(Sharecast News) - Social care provider CareTech reported a first half performance "broadly in line" with its own expectations on Thursday, despite increased costs due to the Covid-19 pandemic, and a lower-than-targeted occupancy due to sector-wide staffing challenges.
The AIM-traded firm said revenue grew by 2.6% in the six months ended 31 March to £249.2m.
Underlying EBITDA was broadly flat at £49.1m, compared to £49.4m a year ago, and underlying earnings per share were up 1.8% to 22.73p.
The board described the balance sheet as "strong", with net debt following acquisitions standing at £278.3m, up from £258.7m on 30 September, and its leverage coming in at 2.8x net debt-to-adjusted EBITDA.
Net cash before non-underlying operating activities totalled £49.9m at period end, up from £49.2m, and operating cash flow conversion was 101.6% for the period.
The board said it was not declaring an interim dividend, given the company remained in an offer period under the takeover code.
On the operational front, CareTech noted the acquisition of Rehavista in the period, providing a "significant opportunity" for its Smartbox operation to expand its market share in Germany, and further strengthen its technology division.
It also expanded its care pathway in the United Arab Emirates through the acquisitions of Dmetco-Bayti and Wellness Center, and the creation of its international division.
"The group delivered a strong performance in the first half, and has been broadly in-line with the board's expectations," said executive chairman Farouq Sheikh.
"The group has continued to navigate well through the various challenges presented by Covid-19, sector staff shortages and inflationary pressures.
"The group completed a number of acquisitions during the first half of the year."
Sheikh said the acquisition of Rehavista added one of Germany's leading augmentative and alternative communication technology resellers to the group, and further accelerated its growing technology offer to international markets.
"We were also pleased to complete the acquisitions of Dmetco-Bayti and the Wellness Center, building on our existing portfolio of companies in the UAE through the AS Group.
"These well-known local brands bolster our capability to service the UAE homecare and outpatient clinic markets and form part of our strategy to develop a 'whole person' care pathway of services for people with disabilities and complex needs."
Farouq Sheikh said CareTech had seen "significant growth" in the digital technology and international division. and was also "well-positioned" to continue to meet a "critical" social care need in the UK.
"CareTech remains in a strong financial position, underpinned by a significant property portfolio and consistent strong cash generation, and I remain confident in our outlook."
At 1112 BST, shares in CareTech Holdings were down 7.95% at 648p.
Reporting by Josh White at Sharecast.com.
