Caretech (CTH) keeps on buying. After raising £37.4m via a share placing, the care home operator acquired Selborne Care for £16.6m in cash. This added 57 residential beds and supported living services to 30 adults with learning disabilities and challenging behaviours. The group also purchased properties including Beacon Reach, a children’s residential education facility near Preston, for £4m. The remainder of the placing proceeds will be used to fund further purchases.
Placing expenses added to acquisition and restructuring-related costs ate into statutory profit. Underlying pre-tax profit was up 13 per cent to £29.4m. Overall capacity increased by 215 places year on year to 2,534. Revenue for the mature adult learning disabilities division – which accounts for more than half of the group total – increased by 10 per cent. The occupancy level stood at 93 per cent, or 86 per cent after accounting for facilities under development.
In the young people residential services division, new services meant 49 beds were added. Revenue here was up 12 per cent to £43.8m. Thanks to sectoral changes caused by the government's apprenticeship levy, learning services providers EQL Solutions and Dawn Hodge Associated had a more challenging time, resulting in a 7 per cent decline in revenue. However, a management reorganisation was undertaken and the outlook is better.
WH Ireland analysts expect adjusted pre-tax profit of £32.6m for the year to September 2018, giving EPS of 34.9p (from £29.4m and 38p in FY2017).
| CARETECH (CTH) | ||||
| ORD PRICE: | 433p | MARKET VALUE: | £328m | |
| TOUCH: | 429-433p | 12-MONTH HIGH: | 461p | LOW: 286p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 270p* | NET DEBT: | 72% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 114 | 28.1 | 47.5 | 7 |
| 2014 | 123 | 12.5 | 23.9 | 8 |
| 2015 | 124 | 9.4 | 13.8 | 8.4 |
| 2016 | 149 | 22.5 | 36.2 | 9.25 |
| 2017 | 166 | 16.8 | 25.5 | 9.9 |
| % change | +11 | -25 | -30 | +7 |
| Ex-div: | 8 Mar | |||
| Payment: | 8 May | |||
| *Includes intangible assets of £84m, or 111p a share | ||||
