CareTech promises in-line results and future cost savings

24th Oct 2013 14:24

AIM-listed care home provider CareTech revealed trading for the full year was in line with expectations.Acquisitions late in the year to September 30th of two properties the company had been renting, are expected to be earnings-enhancing as they will save on "substantial" rental charges of up to £4.4m in 2014, compared with interest payments associated with the acquisition of the properties of £1.6m, and increase in time. Broker Investec said, in spite of "one or two questions on capacity levels and occupancy rates", it thought the performance will meet and possibly beat its forecasts, albeit that its numbers were below consensus on the key metric of earnings before interest, tax, depreciation and amortisation.Analyst Nicholas Keher said he believed net debt levels were serviceable, but thought CareTech's limited borrowing headroom "will hinder both organic and acquisitive growth".OH