- By Region
Mears Group, the outsourcing company, issued a profit warning on Thursday, saying that changes to household subsidies for solar power use would force it to close one of its businesses.
The decision will reduce the company’s full-year operating profits by £2.8m and force it to write off £2m in unrecoverable investments. In response, analysts cut their earnings forecasts for this year and next by about 9 per cent.
Earlier this year the company added solar panel installations to the range of support services, such as domiciliary care and repairs, that it offers to council estates with the intention of benefiting from government-backed clean energy incentives.
However, the Department of Energy and Climate Change said in October that it would cut a household solar energy feed-in tariff by half, which Mears said would take away any upside the installations would have provided.
“We were waiting for an update that everything was on track, not a profit warning,” said Francesca Raleigh of Numis Corp. “Their forecasts were a bit too high and they had hoped solar work was going to make up the difference.”