Cambian Group swings to profit, exceeds capacity expectations

26th Aug 2015 10:19

(ShareCast News) - Behavioural health services provider Cambian Group swung to a pre-tax profit as its expansion plans exceeded expectations.The company posted first half pre-tax profit of £10m, from a loss £11.8m in the same period last year. Revenue was up by more than 20% to £140.9m from £116m, as the company opened 149 places, while 23 were either closed or re-provisioned.The company continued to build on capacity, and in the first half had already added 302 places, ahead of its full year target of 260.Cambian proposed its first interim dividend of 0.91p per share, as basic earnings per share rose to 4.10 from a loss per share of 12.6p.While it was supportive of the introduction of the living wage, Cambian said it would increase its cost base.Cambian said it had begun consultation with customers to pass on wage costs with fee increases."We have a high level of confidence that we will be able to demonstrate the value proposition of our services such that that there will be no material impact to our group," the company said.Berenberg, which held a 'buy' rating and price target of 345p, said the results were "strong" and financial performance was in line with forecasts."Furthermore, it has exceeded expectations with regards to its all-important organic expansion plan," the bank said.Berenberg said while the extra capacity would mean extra losses in 2015, it should benefit earnings from 2016 and this profit estimates would lift by 3-5% over the medium to long term.Shares in Cambian were down by 1.53% to 258.25p at 1056 BST.