Care home and services provider CareTech (CTH) has been busy spending the net £20m it gathered in a placing announced in February. The last of that cash paid for north-west residential care provider ROC, following two deals made before the period-end. This shopping spree is likely to continue: CareTech has signed a new £30m loan facility and secured the deferment of £21.6m in loan repayments. That, along with roughly £10m of free cash flow, should give the group flexibility to make more deals.
Chief operating officer John Ivers says two more transactions are in the pipeline, but insists CareTech's growth story "isn't predicated on acquisitions". The company is still reconfiguring much of its existing business - which includes adult, child, mental health and foster care services - and managing its extensive property portfolio. That, along with the acquisition expenses, explains much of the hit to reported profits. On an underlying basis, pre-tax profits rose 12 per cent to £22m last year, helped by an improved margin in its services for adults with learning disabilities.
Analysts at Panmure Gordon are reviewing their estimates of pre-tax profits of £24.3m and EPS of 32.1p for the year ending September 2016, compared with £22m and 31.8p in FY2015.
| CARETECH (CTH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 234p | MARKET VALUE: | £146m | |
| TOUCH: | 233-235p | 12-MONTH HIGH: | 260p | LOW: 195p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 215p* | NET DEBT: | 119% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 109 | 7.4 | 11.7 | 6.0 |
| 2012 | 114 | 6.4 | 12.3 | 6.5 |
| 2013 | 114 | 28.1 | 47.5 | 7.0 |
| 2014 | 123 | 12.5 | 23.9 | 8.0 |
| 2015 | 124 | 9.4 | 13.8 | 8.4 |
| % change | +1 | -25 | -42 | +5 |
Ex-div: 3 Mar Payment: 9 May *Includes intangible assets of £72.9m, or 117p a share | ||||
