APM Human Services (ASX:APM) wins $720m contract for UK Functional Assessment Services

• APM Human Services International (APM) wins a $720 million contract to deliver Functional Assessment Services (FAS) across the UK
• APM will provide FAS over five years across London, the southeast and east Anglia region, on behalf of the Department for Work and Pensions (DWP)
• FAS look at the functional impact of disability and illness on an individual’s quality of life and assesses different needs for particular health conditions
• APM reported its FY23 underlying NPATA is likely to range between $175 and $180 million with earnings growth impacted by lower client flow, a shortage of qualified allied health professionals, and higher interest costs
• APM shares were up 6.99 per cent and trading at $1.99 at 12:56 pm AEST

APM Human Services International (APM) has secured a $720 million contract to deliver Functional Assessment Services (FAS) across the UK, on behalf of the Department for Work and Pensions (DWP).

FAS look at the the functional impact of disability and illness on an individual’s quality of life and assesses different needs for particular health conditions.

The company announced today that it was the sucessful bidder – locking away a five-year contract to provide FAS across London, the southeast and east Anglia region.

The contract is expected to commence in 2024, with the option to apply for a two-year extension.

“We look forward to partnering with the Department of Work and Pensions to deliver these important Functional Assessment Services,” APM CEO Michael Anghie said.

“The opportunity to deliver Functional Assessment Services demonstrates the strength of our local service delivery team, our reputation for service excellence, and our ability to leverage APM’s expertise across regions and markets.

“The contract win continues the trend of APM executing its strategy and diversifying its business globally both geographically and in terms of service and revenue models.”

The company announced that mobilisation of the new FAS contract would require it to invest in capital expenditure and working capital before its commencement.

APM also reported its underlying net profit after tax and amortisation (NPATA) would likely range between $175 and $180 million for the 2023 financial year with earnings growth impacted by lower client flow, a shortage of qualified allied health professionals, and higher interest costs

The company announced its cash conversion is expected to be greater than 80 per cent for the second half of 2023, and by 30 June 2023, APM expects its net leverage to be in-line with the half-year.

APM shares were up 6.99 per cent and trading at $1.99 at 12:56 pm AEST.