Caretech Holdings (CTH)

Caretech Holdings CTH Logo

A pioneering provider of specialist social care services in the UK.

26-Oct-2017 – 418p – £315.8m

Trading Update For The Year Ended September 2017 – In-line and confident of delivering their exciting growth strategy.

On a PER of 11.7, it’s probably priced about right at these levels, one concern that pops out is the Net Debt. Although it’s reduced to £147.2m versus £156.9m last time – That’s still over 40% of Market Cap!

7-Dec-2017 – 426p – £322.6m – PER 12.0

Preliminary Results For The Year Ending September 2017 – Revenue up 11.4% to £166.0m (2016: £149.0m), underlying PBT up by 12.6% to £29.4m (2016: £26.1m), underlying EPS remained at 38.03p per share due to a share placement – Property portfolio valued at £329m.

Seems reasonably priced here but Net Debt remains high at £147.1m (40% of Mkt Cap). That aside it does have attractions.

6-Mar-2018 – 399.5p – £302.3m – PER 10.8

AGM Statement – In-line.

From memory the property portfolio is valued at something like £329m but there’s Net Debt of about £150m (50% or so of Mkt Cap). It also relies heavily on Local Authoritys for Revenue. Enough for me to remain Neutral.

10-May-2018 – 415p – £314.1m – PER 11.1

Trading Update For The 6 Months To End March 2018 – In-line, local authority annual fee negotiations in an early stage – Expects increased staff costs (living wage & pension contributions) to be covered by increases.

Just too reliant on those fee negotiations, I remain Neutral.

26-Oct-2018 – 345p – £375.6m – PER 9.2

Trading Update For The 12 Months To End September 2018 – In-line.

Looks priced about right here perhaps, considering the forecast growth and reasonable Dividend. However, I don’t think I could ever invest here due to the reliance on local authority annual fee negotiations. For this reason (and the fact Net Debt is also very high) I am going to move from Neutral to Avoid and cease coverage.

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