TIDMCTH
RNS Number : 1701C
CareTech Holdings PLC
17 June 2021
For immediate release 17 June 2021
CareTech Holdings PLC
("CareTech" or the "the Group")
Interim Results for the six months ended 31 March 2021
Strong operational and financial performance
CareTech Holdings PLC (AIM: CTH), a pioneering provider of
specialist social care and education services for adults and
children in the UK, is pleased to announce its interim results for
the six months ended 31 March 2021.
Operational highlights
-- Continued resilience during COVID-19 pandemic with all sites remaining fully operational
-- Extended Care Pathway through acquisition of a majority
holding in diagnostic assistive technology provider Smartbox in
October 2020 and formation of a Digital Technology division
-- Portfolio of seven highly specialised facilities for the
treatment and care of adults with complex learning disabilities,
autism and mental health diagnoses, successfully transferred from
The Huntercombe Group. The transfer was structured with no capital
outlay and is expected to be immediately earnings accretive
-- 13 new Children's Services developments opened with an active pipeline for H2 2021
-- To support and recognise the importance of our front-line
staff who have been key to supporting services users during the
pandemic, the Group increased the minimum hourly rate above the
national minimum wage to GBP9 per hour
Financial results
-- Strong underlying performance of the business
-- Revenue growth of 16.5% to GBP243.0m (2020: GBP208.5m) driven
by organic growth, acquisition of Smartbox, transfer of adult's
specialist services sites from The Huntercombe Group and
constructive fee negotiations
-- Underlying EBITDA increase of 19.1% to GBP49.4m (2020: GBP41.5m)
-- Strong balance sheet with net debt reducing to GBP263.1m
(GBP268.9m at 30 September 2020) and leverage reduced to 2.8x net
debt/ adjusted EBITDA
-- Net cash before non underlying operating activities of
GBP49.2m (2020: GBP38.2m) and operating cash flow conversion of
99.7%
-- Write back of GBP11.8m provision following Supreme Court
judgement regarding sleep-in shifts in March
-- Increased interim dividend of 4.6p (2020: 4.0p) declared and dividend policy reaffirmed
H1 2021 H1 2020 % change
Group revenue GBP243.0m GBP208.5m +16.5%
---------- ---------- ---------
Underlying EBITDA (i) GBP49.4m GBP41.5m +19.1%
---------- ---------- ---------
Underlying profit before
tax (ii) GBP33.6m GBP25.5m +31.6%
---------- ---------- ---------
Underlying basic earnings
per share (ii) 22.33p 18.11p +23.3%
---------- ---------- ---------
Statutory profit before
tax GBP42.3m GBP17.7m +139.7%
---------- ---------- ---------
Statutory earnings per
share 33.37p 9.49p +251.6%
---------- ---------- ---------
Operating cash flow before
non-underlying items GBP49.2m GBP38.2m +28.9%
---------- ---------- ---------
Net debt ( (iii) GBP263.1m GBP287.4m (8.5)%
---------- ---------- ---------
Net assets GBP393.7m GBP352.6m +11.7%
---------- ---------- ---------
Interim dividend 4.6p 4.0p +15.0%
---------- ---------- ---------
i. Underlying EBITDA is operating profit stated before
depreciation, share based payments charge and non underlying items
(which are explained in note 3).
ii. Underlying profit before tax and underlying basic earnings
per share are stated before non underlying items (explained in note
3).
iii. Net debt comprises Cash and cash equivalents net of bank
loans and borrowings and HP leases previously accounted for under
IAS17 excluding Project Teak sale and leaseback.
Commenting on the results, Farouq Sheikh, Executive Chairman of
CareTech, said:
"The Group's first half performance has been strong with all
operational divisions demonstrating considerable resilience during
the ongoing pandemic. I am pleased to report that our trading
performance is significantly ahead compared with the same period
last year.
"COVID-19 has highlighted the importance of having community
based, high quality social care facilities to relieve the pressures
on the NHS. I am immensely proud of our staff during this period
and their efforts and determination in ensuring all our service
users receive high quality care in extremely challenging
conditions.
"The addition of Smartbox to the portfolio has been a
significant milestone and adds a new division enabling digital
technology to extend our Care Pathway. Our belief is that digital
adoption will play a significant role in enhancing the independence
of our service users and our 100 Voices programme has reaffirmed
our strategy.
"We remain confident of our outlook, delivering further earnings
and dividend growth and in the long-term prospects of the
business."
Analyst briefing today
There will be a presentation of the results to analysts at
10.00am this morning via conference call. This presentation will be
available after the conference call at
https://www.caretech-uk.com/investors/reports-and-presentations/financial-reports.aspx
.
For further information, please contact:
CareTech Holdings PLC 01707 601800
Farouq Sheikh, Executive Chairman
Christopher Dickinson, Group Chief Finance Officer
Consilium Strategic Communications 020 3709 5700
Mary-Jane Elliott
Chris Welsh
Angela Gray
Panmure Gordon (Nomad and Joint Broker) 020 7886 2500
Emma Earl
Freddy Crossley
Charles Leigh-Pemberton
Numis (Joint Broker) 020 7260 1000
Jonathan Wilcox
James Black
Duncan Monteith
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
About CareTech
CareTech Holdings PLC is a leading provider of specialist social
care services supporting around 5,000 adults and children with a
wide range of complex needs in more than 550 services across the UK
employing more than 10,500 staff; and an emerging presence in
international markets.
Committed to the highest standards of care and care governance,
CareTech's innovative Care Pathway covers Foster care, Children's
Services, Adults Services and Technology Solutions.
CareTech, which was founded in 1993, began trading on the AIM
market of the London Stock Exchange in October 2005 under the
ticker symbol CTH.
For further information please visit: www.caretech-uk.com
Chairman's Statement
CareTech delivered strong and robust operational and financial
performance for the six months to 31 March 2021.
The Group has remained fully operational with all sites open
throughout the pandemic, delivering high quality care. The focus
has been on the delivery of safe services and ensuring the safety
of our employees and service users. To support our staff during
this challenging period, the Group introduced a number of welfare
and wellbeing initiatives as well as setting up a taskforce to
support and co-ordinate CareTech's group-wide vaccination programme
encouraging that staff take up the vaccine as key workers. This
programme has gone well with over 7,000 of our staff having
received a first dose of the vaccine.
On 6 October 2020, the Group announced the acquisition of a
majority holding in Smartbox Assistive Technology Limited
('Smartbox'). This represented an important milestone towards
building out a digital technology division to develop the use of
technology led solutions to broaden our Care Pathway. Smartbox is a
market-leading creator of software and hardware that helps disabled
people without speech to have a voice and live more independently.
It makes communication as quick, simple and effective as possible
for many service users for whom speech difficulties can be a
challenge. Smartbox solutions include communication aids,
environmental control devices, computer control technology and
interactive learning.
Smartbox has successfully transitioned into the Group, with the
launch of a new 100 Voices initiative to ensure that Smartbox
technology reaches adults and children in CareTech care homes,
specialist schools and complex needs services. The long-term aim is
to establish consistent provision of the life-changing technology
to anyone that needs it in both care and special education
settings.
On 30 November 2020, we completed the transfer of seven services
previously operated by The Huntercombe Group. This broadens our
Adult specialist service pathway by adding highly specialised
facilities for the treatment of adults with complex Learning
Disabilities, Autism and Mental Health diagnoses. The sites have
been integrated into the Group with financial performance exceeding
our initial expectations.
The Group continues to have a strong, active development
pipeline across the UK and is well placed to broaden our service
offering and meet the needs of a growing and evolving
marketplace.
Financial Results
Group revenue in the half year was GBP243.0m, a 16.5% increase
over the corresponding period (March 2020: GBP208.5m) driven by
organic growth, the acquisition of Smartbox in October 2020, the
portfolio of assets transferred from The Huntercombe Group and fee
increases.
The National Minimum and Living Wage increased to GBP8.91 from 1
April 2021. From 1 June 2021, the Group increased the minimum
national hourly rate to GBP9.00 to recognise CareTech's front line
staff who have been key to supporting service users during the
pandemic . Annual fee negotiations with Local Authorities are
progressing well and the Group expects fee increases to cover the
majority of additional operational costs including increases to
front line staff pay.
Divisional EBITDA before unallocated costs increased by 19.8% to
GBP62.0m (2020: GBP51.8m) and Group underlying EBITDA(i) increased
by 19.1% to GBP49.4m (2020: GBP41.5m). Underlying EBITDA(i) margin
has increased from 19.9% to 20.3%.
Finance costs have reduced to GBP6.3m, reflecting the reduced
margins payable as the Group has reduced its net debt/ adjusted
EBITDA to 2.8x.
Underlying profit before tax(ii) increased by 31.6% to GBP33.6m
(2020: GBP25.5m) and underlying basic earnings per share(ii) was
22.33p (2020: 18.11p). The Group's underlying tax charge was
GBP7.0m, which represents an effective tax rate of 20.9%.
Underlying EBITDA to cash conversion(iii) was GBP49.2m which
represents cash conversion rate of 99.7% for the period from 1
October 2020 to 31 March 2021. Key cash flow items during the first
half include GBP6.6m on property acquisitions/ developments,
GBP6.8m on maintenance capex and I.T, GBP5.4m on the acquisition of
Smartbox, payment of the interim dividend of GBP4.5m, interest of
GBP4.0m and corporation tax of GBP5.4m.
Non underlying items include the write back of a provision of
GBP11.8m following the final judgement by the Supreme Court that
social care staff are not entitled to the national minimum wage for
sleep-in shifts and a gain on the bargain purchase of 7 sites
transferred from The Huntercombe Group given the transaction was
structured with no capital outlay.
The Group has continued to adopt strict precautions in line with
Government and Public Health guidance at all our sites during the
third national lockdown, including enhanced levels of cleaning,
additional hygiene facilities and social distancing. Additional
funding in the form of infection control, lateral flow testing and
workforce capacity grants continue to be received by the Group for
its Adults Services provision which totalled GBP1.2m for the period
against costs of GBP2.0m.
Net assets have increased to GBP393.7m as at 31 March 2021
(2020: GBP352.6m).
Operating review
The operational performance of the business in the first half is
in line with the Board's expectations.
The Group's net capacity as at 31 March 2021 increased to 5,135
places (September 2020: 4,984 places). At 31 March 2021, occupancy
levels in the mature estate remained at 83% (September 2020: 83%)
with blended occupancy increasing to 81% (September 2020: 80%).
The Group remains committed to providing the highest quality
standard of care to those it looks after and its regulatory scores
remain above sector averages. Throughout the COVID-19 pandemic, CQC
and Ofsted have suspended all routine inspections but undertaken a
limited number of rated inspections. At March 2021, our CQC
services rated good or outstanding was 88% and Ofsted at 82%. As
easing continues and as CQC/ Ofsted inspections start to
recommence, our aim is to achieve Good or Outstanding ratings
across all of our facilities.
During the first half, we have continued our ongoing focus to
fill existing capacity, reconfigure services and develop new
services across our 'Care Pathway'.
(1) Adults Services
Capacity increased by 143 places to 2,140 with the increase
primarily due to 142 beds transferred from the Huntercombe Group.
These services complement our Adult Specialist Services division
and broaden our care pathway in offering specialised services to
adults with complex learning disabilities, autism and mental health
diagnoses. Despite the turnaround required at these services,
occupancy and financial performance have exceeded initial
expectations and the relationships with Commissioners continues to
go well with progress acknowledged.
Half Year
2021 2020 % change
--------- --------- ---------
Revenue GBP83.0m GBP66.0m 25.7%
--------- --------- ---------
EBITDA before unallocated
costs GBP18.9m GBP16.8m 12.4%
--------- --------- ---------
EBITDA margin 22.8% 25.5%
--------- --------- ---------
Revenue increased by 25.7% to GBP83.0m and EBITDA by 12.4% to
GBP18.9m.
Adults Services has been robust and resilient throughout the
pandemic with care costs being well managed and low agency usage.
Developments in start-up phase, particularly in specialist
services, and the lower initial margins at the recently acquired
Huntercombe services has reduced the division's EBITDA margin.
Throughout the COVID-19 pandemic, CQC have suspended all routine
inspections but undertaken a limited number of rated inspections.
The Group has performed well in the CQC infection control
inspection programme with a high number of our services achieving
'assured' from the regulator. CQC quality ratings at 31 March 2021
remained ahead of sector comparators at 88% Good or Outstanding
(September 2020: 91%), the change being attributable to a limited
number of services moving from Good to Requires Improvement. These
sites each have a comprehensive improvement plan in place and the
Group is confident they will be upgraded as the regulator returns
to a more usual and regular pattern of inspections.
(2) Children's Services
Half Year
2021 2020 % change
---------- ---------- ---------
Revenue GBP134.3m GBP121.5m 10.6%
---------- ---------- ---------
EBITDA before unallocated
costs GBP38.1m GBP30.9m 23.3%
---------- ---------- ---------
EBITDA margin 28.4% 25.4%
---------- ---------- ---------
Capacity increased to 1,981 (September 2020: 1,959). The
increase comprises of 37 beds introduced through new developments,
21 beds withdrawn as closed homes, 1 bed withdrawn for
reconfiguration and an additional 7 places brought into service.
Revenue and EBITDA grew by 10.6% and 23.3% respectively.
There was strong operational performance across the division
with a strong pipeline of referrals. The Group has continued to
fill existing capacity with a combination of longer stay placements
and positive fee increases improving the EBITDA margin of the
division. A number of new developments are in progress with the
purchase of 17 new properties which will open during the year.
OFSTED ratings have remained at the high levels of 82% Good or
Outstanding across the Group.
(3) Foster Care
Half Year
2021 2020 % change
--------- --------- ---------
Revenue GBP19.3m GBP21.0m (8.3)%
--------- --------- ---------
EBITDA before unallocated
costs GBP3.8m GBP4.0m (4.6)%
--------- --------- ---------
EBITDA margin 20.0% 19.2%
--------- --------- ---------
Due to COVID-19 restrictions, capacity decreased by 14 places to
1,014 and occupancy fell leading to a decline in revenue of 8.3%.
EBITDA also reduced by 4.6% with an increase in margin to 20%.
Fostering operationally performed solidly despite a number of
placements moving on due to age and transitions against a
challenging backdrop due to the pandemic. The focus continues to be
to maintain our presence in terms of placements and fees in a
highly competitive segment.
OFSTED ratings for all our Foster Care services are 100% Good or
Outstanding.
(4) Digital Technology
Following the acquisition of a majority holding in Smartbox in
October 2020 and given the Group's ambitions to build out its
digital healthcare capabilities, a new Digital Technology division
has been created.
Half Year
2021
----------
Revenue GBP6.4m
----------
EBITDA before unallocated costs GBP1.1m
----------
EBITDA margin 17.5%
----------
Smartbox delivered strong performance in H1, ending the period
with revenues at GBP6.4m, 36% up on the previous year. This
reflects a 47% growth in system volumes with a total of 1,355
devices sold in 18 different countries around the world. The
increase in volumes is attributable to an increase in NHS orders
(as they work through a backlog of cases due to COVID-19), the
launch of the flagship Grid Pad 15 device, as well as the positive
response to CareTech's ownership.
Net debt
As at 31 March 2021, unaudited net debt was GBP263.1m compared
with GBP268.9m at 30 September 2020, with net debt/unaudited
adjusted EBITDA falling to 2.8x. Strong operating cash flow has
been deployed to purchase 17 new developments, to acquire and
integrate Smartbox and transition adult specialist service sites
transferred from the Huntercombe Group in November 2020. The
Group's capital allocation policy remains to deploy free cash flow
to organically invest in the business, add developments to the
portfolio, assess bolt-on acquisition opportunities and continue a
progressive dividend policy.
The Group has completed the extension of its Term Loan A
facility of GBP161.2m which will now mature in August 2023. The
margin of the facility and covenants remain unchanged, reflecting
the highly cash generative nature of the business and de-leveraging
profile. In addition, arrangements have been put in place to amend
the reference rate for the Group's loans and interest rate swaps to
Compounded Daily SONIA.
Our People
The Group's annualised retention rate has improved and sits at
76% (September 2020: 75%). Throughout the pandemic the Group has
continued to reach out to displaced sectors such as retail,
hospitality and leisure which has increased the number of
applications received. Using our 'values based recruitment' process
coupled with 'skills profiles', we have been able to attract some
excellent talent into the sector who share our values and want to
make a difference.
Although always higher than the industry average, our retention
rates have improved further, and this is attributed primarily to
some of the exciting welfare and well-being initiatives that the
Group is embracing; we have focused on #timetotalk, a Group wide
programme encouraging staff to take time out to reach out to each
other and normalise conversations around welfare and mental
health.
Throughout the COVID-19 vaccination window we have provided
colleagues with extensive information on the vaccine and have
encouraged staff to take up the vaccine as key workers. This has
been widely welcomed by staff and we continue to provide them with
regular updates on the vaccine and have offered discussions with
trained Physicians through webinars. This programme has exceeded
our expectations and over 7,000 of our staff have now received a
first dose of the vaccine.
To support and recognise the importance of our front-line staff
who have been key to supporting services users during the pandemic,
the Group increased the minimum hourly rate above the national
minimum wage to GBP9 per hour. To continue with staff engagement,
we are in the process of setting up a staff consultative committee,
which will be employee led and will focus on 'workforce matters'.
Reports and updates from staff will be provided directly to
Professor Moira Livingston, the Board's People Sponsor. It is our
desire to continue to build a strong supportive culture by giving
the staff a stronger voice on how they would like to see the future
shape and direction of CareTech.
As part of the Groups on-going commitment to reward and
recognise our Senior Leaders, the Group launched the 2020 Long Term
Incentive Plan ('LTIP') in December 2020. We have over 20
participants in the plan and believe that an annual LTIP will
further align the interests of award holders with shareholders with
the continued focus on Quality outcomes for the people that we
support.
Social Responsibility
As we adjust our business to a post-Covid world we are taking
the opportunity to formalise and embed our inherent culture of
responsibility and care through development of a comprehensive
sustainability programme that encompasses environmental and social
issues. This will help us to futureproof against climate related
risks and enable us to respond to social shifts in important topics
such as diversity equity & inclusion, meeting the expectations
of all our stakeholders, in particular the brilliant people who
work so hard to deliver outstanding results for those in our
care.
In 2021 we will launch our first set of targets in an ESG report
using the World Economic Forum's newly developed ESG framework. We
will also launch a set of KPIs that demonstrates CareTech's
significant social impact and delivery of our purpose; to enable
children, young people and adults with complex needs to gain
independence, to live, work, learn and engage in their
communities.
During the first half, the CareTech Charitable Foundation has
continued to broaden its range of partnerships, including:
-- Support for the Open University for its Carers Scholarships
Fund, a unique initiative that supports unpaid carers to gain
access to free OU education and wraparound careers support
-- The first grant provided from the social care sector for The
Prince's Trust's Health and Social Care programmes, which is
working in partnership with the Department of Health and Social
Care and Health Education England, to secure careers for 10,000
young people in the health and social care sector across
England
-- Headline partner for the new Social Care Action Fund, seeking
to find evidence-based improvements to the social care provision
for autistic adults, delivered by leading UK autism research
charity Autistica and supported by the National Institute of Health
Research.
Dividend
Our policy to increase the dividend broadly in line with the
movement in underlying diluted earnings per share continues. In
line with this policy, the Board recommend an interim dividend of
4.6p (2020: 4.0p) per share, to be paid on 19 November 2021 to
shareholders on the register at the close of business on 22 October
2021.
Outlook and prospects
Underlying trends remain positive for the Group and we are well
placed to offer high quality care to our service users which
represents good value to Commissioners. We are confident in meeting
market expectations for the full year.
Looking ahead and as COVID-19 restrictions start to ease, the
Group is in a strong position to broaden our Care Pathway. This
will be achieved through expanding our offering in the UK,
enhancing our services in the Gulf region and broadening our
digital technology platform in order to deliver an innovative
approach focussed on improving outcomes for individuals.
Farouq Sheikh
Chairman
17 June 2021
(i) Underlying EBITDA is operating profit before depreciation,
share-based payments charge and non underlying items (explained in
note 3);
(ii) Underlying profit before tax and underlying diluted
earnings per share are stated before non underlying items
(explained in note 3).
(iii) EBITDA to cash conversion is calculated as operating cash
flows before non underlying items divided by underlying EBITDA
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 31 March 2021
Six months ended Six months ended Year ended
31 March 2021 31 March 2020 30 September 2020
Unaudited unaudited audited
-------------------------------------------------------------------------- ----- ----------------------- -------------------------- --------------------------------
Before non Before non Before non
underlying Total underlying Total underlying Total
items(i) unaudited items(i) unaudited items(i) audited
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Revenue 2 242,964 242,964 208,526 208,526 429,966 429,966
Cost of sales (160,441) (160,441) (139,105) (139,105) (282,029) (282,029)
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Gross profit 82,523 82,523 69,421 69,421 147,937 147,937
Other income - 1,181 - - - 2,550
Administrative expenses (42,823) (35,028) (36,615) (43,943) (74,356) (97,125)
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Operating profit 39,700 48,676 32,806 25,478 73,581 53,362
Underlying EBITDA (i) 49,359 50,540 41,452 41,452 90,932 93,482
Depreciation (9,422) (9,422) (8,496) (8,496) (17,021) (17,021)
Share-based payments charge (237) (237) (150) (150) (330) (4,449)
Non underlying items 3 - 7,795 - (7,328) - (18,650)
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Operating profit 39,700 48,676 32,806 25,478 73,581 53,362
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Financial expenses 4 (6,097) (6,329) (7,268) (7,810) (13,928) (15,539)
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Profit before tax (ii) 33,603 42,347 25,538 17,668 59,653 37,823
Taxation 5 (7,029) (3,541) (4,717) (6,451) (11,325) (10,772)
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Profit for the period 26,574 38,806 20,821 11,217 (654) 48,328 (1,933) 27,051 (1,933)
Non-controlling interest (1,852) (1,852) (654) 10,563 25,118
Profit for the period attributable to equity shareholders of the parent 24,722 36,954 20,167 46,395
-------------------------------------------------------------------------- ----- ----------- ---------- ----------- ------------- --------------- ---------------
Earnings per share
Basic 6 33.37p 9.49p 22.88p
Diluted 6 31.79p 9.45p 22.03p
Profit for the year attributable to owners of the parent:
Exchange movements on overseas net assets (623) (623) - - 53 53
Items that will not be reclassified to income statement:
Exchange movements on overseas net assets of non-controlling interest (547) (547) - - 45 45
Other comprehensive income for the year (1,170) (1,170) - - 98 98
Total comprehensive income for the year 25,404 37,636 - - 48,426 27,149
Non-controlling interest (1,305) (1,305) - - (1,978) (1,978)
Profit for the year attributable to owners of the parent 24,099 36,331 - - 46,448 25,171
(i) Underlying EBITDA is operating profit before depreciation,
share-based payments charge and non underlying items (explained in
note 3).
Condensed Consolidated Statement of Changes in Equity at 31
March 2021
Share Share Shares Merger Foreign Retained Total Non-controlling Total
capital premium held reserve Currency earnings Attributable Interest Equity
by Translation to owners
Executive Reserve of the
Shared parent
Ownership
Plan
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October
2019 545 121,304 (3,537) 125,536 - 90,559 334,407 957 335,364
Profit for the
year - - - - - 25,118 25,118 1,933 27,051
Other
comprehensive
income - - - - 53 - 53 45 98
Issue of
ordinary
shares 18 10,043 (9,997) - - - 64 - 64
Equity-settled
share-based
payments charge - - - - - 4,449 4,449 - 4,449
Redemption of
share
options - - 229 - - - 229 - 229
Acquisition 2 1,732 - 306 - - 2,040 7,927 9,967
Dividends - - - - - (13,006) (13,006) - (13,006)
Transactions
with
owners recorded
directly in
equity 20 11,775 (9,768) 306 - (8,557) (6,224) 7,927 1,703
At 30 September
2020 565 133,079 (13,305) 125,842 53 107,120 353,354 10,862 364,216
Profit for the
year - - - - - 36,954 36,954 1,852 38,806
Other
comprehensive
income - - - - (623) - (623) (547) (1,170)
Issue of
ordinary
shares - 367 - - - - 367 - 367
Redemption of
share
options - - 389 - - - 389 - 389
Equity-settled
share-based
payments charge - - - - - 567 567 - 567
Acquisition - - - - - - - 1,450 1,450
Recognition of
liabilities
with
non-controlling
interest - - - - - (4,351) (4,351) - (4,351)
Dividends - - - - - (4,525) (4,525) (1,006) (5,531)
Other movement
in
non-controlling
interest - - - - - - - (1,040) (1,040)
Transactions
with
owners recorded
directly in
equity - 367 389 - - (8,309) (7,553) (596) (8,149)
At 31 March 2021 565 133,446 (12,916) 125,842 (570) 135,765 382,132 11,571 393,703
Condensed Consolidated Balance Sheet at 31 March 2021
31 March 2021 31 March 30 September
2020 2020
unaudited unaudited audited
GBP000 GBP000 GBP000
---------------------------------------------------------------- -------------- ---------- -------------
Non-current assets
Property, plant and equipment 617,498 615,515 604,096
Right-of-use-assets 113,160 70,317 87,790
Other intangible assets 90,296 87,505 83,084
Goodwill 86,716 84,307 84,604
907,670 857,644 859,574
---------------------------------------------------------------- -------------- ---------- -------------
Current assets
Inventories 3,003 1,925 1,937
Trade and other receivables 64,627 65,669 51,055
Cash and cash equivalents 61,290 36,408 54,273
---------------------------------------------------------------- -------------- ---------- -------------
128,920 104,002 107,265
---------------------------------------------------------------- -------------- ---------- -------------
Total assets 1,036,590 961,646 966,839
---------------------------------------------------------------- -------------- ---------- -------------
Current liabilities
Trade and other payables 65,057 59,003 55,017
Contingent consideration payable 4,537 2,308 1,569
Lease liabilities 5,098 6,719 6,208
Deferred income 35,258 39,251 30,309
Corporation tax 14,053 16,272 14,757
124,003 123,553 107,860
---------------------------------------------------------------- -------------- ---------- -------------
Non-current liabilities
Loans and borrowings 319,481 320,399 318,955
Provisions 7,545 14,803 21,286
Lease liabilities 115,040 82,615 82,480
Deferred tax liabilities 70,876 65,923 69,844
Derivative financial instruments 5,942 1,771 2,198
518,884 485,511 494,763
---------------------------------------------------------------- -------------- ---------- -------------
Total liabilities 642,887 609,064 602,623
---------------------------------------------------------------- -------------- ---------- -------------
Net assets 393,703 352,582 364,216
---------------------------------------------------------------- -------------- ---------- -------------
Equity attributable to equity shareholders of the parent
Share capital 565 550 565
Share premium 133,446 131,363 133,079
Shares held by Employee Benefit Trust (12,916) (13,305) (13,305)
Merger reserve 125,842 127,342 125,842
Other reserves (570) - 53
Non-controlling interest 11,571 9,453 10,862
Retained earnings 135,765 97,179 107,120
---------------------------------------------------------------- -------------- ---------- -------------
Total equity attributable to equity shareholders of the parent 393,703 352,582 364,216
---------------------------------------------------------------- -------------- ---------- -------------
Consolidated Cash Flow Statement for the six months ended 31
March 2020
Six months ended Six months ended Year ended
31 March 2021 31 March 2020 30 September 2020
unaudited unaudited audited
GBP000 GBP000 GBP000
---------------------------------------------------- ----------------- ----------------- ------------------
Cash flows from operating activities
Profit before tax 42,347 17,668 37,823
Financial expenses 6,329 7,810 15,539
Depreciation 9,422 8,496 17,021
Amortisation of intangible assets 5,184 4,537 10,186
Impairment of goodwill 584 - -
Sleep-in provision (11,777) - -
Gain on bargain purchase (5,758) - -
COVID-19 income (1,181) - (2,550)
COVID-19 expense 1,977 - 3,422
Share-based payments charge 237 150 4,449
Acquisition transaction costs 423 231 545
Other non-underlying items 1,572 2,560 4,497
Operating cash flows before movement in working 49,359 41,452 90,932
capital and non underlying items
Increase in inventory (197) - (46)
(Increase)/decrease in trade and other receivables (8,285) 681 5,563
Increase/(decrease) in trade and other payables 8,338 (3,948) (2,227)
Operating cash flows before non underlying items 49,215 38,185 94,222
Integration and restructuring costs (971) (2,308) (3,795)
Payment of charitable donations (601) (308) (702)
COVID-19 receipts 1,181 - 2,550
COVID-19 payments (1,977) - (3,420)
Payment of acquisition costs (423) (231) (545)
Cash inflows from operating activities 46,424 35,338 88,310
Tax paid (5,423) (1,984) (3,899)
---------------------------------------------------- ----------------- ----------------- ------------------
Net cash from operating activities 41,001 33,354 84,411
---------------------------------------------------- ----------------- ----------------- ------------------
Cash flows from investing activities
Proceeds from sale of property, plant and equipment - 186 1,536
Business combinations net of cash acquired (Note 7) (5,447) (1,440) (2,000)
Acquisition of property, plant and equipment (13,432) (11,131) (23,842)
Acquisition of software (1,286) (1,703) (2,840)
Payment of deferred consideration - - (739)
Net cash used in investing activities (20,165) (14,088) (27,885)
----------------------------------------------------------------- --------- --------- ---------
Cash flows from financing activities
Proceeds arising from the issue of share capital (net of costs) 756 294 294
Interest paid (3,941) (6,745) (10,737)
Cash outflow arising from non underlying finance expenses (645) (411) (1,053)
Proceeds from shareholder loans - 1,808 1,808
Payment of finance lease liabilities (4,457) (3,197) (8,797)
Dividends paid to non-controlling interest (1,007) - -
Dividends paid (4,525) (4,093) (13,006)
----------------------------------------------------------------- --------- --------- ---------
Net cash (utilised in)/generated from financing activities (13,819) (12,344) (31,491)
----------------------------------------------------------------- --------- --------- ---------
Net change in cash and cash equivalents 7,017 6,922 25,035
----------------------------------------------------------------- --------- --------- ---------
Exchange gain on cash and cash equivalents - 248 -
----------------------------------------------------------------- --------- --------- ---------
Cash and cash equivalents at start of the period 54,273 29,238 29,238
----------------------------------------------------------------- --------- --------- ---------
Cash and cash equivalents at end of the period 61,290 36,408 54,273
----------------------------------------------------------------- --------- --------- ---------
Net debt as defined by the Group's banking facilities
comprises:
31 March 2021 31 March 2020 30 September 2020
unaudited unaudited audited
GBP000 GBP000 GBP000
------------------------------- -------------- -------------- ------------------
Cash and cash equivalents 61,290 36,408 54,273
Loans and borrowings (317,762) (320,399) (317,122)
Shareholder loan (1,719) - (1,833)
Lease liabilities (i) (4,909) (3,436) (4,204)
Net debt at end of the period (263,100) (287,427) (268,886)
------------------------------- -------------- -------------- ------------------
(i) Net debt includes vehicle finance leases included in lease
liabilities.
Notes
1. Accounting policies
This interim report has been prepared on the basis of the
accounting policies expected to be adopted for the year ending 30
September 2021. These are anticipated to be in accordance with the
Group's accounting policies as set out in the latest annual
financial statements for the year ended 30 September 2020.
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards as adopted by the
EU ("Adopted IFRS") and those parts of the Companies Act 2006 as
required to be adopted by AIM-listed companies. AIM-listed
companies are not required to comply with IAS 34 'Interim Financial
Reporting' and accordingly the Company has taken advantage of this
exemption.
In the current year, the following new and revised standards and
interpretations have been adopted:
Title Subject
Amendment to IFRS 16 'Leases' COVID-19 - Related Rent Concessions
COVID-19 - Related Rent Concessions
(May 2020)
------------------------------------
Amendments to References to Amendments to References to
the Conceptual Framework in the Conceptual Framework in
IFRS Standards IFRS Standards
------------------------------------
Amendments to IFRS 3 (Oct 2018) Definition of Business
------------------------------------
Amendments to IAS 1 and IAS Definition of Material
8 (Oct 2018)
------------------------------------
IFRS 17 Insurance Contracts
------------------------------------
Amendments to IFRS 10 and IAS Sale or Contribution of Assets
28 (Sept 2014) between an Investor and its
Associate or Joint Venture
------------------------------------
The amendments and interpretations listed above which were
adopted did not affect the amounts reported in these interim
financial statements.
The financial information in this interim report does not
constitute statutory accounts for the six months ended 31 March
2021 and should be read in conjunction with the Group's annual
financial statements for the year ended 30 September 2020.
Financial information for the year ended 30 September 2020 has been
derived from the consolidated audited accounts for that period
which were unqualified.
The condensed consolidated interim financial statements for the
six months to 31 March 2021 have not been audited or reviewed by
auditors pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information.
This unaudited interim report was approved by the Board on 16
June 2021.
Going concern
The Group is financed by bank loan facilities that mature in
August 2023. The Directors have considered the Group's forecasts
and projections, and the risks associated with their delivery, and
are satisfied that the Group will be able to operate within the
covenants imposed by bank loan facilities for at least twelve
months from the date of approval of the condensed consolidated
financial information. In relation to available cash resources, the
Directors have had regard to both cash at bank and a GBP25m
committed undrawn revolving credit facility. The Group has
undertaken extensive activity to identify and mitigate its exposure
to plausible risks which may arise from COVID-19. Based on the
Directors' current assessment of the likelihood of the COVID-19
risks arising together with their assessment of the planned
mitigating actions being successful, the Directors have concluded
it is appropriate to prepare the accounts on a going concern
basis.
2. Segmental information
IFRS 8 requires operating segments to be determined based on the
Group's internal reporting to the Chief Operating Decision Maker
("CODM"). The CODM has been determined to be the Chief Executive
Officer as he is primarily responsible for the allocation of
resources to segments and the assessment of the performance of each
of the segments.
The CODM uses underlying EBITDA as reviewed at monthly Executive
Committee meetings as the key measure of the segments' results as
it reflects the segments' underlying trading performance for the
period under evaluation. Underlying EBITDA is a consistent measure
within the Group.
Inter-segment turnover between the operating segments is not
material.
The interim results report segmental information on the Group's
four operating divisions (and the comparative information has been
represented on this basis):
-- Adults Services;
-- Children's Services;
-- Foster Care; and
-- Digital Technology
The condensed segmental results for the six months ended 31
March 2021, six months ended 31 March 2020 and year ended 30
September 2020 and the reconciliation of the segment measures to
the respective statutory items included in the consolidated
financial information are as follows:
Six months ended Six months ended Year ended
31 March 2021
unaudited
GBP000
------------------------------------------------------
31 March 2020 30 September 2020
-------------------------------------------- --------
unaudited audited
GBP000 GBP000
-------------------------------------------- -------- ----------------- ------------------
Adults Services
Client capacity 2,140 1,967 1,997
Revenue 83,019 66,043 136,219
EBITDA before unallocated costs 18,913 16,833 35,676
-------------------------------------------- -------- ----------------- ------------------
Children's Services
Client capacity 1,981 1,948 1,959
Revenue 134,345 121,479 252,863
EBITDA before unallocated costs 38,130 30,916 69,561
-------------------------------------------- -------- ----------------- ------------------
Foster Care
Client capacity 1,014 1,129 1,028
Revenue 19,252 21,004 40,884
EBITDA before unallocated costs 3,847 4,031 8,563
-------------------------------------------- -------- ----------------- ------------------
Digital Technology
Revenue 6,449 - -
EBITDA before unallocated costs 1,126 - -
Total
Client capacity 5,135 5,044 4,984
Revenue 243,065 208,526 429,966
EBITDA before unallocated costs 62,016 51,781 113,800
-------------------------------------------- -------- ----------------- ------------------
Total Group revenue
Segmental revenue 243,065 208,526 429,966
Less: Intercompany sales and other revenue (101) - -
Group revenue 242,964 208,526 429,966
-------------------------------------------- -------- ----------------- ------------------
Reconciliation of EBITDA to profit after tax
Six months ended Six months ended Year ended
31 March 2021
unaudited
GBP000
-------------------------------------------------------
31 March 2020 30 September 2020
-------------------------------------------- ---------
unaudited Audited
GBP000 GBP000
-------------------------------------------- --------- ----------------- ------------------
Underlying EBITDA before unallocated costs 62,016 51,781 113,800
Unallocated corporate overheads (12,657) (10,329) (22,868)
-------------------------------------------- --------- ----------------- ------------------
Underlying EBITDA 49,359 41,452 90,932
Depreciation (9,422) (8,496) (17,021)
Share-based payments charge (237) (150) (330)
Non underlying items 8,976 (7,328) (20,219)
-------------------------------------------- --------- ----------------- ------------------
Operating profit 48,676 25,478 53,362
Financial expenses (6,329) (7,810) (15,539)
-------------------------------------------- --------- ----------------- ------------------
Profit before tax 42,347 17,668 37,823
-------------------------------------------- --------- ----------------- ------------------
Taxation (3,541) (6,451) (10,772)
Profit after tax 38,806 11,217 27,051
Profit attributable to:
Owners of the parent 36,954 10,563 25,118
Non-controlling interest 1,852 654 1,933
-------------------------------------------- --------- ----------------- ------------------
Operations of the Group are primarily carried out in the UK, the
Company's country of domicile. The AS Group, registered in the
United Arab Emirates ("UAE") has generated revenue in the UAE
(GBP12.9m). On 5 October 2021 the Group acquired a majority
shareholding in Smartbox Assistive Technology Limited and
associated subsidiaries. Revenue by Smartbox has been generated in
Europe (GBP2.2m), North and Central America (GBP0.9M), Australasia
(GBP0.3m) and Middle East and Africa (GBP0.3m). All other revenues
arise within the UK.
No asset and liability information is presented above as this
information is not allocated to operating segments in the regular
reporting to the Group's CODM and are not measures used by the CODM
to assess performance and to make resource allocation
decisions.
3. Non underlying items
Non underlying items are those items of financial performance
which, in the opinion of the Directors, should be disclosed
separately in order to improve the readers understanding of the
trading performance of the Group. Non underlying items comprise the
following:
Six months Six months Year
ended ended ended
31 March 2021 31 March 2020 30 September
2020
unaudited unaudited audited
Note GBP000 GBP000 GBP000
------------------------------------------------------ -------- ---------------- ---------------- ----------------
COVID-19 income (1,181) - (2,550)
Included in operating profit (1,181) - (2,550)
---------------------------------------------------------------- ---------------- ---------------- ----------------
COVID-19 expense 1,977 - 3,422
Acquisition expenses (i) 423 231 545
Integration and restructuring costs (ii) 971 2,252 3,769
Charitable donations (iii) 601 308 728
Sleep-in provision (iv) (11,777) - -
Gain on bargain purchase (v) (5,758) - -
Goodwill write off 584 - -
Share based payments charge - - 4,119
Amortisation of intangible assets 5,184 4,537 10,186
---------------------------------------------------------------- ---------------- ---------------- ----------------
Included in administrative expenses (7,795) 7,328 22,769
---------------------------------------------------------------- ---------------- ---------------- ----------------
Fair value movements relating to derivative financial
instruments (vi) (759) 131 557
Put-option interest 152 - -
Charges relating to derivative financial instruments (vi) 606 181 591
Leases imputed interest (vii) 233 230 463
Included in financial expenses 232 542 1,611
---------------------------------------------------------------- ---------------- ---------------- ----------------
Tax on non underlying items
Tax effect:
Current tax (viii) (1,976) (608) (5,988)
Deferred tax (ix) (1,512) 2,342 5,435
Included in taxation (3,488) 1,734 (553)
---------------------------------------------------------------- ---------------- ---------------- ----------------
Total non underlying (income)/expenses (12,232) 9,604 21,277
================================================================ ================ ================ ================
(i) In accordance with IFRS 3 (as revised) items associated with
business combinations have been taken to the income statement as
incurred
(ii) The Group incurred a number of costs relating to the
integration of the Cambian acquisition and reorganisation of the
internal operating, finance and management structures as outlined
in the Scheme of Arrangement dated 19 September 2018.
(iii) These charges represent charitable donations made to the
Caretech Charitable Foundation ("Foundation"), an independent
grant- making corporate foundation registered with the Charity
Commission. Funded and founded by Caretech Holdings plc, the
Foundation has an independent Board of Trustees responsible for
delivering its Charitable Objects. The Trustees include Haroon
Sheikh, Farouq Sheikh, Christopher Dickinson and Michael Adams,
Directors of the Group.
(iv) The Group held a sleep-in provision of GBP11.8m for the
2020 financial year end. On 24 March 2021, the Supreme Court made a
final judgement that social care staff are not entitled to the
national minimum wage for sleep-in shifts and the provision of
GBP11.8m has been written back.
(v) Gain on bargain purchase arising from the Huntercombe
acquisition, see note 7.
(vi) Non underlying items relating to the derivative financial
instruments include the movements during the year in the fair value
of the Group's interest rate swaps which are not designated as
hedging instruments and therefore do not qualify for hedge
accounting, together with the quarterly cash settlements and
accrual thereof.
(vii) Imputed interest recognised as a result of the ground rent
transaction with Alpha Real Capital LLP in 2019.
(viii)Represents the current tax on items (ii) and (vi)
above.
(ix) Deferred tax arises in respect of the following:
Six months ended Six months ended Year
Ended
31 March 2021 31 March 2020 30 September 2020
unaudited unaudited audited
GBP000 GBP000 GBP000
---------------------------------- ---- ----------------- ----------------- ------------------
Derivative financial instruments (144) 25 107
Intangible assets 714 1,367 1,373
Fixed assets 942 - 1,925
Change in tax rate - (3,762) (7,592)
Other adjustments - 28 (282)
Prior year adjustments - - (966)
---------------------------------------- ----------------- ----------------- ------------------
Total 1,512 (2,342) (5,435)
---------------------------------------- ----------------- ----------------- ------------------
4. Financial expenses Six months Six months ended Year
ended ended
31 March 2021 31 March 2020 30 September 2020
unaudited unaudited audited
GBP000 GBP000 GBP000
--------------------------------------------------------------- -------------- ----------------- ------------------
On bank loans and overdrafts 4,257 5,893 11,186
Interest expenses on lease liabilities 1,840 1,375 2,742
--------------------------------------------------------------- -------------- ----------------- ------------------
Financial expenses before non underlying items 6,097 7,268 13,928
Amounts relating to derivative financial instruments (note 3) (153) 312 1,148
Leases imputed interest (note 3) 233 230 463
Put-option interest 152 - -
Total financial expenses 6,329 7,810 15,539
--------------------------------------------------------------- -------------- ----------------- ------------------
5. Taxation Six months Six months ended Year
ended ended
31 March 2021 31 March 2020 30 September 2020
unaudited unaudited audited
GBP000 GBP000 GBP000
----------------------------------------------------------- -------------- ----------------- ------------------
Current tax expense
Current period (6,738) (5,087) (10,494)
Non underlying items (note 3) 1,976 608 5,988
Prior year adjustments - - (374)
Total current tax (4,762) (4,479) (4,880)
----------------------------------------------------------- -------------- ----------------- ------------------
Deferred tax expense
Current period (291) 370 (840)
Deferred tax on non underlying items (note 3) 1,512 (2,342) (5,434)
Prior year adjustments - - 382
Total deferred tax 1,221 (1,972) (5,892)
----------------------------------------------------------- -------------- ----------------- ------------------
Total tax in the consolidated statement of comprehensive
income (3,541) (6,451) (10,772)
----------------------------------------------------------- -------------- ----------------- ------------------
Effective tax rate on profit before tax (before non
underlying items)* 20.9% 18.5% 30.0%
----------------------------------------------------------- -------------- ----------------- ------------------
*The underlying effective tax rate for the interim period was
20.9% (2020 interim: 18.5%). Caretech expects the full year
underlying effective tax rate to be 18.6%.
On 3 March 2021, the Government announced an increase in the
rate of corporation tax to 25% effective from 1 April 2023. This
tax rate change had not been substantively enacted at 31 March
2021.
6. Earnings per share Six months ended Six months ended Year
ended
-------------------------------------------------------- ----------------- ----------------- ------------------
31 March 2021 31 March 2020 30 September 2020
unaudited unaudited Audited
GBP000 GBP000 GBP000
-------------------------------------------------------- ----------------- ----------------- ------------------
Profit attributable to ordinary shareholders 36,954 10,563 25,118
Non underlying (income)/expenses (note 3) (12,232) 9,604 21,277
Profit attributable to ordinary shareholders before
underlying items 24,722 20,167 46,395
Weighted number of shares in issue for basic earnings
per share 110,735,386 111,363,524 109,772,214
Effects of share options in issue 5,494,231 365,110 4,220,077
-------------------------------------------------------- ----------------- ----------------- ------------------
Weighted number of shares in issue for diluted earnings
per share 116,229,617 111,728,634 113,992,292
-------------------------------------------------------- ----------------- ----------------- ------------------
Diluted earnings per share is the basic earnings per share
adjusted for the dilutive effect of the conversion into fully paid
shares of the weighted average number of share options outstanding
during the period.
Earnings per share (pence per share)
Basic 33.37p 9.49p 22.88p
Diluted 31.79p 9.45p 22.03p
Earnings per share before non underlying items (pence per share)
Basic 22.33p 18.11p 42.26p
Diluted 21.27p 18.05p 40.7p
------------------------------------------------------------------ ------- ------- -------
7. Business Combinations
On the 5 October 2020, the Group acquired a majority holding in
Smartbox Assistive Technology Limited and associated
subsidiaries, and Sensory Software International Limited
(Collectively "Smartbox") a creator of augmentative and alternative
communication (AAC) solutions (the "Investment").
To facilitate the acquisition, the Group has established a new
subsidiary, Smartbox Holdings Ltd, which is 70% owned by the Group,
with the remaining minority ownership held by the Smartbox
management team. Smartbox Holdings Ltd acquired 100% of
Smartbox.
The Group will pay up to GBP12.0m comprising of an aggregate
initial purchase price GBP9.1m, funded through an equity
contribution and loan note from the Group and equity contribution
from the minority holders of Smartbox Holdings Limited. Earn-outs
of up to GBP3.6m payable over a two-year period from completion.
The Group expects this amount to be paid over a two-year period
from the date of completion and has valued the contingent
consideration at the fair value on acquisition date. The expected
range of the amount payable is between GBP0 to GBP3.6m. The Group's
contribution will be funded from existing cash resources.
Smartbox is a market-leading creator of software and hardware
that helps disabled people without speech to have a voice and live
more independently. It makes communication as quick, simple and
effective as possible for those service users for whom speech
difficulties can be a challenge. Its solutions include
communication aids, environmental control devices, computer control
technology and interactive learning.
Smartbox, headquartered in Malvern, UK with offices in Bristol
and Pennsylvania US, was acquired by Tobii AB in 2018. Following a
full inquiry from the UK Competition and Markets Authority, Tobii
was required to sell Smartbox on competition grounds, providing the
Group an opportunity to secure a majority equity stake in the
innovative tech firm.
The provisional acquisition table is as follows:
Fair value
Book values adjustments Total
GBP000s GBP000s GBP000s
------------------------------- ------------ ------------- ---------
Intangible assets - 5,217 5,217
Property plant & equipment 249 - 249
Right-of-use asset 1,111 - 1,111
Trade and other receivables 1,126 - 1,126
Inventory 878 - 878
Cash 2,163 - 2,163
Corporation tax 43 - 43
Deferred tax (15) (991) (1,006)
Trade and other payables (110) - (110)
Lease liability (1,111) - (1,111)
Net Assets on acquisition 4,334 4,226 8,560
------------------------------- ------------ ------------- ---------
Less: Non-controlling
interest
------------------------------- ------------ ------------- ---------
Consideration paid 12,028
------------------------------- ------------ ------------- ---------
Goodwill 3,468
------------------------------- ------------ ------------- ---------
Consideration paid was: GBP000
------------------------------- ------------ ------------- ---------
Cash 9,060
Contingent consideration 2,968
------------------------------- ------------ ------------- ---------
Total consideration 12,028
------------------------------- ------------ ------------- ---------
Reconciliation to the
cash flow statement GBP000
------------------------------- ------------ ------------- ---------
Cash paid 9,060
Cash contribution by existing
owners (1,450)
Cash acquired (2,163)
Payments for business combination net of cash
acquired 5,447
------------------------------------------------------------ ---------
Goodwill arises as a result the surplus of consideration over
the fair value of the separately identifiable assets acquired.
Costs relating to this acquisition are expensed in the Income
Statement in accordance with IFRS3 and are identified in note 3 non
underlying items.
Goodwill is attributable to the future economic benefits arising
from assets which are not capable of being individually identified
and separately recognised, these include value of the assembled
workforce within the business acquired. Other intangible assets
acquired comprise technology, customer relationships and the
Smartbox trade name.
On 30 November 2020, the Group completed the transfer of seven
services previously operated by The Huntercombe Group. These
services are highly specialised facilities for the treatment and
care of adults with complex learning disabilities, autism and
mental health diagnoses. They consist of three hospitals, two care
homes with nursing, a number of single accommodation units with
residential care registration and the support of people in their
own tenancies in a step-down facility. The capacity of the services
today is 142 beds. The transfer was structured with no capital
outlay and is expected to be immediately earnings accretive.
The provisional acquisition table is as follows:
Fair value
Book values adjustments Total
GBP000s GBP000s GBP000s
---------------------------- ------------- ------------- ---------
Intangible assets - 6,566 6,566
Property plant & equipment - 440 440
Right-of-use asset - 30,828 30,828
Deferred tax - (1,248) (1,248)
Lease liability - (29,853) (29,853)
Dilapidation provision - (975) (975)
Net Assets on acquisition - 5,758 5,758
---------------------------- ------------- ------------- ---------
Consideration paid -
---------------------------- ------------- ------------- ---------
Gain on bargain purchase (5,758)
------------------------------------------- ------------- ---------
Directors and Advisers
Company Number Solicitors
04457287 Charles Russell Speechlys
5 Fleet Place
Registered Office London EC4M 7RD
5(th) Floor, Metropolitan House
3 Darkes Lane Ashurst LLP
Potters Bar Broadwalk House
Herts EN6 1AG 5 Appold Street
London EC2A 2HA
Directors
Farouq Sheikh (Group Executive Chairman) Registrars
Haroon Sheikh (Group Chief Executive Officer) Link Asset Services
Christopher Dickinson (Group Chief Financial Officer) Northern House
Michael Adams (Care Partnerships Director) Woodsome Park
Karl Monaghan (Non-Executive Director) Fenay Bridge
James Cumming (Non-Executive Director) Huddersfield
Moira Livingston (Non-Executive Director) West Yorkshire HD8 0GA
Company Secretary Auditor
Christopher Dickinson Grant Thornton UK LLP
30 Finsbury Square
Nominated Adviser and Joint Broker London
Panmure Gordon (UK) Limited EC2A 1AG
One New Change
London EC4M 9AF
Joint Brokers
Numis
10 Paternoster Sq.
London
EC4M 7LT
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END
IR DKABDBBKBCAD
(END) Dow Jones Newswires
June 17, 2021 02:00 ET (06:00 GMT)
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