Our client is a profitable, cash-generative domiciliary care agency with a very strong local reputation for excellence in service delivery. The company provides qualified care staff to service users with health needs in their homes.

Highlights

• Turnover of £484,000 in 2020 up to £1.58m in 2022, an increase of 225%.
• Gross profit margin has held steady in past three financial years at approximately 20%.
• Improving net profit margins – 9.0% in 2020, 12.8% in 2021 and 17.0% in 2022.
• Very cash generative business with cash at bank jumping from £4,239 in 2020 to £396,206 in 2022 on balance sheet.
• Established bank of 72 zero hours carers
• Efficient and ambitious back office management team
• Current owner has minimal involvement in the business
• Largest supplier of domiciliary care to Shropshire Council
• New income stream developing from specialist CHC end of life care
• CQC rated good on all five service delivery areas
• Opportunity to grow private service user base

Sources of revenue

Our client is the largest provider of domiciliary care staff to the local authority in their catchment area by revenue.

18% of revenues come in via the CHC end of life program run by the NHS but paid through the council. The remaining 4% of revenues come from directly-engaged private service users.

Both CHC end of life care and private client are more profitable than standard local authority care work.

Management and staffing

Since its founding, the managing director has delegated responsibilities to her senior team. On most decisions, including the hiring of new care staff to fulfil a package (the industry term for a care package for an individual service user), the office manager has full authority. When making more impactful decisions, the owner consults with the office manager and finance manager.

The office team comprises of:

• Registered manager: Day to day responsibility of the running of the business, office staff management, safeguarding, hiring and discipline. She is an ambitious, trusted manager keen to grow the business.
• Finance adminstrator: Payroll, issuing invoices to clients and chasing invoice payment.
• 2 x two rota coordinators: Placement of carers with service users.
• 2 x full-time trainers: Delivery of training training courses to carers new to the business and provide top-up training on areas where deficiencies are identified.
• Senior manager (part time): Ensures that all changes in medication and assessment for users is cascading across the company.
• Interviewer: Conducts interviews with applicants seeking a care team role. Also responsible for running social media campaigns.

There are currently 72 members of staff on bank with our client. They are all on zero-hours contracts. Our client has offered staff minimum hour contracts but the offer was rejected as staff prefer the convenience of the current system.

Staff work on a rota of 4 days on followed by 3 days off. At least sixty of the staff work every other weekend. Our client stipulates this requirement when a carer applies to join the agency. There are some historic exceptions to this as around 10 carers work during school hours only so they can return home to look after their children.

Staff turnover in the sector is around 15%. Our client enjoys very close working relationships with the company’s carer. The staff turnover rate for the agency varies between 5 and 10%.

For more information

Acquiring our client offers a new owner an opportunity to launch into or expand an existing presence in the growing domiciliary care sector. The level of profitability achieved by our client together with their ability to generate high free cash flows means that a new owner may be able to fund expansion initiatives without having to introduce further capital.

For more information, please contact Swan Corporate Brokers.