TIDMCTH
RNS Number : 6409U
CareTech Holdings PLC
26 October 2017
For immediate release 26 October 2017
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 2017.
The Board confirms that trading during the period was in line
with market expectations.
CareTech's care pathways continue to be a key foundation for
delivering positive outcomes for our service users and in total we
have added 248 beds in the year. During the year, a total of 161
beds in reconfigured and new services have been brought into
service. These beds have a higher contribution than the beds
pre-configuration and are part of an ongoing strategy to enhance
fees and margins.
Approximately a third of the additional beds are a result of the
Group's acquisition of Selborne Care Limited in June 2017, which
has an Adult Residential capacity of 57 beds and provides Adult
Supported Living services to 30 service users. Selborne Care has
performed in line with expectations.
The Group's net capacity at the year-end was 2,534 places (2016:
2,319 places), a net increase in capacity of 215 places. A net 33
places were removed for reconfiguration. These included 36 places
in services that have been withdrawn for reconfiguration into new
care models, and 3 places added in supported living.
Occupancy levels in the mature estate remain strong at 93%
(2016: 93%) and the blended occupancy remains approximately
86%.
Annual fee rate negotiations with local authorities have again
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 2017 the National Living Wage was set at GBP7.50 an
hour for all staff aged 25 and over. This new benchmark is welcome
as we expect it will improve staff recruitment and retention. The
change to the National Minimum Wage, for those aged under 25,
affected only a minority of our staff. We are recovering the
increase in cost from the appropriate Local Authorities and these
negotiations are almost satisfactorily complete.
The Company has undertaken a second Sharesave Scheme for staff
during the year whereby on 13 October 2017 it granted options in
aggregate over 254,681 ordinary shares.
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 drive
growth and quality.
Our acquisitions undertaken over the past few years have
performed ahead of expectations in part as a result of being within
the wider Group. As a result of good initial returns we plan to
further invest in some of these businesses.
During the year the Group purchased a number of properties for
refurbishment into new services. There was a particular focus on
property acquisitions and refurbishments in the year with work in
progress on a number of projects that will open during 2017/18.
The CareTech Charitable Foundation was created during the year.
Its objectives are to promote the education of people with special
needs and those at a disadvantage and to provide relief to those
with physical and mental illness by the provision of counselling
and support. The focus of the foundation will be both on projects
and people in the UK and throughout the world.
Net Debt reduced to GBP147.2m at the period end (30 September
2016: GBP156.9m) with the proceeds from the Placement of 11,000,000
new shares in March which raised GBP37m of net proceeds being
partly spent on the acquisition of Selborne Care in June. The Group
continues to work on a number of other acquisition opportunities
and has a strong pipeline of projects and transactions in
progress.
CareTech will announce its preliminary results in early December
2017.
Farouq Sheikh, Executive Chairman, commented:
"I am very pleased to report another successful year of trading
at CareTech. During the year we continued to deliver our organic
and acquisitive growth strategies and also launched some important
initiatives including the CareTech Charitable Foundation and the
second employee Sharesave Scheme. We enter the current financial
year with strong underlying cash flow, solid organic growth and a
sizeable pipeline of opportunities, which together give us
confidence in continuing to deliver 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 Wills
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
Jessica Cave
Alex Bond
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 260 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, specialist
services, young people residential services, foster care and
learning services which come under the two outcome-based sectors of
Adult Services and Young People 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 property portfolio comprises more than 200
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
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