Earnings rise at Southern Cross

11/08/2008 Robert Tyerman

Southern Cross Healthcare says earnings rose 25 per cent to £55.2 million in the 40 weeks to 6 July.

Britain’s largest care home group, Southern Cross, which recently won a repayment extension on a £46 million bank facility, says its revenues increased 24 per cent to £676.8 million over the same period. However, growth seems to have been slowing somewhat, since earnings before interest, tax, depreciation and amortisation rose by a slower 7.5 per cent to £22.7 million in the 14 weeks to 6 July on revenues ahead 18 per cent to £245.6 million.

The fully listed company has increased its number of available beds by 3,670 to 37, 270 and says the average occupancy for all its homes was 89.2 per cent in the 40 weeks to 6 July, against 89.6 per cent in the first half of the year. Since agreeing to postpone the repayment deadline until 30 October, Southern Cross has been talking to several potential buyers of freehold property assets whose sale proceeds would repay the loan and now says ‘the board is encouraged by the progress made to date’.

Shares in Southern Cross, which peaked at 606p last November and collapsed to 78p last month, have rallied to 125p, valuing the company at £235.5 million. Their prospects hinge on the success of the present talks.

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