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CareTech enjoys first-half revenue boom after “transformational” Cambian acquisition

The group's performance reflects the scale of the acquisition and delivers a substantial increase in revenue and EBITDA compared with the same period last year - the company said

disabled woman
CareTech provides support and accommodation for thousands of vulnerable people

CareTech Holdings PLC (LON:CTH) enjoyed a “transformational” first half following the recent £372mln acquisition of rival social care and education services provider Cambian.

The AIM-quoted group now looks after almost 5,000 adults and children with autism, learning disabilities and other complex disorders in its 550-plus residential facilities across the UK.

READ: CareTech lifted as full-year profits and dividend jump over 10%

The acquisition of Cambian, which was announced back in October and eventually cleared by competition regulators in February, has already had a noticeable impact on CareTech’s first-half performance.

Revenue more than doubled to £192.5mln in the six months ended 31 March (H1 18: £87.6mln), while underlying earnings (EBITDA) jumped 71% to £33.3mln (H1 18: £19.5mln).

Excluding Cambian, like-for-like revenue rose 12% and like-for-like EBITDA edged 4% higher.

Bosses added that the integration of the new business is “well underway” as they continue to target £3mln of cost savings in the first full-year of ownership.

Results reflect instant impact of Cambian

“I am delighted to be reporting our first financial results following the acquisition of Cambian in October 2018,” said executive chairman Farouq Sheikh.

“The group's performance reflects the scale of the acquisition and delivers a substantial increase in revenue and EBITDA compared with the same period last year.”

He added: “I am pleased to report that the group's trading performance in the year to date is in line with market expectations and we have delivered on all of our key work streams, all of which have been achieved with the backdrop of the Cambian acquisition, the subsequent CMA investigation and the sad passing of our Finance Director, Michael Hill.”

Dividend upped

Given the strong showing, CareTech upped its interim dividend by 7% to 3.75p (H1 18: 3.5p).

Shares were up 0.5% at the opening bell on Thursday to 375p, valuing the company at £410mln, almost half the estimated worth of the company’s property portfolio.

Quick facts: CareTech Holdings

Price: 370 GBX

AIM:CTH
Market: AIM
Market Cap: £415.02 m
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