Running a listed company that owns and manages care homes for disabled children is not an easy task. Not only do management have to keep customers, staff, regulators and the government happy by providing high standards of care at reasonable prices, but they must also placate shareholders with strong profit growth and dividends. Cambian (CMBN) has made significant progress in the period under review after a disastrous 2016, but is yet to fully satisfy either camp.
True, margins widened in 2017 thanks to a major cost-cutting initiative, meaning adjusted cash profits rose 15 per cent to £18.7m. But the group has not quite returned to a net profit position as management promised. Meanwhile, a 9 per cent increase in average daily fees may have sparked a 6 per cent increase in like-for-like revenue, but it's unlikely to please residents or local councils who are required to foot the bill when customers can’t afford to cover their own costs.
For investors, the best news is the recovery in cash inflows, which have given management the confidence to reinstate the dividend. In 2017, operating cash inflows rose to £29.9m, from £3.4m in the previous year.
| CAMBIAN (CMBN) | ||||
| ORD PRICE: | 195p | MARKET VALUE: | £359m | |
| TOUCH: | 194-197p | 12-MONTH HIGH: | 220p | LOW:117p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 169p* | NET CASH: | £82.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 214 | 7.8 | 16.1 | nil |
| 2014 | 241 | -4.2 | -6.1 | 1.80 |
| 2015 | 161 | -10.7 | -8.1 | nil |
| 2016 | 182 | -37.4 | -17.2 | nil |
| 2017 | 196 | -9.0 | -4.3 | 0.39** |
| % change | +8 | - | - | - |
| Ex-div: | 5 Jul | |||
| Payment: | 31 Jul | |||
| *Includes intangible assets of £117m, or 64p a share | ||||
| **Excludes 27.1p special dividend paid on 15 September 2017 | ||||
