CareTech full-year earnings in line as young people unit blooms

5th Dec 2013 08:46

Annual revenues were flat at social care provider CareTech, though earnings increased in line with expectations in an industry that has been battling serious budgetary pressures. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 6% to £26.4m on sales that crawled just 0.2% higher to £114.3m. The full year dividend was up from 6.5p to 7p per share. The largest division, Adult Learning Disabilities, saw sales shrink from £75.8m to £73.9m but EBITDA improved by 110 basis points to 25%, reflecting the upside from a 2-3 year period of capacity reconfiguration. Income in its Mental Health segment advanced by 8.3% to stand at £6.5m.The Young People Residential Services division began to come into its own with 15% growth to £19.6m revenues. Fostering earnings growth was more muted at 2% to £4.3m. Executive Chairman Farouq Sheikh was pleased with the acquisition of freehold properties in the year which created an increase in net assets of 29.7% and allows future reconfigurations of these properties. He was optimistic about the future, saying the group remained well positioned relative to many of its peers as it has lower leverage, significant freehold asset backing and financial stability arising from strong banking arrangements.Shares in CareTech were up 1% to 245p at 09:35 on Thursday.OH