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Care UK's chief executive Mike Parish expects his company to win contracts worth at least £20m a year in the next 12 months from the government’s 150-plus polyclinic health centres. He also expects to receive sign-off “any week now” for three Independent Sector Treatment Centres contracts, worth close to £50m a year.
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Impressive underlying first-half numbers were driven by 13 per cent revenue growth from Care UK's social care business, which accounts for 77 per cent of the group total. The division provides both residential and homecare services. The main contributor to the growth was the 30 per cent growth in revenues from its Community Care, which provides home care services for the elderly.
| CARE UK (CUK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 450p | MARKET VALUE: | £253.7m | |
| TOUCH: | 448-450p | 12-MONTH HIGH: | 823p | LOW: 333p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 166p | NET DEBT: | 167% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2006 | 106 | 6.8 | 9.2 | 1.22 |
| 2007 | 152 | -9.6 | -19.2 | 1.33 |
| % change | +43 | - | - | +9 |
Ex-div: 4 Jun Payment: 7 Jul *Includes intangible assets £77.5m, or 137p a share |
||||
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The company reported a 23 per cent rise in profit before tax and non-cash write-downs (which include £13.9m relating to the loss of the West Midlands Diagnositic contract), to £8.7m.
Brewin Dolphin raised its forecasts slightly and expects adjusted EPS for 2008 of 26.1p (2007: 26p), increasing to 31.1p the following year.
Care UK has an impressive diversified earnings base, illustrated by strong first-half trading. Priced at just over 17 times expected 2008 earnings, we continue to believe the stock is cheap. The shares are trading slightly below our buy recommendation (461p, 1 May 2008) and remain a buy.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
