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Hot 100 2013 – 1: Potensial

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The basics

Company name: Potensial
What they do: Residential care services
Headquarters: Birkenhead
The Bosses: John and Rachel Farragher

The financials

Latest turnover (£,000): £15,215
Four-year compound sales growth (%): 146
Latest Ebitda (£,000): £2,445

The details

Potensial was founded in 1989 by husband and wife team John and Rachel Farragher to provide accommodation and specialist support to adults with learning difficulties. Today, the company is Britain’s fastest growing business and number one in the Investec Hot 100.

Potensial, which trades under the name Potens (Latin for “able”), provides specialist support for adults with a wide range of needs: learning disabilities, mental health needs, autism including Asperger Syndrome, early onset dementia and Korsakoffs Syndrome (alcohol-related brain injury). Through 42 care homes dotted around the North East and North West of England, and North Wales, the Potens group offers supported living, domiciliary care and residential care.

When they set up the business, the Farraghers say they were motivated by the belief that the way forward for care was through a partnership concept – that care providers should work with service users. In its latest inspection, in February this year, the Care Quality Commission found that service users were treated with dignity and respect, and Potens passed with flying colours.

On the financial side of the business, Potens’s growth has been phenomenal: over the last four years, compound annual growth of 146 per cent has seen the company’s turnover grow from £1m to £15.2m. Pre-tax profits have also ballooned, rising from just £169,444 to £2.4m over the same period of time.

The company’s revenue depends heavily on the public sector: local authorities are responsible for funding most people who require care in a home. Of course, this also means that Potens is susceptible to funding cuts. Research by The Association of Directors of Adult Social Services shows that local authorities have, on average, already cut social care net spending by 20 per cent in the last three years, withdrawing £2.7bn worth of services. This is set to continue.

Yet despite the cuts, Potens has continued to grow, mainly through acquisitions. The company has spent millions of pounds in the last four years to acquire other care homes to add to its property and service portfolio, including Pendle Residential Care and Glencoyne, which now trade under the Potens brand. Potens invests heavily in its 677 staff, which was recently recognised through an “Investors in People” award as well as a “Positive About Disabled People” award, with Potens committing to work with Jobcentre Plus to find more employment for disabled people.

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