Caretech growth on track as Cambian acquisition beds in

For the year ended 30 September the net capacity in CareTech’s residential and supported living increased by 3% to reach 2,622 places, with occupancy levels remaining steady at 93% and ‘outstanding/good’ CQC ratings rising from 79% to 82%.

The outfit's management also confirmed that trading was in-line with market expectations which are for revenues of £180m and EBITDA of £43.7m, both constituting growth of around 10% over the year before.

Net debt was £147m at the year-end, minutely down from £147.2m at the same point last year, which the AIM traded company said reflected investment in new properties and conversion work on properties acquired earlier, as well as further continuous investment in IT.

Farouq Sheikh, CareTech's executive chairman, said: "This has been an exceptionally busy, successful and transformational year as we complete our 25th year as CareTech. In the year to 30 September 2018, we have continued our focus on quality of care, on staff development and on reconfiguring services to meet the requirements of care commissioners."

The company said that its acquisition of specialist childhood behavioural health services provider Cambian on 18 October has morphed the company into a “leading and diversified” operator in the higher acuity social care sector.

"Our vision is for the enlarged group to be a leading, nationwide and integrated provider of social care pathways in the UK to children and adults, with continued growth and care excellence. We look forward to the future with confidence," said Sheikh.

Following the acquisition, the outfit is now comprised of a Caretech trading division and a Cambian division, with separate chief executives reporting to Sheikh.

Analysts at Liberum said: "CareTech management continues to deliver on quality, occupancy and margins which supports our thesis that it can create significant value from the sub-optimised Cambian assets."

CareTech’s shares were up 2.00% at 351.90p at 0849 BST.