28th Apr 2009 07:00
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For Immediate Release |
28 April 2009 |
CareTech Holdings PLC
("CareTech" or "the Group" or "the Company")
Trading update
CareTech (AIM: CTH) the specialist provider of care and support for people with learning difficulties issues the following trading update, ahead of the publication of its interim results for the six months ended 31 March 2009 on 18 June 2009.
With the benefit of secure, asset backed long-term income and highly visible earnings; CareTech is able to report further significant progress:
Trading for the first half of the financial year was in line with expectations and reflects continuing progress from both organic development and acquisition growth during 2008.
Strengthenedmanagement and an efficient organisational model based on two effective regions have led to the successful integration of our two major acquisitions Beacon Care and Valeo that are delivering results in line with Directors' expectations.
Occupancy in established services continues to run at 94% in line with previous years.
During the first half of the year CareTech increased capacity by a further 72 beds.
47 bedswere added through organic initiatives. Our ability to develop local relationships has led to additional preferred provider positions to support our continued growth.
Responding to an increased demand for community mental health provision we have enhanced the Group's step down mental health capabilities through the purchase of 25 beds from Lyndhurst Psychiatric Care ("Lyndhurst"). Established in 1985 Lyndhurst was acquired for a cash consideration of £5.4m. Alongside this acquisition we have extended our mental health infrastructure.
The pipeline of organic development and acquisition opportunities remains strong and CareTech continues to actively evaluate those that the Directors believe to be most attractive in terms of enhancing shareholder value.
Our operational structure is working well to provide greater scalability and the Directors believe that further organic and acquisitive growth can be delivered in line with the Group's strategy.
The Board remains confident of the Group's prospects in its specialist social care niche.
Farouq Sheikh, Executive Chairman commented:
"We are pleased to announce that the Group is trading in line with market expectations and continuing to deliver strong and thoughtful growth from both organic development and acquisitions. The Group has maintained its sound financial position with cash flow and net debt in line with our expectations. CareTech benefits from long term revenue streams which provide highly visible earnings and cash flow. Opportunities for growth remain good within the highly fragmented markets in which we operate."
For further information, please contact:
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CareTech Holdings PLC
Farouq Sheikh, Executive Chairman
David Pugh, Finance Director
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01707 652053
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Brewin Dolphin Investment Banking
Matt Davis
Sean Wyndham-Quin
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0845 213 4730
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Buchanan Communications
Diane Stewart
Isabel Podda
Tim Anderson
Carrie Clement
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0207 466 5000
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