CARE home operator Southern Cross announced
yesterday that it has made an
operating loss of £8.6m over the past six
months but said it is "well placed" for
growth.
The Darlington group's turnover increased
by 28 per cent to £431.2m in the
half year to March 30, largely because of
acquisitions made during the period.
But the company said profits had suffered
amid higher running and payroll
costs for its 720 care homes across the
UK.
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However, Southern Cross predicted
growth over the coming months when it
starts to reap the benefits of fee increases,
averaging five per cent, on more than
85 per cent of its beds this year.
In a statement to the Stock Exchange,
the group said its size had given it the
competitive advantage to increase fees
for private customers and local authorities.
The group has made several care home
acquisitions over the period, raising its
number of beds by 14.4 per cent to just
over 37 per cent. Bill Colvin, chief executive
of Southern Cross, said that further
additions to the group could be
made in the coming months.
The group revealed yesterday it will
open two 157-bedroomed homes and add
another 369 beds by the end of the financial
year.
It plans for 1,750 more beds to be added
to its portfolio by September next year.
"The strong performance in the first
half of the year reflects the continuing
success of our growth strategy," said Mr
Colvin. "Fee increases have been agreed
ahead of our expectations, landlords continue
to show interest in financing our
properties and costs remain under control.
"With many opportunities to improve
the quality of our portfolio, increase
market share and, with demand for our
services increasing as the UK population
ages, we are well placed to make further
progress."
The occupancy rate at Southern Cross,
which employs more than 40,000 people,
is 89.6 per cent, slightly down year-onyear.
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