Recent acquisitions are largely responsible for a 21 per cent improvement in half-year revenues at care provider Cambian (CMBN). Revenues for adult services rose 22 per cent in the six months to June, including contributions from learning disability specialist Woodleigh and the male-focused Ansel clinic, while child services reported a 21 per cent increase in revenues, including three Mencap Colleges (bought in June last year) and the New Elizabethan School. For the last two months of the period, Cambian also raised prices by 2 per cent on average for new service users.
Without £18.7m in largely IPO-related exceptional costs this time around, the group generated operating profits of £14.2m, compared with losses of £3.6m this time last year. But rising costs now appear to be on the horizon. The introduction of the living wage has forced Cambian to negotiate fee increases with its existing clients to mitigate the inevitable spread in the group's cost base. Management says it has a "high level of confidence" that clients will accept the higher fees, so expects "no material impact" on profitability as a result of the wage legislation.
Analysts at Numis expect pre-tax profits of £36.6m, giving EPS of 15.6p, compared with £24.2m and 10.8p in 2014.
| CAMBIAN (CMBN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 255p | MARKET VALUE: | £470m | |
| TOUCH: | 255-255.25p | 12-MONTH HIGH: | 310p | LOW: 194p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 143p* | NET DEBT: | 88% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 116 | -11.8 | -12.6 | nil |
| 2015 | 141 | 10.0 | 4.1 | 0.9 |
| % change | +21 | - | - | - |
Ex-div: 15 Oct Payment: 4 Nov *Includes intangible assets of £191 or 104p a share | ||||
