LONDON (Alliance News) - CareTech Holdings PLC said Friday trading in the first half of its financial year has been in line with expectations, after having made two acquisitions during the period.
The social care services provider said its two acquisitions were performing in line with the board's expectations, with North West England based provider of residential care and education services ROC North West Ltd having been purchased in December and Northampton-based Oakleaf Care (Hartwell) Ltd purchased in March.
CareTech said ROC North West was immediately earnings enhancing and noted ROC is now looking to acquire further properties in the North West.
CareTech added that Oakleaf, which provides specialist care for men with acquired brain injury, was also immediately earnings enhancing, and said at March 31, 16 days after purchase, the new facility had already filled six beds with both internal transfers and new service users. Two further admissions were planned this month, it added.
CareTech said its net capacity at the half year was up at 2,292 places, up from 2,116 a year earlier and, of this increase, 32 were additional beds in reconfigured services and in new services. These have a higher revenue contribution than the beds in pre-configuration and are part of CareTech's ongoing strategy to enhance margins, it said.
Occupancy levels in its mature estate rose were unchanged from at the end of its last financial year in September at 93%, while its blended occupancy rate, including mature and newer capacity, also came in unchanged at 86%.
CareTech said its annual fee negotiations with local authorities are at an early stage but it anticipates a "more positive outcome will be achieved than in recent years", and that costs from the new living wage, introduced April 1, will be covered by the fee increases.
"I am pleased to report another solid performance in the six months ended March 31, highlighting the growth trajectory that our strategy is delivering," said Executive Chairman Farouq Sheikh.
"We have considerable headroom for further acquisitions with the ground rent monies, money from our existing bank facilities and from our strong underlying cash flow. We intend to continue to deliver our exciting growth strategy, both organically and through bolt on acquisitions," Sheikh added.
Shares in CareTech were up 1.0% at 252.52 pence on Friday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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