Four Seasons revenue rises and occupancy is highest for three years

Britain’s largest care provider Four Seasons Health Care reports its Q3 revenue and care home occupancy has risen, prompting its chairman to promise to ‘build on the turnaround’.

The group has reported the strongest quarterly result for two years with a rise in revenue of nine per cent (£13.9m) to £174.3m in the three months to 30 September, when compared to the same quarter last year.

The group’s parent company Elli Investments also reported 89.6 per cent of its care home beds are occupied – the highest it has been for three years.

Four Seasons, which has more than 300 homes providing residential, nursing and dementia care has spent £10.9m on improving care and care homes in the quarter. The business has refurbished or extended 13 homes and three more refurbishments will begin in January.

The group's chairman Robbie Barr said: “We have continued to build on the turnaround and the positive momentum that we achieved in the first half of 2016. Occupancy in our homes is up again, underpinned by our continuing improvements in quality of care."

'Historical underfunding'

But the chairman also highlighted the funding constraints and cost pressures hitting the care sector.

Mr Barr said: “The underlying drivers for the care sector continue to include; cost increases as a result of the introduction of the National Living Wage; pressures resulting from Local Authority funding constraints which increasingly appear to be having a significant impact on bed blocking in the NHS; and on-going nurse shortages, which force hospitals and care homes alike to turn to expensive agency nurses to maintain required staffing levels.

Debts

Costs linked to the sale or closure of homes and restructuring, saw the group’s quarterly loss before tax rise to £27.6m (from £25.6m). Last year, Four Seasons made a pretax loss of £264m after writing down the value of care homes. The group’s debts of £565m, mean it makes interest payments of more than £50m a year.

The group's brighterkind business has 70 homes designed to attract self-funded residents. The business has increased its proportion of self-funded residents to 50 per cent -the highest level since the business was formed. Self-funders account for 60 per cent of its new admissions.

Referring to the social care precept (which allows councils to raise two per cent on council taxes for social care), Mr Barr said: "Only around half of the 80 councils in England who commission our services have recognised the National Living Wage cost pressures and passed on appropriate fee rises.

"Whilst the social care precept provided some mitigation of the additional cost of the National Living Wage increase, it did not begin to deal with the historical underfunding which has seen a five per cent real terms reduction in fees paid for care over the last three or four years.

”The increase in the NHS Funded Nursing Care fees [paid to homes for care requiring a registered nurse] announced in July this year was welcomed by the sector, but again did not address the structural underfunding position. Therefore, it remains critical that the government considers the longer term strategy for the funding of social care in order to try to deal with the inequities that exist and to bring some stability to the future of social care funded services."