The chairman of healthcare group Claimar has announced his company’s “disappointing” trading results - despite an increase in turnover of 136% and the creation last week of an extra 1,500 jobs.
John Crabtree said that the Edgbaston-based company, which provides home care and nursing for the elderly and disabled people, had suffered from difficulties recruiting and retaining staff.
“Notwithstanding the level of growth achieved in the year, these results are disappointing,” he said. “Claimar experienced a number of challenges earlier in the year which led to a trading update in June.”
The board was forced to renegotiate their banking terms with RBS, after the June trading statement sparked fears that they would breach their interest cover covenant.
They also decided not to pay a final dividend for this year or an interim payment for 2008/09.
The company posted profits before tax of £2.95million - an increase of 38.5 per cent - and said that this was in line with market expectations.
“Since June the Board has initiated and delivered on a number of key strategies which have strengthened the group’s ability to respond to more challenging environments now and in the future,” Mr Crabtree said.
“With the expanded range of services now available within the group I believe that the business is well positioned to benefit from the increasing demand for its services.”
Chief executive Mark Hales agreed that Claimar’s results had been unimpressive, but remained upbeat about the future.
“I think the issue is that historically we’ve achieved organic growth of around 20 per cent per annum. And despite certain sectors of our business performing well, we only grew by four per cent this year. It was a bit of a disappointment.
“We’ve had a difficult time this year - there were some integration issues we’ve had to deal with, and our recruitment and retention was under-performing. In the second half of this year, following restructuring, most of those problems have been dealt with, and we’re in a strong position to go forwards.”
Mr Hales said that one of the company’s key sectors for growth was in training, and he predicted that the skills development side of the business would increase.
Since the implementation of their NVQ training programmes six months ago, 500 people have trained in social care, and the company is currently working alongside Job Centre Plus in Coventry to retrain 200 people who have been made redundant.
“This is a big opportunity for us,” he said. “The business has grown exponentially. From a standing start of zero we now have a thriving training business.”
And the company also looks set to profit from the government’s increasing emphasis on home care and outsourcing of social services. Lord Darzi’s proposals for the reform of the NHS - whereby care provision is steadily being shifted away from hospitals towards community-based services - looks set to strengthen Claimar’s position. Alistair Darling’s Pre-Budget speech also put added emphasis on community care.
“The Chancellor said he is expecting efficiency savings for local government of around three per cent. And one of the ways of achieving that is by providing care for people in their homes.
“Typically it would cost around £450 - £500 a week for somebody to be placed in residential care, where as if we provide the same service in their homes then the saving will be exponential. Also we haven’t got all the costs of public sector pensions and high absentee and sickness levels that they have.”
Claimar announced last week that they were seeking to recruit 1,500 new members of staff - 500 of them from the Midlands - to cope with growing demand for its services as the population ages.
However, despite the positive outlook for the company, Mark Hales said that they will not be seeking to acquire further businesses.
“We suspended our programme of acquisitions in January last year so we’ve had a year of consolidation,” he explained.
“I think the broader strategy is not to stop all acquisitions, but given the economic climate it is not one of the biggest priorities for us now. And if we do make further acquisitions, then it will be at the smaller end of the market.”