Hales Group (“Hales”, the “Company” or the “Group”), a key provider of homecare in the UK, is considering an IPO on the AIM market of the London Stock Exchange this summer.
Introducing Hales Group
Founded in 1999, Hales provides care for people in their own homes, including in retirement communities or assisted living accommodation, across the East and North of England, Midlands, and Yorkshire.
Its c.1,700 staff provide a range of services including homecare, dementia care, specialist care for specific conditions, companionship, end of life care and live-in care, amongst others, primarily under long term contracts with local authorities and the NHS. Each year, its homecare staff make over 2.8m home visits, empowering people to live longer, better lives in their own homes.
The Group utilises award-winning technology-enabled care, harnessing a range of technologies, which can improve their service and outcomes for those in their care and maximise the Group’s efficiency. Technology employed by the Group includes:
- a specifically designed app which provides staff and users, as well as their families, with real time information;
- a market leading digital care management system that monitors people in its care, alerting carers and keeping families abreast of changes to care plans; and
- it is piloting an AI supported robot to monitor people in its care and prompt them to undertake tasks including taking medication.
The homecare market
The UK homecare market is forecast to grow by 15% to £13.2bn in 2031 (2022: £11.5bn). This is expected to be driven by:
- an aging population – over the next 40 years, the number of people over 65 is expected to grow by 30%;
- a shift in attitudes to living at home for longer – with nine out of ten over 50-year-olds wanting care in their own-home when the time comes;
- the need to alleviate bed blocking in the NHS – with delayed hospital discharges estimated to be costing the NHS £5.43m per night; and
- the rising cost of residential care – which typically costs c.£40,000 per annum compared to c.£14,000 for homecare.
The homecare market is highly fragmented, with over 20,000 registered companies operating in the UK.
An IPO would accelerate the Group’s growth strategy
Hales is a key provider of homecare in the UK and has a strong track record of delivering growth through acquisitions as it capitalises on its highly fragmented market. The successful execution of this strategy has enabled Hales to grow from a single site in one county in 1999 to 32 in 16 counties today, delivering revenue of over £45m in the year ended 30 June 2023.
An AIM IPO would accelerate the Group’s growth strategy to broaden the scope of care that it offers, expand the geographical area it covers, and continue to build economies of scale including by investment in technology and pursuit of suitable acquisitions in the homecare sector to grow the business.
Current shareholders, including majority shareholder Nigel Wray, will not reduce their holdings in the Company in any flotation.
Jeffrey Fowler, Founder and Executive Chairman, Hales Group, commented:
“After many years of delivering growth as a private company, an AIM IPO would be a significant milestone for the business, enabling us to accelerate our growth ambitions.
“Given the UK’s ageing population, the preferences of the vast majority of adults to receive care in their own homes, and the rising costs of residential care, we have a clear opportunity to consolidate in an attractive and growing, yet highly fragmented homecare sector.
“A successful IPO would provide access to funding to deliver on this opportunity, build on our strong platform as a scale provider, and grow our market share to cement our position as a key provider in the UK homecare market.
“We have a highly experienced and committed management team in place to deliver the Group’s strategy and drive the business forward. We are also extremely thankful to our hard-working employees, who consistently strive to deliver the best quality service to all of the people in their care and uphold Hales’ values.”