Mears Group PLC (AIM:MER) shares rose 7% after trading exceeded market expectations, driven by strong performance in its core housing activities and robust contract momentum.
Operating margins in the housing division continued to strengthen, while volumes in management-led services declined at a slower pace than anticipated.
The mobilisation of a major contract with North Lanarkshire Council, covering 37,000 homes and 1,200 buildings, is progressing well, with strong early performance despite initial margin dilution.
Mears also secured a new £12 million contract with Moat Homes and achieved 100 per cent retention of contracts subject to re-bidding during the year.
In addition, Mears completed the sale and leaseback of 221 residential properties, generating £16.3 million in cash. The group concluded a two-year share buyback programme, reducing its share count by 21%. The company remains optimistic about 2025 trading.
Late morning, the stock was up 24.5p at 372p. Broker Peel Hunt is an 'add' up to 380p, while Panmure Liberum is a 'buyer' up to 499p.
On trading, PL observed: "Management-led volumes performed better than we had originally forecast.
"In addition, group margins expanded more quickly than we expected, with the positive trend strengthening in the second half (in part helped by lower than forecast North Lanarkshire mobilisation costs)."