Cambian Group's directors flag potential for future growth

Cambian Group's shares rose almost 5% as investors liked a rise in full-year revenue, albeit accompanied with a wider pre-tax loss for the period, as directors flagged potential for future growth.

"The sale of the Adult Services business will allow the Cambian Group to focus on being a market leading provider of specialist children's services, where the Board sees significant opportunities for margin improvement and growth," said chairman Christopher Kemball

Cambian was now a pure children's behavioural services and specialist education business, offering a full range of essential services from therapeutic fostering through to specialist schools and residential care, covering autism, mental health, and sexual abuse and exploitation.

At the end of 2016, it managed 224 facilities and employed more than 4400 staff, looking after 1270 children and young people.

"Our Board believes that we have a significant opportunity to grow the business through a combination of organic growth and prudent bolt-on acquisitions," it said.

In addition to our cash balances, the company had secured, subject to documentation, a medium-term revolving credit facility of £30m to support its measured growth plans.

The board's current intention was that, in the medium term, net debt would not exceed 1.5-times Adjusted EBITDA.

"The year has started overall in line with the Board's expectations as we continue to grow our occupancy levels."

Cambian also said it intended to resume its progressive dividend policy this year and expected to pay an interim dividend for the first six months of the financial year.

Revenue was £182.1m, from £160.7m. Pre-tax loss was £37.4m, from £10.7m. The result was dented by £29.8m of finance costs, from £8.8m previously.

At 11:00 BST, shares in Cambian were up 4.58% to 159.75p each.