8 December 2015 – preliminary results
The specialist care provider has announced its results for the year to 30 September and these have shown a modest increase in revenue to £124.3m (2014: £123.3m), although underlying pre-tax profit came out 11.7% ahead at £22.0m (2014: £19.7m). Diluted earnings per share on the same basis rose slightly to 31.8p (2014: 31.0p) and the dividend for the year rose 5% to 8.4p (2014: 8.0p). The group ended the period with net debt of £158.5m (2014: £166.1m) although £21m (before expenses) was raised through a placing in March. This cash has been used to fund two acquisitions in July and one earlier this month. Although the group has expanded rapidly since joining AIM in 2005, it still only has 2% of the large and fragmented market in which it operates and with the regulatory burden increasing there is clearly scope for consolidation. The current financial year will benefit from the acquisitions made as well as organic growth and pre-tax profits could increase to over £25m for earnings per share of 32.5p. With scope for these forecasts to be increased as the year progresses we believe the shares are worth at least 325p (upside of almost 40%) and maintain our recommendation of BUY.