Care homes giant plans to raise its standards

May 12 2009 by Karen Dent, The Journal

CARE homes giant Southern Cross is to concentrate on improving its standards to boost client numbers and increase profits.

The Darlington business, which is the UK’s biggest care home operator with more than 700 homes for elderly and disabled people and has an 8% share of the market, reported a 6.9% increase in revenue to £460.8m for the six months to March 29.

A higher number of available beds and higher weekly fees - averaging £536 - were behind the jump in turnover but pre-tax profits, following a fall in occupancy rates and a one-off charge, dropped by 16.1% to £14.1m.

Southern Cross said the results showed a “resilient operating performance” but the group also “believes significant potential exists to raise operating margins and occupancy within the existing portfolio”.

The group, which has been on the expansion trail since 2005 when it bought Highfield and Ashbourne’s homes, now has 734 properties - six more than it did in the first half of last year.

Its current priority is to integrate the new properties and increase profits by improving its standards, although chief executive Jamie Buchan said a “modest” amount of expansion was still on the cards.

A business review of during the first three months of this year found Southern Cross’s performance was being hampered by inconsistent service quality, declining occupancy levels and profitability.