Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineCareTech maintains growth through acquisitions
Caretech (CTH: AIM) 440p
Gain to date: 85.3%
Original entry point: Buy at 237.5p, 14 July 2016
Social care services provider CareTech (CTH: AIM) continues to grow with its acquisition of residential care provider Selborne Care for £16.9m, boosting its services in the Midlands.
The company has also paid £3.8m for children’s education facility Beacon Reach.
FinnCap analyst Mark Brewer is optimistic about CareTech’s outlook as the latest acquisitions are ‘strategically relevant, offering geographic and future organic expansion’, in his words.
Brewer has upgraded his adjusted earnings per share forecasts for the financial year ending September 2018 by 4% to 36.6p and the target price by 9% to 465p thanks to the strategic nature of its acquisitions after CareTech raised £37m in March.
Panmure Gordon analyst Julie Simmonds expects CareTech to improve its margins over the 12-18 month period following the acquisition of Selborne.
‘We expect Selborne Care to be the first of several acquisitions over the next 18 months as CareTech applies the £37m raised (net) in the recent fundraising and the further £11m released through the deferral of loan payments. The company also has a further £30m available if particularly compelling opportunities arise.’
Keep buying.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
