Housing contractor Mears (MER) is down 6.1% to 451.8p as it warns that the tragic events at Grenfell Tower in London will impact the business this year as its clients review their safety practices.

Delays to planned works are expected to reduce revenues in the division for the year to £800m from previous forecasts of £830m.

Analysts at Liberum estimate that the order book has fallen from an estimated £3.1bn to £2.8bn.

But Mears says any impact is likely to be temporary. The business, which provides support services to the social housing and care sectors, reports revenue has edged up £470.8m in the six months to June 30. Pre-tax profit has also climbed 1% to £18.3m compared to the same period a year ago.

But revenue in the care division of the business slipped 10% over the year after branch closures. The division, which accounts for 15% of group revenues, made an operating loss of £1m over the period, against a profit of £1m a year ago. Mears says restructuring costs have impacted results.

Overall the group says the interim results were in line with expectations and the board says it is confident in the long-term prospects for the firm.

CONFIDENCE EXPRESSED IN LONG-TERM PROSPECTS

Analysts at Liberum say there is likely to be increased pressure for better funding for social housing and the long-term drivers for the sector 'including lack of supply and increasing regulation on the private sector' remain.

Peel Hunt has reduced its profit estimates for the year but says the 'longer-term outlook is strengthening, not diminishing'.

Shareholders are set for an interim dividend of 3.45p a share, up 5% from a year ago.

David Miles, chief executive at Mears, says: 'While the likely revenue shortfall for the full year is frustrating, it is entirely understandable in the circumstances and the group will be working closely with its partners and clients to address their immediate priorities.'

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Issue Date: 15 Aug 2017