Cambian downgrades full-year forecasts on higher costs

22nd Oct 2015 14:33

(ShareCast News) - Cambian said on Thursday that its full-year results will be lower than previously expected due to a significant increase in organic investment. The behavioural health services company said it believes that underlying earnings before interest, taxes, depreciation and amortisation for the year to 31 December will be no less than £54m, representing growth of 7.5% from last year, and adjusted EBITDA for the year to 31 December 2015 will be no less than £49m compared to £48.4m in 2014.The new forecasts are due to a significant increase in organic investment in new places, with the company looking to spend £50m in capital expenditure in the year.That has resulted in increased development losses as well as the impact of staff vacancies which has reduced the number of admissions in the group's Schools and Children's Services.Chief executive Saleem Asaria said there are now a total of 3,022 places under the company's management."We are confident that our increased investment in people and systems will underpin growth in 2016 and onwards."At 1553 BST, Cambian shares were down 48.5% to 131.12p.