TIDMCTH
RNS Number : 5672N
CareTech Holdings PLC
27 October 2016
For immediate release 27 October 2016
CareTech Holdings PLC
("CareTech" or "the Group")
Full Year Trading Update
CareTech Holdings PLC (AIM:CTH), a pioneering provider of
specialist social care services in the UK, is pleased to announce
its full year trading update ahead of its results for the year
ended 30 September 2016.
The Board confirms that trading for the year is in line with
market expectations.
CareTech's care pathways continue to be a key foundation for
delivering positive outcomes for our service users. During the
year, 74 additional beds in reconfigured services and new services
have been brought into capacity. These beds have a higher
contribution than the beds pre-reconfiguration and are part of the
ongoing strategy to enhance fees and margins. The Group acquired
ROC North West in December 2015, which had a children's residential
capacity of 41 beds, and Oakleaf (Hartwell) in March 2016, which
had an adult residential capacity of 102.
The Group's net capacity at the year-end was 2,319 places (2015:
2,116 places), a net increase in capacity of 203 places. A net 14
places were removed for reconfiguration. These included 20 places
in services that have been withdrawn for reconfiguration into new
care models, two places that were added in supported living and
four added in other services. Once the services comprising 20
places have been reconfigured, we expect them to contribute a
higher fee income and profit margin than previously. The addition
of places from supported living is due to contract wins in the
North West.
Occupancy levels in the mature estate remain strong at 93%
(2015: 93%) and the blended occupancy remains approximately
86%.
Annual fee rate negotiations with local authorities have led to
a positive outcome this year. The key to improving fee rates
remains our work on reconfiguring services that we own and
repositioning them for the needs of more complex service users in
line with commissioner demand.
In April 2016 the National Living Wage was set at GBP7.20 an
hour for all staff aged 25 and over. This new benchmark is welcomed
as we expect it to improve staff retention. The change to the
minimum wage affected only a minority of our staff. We are
recovering the increase in cost from the appropriate Local
Authorities and these negotiations are almost complete.
Following the launch of the CareTech Aspire Programme in 2015
our Learning Division continues to ensure that all of CareTech's
care staff receive high quality mandatory and statutory training
whilst also being offered the opportunity to complete a Level 2 or
Level 3 apprenticeship. We have extended this offer to our CareTech
managers who have the opportunity to complete a Level 5 in care
management.
We are pleased that 123 of our support staff have completed a
level 2/3 apprenticeship and 359 are currently taking the
qualification. A further 64 are benefiting from Level 5, Team
Leader, Business Admin or Customer Services delivered by EQL, which
is part of the Group's Learning Division.
As part of our ongoing commitment to excellence in care, the
management team has been further strengthened in the year and we
will continue to bring senior executives into the business to help
build a strong foundation from which to drive growth and
quality.
During the year the Group purchased a number of properties for
refurbishment into new services including a Children's service
(formerly called Crowroyd), which opened during the year in
Yorkshire and has five beds. There was a particular focus on
property acquisitions and refurbishments in the second half with
work in progress on a total of five properties: three for Spark of
Genius in Scotland (one of which has opened in October); one for
Children's services in Fife; and one for ROC North West in
Lancashire. When opened these five properties will add a further 25
beds.
A further property, near Hereford, was purchased in October for
Children's Services, and shortly a new Children's service will open
in Dudley next to a service built last year.
Net Debt reduced to GBP156.9m at the period end (30 September
2015: GBP158.5m) with the monies raised from the ground rent
transaction being spent on the two acquisitions of ROC North West
and Oakleaf. The Group continues to work on a number of other
opportunities and has a strong pipeline of projects and
transactions in progress.
CareTech will announce its preliminary results in early December
2016.
Farouq Sheikh, Executive Chairman, commented:
"I am pleased to report another solid performance over the
second half, highlighting the progress we are making in delivering
our organic and inorganic growth strategy. The acquisitions made
earlier in the year are now fully integrated into the business and
we continue to work through a strong pipeline of projects and
transactions, seeking opportunities to deploy funds available from
the ground rent deal agreed in the first half as well as our
existing bank facilities and strong underlying cash flow.
"As recognition of the hard work and dedication of our staff
teams I am delighted to note that we have five shortlisted
finalists for the prestigious Laing and Buisson 2016 Awards.
"We look forward to providing further updates as we continue
with the execution of our exciting growth strategy."
For further information, please contact:
CareTech Holdings PLC 01707 601800
Farouq Sheikh, Executive Chairman
Michael Hill, Group Finance Director
Buchanan (PR Adviser) 020 7466 5000
Mark Court
Sophie Cowles
Stephanie Watson
Panmure Gordon (Nomad and Joint Broker) 020 7886 2500
Freddy Crossley
Peter Steel
Charles Leigh-Pemberton
WH Ireland (Joint Broker) 020 7220 1666
Adrian Hadden
Nick Prowting
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
About CareTech
CareTech Holdings plc is a leading provider of specialist social
care services, supporting adults and children with a wide range of
complex needs in more than 250 specialist services around the
UK.
Committed to the highest standards of care and care governance,
CareTech provides its innovative care pathways through five
divisions covering adult learning disabilities, mental health,
young people residential services, foster care and learning
services.
CareTech, which was founded in 1993, began trading on the AIM
market of the London Stock Exchange in October 2005 under the
ticker symbol CTH. Its freehold portfolio comprises more than 195
properties.
For further information please visit: www.caretech-uk.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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