Friday 27 April 2018

Earnings top €173m at Irish-backed care provider Barchester

JP McManus. Photo: Ramsey Cardy/Sportsfile
JP McManus. Photo: Ramsey Cardy/Sportsfile

Gordon Deegan

Earnings at the UK-based healthcare group backed by well known Irish investors, Dermot Desmond, JP McManus and John Magnier last year topped £154m (€173m).

New accounts filed by Barchester Healthcare Ltd to Companies House in the UK show that it recorded the earnings before interest, tax, depreciation, amortisation and rent (Ebitdar) as revenues increasing by 2.3pc to £535m in the 12 months to the end of December 31st last.

At the end of last year, the group provided 13,024 beds in the UK.

However, according to the directors' report, "despite a higher number of available beds, occupancy remained flat due to an unusually high death rate seen nationally across the sector in the first half of 2015".

In his report, the group's chairman, John Coleman said: "The group has a very strong balance sheet, with reduced bank and other debt, which leaves it free to explore ways of investing cash to support future growth in the scale of operations."

The group recorded a 59pc decrease in pre-tax profits going from £7.35m to £2.96m last year.

The group recorded the drop in pre-tax profits after paying £15.15m in interest charges.

At the end of last year, Barchester was amongst the top four largest providers in the UK long term care sector with 13,024 registered beds across a portfolio of 210 high quality homes and seven independent hospitals.

The group's strategic report states that it is especially focused on the private pay market.

The directors state that they are pleased with the performance of the group and expect to see continued growth in revenue in the coming year.

The directors state that the increase in revenues "was driven primarily by higher fees rates".

The group's operating profits reduced by £1.7m from £19.8m to £18.1m and the factors behind the drop in operating including rent and depreciation increasing by £5.6m and prior year restructuring costs of £3.6m not re-occurring last year.

The directors state adjusting for the various factors outlined, the operating profit remained the same as 2014.

The directors state that the operating profit remaining the same was as a result of the improved revenue figures being offset by an increase in labour costs and the increase in the use of agency staff due to staff shortages.

The directors state that 4pc of hours were filled by agency staff.

Accumulated profits at the group last year stood at £90m. Shareholder funds totalled £110m that included cash of £17m.

Numbers employed by the group last year decreased from 18,683 to 17,623 including 16,800 working in 'care' roles.

Staff costs last year increased from £265.55m to £270.3m. Remuneration for directors decreased from £3m to £1.63m. The remuneration for the highest paid director totalled £699,000.

The directors state that the group's strategy "is one of continued growth through new builds, the extension of existing facilities and where appropriate, through the acquisition of new nursing homes of a suitable quality

The group's net debt last year increased from £126m to £151m and the directors state that the increase in debt "was primarily as a result of the group entering into finance leases on four newly opened homes in 2015".

The firm's net assets increased to £110m.

Irish Independent

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