Reshaping of aged care business hits UK results at Bupa

Evelyn Bourke, group chief executive, Bupa

UK revenue and underlying profit both fell at Bupa last year as it reshaped its aged care business following the sale of 132 care homes.

Revenue across its UK business, which includes health insurance and dental practice segments, fell 10% to £2,537m during the year ended 31 December 2018 (2017: £2,807m), while underlying profit dived 22% to £156m, from £199m the year previous.

Bupa care services represented 16% of its UK revenue.

It opened four properties during 2018, ending the year with 138 homes and seven Richmond care villages, supporting 6,800 residents. It offloaded the 132 care homes to HC-One and Advinia between December 2017 and February 2018.

Around 80% of its care services were rated as Good or Outstanding by the Care Quality Commission, while average occupancy rate remained stable at 84.5%.

On the UK outlook, the report said ‘political uncertainty relating to Brexit’, including the lack of clarity of the UK’s future relationship with the European Union, and timing, and uncertainty on market access, trade, free movement of people could impact business.

Across Bupa’s aged care businesses worldwide revenue declined by 1% on 2017, while underlying profit fell by 20%, when adjusting the sale of the UK care homes. Funding pressures, lower occupancy and compliance issues in Australia, impacted this segment of the group’s operations.

Its villages and aged services cares for 6,700 residents across 72 homes in Australia, and for 3,500 residents in 49 homes and seven rehabilitation centres in New Zealand, where it also provides independent living in more than 30 retirement villages.

Sanitas Mayores cares for around 6,000 people in 46 care homes and operates five-day care centres in Spain. Its aged care business in Spain showed year-on-year growth, its financial report said.

Group revenue at constant exchange rates (CER) for the year remained flat at £11.9bn, (2017: £11.9bn), while statutory profit decreased by 19% at actual exchange rates to £502m (2017: £620m). Underlying profit was down 12% to £613m (2017: £698m CER).

Group chief executive Evelyn Bourke said flat revenue and falling underlying profit ‘was driven by the effect of our divestment of part of the UK aged care business, and challenges in our Australian aged care and health insurance businesses’.

She added: ‘Looking ahead, conditions in some of our key markets will continue to be challenging with a number of economic and political headwinds. However, Bupa’s strong financial position means we are well placed to continue to invest to meet the needs of customers. This financial strength enables us to balance short term delivery with long term investment for sustainable growth, while maintaining a focus on cost efficiency.’

Previous articleWhen data becomes the new currency
Next articleIncome up at Ulster Independent
Deven Pamben has more than 15 years’ experience as a journalist, working on newspapers, trade magazines and online publications. A Criminology graduate, Deven worked for Hertfordshire Constabulary before becoming a journalist. He began his journalism career at a local newspaper in Hertfordshire before moving into trade magazines in permanent roles or as a freelancer. Titles he has reported and edited on include Law Society Gazette, Harpers Wine and Spirit, and Health Club Management. Deven has also written travel features for the Sunday People, and spent two years working in Beijing for the official press agency of the People’s Republic of China.