Operating Margin - Caretech Holdings PLC (LSE:CTH)

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Price: 750 GBX

Market Cap: 850m GBX

14.1%

Current

14%

Average

3.8%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

14.1%

Operating Profit

69.9m

Revenue

495.4m

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
UK		Caretech Holdings PLC LSE:CTH	850m GBP	14%
US		HCA Healthcare Inc NYSE:HCA	111.2B USD	16%
SA		Dr Sulaiman Al-Habib Medical Services Group Co SAU:4013	98B SAR	20%
ZA	N	Netcare Ltd JSE:NTC	21.4B Zac	14%
MY	I	IHH Healthcare Bhd KLSE:IHH	76.2B MYR	16%
US		Tenet Healthcare Corp NYSE:THC	18.3B USD	18%
BR		Rede D'Or Sao Luiz SA BOVESPA:RDOR3	93.8B BRL	17%
ZA	L	Life Healthcare Group Holdings Ltd JSE:LHC	16.8B Zac	-1%
CN	A	Aier Eye Hospital Group Co Ltd SZSE:300015	106.3B CNY	20%
US		Universal Health Services Inc NYSE:UHS	13.9B USD	11%
ID	S	Sejahteraraya Anugrahjaya Tbk PT IDX:SRAJ	201.9T IDR	5%

Caretech Holdings PLC
Glance View

Market Cap

850m GBX

Industry

Health Care

Caretech Holdings PLC, founded in 1993, has established itself as a vital player in the UK’s social care sector, catering to individuals with complex needs. The company's narrative unfolds in providing tailor-made residential care solutions, leveraging expertise across mental health, learning disabilities, and physical impairments. By focusing on person-centered care, Caretech designs personalized care plans that emphasize comfort, development, and independence. Ensuring such nuanced levels of support requires not only a well-trained workforce but also integrated systems that maintain high quality in service delivery. It’s this strategic commitment to bespoke care solutions that propels their substantial reach across the UK. The engine driving Caretech's revenue machine is its diverse range of services, which encompasses both children's and adult care portfolios. For children's services, the company offers residential care, fostering, and specialist education, creating a holistic support framework. Meanwhile, adult services focus on community support and residential care for those with learning and physical disabilities. The company adeptly leverages government contracts and private pay engagements, establishing a robust financial foundation through long-term agreements. This model not only ensures steady cash flow but also aligns with broader societal objectives, making Caretech a pivotal contributor to the social care landscape. The delicate balance between compassionate service delivery and sound financial stewardship remains at the heart of Caretech’s operations, underpinning its stature in the care sector.

View CTH Analysis

CTH Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Caretech Holdings PLC
LSE:CTH