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1. Company Snapshot

1.a. Company Description

Mears Group plc, through its subsidiaries, provides a range of outsourced services to the public and private sectors in the United Kingdom.It offers rapid-response and planned maintenance services to local authorities; gas and repair services; and maintenance and repairs, capital works, energy investment, and regeneration solutions for public buildings, as well as grounds maintenance services.The company also provides housing management services, which include supply of affordable homes to public and private sectors, emergency and temporary accommodation services, affordable housing services, housing with care services, and housing services to government departments.


In addition, it offers house building services; and facilities management services to the public and private sectors, including defense estates, education, healthcare, public buildings, and commercial office accommodation.The company was founded in 1988 and is headquartered in Gloucester, the United Kingdom.

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1.b. Last Insights on MER

Mears Group plc's recent performance has been positively driven by its undervalued status, with an estimated fair value of UK£3.41, suggesting potential for growth. Additionally, the company's inclusion in lists of undervalued European small caps with insider action has likely boosted investor confidence. As a small-cap stock, Mears Group has demonstrated resilience in uncertain market conditions, making it an attractive option for those seeking growth opportunities outside the blue-chip sphere. Insider buying has also been cited as a growth indicator, implying confidence from those closest to the company.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.39%)

6. Segments

Life Science

Expected Growth: 8.5%

Mears Group plc's Life Science segment growth of 8.5% is driven by increasing demand for outsourced services in the pharmaceutical and biotechnology industries, expansion into new geographic markets, and strategic partnerships with leading life science companies. Additionally, investments in digital transformation and process efficiencies have improved operational productivity, further contributing to the segment's growth.

Healthcare

Expected Growth: 8.27%

Mears Group plc's Healthcare segment growth of 8.27% is driven by increasing demand for social care services, government initiatives to outsource healthcare services, and strategic acquisitions. Additionally, the company's focus on providing high-quality, person-centered care and its ability to adapt to changing regulatory requirements have contributed to its growth.

Electronics

Expected Growth: 8.37%

Mears Group plc's Electronics segment growth of 8.37% is driven by increasing demand for smart home devices, rising adoption of IoT technology, and growing need for energy-efficient solutions. Additionally, the segment benefits from the company's strategic partnerships with leading technology firms and its focus on innovation, enabling it to capitalize on emerging trends in the industry.

7. Detailed Products

Repairs and Maintenance

Mears Group plc provides repairs and maintenance services to social housing providers, local authorities, and private landlords, ensuring that properties are safe, secure, and well-maintained.

Capital Works

Mears Group plc delivers capital works projects, including new build, refurbishment, and regeneration schemes, for social housing providers, local authorities, and private developers.

Compliance and Safety

Mears Group plc offers compliance and safety services, including gas servicing, electrical testing, and fire safety, to ensure that properties are safe and compliant with regulations.

Energy and Sustainability

Mears Group plc provides energy and sustainability services, including energy efficiency measures, renewable energy solutions, and sustainable construction, to help reduce carbon emissions and improve energy efficiency.

Care and Support

Mears Group plc offers care and support services, including domiciliary care, supported living, and extra care, to support vulnerable adults and children.

8. Mears Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Mears Group plc operates in the social housing and care sectors, which have limited substitutes. However, there is a growing trend towards community-based care, which could potentially substitute traditional residential care services.

Bargaining Power Of Customers

Mears Group plc's customers are primarily local authorities and housing associations, which have limited bargaining power due to their reliance on the company's services.

Bargaining Power Of Suppliers

Mears Group plc relies on a network of subcontractors and suppliers, which can exert some bargaining power. However, the company's scale and reputation help to mitigate this risk.

Threat Of New Entrants

The social housing and care sectors have high barriers to entry, including regulatory hurdles and the need for specialized expertise. This limits the threat of new entrants.

Intensity Of Rivalry

The social housing and care sectors are highly competitive, with several established players competing for contracts and market share. Mears Group plc must differentiate itself through its services and reputation to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.58%
Debt Cost 4.93%
Equity Weight 40.42%
Equity Cost 9.84%
WACC 6.92%
Leverage 147.41%

11. Quality Control: Mears Group plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Mears

A-Score: 6.6/10

Value: 9.0

Growth: 7.2

Quality: 4.7

Yield: 7.5

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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XPS Pensions

A-Score: 6.5/10

Value: 3.2

Growth: 8.0

Quality: 7.7

Yield: 6.9

Momentum: 7.5

Volatility: 6.0

1-Year Total Return ->

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Atal

A-Score: 6.5/10

Value: 6.0

Growth: 3.6

Quality: 5.6

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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CEWE

A-Score: 6.5/10

Value: 6.9

Growth: 5.7

Quality: 7.5

Yield: 5.0

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

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Debica

A-Score: 6.3/10

Value: 8.7

Growth: 3.9

Quality: 4.1

Yield: 8.1

Momentum: 3.5

Volatility: 9.7

1-Year Total Return ->

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Musti

A-Score: 2.8/10

Value: 3.0

Growth: 3.4

Quality: 2.1

Yield: 0.0

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.55$

Current Price

3.55$

Potential

-0.00%

Expected Cash-Flows