Caretech Holdings (CTH)


CareTech hikes divi as earnings rise

CareTech's revenues rose by 11.3% to £78.8m in the six months to the end of March and the group announced that it has agreed to acquire Selborne Care Limited for a total consideration of £16.9m in cash.

The group's underlying EBITDA increased by 8.3% to £18.3m (H12016: £16.9m) and underlying profit before tax rose by 13.9% to £13.1m (H12016: £11.5m).

Other highlights:

- Underlying diluted earnings per share increased by 11% to 16.37p (H12016: 14.75p)

- Operating profit decreased by 28.5% to £10.7m (H12016: £15.0m) and profit before tax decreased by 37.5% to £7.0m (H12016: £11.2m) principally due to £5.6m profit on sale of fixed assets in 2016

- Strong operating cash inflow before non-underlying items of £15.8m (H12016: £15.6m) with net debt of £122.5m at 31 March 2017 (31 March 2016: £156.4m) (iii)

- Interim dividend increased by 10% to 3.30p (2016: 3.00p) per share

Executive chairman Farouq Sheikh said: "We are pleased to report an impressive performance for the first half of 2017 which delivered year on year growth in revenue, underlying EBITDA, underlying profit before tax and underlying EPS.

"Having raised £37m of net proceeds from the share placing in March 2017, the Group has completed on two acquisitions with a total spend of £20.7m since the half year ended.

"A number of potential acquisition opportunities are under active consideration and in addition we have a strong organic pipeline of additional beds in reconfigured services and in new services.

"The Directors believe that this will lead to a sustained growth in capacity and revenues which will generate additional EBITDA and cash so that the Group can achieve its target of double digit growth annually in underlying diluted earnings per share.

"It is pleasing to recognise the hard work that has gone into the disability confident level 3 accreditation. Also the creation of the CareTech Charitable Foundation is an exciting initiative to make a difference to support service users and our staff and their families plus contribute to disability related causes.

"The continued provision of first-class social care which represents good value and is focused on successful service user outcomes will remain the main market driver for CareTech's continuing growth."

Separately, the group said it had agreed to acquire the entire issued share capital of Selborne, a high quality provider of specialist residential care, supported living and day care services for adults with learning disabilities and challenging behaviours.