Companies: CTH   

Learning disability specialist CareTech Holdings has accompanied a 58 per cent interim profits gain with another acquisition in the sector.

The Hertfordshire-based company, a leading provider of care services for those with learning disabilities, increased pre-tax profits by £1.4 million to £3.8 million on turnover up 24 per cent to £30.7 million in the six months to March and has agreed to acquire Valeo Ltd, with ten similar care homes in Yorkshire, for up to £15.3 million. AIM-quoted CareTech, which recently bought Beacon Care Holdings for up to £22.5 million, says it intends to follow this latest deal with a £30 million placing at 420p with institutions and directors, handled by broker Brewin Dolphin.

Steered by executive chairman Farouq Sheikh, CareTech is initially paying £11 million cash and £1 million in shares at an above-market 500p for Valeo, to be followed by a £2.8 million deferred payment in shares at 525p if Valeo hits certain performance targets. CareTech argues this deal continues its strategy of taking advantage of the consolidation opportunities in the personal learning difficulties market, ‘reinforcing the company’s position as a market leader in its niche’.

Floated three years ago at 160p, CareTech shares reached 637.5p last August and now trade at 3,435p, valuing the company at £162 million. They should resume their progress in the longer term.

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CareTech Holding	AIM	£130.83m	293.75p	-3.25p
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