wmcha

By Debbie le Quesne

Key industry findings not the case for Midland operators

leave a comment »

Increasing national profit trends in care home business as reported in the latest research data do not necessarily reflect the industry’s economics in the Midlands.

The Care Homes Review document, compiled by real estate advisory organisation Colliers International, reveals that although there has been little change from 2012, the outlook is brighter.

It reports profitability is now “up slightly” from the first half of 2013 in both the personal care and nursing sectors; with personal care profit margins at 31.7 per cent and nursing care profitability at 28.7 per cent.

Nick white, senior surveyor in the Colliers international Healthcare team is quoted: “There appears to be positive news for elderly care homes, which are maintaining levels of EBITDAR [Earnings Before Interest Tax Depreciation, Amortisation And Rent)].

“This is in a period when local authority fees have generally not been increasing with inflation. We have found that many of the more successful operators are focussing on self-funding residents and continue to closely control costs.”

The report adds; “Profit margins in the long-term elderly sectors remained steady, increasing only marginally over the last half of 2013. However, EBITDAR margins for specialist care homes have decreased for the third consecutive period, after remaining relatively stable since 2010.”

But the green shoots of any recovery are scare in the Midlands with my West Midland Care Association offering a very measured response to the findings.

Although this report shows an increase in profit across the country, this is not reflective of the situation in the West Midlands were the average residential care home charges about £430 and the average nursing home fees are £520.

These figures include a small top-up element paid by families, as they local authority rates are less.

With these figures and still-increasing outgoings, many businesses are struggling to have investment sleeve for the future and frankly, the outlook is not great.

The Colliers’ data is based on key performance indicators (KPIs) and the spectrum of providers includes national corporates, regional private companies and operators of single homes.

Occupancy rates have risen in all three sectors – residential (personal care), nursing and specialised care. Occupancy in the nursing and specialist sectors is around 90 per cent; whereas, occupancy levels in the personal care sector remains just under, the report says.

Average weekly fees fell in both of the long-term elderly care sectors; with nursing sector fees showing the greatest decrease over the second half of 2013 (2 per cent). However, specialist care fees have increased by more than 4.5 per cent in the second half of 2013.

Outgoings for wages across the sectors are marginally lower than in first half year of 2013.

In the West Midlands Care Homes Occupancy has remained the same, despite local authorities trying to reduce numbers and keep people in their own homes.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: