The group, established five years ago by sector specialist Mike Rogers with backing from Close Brothers Venture Management, is seeking a post-float valuation of between £15 million and £20 million.
The company reported a 45 per cent rise in revenues to £12.5 million during the year to July. This allowed operating profit before goodwill to nearly double to £658,000. The money raised will repay the loan stock that Close has put into the business. However, the fund manager will retain its equity stake in Careforce.
Rogers formed Careforce to take advantage of the increased trend by local authorities to outsource domiciliary care to the private sector. ‘We have 1,100 carers looking after elderly people, who are frail but not ill, in their own homes,’ he explains, adding that ‘The demographics behind the potential growth in the business are very compelling.’
Following a series of acquisitions, the company operates from 17 locations, serving local authorities on long-term contracts in Yorkshire, East Anglia, the Midlands and the South East. The sector remains highly fragmented and Rogers hopes to take part in expected consolidation in this area. ‘We want to become the pre-eminent national provider of domiciliary care within four years,’ states Rogers.
A rival might be fellow AIM concern Supporta, set up by Bob Holt, who is behind the growth of support services venture Mears. Supporta, chaired by veteran outsourcing specialist John Jasper and led by chief executive Gavin Kaye, bought domiciliary care staffing agency Quality Care for an initial £3.35 million in mid-August. Quality Care’s major contracts are with London boroughs.
The Careforce flotation follows Close Venture’s successful sale of its stake in online hotel room reservation business Active Hotels. This came after Active was taken over by Nasdaq-listed PriceLine.com for £90 million. Close’s Technology & General VCT received £5.2 million for its 5.9 per cent holding, which represents ten times its initial investment in Active. The VCT has declared a dividend of 5p a share.