Charity reports £7.5m windfall from social care giant’s sale

17 Mar 2023 News

CareTech Foundation logo

CareTech Foundation

CareTech Charitable Foundation received a £7.5m windfall from its private funding partner’s sale last year, according to recently filed documents, and has spent £3.6m on a property purchase.

The grantmaker, set up by private social care provider CareTech Holdings in 2017, said in its latest annual report that it would invest the funds in “a sustainable and diverse income stream”.

CareTech Holdings, one of the largest social care providers in the UK, was de-listed from the London Stock Exchange last year when it was bought for around £870m ($1.1bn) by a consortium led by its co-founders.

According to the company’s announcement, its charitable arm held 1 million shares in the firm before the consortium, called Bidco, purchased it.

“Under Bidco's ownership CareTech intends to continue its support for the CareTech Charitable Foundation and its work supporting individuals with physical and learning disabilities, advancing skills development for the care sector, and supporting local communities,” the announcement read.

The charity said in its latest annual report that it received £7.5m from the deal.

“Following CareTech Holdings Plc being delisted from the London Stock Exchange, the Foundation received £7.5m proceeds which will be invested in a sustainable and diverse income stream,” chair Haroon Sheik wrote in the report’s introduction.

“CareTech will continue to support the Foundation and, along with investments, this will provide an excellent opportunity for the Foundation to grow and flourish as a powerful independent charity.”

CareTech Foundation chief executive Jonathan Freeman told Civil Society News that the charity did not plan to hire fundraisers.

“The Foundation’s Investment Committee has developed a mixed investment approach for the proceeds of the sale of the shares, which we have been finalising and implementing since the completion of the sale,” he said,

“This includes a spread across a managed portfolio with our external investment managers, a property transaction and also taking advantage of a partial ‘rollover’ shares opportunity afforded to shareholders in the previous public company.

“Together, we expect these investments to provide a more diverse and sustainable income for the Foundation to supplement the company’s continued generous support.”

£3.6m property purchase

CareTech Holdings' sale was approved just before the charity's financial year end, but the bulk of receipts from the transaction were received afterwards. £5.7m is listed "as amounts owed by a related party" due by September 2023.

The charity recorded £2.4m of income in the year to September 2022, up from £1.4m the year prior, with £1.6m coming from CareTech Holdings.

It also received £558,000 from the Care Sector Fundraising Ball and made £141,000 from investments.

The charity employed seven people on average during the year and paid £217,000 in staff costs.

After the year end, the charity purchased a property from CareTech Estates Ltd for £3.6m, which it agreed to lease back to the firm on 16 February 2023.

CareTech Estates is the property holding company which operates on behalf of certain subsidiaries of CareTech Holdings.

For more news, interviews, opinion and analysis about charities and the voluntary sector, sign up to receive the Civil Society News daily bulletin here.

 

More on