Claimar Care Share Discussion Threads

[joshalexander] 04/10/2007 18:08

d0ubtfire

I have strong links to this industry and have been assured today that the price paid for Complete Care was a very fair one, from Claimar's point of view.
As a result of my discussions today, I have amended my posting from yesterday.

Claimar now looks to be heading for a New all time high.

[joshalexander] 04/10/2007 18:00

Well the Market definately likes the news.
My contacts in the industry think that yesterday's aquistion is a perfect fit
and huge opportunities exit to drive growth forward here.

[d0ubtf1re] 04/10/2007 14:57

By the looks of the chart the market likes it. You always seem to pay a premuim for diversification in this way especially in such a specialist area and I think the market understands that. Would be interesting to see what if any synergies there are here for Claimar. IMO the way you intergrate the acquisition into your business is more important than the price you pay. An awful lot of companies especially international ones acquire a business and then six-months down the line there are still 'teething problems' and a statement along the lines of "intergration has been slower than expected". Telford is 40 minutes up the road from their head office they have added to their standing and list of offerings in the region. The companies very ambitious expansion plans seem to be well on course.

[igoe104] 03/10/2007 19:25

MORE WRITE-UPS.

[igoe104] 03/10/2007 16:32

Taken from growthcompany.

New takeover for Claimar
Companies: CCGP
03/10/2007
Acquisitive Claimar Care Group is paying £33.1 million in shares and cash for Complete Care Holdings and raising £23 million.

AIM star Claimar, which provides domiciliary care for the old and infirm throughout the Midlands and North West, has chosen Complete Care, a leading supplier of bespoke care packages to adults and children with severe disabilities, as its biggest acquisition to date. Complete Care, which lifted operating profits from £270,000 to £980,000 between 2004 and 2006 on turnover up from £7.6 million to £13.4 million, should open up new opportunities for its Birmingham-based acquirer and advance Claimar's strategy of securing market leadership.

Claimar is partly funding the deal through a £23 million placing at 137p, handled by broker Arden Partners. At 143.5p, its shares were 3p higher this morning and could go further

[joshalexander] 03/10/2007 12:53

Well, at a surface level it may look easy.
But now the real job begins.

Now Managemt need to ensure Claimar's transition to a much larger Company.
They have not disappointed so far - and I fully expect the sucess story here to continue.

[gac100] 03/10/2007 12:28

Its quite something to think that Complete Care's turnover in 2006 (£13.4m) was bigger than the entire Claimar Group (£13.2m). Moreover, with Complete Care's turnover at Sep 2007 running at an annualised £21m and Claimar's (pre- the acquisition) forecast for 2007 at £22.7m - then the expanded CCGP will be on the way to turning over £50m a year. We really are growing fast and with more acquisitions in the pipeline, you can see why the management team was expanded so much earlier this year. The only thing that's slightly unnerving is that it all seems just so easy!!

[joshalexander] 03/10/2007 10:15

Hang on to your hats!!!.

Fantastic news for holders, both earnings enhancing and will result in Claimar being a significantly larger Company, which will now be on the radar of far more institutions.

I did say repeatedly here that the future looked very bright indeed - and
that Claimar had the ability to make holders, at this stage, huge returns over the next 3-5 years IMO.

[jailbird] 03/10/2007 08:40

igoe,

spot on.

[gac100] 03/10/2007 08:27

Acquisition and placing:



Huge acquisition compared to previous:

"Claimar Care will pay a consideration of £33.1 million in a mixture of cash and shares"

and

"a Placing of 18,248,176 new Ordinary Shares to raise £23.0 million (net of expenses) at 137 pence per Ordinary Share to help finance the Acquisition."

[joshalexander] 25/9/2007 12:11

igoe

Good spot.
And remember the majority of this is still "in house" Local Authority provision.
The trend towards outsourcing to providers like Claimar is what makes this Market so exciting, its the outsourced Market that is growing very rapidly.


On a technical point some very nice consolidation now on the Chart.
The next big move is coming shorly, with or before the November results IMO.

[igoe104] 25/9/2007 11:33

WORTH A READ.

The UK market for domiciliary care will increase by 3% in 2007 to £51.3 billion, representing an increase of 16% since 2003. By 2011 the value of the market is anticipated to increase to an estimated peak of £58.2 billion (at 2007 prices), representing growth of 13% since 2007." MBD Report July 2007.

The Complete Package - Exclusive territory - Comprehensive initial training - 120 hours mentoring - We help you get the business from day one - A Guaranteed Investment with high potential rewards - Computer equipment and bespoke management software - Accountancy fees, payroll and Quickbooks software included - Professional registration fees paid - Full HR and Legal Support - Day to day operational advice - Unique wealth builder Package - We want you to benefit from your hard work.

"We are looking for people like you who are dedicated to providing the highest quality of domiciliary care services, people who want to use their experience in business or the care industry to provide a much-needed service, and at the same time create a secure long term future for themselves. Phone [phone] today and we'll be happy to discuss how we can help you put your valuable experience to use to create a stable and successful business. Our support package of materials, equipment, software and even people, is unrivalled. I truly believe that we're offering an exciting, challenging and extremely rewarding business opportunity." David Ashcroft MD The Local Care Company Ltd

[gac100] 19/9/2007 12:40

Josh

I agree with what you say about the scope to grow the business without SureCare and about the excellent prospects of the company over the next 3-5 years.

Yet they do seem determined to develop the franchise side of the business and see great potential in it.

As you say, service delivery is crucial, and Claimar state explicitly in the Admission Document under "Risks" that

"Regulatory breaches or alleged breaches, criticisms of its service or litigation may damage Claimar Care's reputation and may have a material adverse impact on the Group's business and its ability to grow."

I think you're absolutely right that the franchise arm is not an issue "As long as Claimar have the Operational structure in place to support the franchised operations and ensure standards."

I've no doubt that Claimar are well capable of meeting these essential requirements, and I note that the significant investment in key management areas announced in the interims included the appointment of a dedicated Managing Director for the franchise business.

I believe Claimar are well set up for the next phase of growth (however large or small a part the franchise operation may play). As a LTBH investor, with no first-hand domiciliary care knowledge (I bought into the company early on, largely on the basis of its pre-float record of identifying and quickly integrating earnings-enhancing acquisitions), its a pleasure to hear the positive views on the company from someone who knows the sector inside out - and who has moreover backed the company with hard cash.

[igoe104] 17/9/2007 10:22

An interesting write up on homecare in usa.

[joshalexander] 17/9/2007 08:11

The issue is in the maintenance of standards.
The key to Domilicary Care is service delivery, even more so than in other business models.

As long as Claimar have the Operational structure in place to support the
franchised operations and ensure standards, then this is not an issue.
And Claimar's reputation in the Industry is Impeccable.
I would not hold such a large number of shares, if it was any other way.

I am just supprised more than anything, because there is so much scope to grow this Business without SureCare.

And I very much doubt that franchised operations will comprise a third of revenue in 12 months time, even allowing fo growth in this area.

I expect significant aquisition developments over the next 12 months, and Mark Hales has already given a large hint that this will happen; by saying Claimar are in talks with a number of companies.

Claimar have they ability to make investors at this stage, huge returns over the next 3/5 years. This really is similar to Mears 5 years ago.

[gac100] 15/9/2007 01:14

Josh

Claimar seem to be intent on developing the franchise operation, following the acquisition of SureCare:

"SureCare is a franchise business operating twenty seven domiciliary franchises across the UK. Franchises are sold under a ten year exclusivity agreement and then pay a royalty payment based upon a percentage of turnover. The franchisor then provides support and consultancy services over the period of the agreement." (Chief Executives statement, Annual Report 2006

Claimar see the development of this as having "great potential" (Chairman's statement, Annual Report 2006).

More recently:

"In order to maximise the potential of Surecare, we are undertaking a complete re-focus on the business. Apart from the appointment of a Managing Director with franchise experience, we recently took a stand at the franchise exhibition held at Olympia which attracted a number of potential new franchisees. Ongoing discussions and negotiations with them are encouraging. With the current barriers to entry into the domiciliary care market, we believe franchising is set to increase significantly and represents a great opportunity for Claimar to grow two separate but complementary income streams where our existing training, recruitment and administrative systems can provide additional significant economies of scale" (Chairman's statement, Interim Report 2007).

Josh, you say franchising is not the way to proceed. How worried are you by Claimar's plans to develop this aspect of their business? I know nothing about franchising in the domiciliary care sector, and would be interested to hear your views on the drawbacks/dangers of Claimar going down this route. As far as I can tell it forms a significant portion of the hours per week Claimar is delivering - about a third versus two thirds from non-franchise business.

[joshalexander] 14/9/2007 20:26

gac

I agree with all of that, except the franchising aspect.

And I know the Domilicary Care Market inside out, having enjoyed very strong links with this Market over the last 15 years. Franchising is not the way to proceed here IMO.

But this is a minor point, there are so many opportunities to drive growth here by consolidation, that will result in fantastic growth over the next 3-5 years.

As I posted previousy, just think Mears about 5 years ago.
MER's glory days may now be behind it IMO, CCGP's are yet to come.

[gac100] 14/9/2007 09:41

CCGP's strategy is to raise debt finance to make acquisitions and then wash the debt out through the issue of equity.

The Acorn acquisition (by far CCGP's biggest to date) was financed by the £7m March placing + increased bank facilities.

CCGP's track record of identifying and quickly integrating acquisitions is excellent and most acquisitions are more or less immediately earnings enhancing.

Earnings are good quality, underpinned by consistent cash generation.

In the longer term, franchising will provide a potentially lucrative complementary income stream.

[jailbird] 14/9/2007 09:36

igoe,

i like these but do not what to get in unless i have done my research a little.

The mkts look very shakey and if money is needed, i rather buy afterwards.

i will reply to you later...off out.

[igoe104] 14/9/2007 09:23

GOOD point jailbird, id expect they will have raise some funds soon.

[jailbird] 14/9/2007 09:19

they raised £7m in march and bought Acorn in July for £10.25M

but that £7M was also to pay debt...so they have had other cash anyway.
But how much is left.

Can someone read the balance sheet from the interims.

[igoe104] 14/9/2007 09:02

I reckon they will need more cash in the future, to make acquistions. think its one to put away and add along the way. they raised 7 million in march, so we might be all right for a while, all depends on the size of acquistions.

[jailbird] 14/9/2007 08:59

igoe,

i lkie this compny..do u know their cash situ...just wondering ig further cash may be needed as acquistions are being made.