20th Jun 2019 10:48
(Alliance News) - CareTech Holdings PLC on Thursday said its "transformational" acquisition of Cambian Group PLC is "well underway" and the synergies of the deal are "on track to be delivered to plan".
In mid-August, CareTech agreed to buy children's specialist education services provider Cambian for GBP278.5 million. Cambian shareholders now own around 36% of the enlarged company.
As a result of the acquisition, the company's revenue in the first half saw a sharp increase.
In the six months to March 31, the adult and child care home operator's revenue more than doubled to GBP192.5 million from GBP87.6 million the year before. CareTech's like-for-like revenue increased 12% to GBP98.2 million.
The company posted a 19% decrease in pretax profit, however, slipping to GBP6.9 million from GBP8.5 million the year before. CareTech's administrative and financial expenses more than doubled to GBP46.9 million and GBP7.1 million, respectively.
"I am delighted to be reporting our first financial results following the acquisition of Cambian in October. The group's performance reflects the scale of the acquisition and delivers a substantial increase in revenue and earnings before interest, tax, depreciation and amortization compared with the same period last year," said Executive Chair Farouq Sheikh.
The company's underlying Ebitda increased 71% to GBP33.3 million from GBP19.5 million in the same period a year before. CareTech's like-for-like Ebitda saw a 3.6% rise to GBP20.2 million from GBP19.5 million.
CareTech declared an interim dividend of 3.75 pence, which is 7.1% higher than the 3.50p paid the year before.
"I am pleased to report that the group's trading performance in the year to date is in line with market expectations and we have delivered on all of our key work streams, all of which have been achieved with the backdrop of the Cambian acquisition, the subsequent Competition & Markets Authority investigation and the sad passing of our Finance Director, Michael Hill," added Sheikh.
He continued: "Like for like, the performance of the CareTech business in the half year was stronger when compared with the same period last year. The Ebitda margins of the CareTech business are in line with market expectations and the Ebitda margins of the Cambian business, before synergies, show considerable improvement when compared with their historic announced margins."
Sheikh said the company is looking forward to the future with "confidence".
Shares in CareTech were up 3.1% Thursday at 384.38 pence each.
Related Shares:
CTH.L