Lower care home occupancy and increased use of agency staff resulted in EBITDA at the parent of Four Seasons Health Care (FSHC) falling to £12.7m during the third quarter of 2018, from £13.9m in Q3 last year.
Across its three brands – FSHC, brighterkind and The Huntercombe Group (THG) – Elli Investments reported a turnover of £159.8m in the three months to 30 September 2018, down from £162.1m in the corresponding period last year.
Costs of sales were slightly up to £144.4m (Q3 2017: £144m), while administrative expenses rose to £15.8m, from £13.7m. The group was left with an operating loss of £376,000, compared to its operating profit of £4.5m last year.
Following ordinary and exceptional activities as well as interest payable, the group was left with a pre-tax loss of £35m, up from its £27.5m deficit last year in the third quarter.
The group’s net debt at the end of the reporting period was £571m.
Average occupancy at the group was 88.1% (care homes: 88.3%; THG: 83.2%), compared to 89.6% in Q3 2017 (care homes: 90%; THG: 82.3%). The group said the decrease was mainly because of a ‘very high level of winter deaths’ in the first three months of the year, which had a knock-on effect in the second and third quarters.
However, care home occupancy has shown some recovery, with a 0.3 and 1.6 percentage point increase in FSHC and brighterkind respectively compared to the second quarter this year.
Agency costs as a percentage of payroll across the group rose by 1.5 percentage points compared to the previous quarter, and by 1.2 percentage points compared to Q3 2017, mainly due to ‘operational challenges and the continued shortage of nurses across the NHS and the wider healthcare sector,’ the financial update said.
Own staff payroll costs rose by £3.3m, driven largely by an additional quarter of increased National Living Wage and National Minimum Wage.
The update said an average weekly fee of £857 across the group was 4.6% higher than the comparative quarter in 2017. Since Q3 2017, Four Seasons has witnessed fees rise 5.4%, brighterkind has seen growth of 4.8% and THG has reported an 8.5% expansion.
The increases benefited from ‘rationalisation of the FSHC estate, including selling or closing certain homes with unviable fee rates, an increase in private mix in brighterkind and the closure of certain units in THG,’ the report said.
Over 72% of the group’s English and Scottish care homes are rated as Good or Outstanding, or the approximate equivalents under the Scottish regulators – an increase from around 64% in November last year. THG has 82% of facilities rated as Good or Outstanding.