January 21, 2020 / 7:35 AM / a month ago

Mears unit sale plan to hit 1,500 jobs; order book falls

(Reuters) - Mears Group Plc (MERG.L) reported a lower order book at the end of 2019 and said it was in advanced talks to sell its unit that provides homecare services in England and Wales, impacting about 1,500 jobs.

The company, which has been grappling with higher debt levels, is looking to slim down its operations and focus more on housing and social care services.

“Our exit from standalone Domiciliary Care will enable us to focus our efforts where we can deliver superior returns for shareholders,” Chief Executive Officer David Miles said.

Mears, which bought the England and Wales domiciliary care unit in 2015, plans to complete the sale of its Scottish Domiciliary Care business this year. It employs about 1,000 people in the Scottish unit.

The company and its peer Serco (SRP.L) won contracts worth 2.9 billion pounds last year from the British government to provide accommodation and support for asylum seekers.

Mears said the contract is now fully operational, generating revenue of about 45 million pounds in 2019, with full-year revenue expected to be more than 100 million pounds.

The company said it expects to report an annual underlying profit before tax on continuing activities in line with expectations.

Mears, which employs over 12,000 employees, said its order book stood at 2.5 billion pounds ($3.25 billion) for the year ended Dec. 31, down from 3 billion pounds a year ago.

The company is expected to report closing net debt of about 52 million pounds, lower than 65.9 million pounds a year earlier.

Reporting by Indranil Sarkar and Yadarisa Shabong in Bengaluru; Editing by Anil D'Silva

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