Preliminary Results for the year ended 30 September 2008

Company news

Nov 19, 2008

* Including joint venture operating profit; before amortisation of intangible assets and impairment of goodwill and intangible assets and, for 2007 only, integration and restructuring costs

A year of strong organic and acquisitive growth for Care UK, most notably from the Health Care division.

Total borrowing facilities available of £273.7m, with total funding headroom of over £80m including over £54m under the main syndicated facility, which is committed until early 2015; the group remains comfortably within key covenants with no need to raise additional finance to fund development plans.

Social Care:

• Aggregate revenue increased by 10% and adjusted operating profit by 4%, with solid performances in Residential Care and much of Specialist Care
• Business growth in the year includes:
  • Preferred bidder appointment for new care home of c100 beds (around two-thirds to be contracted for 25 years); limited Care UK capital required
  • Approved development of a new 74-bed greenfield care home in Crowborough, East Sussex
  • New and renewed home care contracts awarded in Community Care, amounting to net growth of c5,000 additional hours per week
  • Acquisition of new homecare branches in South Gloucestershire and the West Midlands added 3,500 hours per week in total
  • Several new and extended learning disabilities contracts in both England and Scotland

Health Care:

• Excellent growth in revenue, up 73%, and adjusted operating profit, up 112%, driven by full year contribution from the 2007 acquisition of Mercury Health, full ownership of PHG and growth in the Primary Care business
• Care UK’s Health Care business now widely recognised as sector’s largest and most influential independent sector provider of healthcare services to NHS patients
• Strategic acquisition of 50% of Partnership Health Group not previously owned completed on 1 August 2008
  Targeted bidding activity under the ‘Equitable Access’ initiative. Two new small primary contracts recently awarded for commencement in spring 2009
• Phase 2 ISTC in Southampton reached financial close in June 2008, services commenced in late October 2008
• Good progress made on the mobilisation of the Greater Manchester CATS service, which reached financial close in June 2008

John Nash, Chairman of Care UK, commented:

“Care UK’s strong performance during 2008 demonstrates the resilience of the group and the benefits of investment in the emerging healthcare market.

“Both the current Government and the Conservative party have reaffirmed their strategies for the evolution of a competitive market for NHS services and we anticipate further growth in both our Health Care and Social Care businesses as a consequence. We are currently bidding for selective opportunities in the NHS’ ‘Equitable Access’ procurement for primary care services and we anticipate a further substantial range of opportunities to flow from the NHS strategy to separate and introduce competition for PCT Provider Arms that represent expenditure of around £10bn per annum.

“Having successfully created competencies strongly aligned with the integration of secondary and primary healthcare and with social care services, Care UK is strongly positioned to benefit from further service and market reform offering good opportunities for delivering exceptional long-term value to shareholders”.

View the full announcement

View the investor presentation