The care home provider that bought a clutch of Bupa nursing and residential homes reported a 10% rise in turnover in the year to 31 March 2017, but profits were hit due to staff costs.
Advinia Health Care Ltd bought 22 large-scale Bupa properties in October, in a deal which saw 2,714 beds transferred, expanding its portfolio to 38 homes with 3,250 beds.
Before the deal, its accounts show that turnover grew to £3.3m last year, from £3m in 2016. Administrative expenses at the provider, however, grew 50% to £1.5m (2016: £1m).
EBITDAM improved to £1m during the financial period, from £777,555, the year previous, while pre-tax profit for the year was £14,814 (2016: £299,550).
Leonard Merton, Advinia director, said: ‘There continues to be an acute shortage of nurses in the UK and this has meant the competition for those nurses is high and use of replacement agency workers is expensive and puts a strain on financial resources as we have to use expensive agency workers.’
The occupancy rate at its care homes during the year averaged at 93%. Despite occupancy rates being above the market average, Merton said the group could not be complacent. ‘The acute shortage of nurses for our care homes has meant that gaps have been filled by more expensive staff. We continue to look overseas to recruit foreign nurses who we can deploy locally,’ he said.
Performance improved mainly due to better average weekly fee rates and tight cost control. However, staffing remains a concern.
Merton added: ‘Staff costs are our largest cost and we have worked hard to recruit, motivate and retain our staff. We will be challenged by the shortage of nurses and the fact that agency replacements are expensive and require close supervision by permanent staff to ensure our standards of care are met.’