CareTech looks to Scotland to grow children’s services

Social care provider CareTech is expanding in Scotland as it focuses on organic growth following a series of acquisitions.

The Aim-quoted firm said it had finished integrating the companies it bought in recent years, when it set about consolidating the care market using an £85 million war chest.

Finance director Michael Hill said Scotland was an ideal environment for CareTech’s activities because political and social attitudes were aligned with its own preference to move children into foster care where possible.

The group’s last set of acquisitions were north of the Border, including the purchase in 2010 of Edinburgh-based Phoenix Therapy & Care.

It also bought businesses in Dumfries and Galloway and Fort William.

Now it is seeking to open a further four children’s homes working on contracts from Scottish local authorities, with the first one planned for Fife.

Hill said the group would take on about 30 or 35 staff to work at the homes, plus a smaller number of social workers to start a foster care support operation.

He said: “We see the market in Scotland as being a lot simpler and more focused than in England.”

He was speaking to The Scotsman after CareTech reported a small rise in first-half profits. The Hertfordshire-headquartered firm posted an underlying pre-tax profit of £7.6m for the six months to 31 March, up from £7.4m a year earlier and in line with market expectations.

Revenues were 1 per cent higher at £56.6m, and the interim dividend was raised 5 per cent to 2.32p a share.

Hill said the rises would have been higher but the group had temporarily closed a home in England in order to reorganise it as demand for services from outsourcing councils changed.