about average for companies of similar size in the UK market ($USD565.51K).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: MER's management team is seasoned and experienced (10.5 years average tenure).


Board Members

Experienced Board: MER's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Mears Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mears Group plc
  • Ticker: MER
  • Exchange: LSE
  • Founded: 1988
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: UK£210.590m
  • Shares outstanding: 110.84m
  • Website: https://www.mearsgroup.co.uk

Number of Employees


Location

  • Mears Group plc
  • 1390 Montpellier Court
  • Gloucester Business Park
  • Gloucester
  • Gloucestershire
  • GL3 4AH
  • United Kingdom

Listings


Biography

Mears Group PLC, through its subsidiaries, provides a range of outsourced services to the public and private sectors in the United Kingdom. The company offers rapid response and planned maintenance service...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/05/08 01:56
End of Day Share Price2021/05/07 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.