Cambian reports revenue growth boosted by daily fees

Asaria Saleem Cambian

Improved fees and a reduction in overheads led to revenue growth and rising EBITDA in the first half of the year at children’s specialist education and behavioural health service provider Cambian Group.

Revenue grew to £105.2m (2017 H1: £100.6m) driven by a repositioning to higher severity services resulting in an increase in average fees. Of this total, £16.3m (2017 H1: £15.1m) was attributed to its fostering division.

Average daily fees for residential care and specialist education rose 8% to £369 (2017 H1: £342), while for its fostering division increased to £135 (2017 H1: £131).

The group reported a rise of 40% in adjusted EBITDA to £11.8m (2017 H1: £8.4m) during the period, with its adjusted EBITDA margin increasied to 11.2% (2017 H1: 8.3%).

Its figures showed that pre-tax profit for the January-June period was £1.6m, after reporting a loss of £1.2m in the first half last year.

Cambian’s closing capacity at 30 June 2018 was 1,617 places (2017 H1: 1,640). The drop, predominantly within its specialist education division, related to the closure of Southwick Park School, in Tewkesbury, Gloucestershire, in April. This property was sold for £5.1m in July.

Its closing occupancy was 1,266 places (2017 H1: 1,332), while in its fostering division it was 688.

Saleem Asaria (pictured), chief executive, said: ‘The group is performing in line with the board’s expectations and we are very pleased with our first set of results as a pure children’s specialist education and behavioural health services company.

‘These results are in line with the medium-term strategy presented in January and further opportunity exists to improve occupancy and margins.’

On 16 August social care operator CareTech Holdings agreed to buy Cambian in a deal worth up to £372m. The acquisition is expected to go through before the end of the year.