GB : Mears Group - In line results with average net cash

The FY 21 results were in line with the guidance set out in February. Having increased our estimates in February, we now leave them unchanged and introduce FY 24 estimates. Staff and supply chain challenges are being managed. Average daily net debt improved from £97.3m in FY 20 to average net cash of £0.4m at FY 21, helped by the TerraQuest sale and property sales. We maintain our FY 22 average net cash estimate (excluding leases) of £5m which may prove to be prudent. The order book fell slightly from the interim level of £2.5bn to £2.4bn at FY 21 despite RLAP, and the next big contract news is North Lanarkshire. The business has started to generate positive momentum and a CY 22 P/E of 10.5x is not expensive; BUY, TP 230p.