CareTech Holdings - Trading Update
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CareTech Holdings PLC
("CareTech" or "the Group")
CareTech Holdings PLC (AIM: CTH), a pioneering provider of specialist social care and education services to adults and children in the UK, today announces a pre-close trading update for the year ended
· Continued robust trading - results ahead of market expectations
· Strong operating cash conversion, accelerated reduction in net debt to
· Core business performing strongly
· Staff rise to challenges of Covid-19 and deliver exceptional support to service users
· Cambian performing in line / slightly ahead of targets set out at acquisition
· Continuation of organic growth initiatives
· Acquisition of Smartbox in line with digital roadmap strategy
Farouq Sheikh, Executive Chairman of CareTech, commented:
"CareTech continues to provide a vital role as a leading provider of complex care across the UK. The Group has remained resilient throughout the COVID-19 crisis and this is a testament to the quality of our operations, staff, and to the underlying business model. The financial performance of the Group has further strengthened over the period with strong cash flow generation and continued deleveraging. Our acquisition of Smartbox is in line with our strategy to blend care and technology which will benefit our service users. Whilst these remain challenging times, we enter the new financial year in a robust position and remain confident in our outlook."
Trading and operational performance
The Group continued to perform well during the period with year-on-year revenue growth as expected in Children's and Adults services. Trading was also particularly strong in the latter part of the year in the Group's subsidiary in the United Arab Emirates. These factors, combined with the continued successful progress in the integration of Cambian and reduction in the use of agency workers during the Covid-19 pandemic, mean CareTech will announce revenue, adjusted EBITDA and cash conversion which is slightly ahead of market expectations for the year ended
The Group's priority throughout the Covid-19 crisis has been the health, safety and wellbeing of its employees and service users. At the outset of the crisis, management took immediate steps to develop a co-ordinated response to ensure safety and business continuity. Subsequently, all of the Group's operational sites have remained open throughout the pandemic.
To support staff through this unprecedented time, a CareTech Covid-19 Fund was launched in
Adult social care providers have had funding available via Local Authorities to help support the provision of additional resources and associated costs necessary to halt any transmission of Covid-19. This funding has been extremely helpful in allowing the Group to take key steps to improve prevention and infection control in our services, and to support staff financially to self-isolate where this has been necessary. As a result, the negative financial impact of these additional costs on our performance has been minimal.
Despite the impact of Covid-19, Local Authorities have continued with fee increases to cover the additional costs resulting from increases in front line staff pay as a consequence of the National Minimum and Living Wage increase from
Strong balance sheet
Cash performance has exceeded market expectations. The Group continues to have a strong financial position with unaudited Net Debt at
CareTech continues to see a strong active pipeline of organic investments and bolt-on acquisition opportunities, in particular in Adult Specialist services and across the Cambian residential portfolio.
Favourable CQC quality ratings and staff retention
Due to Covid-19, both CQC and OFSTED suspended routine inspections in
For CareTech's Adult CQC registered services, quality ratings remained at 91% Good or Outstanding which compares favourably to the Adult social care average of 85%. OFSTED ratings remained at 82% Good or Outstanding across the Group.
Maintaining high levels of staff retention underpins our high service quality ratings and the Group's annualised retention rate sits at 75%, which compares favourably to the industry average of 70%. We remain committed to delivering best in class training and development to deliver the highest quality care for the individuals supported by the Group.
Capacity and occupancy
Adult's Services increased 30 places to 1,997 (
Overall, the Group's net capacity as at
Smartbox is the clear market leader in the UK, has a presence in the US which represents a significant growth opportunity and is supplied into over 30 countries. It is estimated that more than 50 million people globally could benefit from augmentative and alternative communication (AAC).
CareTech looks after more than 4500 service users as well as has access through Purple to disabled people who have entitlement to personal disability budgets and would benefit from assistive technology. Smartbox offers a unique opportunity to introduce AAC solutions to improve outcomes for those in our care and extend Care Pathway solutions to commissioners.
For further information, please contact:
CareTech Holdings PLC 01707 601800
Farouq Sheikh, Executive Chairman
Christopher Dickinson, Group Finance Director
Consilium Strategic Communications 020 3709 5700
Panmure Gordon (Nomad and Joint Broker) 020 7886 2500
Numis (Joint Broker) 020 7260 1000
CareTech Holdings PLC is a leading provider of specialist social care and education services, supporting around 4,500 adults and children with a wide range of complex needs in more than 550 residential facilities and specialist schools around the UK and employing approximately 10,000 staff.
Committed to the highest standards of care and care governance, CareTech provides its innovative care pathways covering; Adult learning disabilities and specialist services; Children's residential and education services; and foster care.
CareTech, which was founded in 1993, began trading on the AIM market of the London Stock Exchange in
For further information please visit: www.caretech-uk.com
Quick facts: CareTech Holdings
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