Along with the social housing and care outsourcer, Snoozebox signed a deal with the council in March to help alleviate a social housing shortage in west London.
Commenting on the deal after his company's full-year results update today, Mears chief executive David Miles says the deal structure means Snoozebox will earn profits up-front, while Mears is to receive service revenues over the course of the let.
Snoozebox will deploy up to 44 modular accommodation units and Mears is to provide maintenance and services for tenants when they move in.
‘Mears won’t start to see a financial impact this year because during the build element all of the profit will go to Snoozebox,’ says Miles. 'It is their property that’s being used – we will start providing services and generating revenues when tenants move in.'
Miles explains that 'the first tenants are expected in October but that is a broad estimate. If set-up drags past November a start date in the New Year becomes more likely. Tenants are not usually moved around the Christmas period.' He also expects similar contracts to be awarded by other councils in the coming years.
Earnings per share at Mears grew 15% to 32p last year, though the shares are flat at 445p in early dealings.