Caretech looks at possible acquisitions

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CareTech Holdings, provider of residential care services for adults with learning and other disabilities, said it was evaluating “a substantial pipeline of acquisition opportunities”.

Caretech Holdings results year to March 31
SalesPre-tax profitEarnings per shareDividend
£41.4m£4.6m6.97p1.84p
↑ 5%--↑ 15%

Farouq Sheikh, founding chairman, said that whatever spending cuts would be announced in next week’s UK Budget, the company was well placed to continue its growth as it had only 2 per cent of a large market.

Revenues for the year to March 31 rose by 5 per cent to £41.4m ($61.3m). Pre-tax profits before amortisation and other exceptional costs increased from £5.7m to £7.6m, and the interim dividend is being raised 15 per cent to 1.84p.

In April the company raised £15m through a placing at 400p and increased its banking facilities from £107m to £165m. The shares closed on Thursday at 352p, up 4½p.

Mr Sheikh said the company had spent £11m on three acquisitions since the financial year end, adding a further 140 beds to the total of 1,480 at the year end, an increase of 50 over the previous year. It had £85m available for further acquisitions.

Basic earnings per share excluding amortisation and other exceptionals rose from 10.21p to 13.04p. After including non-cash charges for interest rate swaps and future lease adjustments, pre-tax profits were £4.6m compared with a previous loss of £821,000, and basic earnings were 6.97p, compared with a 1.77p loss.

Brewin Dolphin, the company’s broker, left its forecast for full-year pre-tax profits before exceptionals unchanged at £18.5m, compared with 2008-09’s £15.3m.

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