Care UK

Health and social care provider Care UK reports satisfactory trading progress as management buy-out talks involving Bridgepoint Capital continue.

The fully-listed company, which increased pre-tax profits 25% to £28.1m in the year to September on turnover up 20% to £410m, says occupancy and fee rates in residential and specialist care remain satisfactory, despite last month’s extreme weather intensifying holiday season volume falls. Care UK, which is beginning to build new old people’s homes in Portsmouth and Crowborough and is seeking planning permission for another at East Grinstead, says its community care operations’ recovery is ‘progressing’, with 94% of its branches winning ‘good’ or ‘excellent’ ratings.

Steered by chief executive Mike Parish, the company says its health care business has continued to ‘perform ahead of expectations’, with a steady growth in patient numbers at its clinical assessment and treatment support service in Manchester and short-term extension arrangements agreed for several of its independent treatment centres. Parish comments the pipeline of potential new business ‘remains encouraging’.

With year-end net debt of £159m, the company says it has enough funding headroom, including its cash, to pay for ‘all existing and planned expenditure commitments’. Having received a bid approach from private equity group Bridgepoint in September, Care UK says it is still talking to the group and has given it access to ‘work with the existing management team on a management buy-out proposition’.

There is no guarantee a formal offer will emerge, but the possibility adds spice to the shares, which have risen 15% to 410p since Growth Company Investor’s recommendation at 355p in November. Hold on.