Cost cutting boosts CareTech’s profits

CareTech enjoyed a solid trading period for the year ending 30 September 2013, its preliminary, unaudited results show. Turnover remained steady at £114.3m (2012: £114.1m) and underlying EBITDA was boosted to £26.4m (2012: £24.9m) as a result of a small reduction in underlying cost of sales and a larger reduction in underlying administrative expenses. At 23.6% of revenue, CareTech’s underlying EBITDA puts it in the middle rank of profitability among learning disability care home groups. Total EBITDA declared by the company was even rosier, leaping to £39.9m (2012: £21.3m) as a result on some chunky non-underlying’ items. The biggest of these was an £18.5m gain recognised in respect of business combinations’. Netted against a number of non-underlying acquisition expenses totalling £5m this added £13.5m into the total 2013 EBITDA pot (2012: £-3.5m, in the absence of any similar revaluation gains).