Commercial Property News

Southern Cross Healthcare Group Plc, the UK's largest care home operator, today reported in its Q3 Interim Management Statement that it had slightly increased revenue to £238 million from £236 million last year, but that it's adjusted EBITDA had fallen 40% to £12.1 million.

Net debt was reduced by £3.6 million to £22.1 million during the quarter. Average occupancy during Q3, for all homes, including immature homes, was 84.0% (2009: 86.9%), which shows how recession proof the business is.

The business is however being squeezed by rising labour costs, which it has not been able to recover in fees, margins in Q3 were down 2.5% at 29%.

Southern Cross is moving to a lease and operate model. During the period, the Group sold the freehold interests in its two remaining internally developed properties and received a net cash consideration of £14.0 million. During the year to date, a total of six freeholds, with a value of £31.4million, have been disposed of. The Group continues to hold eight freehold assets for resale with a net book value of £15.1million and discussions continue with potential purchasers in respect of a number of these properties.