The company, which cares for people with behavioral or mental health problems, will miss expectations in 2015 after spending more than anticipated on expanding its property portfolio. It is also having problems recruiting trained staff to cover the 400 new places it is working to create this year. This has led to lower admissions at its schools.
The new guidance puts adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) at not less than £49 million, compared to the £59.3 million consensus penciled in before the update.
The news creates uncertainly around next year’s trading and analysts have been quick to reappraise the business. Sally Taylor at Numis reduced her EBITDA forecast for 2016 by 10% to £64.8 million and earnings per share by 16% to 15.8p.
A note published by Berenberg was more upbeat stating that the slump in the share price ‘is a significant over-reaction and [WE] continue to believe Cambian is well positioned to take advantage of the strong growth in the outsourced market for mental health services’.