Report reveals UK’s 50 fastest growing privately owned specialist care businesses
The UK’s leading specialist care businesses continue to grow rapidly according to Alantra’s annual Specialist Care Fast 50, which ranks the UK’s fastest-growing privately owned businesses in the sector. These businesses offer specialist services to individuals with needs that go beyond domiciliary care.
The average business in the Alantra Specialist Care Fast 50 has seen annual sales growth of 18.2% over the past two years, with the top ten companies achieving above 25% growth. The leader, West Midlands-based Select Healthcare Group, which operates a range of facilities throughout England, doubled its turnover to achieve an annual growth rate of 44.4% over the past two years.
In second place, Healthcare Homes, a provider of specialist elderly care based in Essex, grew by 34.4%, while Merseyside’s Potensial, a health and social care support services for children and adults with disabilities and complex needs, achieved third place with a growth rate of 31.9% over two years.
This impressive level of growth is attracting increasing attention, with investment in the sector now growing significantly year-on-year.
Justin Crowther, Alantra Partner and a leading adviser to the healthcare sector, said: “Although at the front line of care in the UK, specialist care businesses are rarely well known or high profile; the Alantra Fast 50 seeks to recognise their achievements. Their accelerating sales growth reflects both the quality of their provision and the continued consolidation seen in the market, with public sector commissioners confident in their ability to meet the needs of their clients. These businesses are in a very strong position to continue growing, investing and innovating to continue improving specialist services that are greatly undersupplied.”
He added: “Where businesses have a clear focus on quality of care and regulatory compliance, performance will follow. This is why the specialist care sector is attracting increasing interest from a variety of investors and experiencing ongoing consolidation. Indeed, in a fragmented market where the ten largest providers account for only c. 15% of a sector dominated by smaller operators – often family owned and run – M&A activity is now accelerating.”
Despite ongoing Brexit uncertainty, international investors continue to be attracted to the UK specialist care sector. Christopher Jobst, a Director of Healthcare at Alantra based in Germany said, “Compared to Continental Europe, it offers fewer language barriers and a single reimbursement system to get to grips with.”
The growth demonstrated by the Fast 50 reflects the underlying dynamics of the sector. “This remains a fragmented industry where the demand for specialist care services significantly exceeds supply,” said Justin Crowther.
According to Alantra, factors driving demand include increasing awareness of mental health problems, better diagnosis and support for conditions such as autism, and rising life expectancies, meaning there are more older people with specialist care needs.
Meanwhile on the supply side, the potential for increased provision is constrained by factors such as the lack of care facilities and homes, and shortages of staff with specialist care skills.
Justin Crowther added: “This is not to suggest that operating specialist care facilities is easy – far from it. Regulation of the sector is understandably strict, with operators required to invest significant sums in high-quality services and compliance. The penalties for regulatory failure, moreover, are high, with reputational damage impairing operators’ ability to win new business from public sector payors in particular. Recruitment and retention also represent a constant challenge for the specialist care sector with skilled staff limited in number and in high demand.”
Despite these challenges, the Fast 50 demonstrates how many of the UK’s specialist care companies are thriving and attracting increased levels of investment.
The Alantra Specialist Care Fast 50 ranks the UK’s fastest-growing, privately owned specialist care businesses on the basis of the revenue growth they have achieved over the past two years, according to their most recently published accounts. As such, it provides a unique snapshot of the health of the sector.
Alantra is an independent global investment banking and asset management firm.
Pictured above: Justin Crowther