Caretech Holdings PLC (CTH) 2019年年度報告「AIM」.pdf

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1、Annual Report and Accounts 2019A bigger business bringing high quality care to change livesStrategic Review01 Financial and Operational Highlights02 CareTech at a Glance04 Group Chairmans Statement08 Group Chief Executives Statement and Performance Review12 Our Market16 Our Strategy 18 Our Business

2、Model24 Our Key Performance Indicators26 Principal Risks and Our Strategic Response 28 Group Financial ReviewGovernance32 Board of Directors34 Corporate Governance Report42 Directors Report 44 Directors Remuneration Report50 Statement of Directors Responsibilities Financial Statements 51 Independent

3、 Auditors Report to the Members of CareTech Holdings PLC 58 Consolidated Income Statement59 Consolidated Balance Sheet60 Consolidated Statement of Changes in Equity61 Consolidated Statement of Cash Flows62 Notes to the Financial Statements93 Company Balance Sheet94 Company Statement of Changes in Eq

4、uity95 Notes to the Company Financial Statements98 Appendix Alternative Performance Measures100 Directors and AdvisersContents2019 Financial and Operational HighlightsRevenue 395.0m CareTech like-for-like increased to 196.5m(2018:185.7m)Underlying profit before tax(ii)50.2m increased by 52.5%(2018:3

5、2.9m)Net cash inflows from operating activities(v)66.3m(2018:39.4m)Property portfolio valuation(iv)774m with net debt(iii)of 291.1mEBITDA(i)73.5m increased by 67.4%(2018:43.9m)CareTech like-for-like increased to 44.3m(2018:43.9m)Underlying basic earnings per share(ii)37.6p increased by 7.2%(2018:35.

6、07p)Final dividend per share 7.95p Increased by 6%(2018:7.5p)Operational highlightsOverall care capacity increased by 2,457(v)5,079 placesCareTech 2,620(2018:2,622)Cambian 2,459Quality CQC Group95%(2018:86%)Ofsted Group82%Caretech like-for-like 93%(2018:86%)Statutory financial highlightsOperating pr

7、ofit 39.5m Increased by 95.5%(2018:20.2m)Diluted earnings per share 18.31p Increased by 30.2%(2018:14.06p)(i)EBITDA is operating profit stated before depreciation,share-based payments charge and non-underlying items(see page 58).(ii)Underlying profit before tax and underlying basic earnings per shar

8、e are stated before non-underlying items.(iii)Net Debt comprises cash and cash equivalents net of all loans and borrowings(see page 85).(iv)September 2018 market value of CareTech property portfolio of 424m and Cambian 350m.(v)Cash flow from operations before non-underlying items and tax(and excludi

9、ng capex)(see page 61).An enlarged group offering extended care pathwaysCambian acquisition On 19 October 2018,CareTech Holdings PLC acquired the entire share capital of Cambian Group PLC(“Cambian”).Cambians services have a specific focus on children who present high severity needs with challenging

10、behaviours and complex care requirements.The acquisition has extended our care pathway and given the Group(Caretech Holdings PLC and its subsidiaries)a broader geographic and acuity service offering which we will seek to capitalise on over the coming years.The headline consideration for the acquisit

11、ion was 359.9m(of which 241.7m was paid in cash),with the net price paid being 278.5m reflecting 81.5m of net cash held by Cambian on the date of acquisition.The acquisition was funded by the issue of 33.2m shares and new bank facilities.Therefore,this report shows significant increases in Revenue,E

12、BITDA and other income statement items reflecting the Cambian acquisition as well as presentational changes reflecting the on-going integration of the two businesses,most notably our new outcome-based operational segments:Adults Services,Childrens Services and Foster Care.Strategic reviewGovernanceF

13、inancial StatementsCareTech Holdings PLCAnnual Report and Accounts 20191CareTech at a GlanceExtraordinary days every dayAbout UsFocusing on the high acuity special education social care population we support children and adults through solutions that are tailor made to each of our service users.Our

14、core services provide for adults with learning disabilities,individuals who have or are recovering from mental illness,people with autistic spectrum disorder,people who have one or more physical impairments and provide care and rehabilitation for men with acquired brain injury(“ABI”).We deliver supp

15、ort through residential services and a wide choice of creative home-based options.Our childrens services cover assessment,residential care,education and fostering options,including specialist provision for very complex young people.We carefully and professionally support any child irrespective of th

16、eir reasons for being in social care.CareTech provides the right solution for complex and difficult situations through our nationally recognised expertise in provision for children and young people including those with challenging behaviours,sexually offending behaviours or who have emotional and be

17、havioural disorders.Our comprehensive service includes education in Ofsted registered schools of very high quality.Find out more online:www.caretech- has pioneered outcomes and progression along Care Pathways including transition services for young people leaving care and for adults who are making t

18、he move into their own home after a lifetime in residential or institutional settings.We remain a national leader in the drive to enable people to live as independently as possible in a home of their own.We believe in career development and creating learning opportunities and have developed an envia

19、ble reputation as a leading provider and organiser of modern apprenticeships across the UK,to members of staff,those we care and support for other organisations seeking to develop their teams.CareTech Holdings PLCAnnual Report and Accounts 20192Adults Services:258 sitesChildrens Services:281 sitesFo

20、ster Care:11 registered officesCaring everyday The CareTech Group provides education,care and support to individuals in need.This is both children and adults who present with special and high severity needs,challenging behaviours and who have complex care requirements.Since CareTech came to the AIM

21、market 14 years ago,it has evolved through a mix of organic and acquisitive growth that has led to our current position as one of the best established and reputable national specialist education and social care providers.We provide services across England,Scotland and Wales in a highly fragmented UK

22、 social care market,covering the majority of the social care spectrum or care pathways.Many of the tailor-made services are offered in specialist schools,residential care and community based settings.All the residential homes are registered with the UK Government regulator:Care Quality Commission(“C

23、QC”),Office for Standards in Education,Childrens Services and Skills(“Ofsted”)and other relevant regulators.CareTech also provides care and support to a significant number of people who have their own tenancies(supported living)and in various day or support centres.We provide services to over 4,000

24、adults and children across 550 locations.We work with the majority of Local Authorities and Clinical Commissioning Groups in England,Scotland and Wales and employ approximately 10,000 people.The total market value is estimated(Laing and Buisson 2017)to be worth 7bn for childrens services and 6bn for

25、 the care of adults(below 65 years of age)in the learning disability and specialist services categories.The private sector share of this market has developed through successful outsourcing of services over the last 20 years and this trend is expected to continue.Local Authorities have largely protec

26、ted their budgets for children and complex younger adults.The Group observes an increased political and societal awareness concerning the funding of Social Care budget for adults and children.We believe budgets require additional funding,given the importance to the healthcare and social fabric of so

27、ciety in supporting an increasing population of the most vulnerable.CareTech Holdings PLCAnnual Report and Accounts 20193Strategic reviewGovernanceFinancial StatementsGroup Chairmans StatementA year of delivery and changeCareTech Holdings PLCAnnual Report and Accounts 20194I am privileged to present

28、 our results for the period ending 30 September 2019.In the year we are celebrating our 25th Anniversary in care,the Group has become a leading national social care provider to young people and adults and is now the largest provider of care and education services to children in the UK.This is a real

29、 milestone for CareTech.2019 has proved to be another exceptionally busy and successful year,with the acquisition of Cambian delivering:an extended care pathway and broader geographic and acuity service offering;operational best practices across the Group to better service partners and service users

30、;improved Ofsted quality ratings to 80%;synergies of 3m PBT synergies as set out in our acquisition plan;margin improvement to 13.4%pre-synergies;and delivering a transformational business which is earnings accretive for shareholders.Whilst Cambian has been the largest acquisition in CareTechs histo

31、ry and significant progress has been made on its integration,our core business continues to grow and perform well.In this regard,I am pleased to report:like-for-like underlying performance in the CareTech business has increased;improvement on CQC and Ofsted Quality Ratings;accelerated organic growth

32、 initiatives including property purchases and reconfigurations;strong occupancy levels have been maintained throughout the year;staff retention initiatives have proven successful with retention rates ahead of sector average;and exciting initiatives and partnerships launched by the CareTech Charitabl

33、e Foundation.Management have performed extremely well to manage these various workstreams whilst ensuring that the business moves forward on all fronts.The Group has stood out from its peers as a company that can successfully combine quality,integrity and sound financial acumen,and has consistently

34、achieved good care quality ratings.Our credibility as the provider of choice has never been stronger and we continue our successful growth strategy with a confident outlook.This is only possible due to the dedication,determination and hard work of our staff.To acknowledge their success,I was proud t

35、o celebrate their achievements with them at our fifth National Care Awards in November this year.In line with our ethos of promoting the CareTech culture,the Group announced in October 2019,the most wide-ranging share ownership incentive plan to include c.600 individuals across the business includin

36、g home managers,back office staff and executive management.This,together with our various training and incentive programmes,gives us a highly committed staff team who deliver positive outcomes for our service users.Financial results and position The Groups performance reflects the scale of the acqui

37、sition of Cambian and delivers a substantial increase in revenue,EBITDA and other income statement items together with the cash flows for the period following completion on 19 October 2018.2019 2018 ChangeRevenue 395.0m 185.7m 113%CareTech like-for-like revenue 196.5m 185.7m 6%EBITDA(i)73.5m 43.9m 6

38、7%CareTech like-for-like EBITDA 44.3m 43.9m 1%Underlying profit before tax(ii)50.2m 32.9m 53%Underlying basic earnings per share 37.60p 35.10p 7%Statutory profit before tax 24.3m 15.4m 58%Statutory earnings per share 18.38p 14.07p 31%Cash flow from operating activities(iii)66.3m 39.4m 68%Final divid

39、end per share 7.95p 7.50p 6%I am pleased to report that the Groups trading performance in the year to date is in line with market expectations.This report includes presentational changes first outlined in the trading update issued on 1 May 2019 to reflect the ongoing integration of the two businesse

40、s,most notably in the reporting of operational information which is presented as the following three outcome-based operating divisions:Adults Services,Childrens Services and Foster Care.Revenue increased by 112.7%to 395.0m(2018:185.7m).The split of revenue is 196.5m for CareTech and 198.5m for Cambi

41、an.Like-for-like CareTechs revenue in the period increased 5.8%from 185.7m.Group EBITDA of 73.5m(2018:43.9m)represents growth of 67.4%when compared with the same period last year.The split of EBITDA is 44.3m for CareTech and 29.3m for Cambian.Like-for-like,CareTechs EBITDA increased by 1%reflecting

42、the effect of re-configurations during the year.The EBITDA margin was 18.6%(2018:23.6%)which reflects the acquisition of Cambian whose margins are historically lower than the CareTech EBITDA margins.Like-for-like,CareTech EBITDA remained broadly flat at 22.5%reflecting business mix and timing of re-

43、configurations.Cambians EBITDA margin before synergies was 13.4%,which reflects a considerable increase on the last reported margin prior to the acquisition of 10.9%and a significant step towards our medium-term target of 16%.Underlying profit before tax increased by 52.5%to 50.2m(2018:32.9m)and und

44、erlying basic earnings per share was 37.60p(2018:35.07p),representing an improved return to shareholders following the Cambian acquisition.We entered into new banking facilities at the time of the acquisition of Cambian which include term loans of 322m and an undrawn revolving credit facility of 25m

45、.In January 2019,the Group completed its second ground rent transaction with Alpha Capital,raising 31m of net proceeds on attractive terms providing further capital for investment.The Groups property valuation of 774m was undertaken in September 2018,establishing a loan to value at approximately 40%

46、whilst the net debt to EBITDA is just under 4.0 x and the Board remain committed on reducing net debt to EBITDA in the medium term to under 3.0 x.(i)EBITDA is operating profit stated before depreciation,share-based payments charge and non-underlying items.(ii)Underlying profit before tax and underly

47、ing basic earnings per share are stated before non-underlying items.(iii)Cash flow from operating activities before non-underlying items.Delivering high quality support and care to individuals with complex needs to achieve positive outcomesStrategic reviewGovernanceFinancial StatementsCareTech Holdi

48、ngs PLCAnnual Report and Accounts 20195Group Chairmans Statement continuedProgress on CambianThe acquisition of Cambian was immediately followed by the CMA placing a hold separate embargo over the combined business.Following the unconditional clearance of the acquisition from the CMA in February 201

49、9,the integration of the two businesses commenced.Significant headway has been made into this.Cambian shares CareTechs commitment to delivering the highest standards of care and together the Group will benefit from favourable demographics underpinned by the growth in outsourcing to the private secto

50、r and from the increasingly stringent regulatory environment.Ofsted ratings increased from 77%at the date of acquisition to 80%Good or Outstanding.Best practice is being shared across the Group which we will seek to capitalise on over the coming years.The EBITDA margin of the Cambian business was 13

51、.4%before synergies which shows considerable improvement when compared with their historic announced margins of 10.9%pre-acquisition.This puts us in a good position to deliver our medium-term target of 16%pre-synergies as set out at the time of acquisition.The Group reports that it has delivered 3m

52、of pre-tax profit synergies for the year and is on track and already taken action to deliver pre-tax profit synergies of 5m for the year ended 30 September 2020.Initiatives that have been implemented include,inter alia:the former CEO,CFO,COO and all Non-Executive Board members of Cambian have left t

53、he Group;a number of senior management savings have been delivered;a number of back-office functions have been integrated and cost savings identified;the Group has exercised a break clause on the lease of the Cambian head office in Hammersmith and all employees have been relocated to the CareTech he

54、ad office;a number of ongoing IT costs have been streamlined and a new IT strategy put in place;and a number of non-staff synergy savings such as in Procurement and Estates have been made.Following a year of ownership,we have established a strong operational fit,enhanced our management team and exte

55、nded our care pathways.This provides us with a solid platform to build upon in the future.DividendThe Board intends to maintain a progressive dividend policy.The Board has proposed a final dividend of 7.95p(2018:7.5p)per share bringing the total dividend for the year to 11.7p(2018:11.0p)per share.Th

56、is represents a full year increase of 6.4%year on year.The final dividend will be paid,subject to shareholder approval,on 6 May 2020,with an ex-dividend date of 5 March 2020 and an associated record date of 6 March 2020.Our BoardWe were delighted to welcome Professor Moira Livingston to the Board as

57、 a Non-Executive Director on 1 May 2019.Moira has been involved in health and social care for 32 years and spent many years working initially as a Doctor in the field of older-age psychiatry and latterly as a senior clinical leader and manager in the NHS.Moira has held a number of Director level lea

58、dership roles in the healthcare sector and she will Chair the Groups Care Quality and Governance Committee as well as join the Remuneration Committee and the Audit Committee.Mike Adams OBE also became an Executive Director which has enabled him to pursue a strategic role within the Group and to push

59、 forward the Purple business model.Purples vision is to transform thinking and“change the conversation”by bringing together disabled people and business,creating sustainable solutions for the benefit of society and to add value to CareTechs growing service user base.We also welcome Christopher Dicki

60、nson(FCA)to the Board as Group Chief Financial Officer on 13 January 2020.Christopher has spent the last year as Cambian Chief Financial Officer and prior to joining CareTech was a Managing Director at Jefferies where he acted for CareTech on its acquisition of Cambian.On behalf of the Group,I would

61、 also like to thank Gareth Dufton who stepped in as Interim Group Finance Director and has supported the Group on the sad passing of Michael Hill last December.It is expected that an additional Non-Executive Director will be appointed during early 2020.Our peopleOur people are our most critical asse

62、t.Nothing of what we do to improve the lives of the adults and children placed in our care would be achievable without the hard work and dedication of the front-line staff and managers throughout the organisation.I am always drawn to the achievements of our excellent front line staff,which is inevit

63、able as we are first and foremost a care organisation.Their care and commitment would be much less without the dedicated support of our administrators and support teams whose hard work and energy is critical to the success of the Group and the care we provide.In terms of staff retention,the Groups r

64、etention rate sits at 74%(which is analysed as 77%for CareTech employees and 71%for Cambian employees)and compares favourably to the industry average of under 70%.We continue to strive to be the employer of choice within the sector.As part of the Groups focus on attracting and retaining the best tal

65、ent in the sector,CareTech announced a new ExSOP and CSOP scheme in October 2019.This is the most wide-ranging share incentive plan to include approximately 600 individuals from across the business including home managers,back office staff and executive management,demonstrating our commitment to cre

66、ate a culture of share ownership and to ensure our staff share in the success of our business.We plan to introduce another CareTech Sharesave Scheme in early 2020 as part of our staff retention strategy.To embed our culture across our business we reward our people throughout the year culminating in

67、the fifth Care Awards ceremony in November 2019.We were delighted to host a number of parents,carers and families and also gave an opportunity for our shareholders to experience our culture first hand.Social responsibilityThe CareTech Foundation was created in 2017 and is an independent grant-making

68、 corporate foundation registered with the Charity Commission.It is the first corporate foundation in the UK social care sector,demonstrating the Companys commitment to wider society and to its staff and its desire to play a strong leadership role within the social care sector.CareTech has continued

69、its support both financially and more widely during 2019 and I am pleased to see the Foundation growing from strength to strength.Highlights during the year include:launching a new partnership with Birkbeck,University of London in the construction and development of the world-first ToddlerLab which

70、will incorporate the highest quality of technology to play a key role in the research and understanding of autism;recently supporting Depaul UK for their Mental Health and Wellbeing for Homeless Young People programme in the North East;and a new Staff Hardship Grants fund to enable us to provide sma

71、ll grants to CareTech staff was also launched.CareTech Holdings PLCAnnual Report and Accounts 20196We were also delighted to have officially supported the Special Olympics Great Britain(Team SOGB)at the March 2019 Special Olympics World Summer Games,held in Abu Dhabi,United Arab Emirates(UAE),with o

72、ver 190 countries participating in a truly spectacular and successful global event.CareTechs involvement with Team SOGB and the World Games arose from the close pathway affinity between our national expertise in supporting people with learning disabilities through our living,learning and employment

73、support services and the Special Olympics movement using sport to build confidence,skill and determination for athletes with intellectual and learning disabilities as a gateway to empowerment,competence,acceptance and joy.The Games were a real highlight on the 2019 World Sporting Humanitarian calend

74、ar and Team SOGB excelled against the competition winning an outstanding tally of 61 Gold,57 Silver and 46 Bronze Medals.Purple Tuesday was launched again on 12 November 2019 and was a huge success.The consumer spending power of disabled people and their families is worth 249bn and is rising by an a

75、verage of 14%per annum.Yet,less than 10%of businesses have a targeted plan to access the disability market.Purple is driving the agenda to improve awareness and the customer experience for disabled people.Outlook and prospectsOur aim is to be the highest quality provider of quality support and care

76、for individuals who often have complex needs.I am proud of our track record and the culture we have embedded within the organisation.We listen to our service users,their families,to our staff and work closely with the local authorities,independent inspectors and regulators to continually improve and

77、 set best practice.The next financial year will see CareTech grow through the continued integration of the Cambian business together with organic developments and reconfigurations.In addition,we will continue to look at bolt-on acquisitions as part of our wider strategy to consolidate the market in

78、the UK,as well as an opportunity in the Gulf region where we are in advanced discussions with a potential partner.We also continue to invest time in how we can enhance further the use of technology as a validation of our work as well as for diagnostic and assessment purposes.As the business grows,we

79、 will continue to further strengthen our management team offering a forceful blend of experience,commercial wisdom and dedication to care.I have no doubt that the next few years will see continuing growth in line with market expectations and care excellence which will help deliver our target of doub

80、le-digit growth in underlying EPS.On behalf of our Board,I would like to thank our many stakeholders and all CareTech employees,including those joining us from Cambian during the year,for their dedication and commitment to the Company and for going the extra mile.Finally,I would also like to thank o

81、ur shareholders for your continued support.Farouq SheikhGroup Executive Chairman30 January 2020Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 20197Group Chief Executives Statement and Performance ReviewDelivering purposeful progressCareTech Holdings PLC

82、Annual Report and Accounts 20198The Group has continued to build on our values driven,and quality focused,approach to transforming outcomes for service users in our care,and delivering value to commissioners.During the year we have deepened our relationships with key stakeholders and are well positi

83、oned to serve local authority partners and communities with responsive and innovative service solutions.Our care priorities drive successful outcomes for our service users and follow closely the guidance from central Government and commissioning needs locally.The Group also continues to realise the

84、benefit of organisational improvements put in place over the past few years.We have continued to strengthen our management structure through the Cambian acquisition and plan for further senior appointments.These along with investment in our processes and new systems will drive efficiencies across th

85、e Group.Commitment to high qualityOur commitmeant is to provide high quality support and care for all our service users.By embedding a culture of quality we have seen our quality ratings continually improve and this year is no exception.Our rising CQC ratings to 95%demonstrate the high standards of

86、care our service users receive.We have also shown improvement in our Childrens Services blended quality rating of 82%with both CareTech and Cambian showing improvement.This is a Key Performance Indicator for the Group.We have built and continue to strengthen an open and honest working relationship w

87、ith our regulators and those who commission us to deliver services.During the year,I am delighted that our teams have received external recognition for the quality of services we deliver.I would like to congratulate The Oakleaf Group for winning the Health Investor Awards 2019 Complex Care Provider

88、of the Year award,Spark of Genius winning the LaingBuisson Public Private Partnership Award,and Branas Isaf for counting three winners in the National Wales Care Awards.We are continually improving and examining ways to improve our quality standards including investing significantly in the training

89、and induction of our staff and deciding to strengthen our internal compliance team.The appointment of Professor Moira Livingston to Chair our independent Care Quality and Governance Committee will reinforce our approach and ensure we deliver on our strategy.Business performanceFollowing the acquisit

90、ion of Cambian,it was announced that the Group has changed its reporting operating segments to more accurately reflect the Groups management and internal reporting structure.A review of each operational division is set out below:1.Adults Services Year to 30 September 2019CareTechRevenue 123.6m(2018:

91、118.7m)EBITDA before unallocated costs32.7m(2018:31.9m)Capacity 1,968(2018:1,968)Our focus remains to provide innovative service solutions that transform outcomes for service users and delivers value to commissionersStrategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and

92、 Accounts 20199Group Chief Executives Statement and Performance ReviewcontinuedAdults Services comprises the core CareTech Adult Learning Disabilities business,the Specialist Services business and Learning Services business.The Group offers a flexible,person-centred approach with support offered on

93、an individual planned basis both within a registered residential setting and in step-down supported housing.Demand remains high across the spectrum for the support of people with learning disabilities and the Group recognises an increasing complexity of need for referrals to specialist services with

94、in the Group.Specialist Services comprise the Adult Mental Health Services and Oakleaf Care(Hartwell).Specialist Services works in partnerships with the NHS to ensure a successful transition out of acute care,delivering pathways to independence.We have an outstanding track record for helping people

95、away from acute care and supporting them in their own homes.The market for high acuity care and the support of people with learning disability is estimated to be 5.8bn and growing year on year due to demographics and individuals living longer.Demand for lower acuity support has been impacted by the

96、cuts in Local Authority expenditure,but this is not an area of activity in which CareTech operates.Conversely,resources for those with the highest level of need are being maintained and increased in some Local Authorities.Across the Group,the focus on quality continues with CQC ratings at 95%which c

97、ompares favourably to 86%the previous year and the market average of 84%.Revenues for the Division were 123.6m(2018:118.7m)and EBITDA was 32.7m(2018:31.9m).Revenues and EBITDA increased by 4.1%and 2.5%respectively.EBITDA margins broadly remained flat at 26.5%from 26.9%reflecting the change in mix of

98、 the business as the number of supported living beds grew.We expect to see the benefit during 2020 due to a number of reconfigurations which have come on stream during the second half of the year.During the past year we have withdrawn four adult places in services for reconfiguration into new care m

99、odels,a further 47 supported living contracts came to an end plus an additional 51 beds have been brought into service.2.Childrens Services Year to 30 September 2019CareTech CambianRevenue 64.8m 165.7m(2018:58.7m)EBITDA before unallocated costs 18.2m 37.4m(2018:17.0m)Capacity 351 1,582(2018:353)A nu

100、mber of children and young people need to live in specialised residential services and receive specialist education.As far as practicable we aim to help these children move into a family style environment.This segment contains childrens residential care homes,which includes facilities for children w

101、ith learning difficulties and emotional behavioural disorders(EBD),and specialist schools.The Group operates services that cater for local needs but also manage certain highly specialised services that have a national catchment.The Cambian acquisition has increased the geographical spread of Childre

102、ns Services across the UK as well as increasing the types of services being offered including Complex Needs,Social,Emotional and Mental Health(SEMH)and Child and Adolescent Mental Health Services(CAMHS).The Ofsted ratings for the CareTech services are 93%(2018:86%)Good or Outstanding and 80%for the

103、Cambian services compared with 77%at the date of acquisition.This results in a blended 82%Good and Outstanding ratings for Childrens Services across the Group,an increase from 78%when compared with our half year results.The Group has continued to build on our values driven,and quality focused,approa

104、ch to transforming outcomes for service users in our care,and delivering value to commissioners.CareTech Holdings PLCAnnual Report and Accounts 201910Revenues and EBITDA before unallocated costs for the Division were 230.6m and 55.6m respectively.Like-for-like,CareTechs revenues increased by 10.5%an

105、d EBITDA by 7.1%.During the year,we have seen an improvement in Cambians EBITDA margins through increased staff retention and improved quality ratings which lead to increased occupancy levels which in turn lead to increased EBITDA margins.There has been a net increase of four places in Cambian homes

106、 since acquisition due to one new home registration occurring in August 2019.3.Foster Care Year to 30 September 2019CareTech CambianRevenue 8.0m 32.8m(2018:8.2m)EBITDA before unallocated costs1.5m 6.0m(2018:1.9m)Capacity 301 877(2018:301)Foster Care comprises CareTechs and Cambians fostering service

107、s.Foster Care provides for both mainstream and specialist foster care in small supportive groups across England and Wales for children with disabilities.We also provide foster care family assessments in the home rather than in a residential setting.Fostering is an important part of our care pathway

108、and considerably less expensive than residential care.It is a generally held view that fostering in an ordinary family home delivers better quality than any residential setting.However,the rising tide of fostering has been constrained by the challenge of finding foster carers with the right skill an

109、d motivation alongside preference by social workers to place within Local Authority services rather than the independent sector.The acquisition of Cambian enhances our Foster Care service through offering a more specialist therapeutic service.With a combined capacity of 1,178 places,the Group has es

110、tablished one of the largest independent fostering agencies in England and Wales.Revenues for the Division were 40.8m analysed as CareTech 8.0m and Cambian 32.8m.EBITDA for this Division was 7.5m analysed as CareTech 1.5m and 6.0m Cambian.Looking forward,we are training our foster carers with the sk

111、ills required to manage more complex work and have linked the fostering division with our residential team for children so that we can maintain an effective care pathway.Summary and outlookThis has been a year of transformational change for CareTech and I am pleased to report that we are delivering

112、all of our key objectives including the integration of the Cambian business.Our strategy and the fundamentals of the markets we serve remain sound.We are integral to providing service solutions to commissioners to meet the specialist and complex needs of children and adults.Our opportunity over the

113、medium term is to drive organic revenue and further consolidate our market position through bolt-on acquisitions that fit with our strategic objectives and meet our financial criteria.We are a values driven,quality focused Group and I am confident that through the energy and commitment of all our pe

114、ople we will continue to innovate and transform care pathways.I am honoured to lead a Group that is making a real difference to so many lives.I would like to conclude by expressing my sincere thanks to our staff at all levels in the organisation for their hard work,commitment and dedication to the o

115、rganisation.Haroon SheikhGroup Chief Executive Officer30 January 2020Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201911Our market is driven by three big trends:funding for healthcare,customer expectations and access to skilled care workersOur Market1

116、.Adults Services*People that currently live in care homes or NHS hospitals or are in supported living arrangements75,000-80,000UK population who have specific mental disorders13%Market for residential learning disabilities and supported living worth an annual5.8bnNHS/LA total spend on specialist ser

117、vices is worth an annual10.1bnMarket growth rate1.2%pa2.Childrens Services*Children in UK looked after outside foster care10,085Children in independent sector special schools and colleges 16,995Residential childrens market across UK worth1.39bnEducation and training in special schools and colleges3.

118、7bnMarket growth rate1.2%pa3.Foster Care*People placed in foster care in England63,718Foster care market across England worth1.95bnMarket growth rate5.2%pa*Data from Laing and Buisson Adult Specialist Care 2nd edition 2015/2016 report.*Data from Laing and Buisson Childrens Services Market Report 3rd

119、 edition 2017 report.The Directors present their Strategic Report on the Group for the year ended 30 September 2019.In preparing this report,the Directors have complied with S414C of the Companies Act 2006.The Strategic Report should be read in conjunction with the Strategic Review for the Group whi

120、ch includes the Highlights,Group at a glance,Chairmans Statement,the Chief Executives Statement,Strategic Report and Performance Review and Financial Review.CareTech Holdings PLCAnnual Report and Accounts 2019121.Funding for healthcare Key market driversThe care market in which the Group operates is

121、 a UK market worth an estimated 13bn per annum and estimated to be growing by more than 5%per annum.In 2017,the total market for specialist childrens care services was worth approximately 7.2bn.The market is growing,driven by population growth and increasing survival rates of the current addressable

122、 population,as well as a greater awareness and,in certain cases,increased incidence of certain conditions amongst the underlying population.The UK has a well established system of public and private providers of health and social care.Although the available resources to purchase social care remain l

123、argely static there is a known increase in demand across the whole spectrum,presenting purchasing bodies with a conundrum.One response has been to move money away from the NHS in order to allow Local Authorities greater purchasing power.However,the most significant change has been to a system of agg

124、ressive rationing.This has focused money on the areas of highest need such as complex children,very disabled or complex people with learning difficulties and hospital discharge schemes.The principal driver for commissioners in Local Authorities and the NHS is value.This is interpreted by them as the

125、 optimum balance between quality and price,but has an underpinning criterion determined by“outcomes”.Social care funding has been prominent in the main parties 2019 election campaign with both Conservative and Labour pledging to increase funding.What this means for CareTechMost providers of social c

126、are have fewer than three services and this huge,fragmented range of providers represents the vast majority of the market.However,the market has been steadily consolidating and a very small number of large“corporate”providers have emerged,with CareTech being one of the bigger players within the non-

127、elderly care sector.The market segments served by CareTech is focused on adults and children who present with high severity needs,challenging behaviours and who have complex care requirements.Hence budget cuts have a very limited impact on the Group.One of our differentiating factors is the concept

128、of Care Pathways to reflect our optimism that users of our services can make progress with their lives.Our commitment to maximise independence is great for our service users,rewarding for our staff and strongly supported by those who commission and support our services.Our“outcome”focused approach f

129、or our service users has a wider impact on society including more individuals back into work,fewer individuals returning to care facilities,a reduction of adult prison population having been in care and children leaving care achieving educational attainment levels.CareTech has been aligned to Local

130、Authorities purchasing principals and we work closely with Commissioners to ensure that we stay in tune with their approach to market management.Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201913Our Marketcontinued2.Customer expectations Key market d

131、riversThe market that CareTech serves is regulated by Care Quality Commission(CQC)and the Office for Standards in Education,Childrens Services and Skills(Ofsted)in England and equivalent regulatory bodies in Scotland and Wales.These bodies control and administer the registration,inspection and compl

132、aints procedures set out under applicable laws and regulations.In order to open a service,it needs to be registered with CQC or Ofsted,and must pass regular inspections to ensure it meets the minimum standards and requirements prescribed under laws and regulation.Commissioners placing adults or chil

133、dren into services expect high quality.What this means for CareTechWe work closely with our Regulators and Commissioners across England,Scotland and Wales.CareTech is a very well known care company in public ownership and offers high quality services with a strong ethical and value-based approach.We

134、 have leading quality ratings for both CQC and Ofsted and have ambitions to improve these.Our quality assurance is embedded within the organisation from the Home Manager,Regional Manager,and Operations Director through to the Chief Operational Officer and the Board.The Group uses Acoura and NYAS as

135、independent suppliers,to audit and report monthly Health and Safety matters as well as all RIDDORS(Reporting of Injuries,Diseases and Dangerous Occurrences).CareTech Holdings PLCAnnual Report and Accounts 2019143.Access to skilled care workers Key market driversThe sector has high levels of turnover

136、 and vacancies.Following the introduction of the national living wage on 1 April 2016,care workers pay has increased but turnover remains high given tough working conditions.Care workers in the sector find it rewarding but there is perception of low pay and lack of training or promotional prospects.

137、What this means for CareTechWe promote our values and culture by helping our employees and supporting them with regular supervision,training and clear career development programmes.To embed our culture across our business we reward our people throughout the year culminating in the Fifth Care Awards

138、ceremony in November 2019.These initiatives promote staff continuity and leads to improved standards of care quality.Our annual Staff Engagement Survey which took place in May 2019 and involved all staff and looked at values and questions across five engagement drivers:Trust,Teamwork,Empowering,Corp

139、orate Pride and Career Progression.The feedback has led to a communication plan that will lead to improved communication across the Group.The Group continuously focuses on employee engagement and has launched the most wide-ranging share incentive plan across the business to include home managers,bac

140、k office staff and executive management.In addition,it is the Companys intention to make a Save-As-You-Earn issuance for front line staff in due course.This scheme,along with regular senior management share option awards,contributes to the fulfilment of our desire to reward staff for loyalty,diligen

141、ce and commitment to high standards of service.CareTech is resilient to a hard Brexit given the Group only trades within the UK and has limited exposure to nursing staff and the EU labour market.Our primary recruitment is focused on the UK labour market for support staff.Strategic reviewGovernanceFi

142、nancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201915CareTechs strategic objective is to be a leading national integrated provider of high quality social care pathways in the UK for children and adults,with continued growth and care excellence.We aim to distinguish ourselves from

143、other providers by offering a bespoke range of options which meet the needs of Commissioners and offer service users a care pathway for the medium to long term where required.The CareTech Groups focus is the provision of high acuity specialist social care through three outcome-based sectors of Adult

144、s Services,Childrens Services and Foster Care.We achieve our strategic objective and drive growth in the profitability of the Group through a range of actions,including,but not limited to:focusing on areas of social care that have a high acuity level across the UK where demand for services from Loca

145、l Authorities is expected to remain strong and fee rates are typically higher;targeting organic growth through increases in capacity and optimisation/remodelling of existing and acquired properties to meet market demand and to achieve enhanced fee rates;maintaining high occupancy through the Groups

146、facilities by attracting continued high level of referrals from Local Authorities on the back of strong regulatory ratings;continuing to invest in people and training to deliver social care expertise,leadership and high quality care;investing in IT,systems,processes and controls to improve quality l

147、evels,manage risks effectively and improve occupancy;working closely with Local Authority(“LA”)commissioners to help them deliver their statutory duties efficiently and with care and react to their changing demands;continuing to offer a strong national presence with local brands and regional service

148、 delivery points.This supports development of local relationships while offering the comfort,security and governance oversight of a well-resourced and strong group;and continuing to identify bolt-on acquisition opportunities offering complementary services or expanding the Groups geographical presen

149、ce which offer the opportunity for the Group to increase market share in a highly fragmented market.We have defined three pillars to execute our strategic objectiveOur Strategy1.Build the industrys best leadership and workforceEmploying approximately 9,000 numerous qualified and skilled care workers

150、,foster carers,teachers and managers,the CareTech front line teams are supported by a wide range of high level professionals such as social workers,nurses,therapists,psychologists with oversight of all interventions.Their care,commitment and dedication is critical to the success of our Company and t

151、he care we provide.CareTech places emphasis on the provision of attractive working conditions and staff training.Part of our recruitment process is focused on matching the needs of the Groups service users to the skills values and behaviour of our staff,which necessitates a person centred approach t

152、o recruitment and on-boarding.We offer a range of learning and development to ensure that staff have the necessary knowledge,skills,competencies and attitudes to provide a high quality service of support and care in compliance with best practice,regulatory requirements and service specifications.Car

153、eTech Holdings PLCAnnual Report and Accounts 2019162.Have the highest quality ratings The driver for social care is an organisations ability to deliver high quality care,with reliable outcomes at a fair price.We believe that the market has recognised that CareTech offers the best possible balance be

154、tween quality and value and understands the need for progressive thinking and innovation to deliver ongoing results.The CareTech brand is strong and our extensive relationships across the UK are robust.This is reinforced by our presence at major industry events where we have been reliable sponsors a

155、nd commentators.The most effective way that we sustain our reputation is by delivering what we promise for the people we support and by treating our staff well.Quality is not simply compliance with the requirements of regulation.Our approach is to embed quality throughout the Groups operations and e

156、mploy well-qualified and skilled professionals who operate within a quality framework.Our quality framework and processes include,but are not limited to:recruitment and retention of appropriate staff alongside appropriate training and induction;regular reporting from home managers through to localit

157、y managers,operational directors and divisional senior management as well as the CareTech Groups head of quality;“Line of sight”monitoring which looks for key performance indicators which support high quality services.Each service is rated internally and high potentials or early warning signs are id

158、entified and progress monitored by senior management to drive continuous improvement;an experienced internal quality and compliance team who operate across all divisions,reporting to senior management.The team undertake a programme of regular inspection and assessment of facilities and services agai

159、nst internal quality assurance frameworks and also carries out thematic reviews;A Care Quality and Governance Committee chaired by Professor Moira Livingston.The Committee has oversight of all issues and reports relating to the well-being of service users;commissions enquiries into matters of concer

160、n;and strive to ensure that CareTech operates to the highest level of professional care standards;careful analysis of regulatory inspection reports from external regulators;and CareTech Board oversight through monthly reporting of key performance indicators and compliance data.3.Achieve high occupan

161、cy through matching Our strategy is to offer a strong national presence with local brands and regional service delivery points.This supports development of local relationships while offering the comfort and security of a well resourced and strong Group.Our services are in demand and occupancy has re

162、mained high despite unrecognised fears of Local Authority austerity impacting referrals.Whats more,the nature of referrals in recent years has been toward the more complex end of the spectrum.New residents arrive in a CareTech care home following a referral from a Local Authority or a Clinical Commi

163、ssioning Group care manager.Once a referral has been received,a resident assessment is typically followed by an assessment including a detailed matching of the proposed resident with a known or anticipated vacancy.The selection of new residents is undertaken with care and sensitivity to ensure the o

164、ngoing success of the service.This sometimes means that a home can have a short-term vacancy.Local Authorities or Care Commissioning Groups are more likely to place a resident in a home that seeks to match each residents need with those of the people already living there.This practice is commerciall

165、y advantageous and maintains the success of an existing home and helps to ensure continuing high referral levels.Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201917Adults ServicesAutism and AspergersMental healthPhysical disabilitiesBrain injury rehab

166、ilitationLearning disabilitiesInnovative care pathwaysServices segmentSpecialismChildrens ServicesAutism spectrum conditionsMental healthComplex social,emotional and behavioural difficultiesEducation and therapeutic supportYoung people in crisisLearning disabilitiesFosteringChallenging and complex b

167、ehaviourTherapeutic foster placementLearning disabilitiesOur Business ModelOur business model represents how we aim to generate revenue and profit from our operationsOur purpose is to deliver innovative social care on behalf of Local Authority and Health Service Commissioners throughout the UK in th

168、ree areas:Adults services,Childrens Services and Foster Care.Our innovative care pathways and services offeredCare and support is characterised by optimism and a genuine belief in the abilities of our service users.Everyone we support has an opportunity to make progress in their lives and our profes

169、sional teams work hard to help those people understand how to move forward.Many years ago we began to describe our services as a Care Pathway,making clear our intention to break away from the old belief that care is for life.We have delivered on this commitment and everyone we support,from young chi

170、ldren to profoundly disabled adults,shares our approach to maximise their independence.This is great for service users,rewarding for our staff and strongly supported by those who commission and support our services.CareTech Holdings PLCAnnual Report and Accounts 201918Adults ServicesSocial care serv

171、ices for adults over the age of 18 Care capacity 2019 1,968 2018:1,968.Contribution to Group revenue 31.3%(2018:63.9%)Quality Rating(CQC):95%2018:86%Learning Disabilities Supporting adults with conditions such as autism and learning difficulties including care and education needs.Specialist Services

172、 Assessment and specialised rehabilitation focus on providing active rehabilitation.Unique care programmes are developed and centre on the needs and goals of each resident,looking at short and long-term goals.Residents may also have associated complex cognitive impairments,challenging behaviours and

173、/or physical disabilities.Learning Services Pre-employment,development and apprenticeship programmes using public funds from the Skills Funding Agency to lay foundations to achieve their career goals whilst helping to provide businesses with the vital skills they need in their workforce.Adults with

174、learning disabilities are increasingly being provided with direct funding to enable them to purchase their own care and support.We work actively with service users and advisory bodies to deliver self-directed support packages and see this as an increasingly important aspect of our service model,as w

175、ell as offering commercial opportunity.For many people with the most complex intellectual or physical challenges,residential care will continue to be the preferred option although the services will change in their approach as we move toward a more enabling,modern type of service.An alternative to re

176、sidential care is the opportunity for people to live in a home of their own,sometimes shared with others.CareTech is a leader in the provision of supported living and offers packages of individualised self-directed support to people in their own homes.Specialist Services provision continues to domin

177、ate the health and social care agenda.Good Specialist Services is a significant contributor to a healthy community and national economy,while mental ill health is devastating to individuals and their families.Most Commissioners are driven by a wish to reduce patient time in acute care and rely on cr

178、eative outsourcing to dramatically cut the cost of Specialist Services care in hospital and within the criminal justice system.CareTechs Specialist Services team works in partnership with the NHS and Social Service departments to ensure a successful transition out of acute care and the prison servic

179、e,delivering pathways to an ordinary life.We also have an outstanding track record for diverting people away from acute care and supporting them in their own homes.CareTechs highly effective care teams are developing new ways to offer community support solutions and we believe that this will be an i

180、mportant growth platform in years to come.Childrens ServicesSocial care services for children and young people up to the age of 18Care capacity 2019 1,933 CareTech 351 Cambian 1,5822018:353.Contribution to Group revenue 58.4%(2018:31.6%)Quality(Ofsted):82%2018:86%(CareTech only)Residential Care Supp

181、orting children and young people with a range of complex conditions such as autism,learning difficulties,challenging social circumstances or traumatic experiences such as abuse,neglect or exploitation in residential care.Education CareTech is the largest provider of education services for children i

182、n the UK.Services focus on individuals who present with high severity needs,challenging behaviours and who have complex care requirements.ResidentialFor a relatively small number of children,residential care offers a safe and helpful solution for their care needs and CareTech has developed an extens

183、ive range of highly technical care and education environments where those children will thrive.Our residential provision offers high staff ratios and highly skilled carers,capable of ensuring both safety and progression.These are high cost services where we aim for an intensive period of care and a

184、strict timetable that delivers results at a fair price to commissioners.As far as practicable we aim to help these children through our therapeutic care approach to move into a more normalised family style environment as soon as it is practicable to do so.These services are highly integrated operati

185、ons with dedicated staff ratios and may also include on site or dedicated educational facilities.EducationOur specialist education services are focused on the areas of social,emotional and mental health,further education,Asperger syndrome and across the autism spectrum,from those with severe learnin

186、g difficulties to those who are gifted and talented.Teachers and assistants are trained to a high standard in order to deal with the behavioural issues that pupils present.Our schools operates a“waking day”curriculum encompassing the UK national curriculum and using modified or differentiated progra

187、mmes of study to prepare students for the demands of adult life.Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201919Our Business ModelcontinuedFoster careCare capacity 2019 1,178(2018:301)CareTech 301 Cambian 877 Contribution to Group revenue 10.3%(201

188、8:4.4%)Quality:100%2018:100%Residential care of children and young people Family assessments in the homeMost children enter foster care because they have been abused and/or neglected at home and need a new family care environment which offers the support they need.Other children may be fostered beca

189、use a family breakdown(dysfunctional or in acute stress),a family illness or disability,or a death in a family means children need an alternative care solution such as fostering.Foster Care is undoubtedly the best care solution for most“looked after”children.Most children thrive in foster care where

190、 they are supported within an ordinary family home and with trained foster carers.CareTech provides for both mainstream and specialist foster care through local agencies across the UK.We offer a highly respected service for physically and intellectually disabled children as well as support for child

191、ren with sensory impairments.We provide foster care family assessments and ongoing support to children who remain with their birth families and in their family home.Our revenue modelA significant majority of CareTechs revenue is from Local Authorities(LA)and Clinical Commissioning Groups(CCGs)for de

192、livery of CareTechs specialist social care services.The Group works with over 250 Local Authorities,Clinical Commissioning groups and Health Boards.Independent providers typically receive funding for their service provision in four main ways:Framework agreementsFramework agreements are typically awa

193、rded to providers on a non-exclusive basis pursuant to a public tender.These agreements outline various service and reporting obligations as well as pricing terms.Framework agreements can be set up for any period of time,although a typical framework agreement is at least two years in length.The actu

194、al care package to be provided for an individual in a providers care and the pricing for such services is agreed on a case by case basis at the time an assessment of their individual needs is made.Spot contractsMost admissions and referrals remain based on“spot”contracts,which are individual placeme

195、nt agreements.Spot contracts generally have a four week notice period to terminate the contract and typically do not have a minimum term.Spot contracts provide greater operational flexibility and are appropriate for bespoke care packages to meet the high severity support needs of the individuals in

196、a providers care.Fees are typically negotiated on a case-by-case basis.Block contractsA limited amount of specialist care funding is provided through block contracts.Such block contracts are negotiated for a specific volume of service,pre-booked over a fixed period of time,usually for a specified pr

197、ice.Private pay/insurancePrivate pay services make up a very small part of our revenue as the UK publicly funded bodies will typically provide funding.Our clinical offeringCareTech has an in-house,clinically led multi-disciplinary team including doctors,psychologists,occupational therapists,speech a

198、nd language therapists and nurses.The overall approach across the group is to ensure primarily a stable,secure and nurturing environment for the young people in its care then focus on individualised care plans for the young people,working closely with the care and educational teams.The strength of t

199、he clinical function in the Group is the integrated working.Our clinical team sit as part of the operations team and working very closely with our residential homes or schools and are involved in training and providing consultations and role modelling where needed to the care teams.CareTech Holdings

200、 PLCAnnual Report and Accounts 201920The driving force underpinning CareTechs operation continues to be the provision of the highest quality of care to our service users.Our commitment to our staffWe remain committed to ensuring employees share in the success of the Group and fully appreciate that G

201、roup performance is affected by the relationship we have with them.We promote our values and culture by helping our employees and supporting them with regular supervision,training and clear career development programmes.To embed our culture across our business we reward our people culminating in the

202、 Fifth Care Awards ceremony in November 2019.These initiatives promote staff continuity and lead to improved standards of care quality.Out of a total of c.10,000 staff at the end of September 2019,69%are female and equal opportunity for all remains at the heart of our recruitment policies and the di

203、versity of our workforce bears this out.We value our staff at all levels and work closely with them through our robust human resources department to foster consultation in all matters,ensure fair pay for all,maximise conditions of service and facilitate flexible working where feasible.The Staff Enga

204、gement Survey which took place in May 2019 and involved all staff and looked at values and questions across five engagement drivers:Trust,Teamwork,Empowering,Corporate Pride and Career Progression.The feedback has led to a Communication Plan that will lead to improved communication across the Group.

205、We have a team of in-house training staff delivering courses on all relevant subjects,enabling our workforce to gain the skills,knowledge and confidence to provide the care and support to our service users on a daily basis.The Group continuously focuses on employee engagement and has launched the mo

206、st wide-ranging share incentive plan across the business to include home managers,back office staff and executive management.In addition,it is the Companys intention to make a Save-As-You-Earn issuance for front line staff in due course.This scheme,along with regular senior management share option a

207、wards,contributes to the fulfilment of our desire to reward staff for loyalty,diligence and commitment to high standards of service.We paid 1m into the Apprenticeship Levy scheme in FY 18/19 and currently have 804 apprentices working across our business.All CareTech apprentices benefit from permanen

208、t employment contracts and are fully embedded in business activities to maximise learning.We care about quality and safetyAs a Group,our aim is to provide a safe working environment for service users,staff and visitors.Our aim is to be the highest quality provider across the breadth of our services.

209、For our Adult CQC registered services,quality ratings at 30 September 2019 were 95%“Good”or“Outstanding”(2018:86%).For our Ofsted registered Childrens services,ratings for the CareTech services at year end were 93%“Good”or“Outstanding”(2018:86%)and 80%for the Cambian services,compared with 77%on acq

210、uisition.This performance is against a backdrop of the continued raising of quality standards in the sector reflected in an increasingly stringent regulatory environment.We continue to resource our own highly experienced internal quality and compliance teams which undertake a programme of regular in

211、spection and assessment and give constructive feedback backed by training and supervision if the requirement is there.We engage the services of outsourced expert advisers ensuring best practice and procedures are maintained.Our independent Care Quality and Governance Committee provides rigorous over

212、sight of our regulatory and safeguarding performance and has been strengthened by the appointment of Professor Moira Livingston as Chair.We are continuing to evaluate ways in which we can improve our standards of care and are investing significantly in the training and induction of staff.Our commitm

213、ent to our service usersWe believe the success of those entrusted in our care is our most important corporate responsibility.We have continued to strive for long-lasting improvements in our services in a way that is consistent with the interests and concerns of our stakeholder community.As always,th

214、e driving force underpinning CareTechs operation continues to be the provision of the highest quality of care to our service users.Service users are the reason for our existence and satisfying their needs remains our key objective.As our organisation grows,we strive to maintain a culture which never

215、 forgets the important relationship we have with our service users.We seek to nurture these relationships and see them as partnerships of mutual interest and respect,with our person-centred approach ensuring service user interests are safeguarded and vulnerabilities minimised.The further expansion o

216、f our Care Pathway strategy seeks to provide our service users with“whole of life”solutions to their needs,maximising independence where possible by encouraging education,promoting choice,being proactive with family members,providing training for employment where feasible and nurturing personal ambi

217、tion where helpful.In the year we have been celebrating the achievements of our service users across the country,including an Art Competition held in September 2019 and a“Blooming Marvellous”gardening competition.We are determined to preserve the dignity of those we care for and fully support Govern

218、ment initiatives to this end.We see making each day as fulfilled as possible for our service users as a vital ingredient to their,and our,success.Female to male ratio 2019 staff count 10,000+How do we operate responsibly?69%FemaleStrategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnn

219、ual Report and Accounts 201921Our commitment to the UK social care sector the CareTech FoundationEstablished during 2017,the CareTech Foundation is an independent grant-making corporate foundation registered with the Charity Commission.Funded and founded by the Group,the Foundation has an independen

220、t Board of Trustees responsible for delivering its Charitable Objects.The Foundation has ambitious and clear-sighted objectives to deliver meaningful impact to communities in the UK and Overseas about which the staff of the Group and its service users feel proud and strongly engaged,providing a uniq

221、ue contribution to the charitable marketplace consistent with the Groups values and approach.In the year to September 2019 the Group made charitable donations through the Caretech Foundation of 736,000(2018:380,000).The CareTech Foundation is the first corporate foundation in the UK social care sect

222、or,demonstrating the Companys commitment to wider society and to its staff and its desire to play a strong leadership role within the social care sector.The CareTech Foundations work is focused on the following three key objectives:1.Physical and learning disabilities and Specialist Services.Support

223、ing disabled people and those with long-term health difficulties,including those with Specialist Services conditions and complex physical and learning disabilities.2.Skills development for the care sector.Skills development for those from deprived and disadvantaged backgrounds for careers in the car

224、e sector.3.Supporting our communities and the CareTech family.Developing an ambitious corporate social responsibility programme in partnership with the Group,supporting the family and friends of the Groups staff facing significant financial,health or similar challenges.The Foundations focus is devot

225、ed to supporting those in need in the UK and in developing countries overseas.The CareTech Foundation delivers its key objectives through the following key approaches:Partnership grant-givingThe CareTech Foundation supports a small number of significant partnerships with credible and high quality ch

226、arities and social enterprises consistent with its three key objectives.To be considered for the Foundations support,any partnership must:Involve medium to long-term investments in innovative and high-impact programmes that will deliver one or more of the Foundations objectives.Demonstrate and be co

227、ntingent upon any investment by the Foundation leveraging additional investment.Enable the Foundation to provide wider in-kind support through the expertise of the Groups staff,supply chain and wider network.The Foundation has grown its Partnerships to include seven major programmes.During the year,

228、the Foundation has launched a new partnership with Birkbeck,University of London in the construction and development of the world-first ToddlerLab.The ToddlerLab will incorporate the highest quality of technology to play a key role in the research and understanding of Autism.The Foundation has also

229、recently supported Depaul UK for their Mental Health and Wellbeing for Homeless Young People programme in the North East.Community grantsThe Foundation delivers a small grants programme to support the communities,families and friends of CareTech staff facing significant financial hardship or for iss

230、ues affecting local communities in which CareTech plc operates.These grants are open to staff members of CareTech Holdings plc to support the positive contributions they make to their communities and through volunteering.Match-fundingThe Foundation provides match-funding to CareTech staffs individua

231、l fundraising efforts for charitable causes in line with the Foundations Charitable Objects.During the year,the Foundation supported 26 match funding grants to support CareTech staffs charitable fundraising activities.Staff hardship grants fundDuring 2018/19,the Foundation launched a new Staff Hards

232、hip Grants Fund to enable us to provide small grants to CareTech staff and those who may recently have left the Company who find themselves in significant financial hardship or at serious risk of becoming in significant financial hardship.We care about our communitiesDoing business the right way is

233、of fundamental importance to us.A successful business needs to operate in healthy,thriving communities and needs to be seen as a good neighbour to those communities.We have direct involvement in a variety of community-based programmes further improving our service reputation and helping to foster a

234、strengthened relationship with Local Authorities.Being a socially responsible organisation with a focus on developing our ethical standards aligned with our economic objectives remains a core aim and we strive to identify the real value of our organisation,beyond its financial bottom line.Considerin

235、g non-financial values such as reputation,employee commitment and service user fulfilment helps us develop longer-term opportunities,ultimately adding to the financial bottom line.Behaving responsibly and maximising the benefits of a strong relationship with our stakeholders is an integral part of a

236、 continuing process of building long-term value.CareTech is delighted to have officially supported Special Olympics Great Britain(Team SOGB)at the March 2019 Special Olympics World Summer Games,held in Abu Dhabi,United Arab Emirates(UAE),with over 190 countries participating in a truly spectacular a

237、nd successful global event.CareTechs involvement with Team SOGB and the World Games arose from the close pathway affinity between our national expertise in supporting people with learning disabilities through our living,learning and employment support services and the Special Olympics movement using

238、 sport to build confidence,skill and determination for athletes with intellectual and learning disabilities as a gateway to empowerment,competence,acceptance and joy.The Games were a real highlight on the 2019 World Sporting Humanitarian calendar and Team SOGB excelled against the competition winnin

239、g an outstanding tally of 61 Gold,57 Silver and 46 Bronze Medals.Our Business ModelcontinuedCareTech Holdings PLCAnnual Report and Accounts 201922Bringing disabled people and business togetherThere are more than 12 million disabled people in the UK who have a combined spending power of 249 billion.P

240、urple,led by Mike Adams OBE,has been highly influential at a national level in shaping a new vision for disability designed to tackle the issues around employment and opportunities.The Purple vision is to be the catalyst for change in creating opportunities that transform futures by bringing togethe

241、r disabled people and business for a single purpose.On 12 November 2019,Mike Adams launched Purple Tuesday.Our commitment to the environmentWe seek to maximise environmental standards in all areas of our organisation.Energy costs are now more closely monitored centrally and with the installation of

242、smart meters in our services we are encouraging more efficient consumption of energy,without compromising service user care.Clinical waste management has an environmental impact and we are focused on ways to make this more effective whilst still adhering to statutory requirements.We aim for minimal

243、waste production and waste-free processes.Encouraging the involvement of our workforce in seeking new ways to“be green”is important and we are striving to reduce our carbon footprint in all commercial areas including promoting recycling initiatives,developing a carbon offset scheme for paper usage,u

244、sing public transport where feasible and improving our energy efficiency.CareTech vehicles typically operate on a rolling four-year contract hire agreement from our strategic partner,Fleet Alliance.By outsourcing fleet management,CareTech aims to take advantage of the most efficient technology when

245、it becomes available.Modern Slavery Act 2015The Modern Slavery Act 2015 came into force in October 2015 consolidating legislation surrounding modern slavery and human trafficking.We have a zero tolerance approach towards modern slavery or human trafficking across all areas of our organisation includ

246、ing in our supply chain and are committed to acting ethically and with integrity throughout all of our dealings.We aim to work in partnerships with all of our contractors,suppliers and other business partners to ensure that they share and work towards the same values we hold against slavery and huma

247、n trafficking.A full version of our Anti-Slavery and Trafficking Statement can be found on our website.Anti-bribery and corruptionThe Company maintains a policy for anti-bribery and corruption and has a zero tolerance towards such activities.The Company requires compliance with the laws of the UK,in

248、cluding the Bribery Act 2010 in respect of its conduct both in the UK and overseas.Internally we operate a suite of policies that are embedded into our culture and help govern our activities.Examples of these include:Code of Conduct Policy this sets out the behaviours we expect of our employees when

249、 acting for CareTech.Recruitment Policy all of our employees are recruited after a robust recruitment process in line with UK employment laws and are required to undertake appropriate CRB checks.Whistleblowing Policy we want colleagues to feel confident and empowered to raise any issues or concerns

250、they may have;however,we have a whistleblowing policy in place.Our whistleblowing policy helpline is managed by a third-party provider,enabling colleagues to raise concerns they may have about issues of safety or wrongdoing,anonymously if necessary.All such concerns received through the helpline are

251、 sent to the Head of Compliance for review,and to ensure that they are appropriately investigated and concluded.We also continue to regularly monitor the risks we face.All risks are reviewed by either our Audit Committee or our Care Quality and Governance Committee.General Data Protection Regulation

252、s(GDPR)CareTech takes its responsibilities as a data controller/processor very seriously and is committed to operating within the boundaries of any necessary data security regulations to include the Data Protection Act.CareTech is conversant with the requirements of both the GDPR and Data Protection

253、 Bill and is constantly updating its information governance practices.By order of the BoardHaroon Sheikh30 January 2020Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201923Our Key Performance IndicatorsKPIs help us to measure the Groups performance agai

254、nst its strategy and objectivesEBITDA 73.5m(2018:43.9m)How this is calculatedEBITDA is operating profit stated before Interest,Tax,Depreciation,Amortisation,share-based payments charge and non-underlying items which are described in note 4 to the Financial Statements.Performance this yearThe EBITDA

255、has improved by 29.6m 67.4%year on year.This reflects the EBITDA contribution from the Cambian acquisition and organic growth achieved by the core business which has been in part reduced by the reconfiguration work on some properties,improved margins and acquisitions.CareTech like-for-like EBITDA in

256、creased by 1.0%to 44.3m(2018 43.9m).FinancialRevenue 395.0m(2018:185.7m)How this is calculatedRevenue measures how we have filled our capacity,the fees we have charged,together with the impact of acquisitions.Performance this yearRevenue has improved by 209.3m 112.7%year on year.This reflects the ac

257、quisition of Cambian in October 2018 and organic growth achieved by the core business which has been in part reduced by the reconfiguration work on some properties,improved margins and acquisitions.Like-for-like,CareTech increased by 5.8%to 196.5m(2018:185.7m).Underlying basic EPS 37.60p(2018:35.07p

258、)How this is calculatedUnderlying basic earnings per share is the profit after tax divided by the weighted number of ordinary shares which are fully described in notes 11 and 12 to the Financial Statements.Performance this yearThe underlying basic earnings per share has increased by 2.53p in the yea

259、r.Operating cash conversion 90.2%(2018:89.9%)How this is calculatedCash flow from operations before non-underlying items and tax(and excluding capex)divided by EBITDA.Performance this yearOperating cash flow increased to 90.2%for the year.Cambian was acquired mid-October and in the pre-acquisition p

260、eriod(from 1 October to 18 October 2018)there were particularly strong cash receipts.The mid-month acquisition resulted in the Group being unable to count these receipts in the conversion calculation,whilst the payrolls,which typically go out at the end of the month,are counted in the combined Group

261、 cash flows.Excluding this,for the period 1 October 2018 to 30 September 2019,Cambian has a 100%EBITDA to cash conversion and CareTech has a 101%cash conversion.CareTech Holdings PLCAnnual Report and Accounts 201924Underlying profit after tax and non-controlling interest 40.3m(2018:26.5m)How this is

262、 calculatedUnderlying profit after tax and non-controlling interest is the Groups profit after provision for taxation excluding non-underlying items such as amortisation of intangible assets after tax which are fully described in note 6 to the Financial Statements.Performance this yearThe profit aft

263、er tax is 51.9%more than 2018 representing an improved return to shareholders following the Cambian acquisition.Net Debt 291.1m(2018:147.0m)How this is calculatedNet Debt comprises the balance at the year-end for cash and cash equivalents net of bank loans outstanding and finance lease and hire purc

264、hase contracts.Performance this yearBank debt at 30 September 2019 was 291.1m which is an increase of 144.1m from 30 September 2018 of 147.0m.The change reflecting the cash consideration and the associated financing necessary for the Cambian acquisition together with the receipt from the ground rent

265、 transaction.OperationalCapacity 5,079CareTech 2,620Cambian2,459(2018:2,622 places)How this is calculatedThe Groups capacity is the total number of Adults Services(1,968),Childrens Services(1,933)and Foster Care(1,178)places that the Group is able to offer at that date.It is a total including reside

266、ntial care beds,independent supported living accommodation,community support service users and children that foster carers can currently look after.Performance this yearOverall capacity has increased by 2,457 which is a 93.7%increase.CareTech added 56 new beds whilst reconfigurations reduced capacit

267、y by a net 11 beds.A further 47 supported living contracts came to an end,resulting in a net decrease of two places for CareTech.There has been a net increase of four places in Cambian homes since acquisition due to one new home registration occurring in August 2019.Mature Estate Occupancy CareTech

268、Cambian85%92%74%(2018:93%)How this is calculatedThe Mature Estate Occupancy is the total number of Adult and Children Service Users placed in services that were open throughout the year.Performance this yearCareTechs ratio has remained broadly unchanged at 92%and reflects the long length of stay tha

269、t the majority of service users have in our services.The occupancy of the Cambian business as at 30 September each year is affected by the timing of the start of the educational year because a number of non-residential Cambian schools operate on a 38-week basis with the new education term commencing

270、 in October.Blended occupancy CareTech Cambian80%87%73%(2018:86%)How this is calculatedBlended occupancy is the total number of Adult and Children Service Users actually placed as a percentage of the Groups total capacity and so reflects facilities undergoing development and reconfiguration.Performa

271、nce this yearThe ratio decreased overall reflecting the Cambian business which has a lower occupancy level and is also impacted by the timing of the start of the educational year because a number of non-residential Cambian schools operate on a 38-week basis with the new education term commencing in

272、October.QualityRegulatory rating(%)facilities rated“Good”or“Outstanding”CQC Adult Ofsted CareTech Cambian95%93%80%(2018:86%)(2018:86%)(2018:77%)How this is calculatedThe market that CareTech operates in is regulated by Ofsted and the Care Quality Commission and their equivalents in Scotland and Wale

273、s.Each facility is inspected and given a score,with a range of outcomes from“Outstanding”,“Good”,“Requires Improvement”to“Inadequate”(or equivalent).Performance this yearQuality ratings continue to improve across the Group.Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Rep

274、ort and Accounts 201925Principal Risks and Our Strategic ResponseSocial care is a long-term contract with the public sector and is inherently free of risk so long as quality is maintained,outcomes are achieved and the price is right.However,social care does carry risks that will always be at the for

275、efront of our minds.The most obvious risk is that a tragedy will occur and that the Company will be held to blame.We take the risk very seriously.Our principal risk management strategy is to ensure that our staff are recruited well,are trained and supervised properly and are subject to rigorous qual

276、ity oversight.In addition we know from experience that processes and documentation must be very carefully observed and constantly reviewed to ensure that it protects service users and provides the Company with a defendable position in the case of tragedy.These matters,along with general safeguarding

277、,are subject to intense scrutiny by our in-house compliance and quality teams and Board-level oversight.Managing and mitigating riskSocial care is not a high risk business proposition but there are several unique factors that could cause difficulties.These centre on the way in which care and support

278、 are provided and the reliability of those front line staff who provide it.CareTech approaches these issues with considerable care and diligence,building in quality and training wherever it is required but also through its established scrutiny protocols and firm leadership.We care a great deal about

279、 what we do and have established a reputation for careful management of all those processes that could expose us to risk.We have thoroughly reviewed our operations.The Group currently trades only within the UK and has no foreign exchange exposure.We have limited exposure to nursing staff and the EU

280、labour market.Our primary recruitment is focused on the UK labour market for support staff and the recruitment of new staff is the factor that we are managing and we continue to monitor closely.Our risksAll providers of health and social care are conscious of the need for management vigilance and th

281、e requirement to have a thorough commitment to delivering care that is safe and of a high quality.CareTechs approach to quality and safe service delivery is characterised by a mixture of a dedicated compliance team carrying out regular audits of inspection and a commitment to building quality into e

282、verything we do.The market for the provision of social care services continues to be dynamic,presenting both risks and opportunities.The overall number of people needing support will increase,and a smaller proportion of them will be placed into residential services.Those who do need a residential ca

283、re solution will have more complex needs and are likely to require a wider range of services,including clinical and therapeutic support.Our operational management teams are already focusing on the delivery of high quality care.As we move forward this will become increasingly specialised with the ben

284、efit of professional qualified care co-ordinators who will prepare and direct personalised care plans within the services.Most service users will be supported in their own homes through domiciliary care or in more formal supported living arrangements.This is a major growth area for care providers an

285、d CareTech already has a solid reputation for its high quality and flexible solutions.We are building this to a higher level and refining our organisational structure to build more rapidly on our successes to date.Principal RisksService offer and user needsWe have to create and staff a service offer

286、ing which matches the needs of the service user and can be communicated to Commissioners so it is carefully recorded locally at every service in order to reduce the risk of service users moving to other service providers.Quality and safetyA health and safety breach would impact reputation,brand and

287、compromise the safety of those in our care.This could impact on the demand for our business as well as incur costs to rectify.We have to provide and deliver safe care of a high quality and the Group utilises Acoura,an independent supplier,to audit and report monthly on Health and Safety matters as w

288、ell as all RIDDORS(Reporting of Injuries,Diseases and Dangerous Occurrences Regulations)so that all incidents are recorded and acted upon.Service valueThe service offer has to be provided to meet the needs of the Commissioners at a fair price and this is coming under increased scrutiny as Commission

289、ers regularly review value for money so the Group communicates frequently with its Commissioners locally.ReputationThe Group has to have a reputation for delivering a service that is good value and takes account of all risks.The Group maintains a Risk Register which includes all key risks,including

290、reputational risk,and how they are mitigated though quality of service and good communication with service users and Local Authorities and this Risk Register is reviewed monthly.Growth fundingSo that the Group can keep growing,adequate funding has to be anticipated and put in place,and the Group ens

291、ures that all of its facilities are monitored and reviewed regularly in particular during its Budget and forecasting processes.Manage debtThe level of debt obtained to fund operations and ensure that growth can occur has to be carefully managed and the different forms of leasing and debt are reviewe

292、d quarterly when all of the covenants are also reviewed.By order of the BoardFarouq SheikhGroup Executive Chairman30 January 2020CareTech Holdings PLCAnnual Report and Accounts 201926Group Financial ReviewCareTech Holdings PLCAnnual Report and Accounts 201927Strategic reviewGovernanceFinancial State

293、mentsGroup Financial Review continuedHighlights 2019 has been transformational for CareTech following the 359.9m acquisition of Cambian in October 2018 2019 results reported reflect the enlarged Group including the Cambian operations since acquisition Integration plan for the combined business is we

294、ll underway Pre-tax profit synergies of 3m have been delivered Revenue:395.0m EBITDA:73.5m Non-underlying items of 23.3m comprising predominantly 10.3m acquisition expenses and 10.2m non-cash amortisation,reflecting the acquisition of Cambian in the year Statutory profit before tax:24.3m Diluted und

295、erlying EPS:37.48p and statutory EPS:18.31p representing real value growth for shareholders Net debt:291.1m Freehold portfolio valued at 774m on acquisition 90%EBITDA to operating cash conversion(i).Net assets:335.4m(i)Cambian was acquired mid-October and in the pre-acquisition period(from 1 October

296、 to 18 October 2018)there were particularly strong cash receipts.The mid-month acquisition resulted in the Group being unable to count these receipts in the conversion calculation,whilst the payrolls,which typically go out at the end of the month,are counted in the combined Group cash flows.Excludin

297、g this,for the period 1 October 2018 to 30 September 2019 Cambian has a 100%EBITDA to cash conversion and CareTech has a 101%cash conversion.ResultsIncluded in the Group consolidated results for the year ended 30 September 2019 are Cambians revenue,EBITDA and other income statement items together wi

298、th cash flows for the period following completion on 19 October 2018.Following the acquisition of Cambian and to reflect the ongoing integration of the two businesses,we are reporting three operating segments:Adults Services,comprising the core CareTech Adult Learning Disabilities business(ALD)as we

299、ll as the Specialist Services business(SS)and Learning Services;Childrens Services,comprising CareTechs and Cambians childrens services;and Foster Care,comprising CareTechs and Cambians fostering servicesFor the year to 30 September 2019,we have also provided segmental data in Note 4 for the histori

300、c CareTech and Cambian businesses to enable a like-for-like analysis in the first year following the acquisition.For subsequent financial years,the results of the Group will be combined on the basis of the operating segments described above.The change in reporting segments reflects the way the busin

301、ess is managed and reported.The Group reports certain non-IFRS performance measures,known as Alternative Performance Measures(APMs).The Directors believe that APMs provide useful supplemental information for the readers of the annual report and,when read in conjunction with the IFRS financial inform

302、ation,assist in providing a balanced view of the Groups financial performance and financial position.In assessing its performance,the Group has adopted a number of APMs because,statutory measures can have limitations as analytical tools and are necessary to readers of the accounts when understanding

303、 our performance relative to other companies in our sector and in the wider economy.Our APMs referred to in this report and in the financial statements as a whole include EBITDA,non-underlying items,underlying earnings and non-financial measures such as capacity,occupancy and regulator quality ratin

304、gs.You can read more about APMs on page 98.Capacity and occupancyAs at the balance sheet,date Group capacity was 5,079.CareTechs capacity was 2,620 with blended occupancy 87%and mature occupancy 92%.CareTechs organic developments have continued during the year ended 30 September 2019 with the additi

305、on of 56 new beds whilst reconfigurations reduced capacity by a net 11 beds.A further 47 supported living contracts came to an end,resulting in a net decrease of two places for CareTech.The occupancy of the Cambian business as at 30 September each year is affected by the timing of the start of the e

306、ducational year because a number of non-residential Cambian schools operate on a 38-week basis with the new educational term commencing in October,with total capacity at 2,459 with blended occupancy 73%and mature occupancy 74%.CareTech Holdings PLCAnnual Report and Accounts 201928Condensed Income St

307、atement before non-underlying items2019 m2018 mGrowthRevenue395.0185.7112.7%Gross profit133.065.3Administrative expenses excluding depreciation and share-based payments charge(59.4)(21.4)EBITDA73.543.967.4%EBITDA margin18.6%23.6%Depreciation(10.6)(5.9)Share-based payments charge(0.1)(0.2)Underlying

308、operating profit62.937.866.4%Net financial expenses(12.7)(4.9)Underlying profit before tax50.232.952.6%Underlying taxation(9.4)(5.8)Underlying effective tax rate18.7%17.6%Underlying profit for the year40.727.1Non-controlling interest(0.4)(0.6)Weighted average number of diluted shares(millions)107.67

309、5.7Underlying basic earnings per share37.60p35.07pFull year dividend per share11.7p11.0pRevenueGroup revenue increased by 112.7%to 395.0m(2018:185.7m)with like-for-like revenues increasing by 5.8%year on year.In the established Adults Services segment we continued to experience high levels of occupa

310、ncy and reported 93%occupancy at 30 September 2019.When this is blended with the facilities that are being reconfigured and so are under development,the blended occupancy level at 30 September 2019 was 89%of capacity(September 2018:86%).As in recent years the demand for residential services continue

311、s to be encouraging for high acuity users.Annual fee rate negotiations with Local Authorities across the Group have received a favourable response.The National Minimum Wage increased from 1 April 2019,as did increases to both employer and employee pension contributions.The Group believe this has pos

312、itively influenced its discussions with Local Authorities,who recognise that front line staff are an integral part of quality of delivery.In Childrens Services,total revenue has risen by 292.9%reflecting that Cambian was the largest provider of specialist education and behavioural health services fo

313、r children in the UK.Revenue and EBITDA by division2019 Revenue m2019 EBITDA m2018 Revenue m2018 EBITDA mAdults ServicesCareTech123.632.7118.731.9Cambian123.632.7118.731.9Childrens ServicesCareTech64.918.258.717.0Cambian165.737.5230.655.758.717.0Foster CareCareTech8.01.58.21.9Cambian32.86.040.87.58.

314、21.9Total CareTech196.552.4185.750.8Cambian198.543.5395.095.9185.750.8Strategic reviewGovernanceFinancial StatementsCareTech Holdings PLCAnnual Report and Accounts 201929EBITDADivisional EBITDA before unallocated overheads was 95.9m which comprises 52.4m for CareTech(and represents an increase of 3.

315、3%year on year)and Cambian of 43.5m.Total unallocated corporate overheads are 22.3m resulting in EBITDA of 73.5m.EBITDA margin has decreased from 23.6%to 18.6%as a consequence of the Cambian EBITDA margin being at a lower rate than the CareTech business prior to acquisition.The EBITDA margin of the

316、Cambian business was 13.4%,before synergies,showing improvement when compared with their historic announced margins(which,in June 2018,were announced at 11%).The medium-term margin target for the Cambian business is 16%.Operating profit and profit before taxThe Group presents operating profit and pr

317、ofit before tax as both underlying and statutory results.Underlying operating profit of 62.9m is EBITDA after depreciation and share-based payments charge.The depreciation charge is 10.6m(2018:5.9m)reflecting the investment in land and buildings,motor vehicles and fixtures,fittings and equipment and

318、 the share-based payments charge of 60k(2018:197k).Statutory operating profit of 39.5m is underlying operating profit less amortisation of 10.2m(2018:7.4m),acquisition costs of 10.3m(2018:4.5m),reflecting the costs incurred in acquiring Cambian in October 2018 and other non-underlying items of 2.9m(

319、2018:5.6m).Underlying financial expenses increased to 12.7m(2018:4.9m)due to additional bank financing to fund the cash consideration of the acquisition of Cambian with non-underlying financial expenses of 2.4m(2018:0.1m)relating to the non-cash movement in derivative financial instruments(1.5m)whic

320、h do not qualify for hedge accounting and 0.4m relating to the write-off of finance fees on facilities extinguished in the year.Underlying profit before tax improved to 50.2m(2018:32.9m)and statutory profit before tax increased to 24.3m(2018:15.4m).Taxation The effective underlying tax rate was 18.7

321、%(2018:17.5%)and reflects managements expectations of future capital investment through organic developments and reconfigurations relative to available capital allowances and the impact of the reduction in the main rate of corporation tax in the year.Earnings per shareThe weighted average number of

322、shares in issue rose to 107.6m mainly due to the issue of 33.2m as consideration shares as part of the Cambian acquisition in October 2018.Underlying basic earnings per share increased by 7.2%to 37.60p from 35.07p in 2018.Statutory earnings per share increased by 30.6%to 18.38p(2018:14.07p).Dividend

323、sOur policy has been to increase the total dividend per year broadly in line with the movement in underlying diluted earnings per share.The final dividend will rise broadly in line with the increase in underlying earnings per share and increase to 7.95p per share(2018:7.50p),bringing the total divid

324、end for the year to 11.7p(2018:11.0p),a growth of 6.4%.Dividend cover for 2019,based upon diluted earnings per share before non-underlying items is 3.18 times(2018:3.19 times).Cash flow and net debt The cash flow statement and movement in Net Debt for the year is summarised below:2019 m2018 mEBITDA

325、73.543.9Increase in working capital(7.2)(4.4)Cash inflows from operating activities before non-underlying items66.339.5Tax paid(5.9)(4.1)Interest paid(10.9)(4.7)Dividends paid(10.8)(7.5)Capital expenditure(31.5)(17.1)Proceeds from disposal of fixed assets31.8Acquisition of Cambian net of cash(160.3)

326、Non-underlying cash flows(20.4)(6.1)New HP arrangements(2.4)Movement in Net Debt(144.1)0.1Opening Net Debt(147.0)(147.1)Net Debt as at 30 September 2019(291.1)(147.0)A key feature of this business is its strong cash generation.Cash inflows from operating activities before non-underlying items were 6

327、6.3m(2018:39.1m).Cash inflows from operating activities including the payment of integration and restructuring costs of 5.6m and acquisition costs of 14.4m were 45.4m(2018:34.2m).For the period 1 October 2018 to 30 September 2019 Cambian has a 100%EBITDA to cash conversion and CareTech has a 101%cas

328、h conversion.Cambian was acquired mid-October and in the pre-acquisition period(from 1 October to 18 October 2018)there were particularly strong cash receipts.The mid-month acquisition resulted in the Group being unable to recognise these receipts in the conversion calculation,whilst the payrolls,wh

329、ich typically go out at the end of the month,are recognised in the combined Group cash flows.Taking this into account,the EBITDA to operating cash conversion for the consolidated Group is 90%.Capital expenditure was 31.5m(2018:17.1m)which includes software development of 2.7m(2018:3.9m)and payments

330、of deferred consideration of 1.0m(2018:Nil).Other key cash flows in this period include payment of integration costs of 6.5m(2018:4.3m),payment of acquisition costs of 14.4m(2018:0.9m),bank fees paid on the new facility of 4.7m(2018:nil),dividend payments of 10.8m(2018:7.5m)and corporation tax payme

331、nts of 5.9m(2019:4.1m).Net Debt at 30 September 2019 was 291.1m(2018:147.0m),the increase reflecting the cash consideration of 160.1m and the associated financing necessary for the Cambian acquisition together with the 31m receipt of the ground rent transaction and the other cash flows identified ab

332、ove.Group Financial ReviewcontinuedCareTech Holdings PLCAnnual Report and Accounts 201930Acquisitions,share issue and bank facilitiesOn 19 October 2018,CareTech Holdings plc acquired the entire share capital of Cambian Group plc,a leading childrens specialist education and behavioural health service

333、 provider.The headline consideration for the acquisition was 359.9m(of which 241.7m was paid in cash),with the net price paid being 278.5m reflecting 81.5m of net cash held by Cambian on the date of acquisition.The acquisition was funded by the issue of 33.2m shares and new bank facilities.The Group entered into new Banking facilities of 322m and a revolving credit facility of 25m to a group of ba