Fri, 06 May 2016 | BUSINESS NEWS
The credit ratings agency Moody’s has issued a stark warning that the financial position of the UK’s largest care home operator is unsustainable.
Four Seasons Health Care is in a perilous position after posting annual pre-tax losses of £264 million in late April 2016. The financial state of Britain’s biggest care home company is seen as indicative of the entire sector, which is predicted to face further hardship after workers aged 25 and over saw their wages increase to £7.20 per hour with the introduction of the National Living Wage at the start of April.
Tim Snow, a senior analyst at Moody’s, said the introduction of the National Living Wage has increased the costs of running the business and added that it was unclear if local councils would step in to leverage this additional cost by increasing the fees paid towards resident’s care. Furthermore, Mr Snow said that the firm’s ability to sell off property was dwindling.
Four Seasons currently has a portfolio of 440 care homes in the UK, housing approximately 18,500 residents. However, the distressed business is struggling to stay afloat with debts amounting to more than £500 million and interest payments of around £52 million last year.
The most likely outcome for the care home operator, according to Mr Snow, was that a debt-for-equity swap with lenders would come into play. These lenders include US investment companies HCP and H/2 Capital Partners. Robbie Barr, the chairman of Four Seasons, admitted that the company needed to restructure its finances in order to keep the care homes running.
For more background on the industry's problems, which has resulted in a rapid escalation of care home business insolvencies, read our May 2016 blog post.
View the latest healthcare businesses for sale.
See our guide on buying a care home out of administration.
Over its 20-year history, the commerce has evolved into a reputable business in the industry with a pool of highly-skilled makers that have made circa 3,000 commissions. The Company is the only bespoke swing and bench maker with an endorsement from t...
The operators have owned the business for just short of 20 years and has built up a profitable and well-respected business in their area.
The business has been operating for some 15+ years and now runs under very good management. There are currently circa 480 fully managed properties and a healthy sales portfolio and pipeline.
18
|
Mar
|
Utilities group Beauparc acquires Sheffield waste management firm | BUSINESS SALE
Beauparc, a Dublin-headquartered utilities provider, has acq...
18
|
Mar
|
Derbyshire flag printing firm set to fall into administration | ADMINISTRATION
A Derbyshire-headquartered flag printing and branding busine...
18
|
Mar
|
Rescue deal saves Blackburn custom clothing firm | BUSINESS SALE
A Blackburn-based custom clothing company that fell into adm...
24
|
Nov
|
Four Seasons Health Care faces being sold | BUSINESS SALE
Blackstones is to offer advice on financial and strategic op...
31
|
Jan
|
Four Seasons Heath Care homes sold | BUSINESS SALE
Four care home businesses have been sold in Dundee to two lo...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.