16 June 2011 – interim results

Although the sector has been under fire of late, interim results from CareTech demonstrate that social care is still potentially a very attractive area to operate in.   In the six months ended 31 March 2011 revenue rose by 26% to £52.2m (2010: £41.4m) and adjusted profit before tax edged up from £6.5m to £6.7m.  Adjusted diluted earnings per share slipped from 11.39p to 10.76p but a strong inflow of cash allowed the interim dividend to be raised to 2.0p (2010: 1.84p).  The share price has no doubt been hit by negative sentiment, with some justification.  At these levels there is scope for strong capital gains.  BUY.