Updates

Caretech

August 2010

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Caretech delivered solid interims in line with its April update. Revenues rose 5% to £41.4m while pretax profit increased 32% to £7.6m, helped by a 1.8% increase in operating margins to 22.4%. Eps rose 28% to 13.0p, while net debt was £80.8m. Caretech added another 50 beds organically while it also made three bolt-on acquisitions costing £11m, increasing bed capacity by 140 beds or c. 10% to 1620. These acquisitions were bought on an undemanding multiple of 6.5x EBITDA, falling to 5.5 in 20101. Collectively they bolster Caretech's supported living and children's services propositions, with the latter augmented by a move into the highly fragmented but growing foster care sector. Whilst local authorit ...

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