Analysis shows one in five companies are struggling

Posted on June 1st, by editor in Caring Times. No Comments

Nearly one in five private providers of residential care are grossly inefficient in their use of capital, according to a report by Plimsoll Publishing. In the short term, the inefficiencies lead to a less competitive market and, for some companies, tough decisions need to be made if they are to become more competitive. Of the 1031 companies studied in Plimsoll’s analysis, 19% were found to be making inadequate use of capital. On average, for each £1 invested in their business, residential care providers only sold 54p of services, and this had not changed over a four year period. 190 companies were identified as having suffered a serious decline in their sales performance relative to their assets, falling to such low levels that capital return is no longer competitive. These companies are generating only about 36p in sales for every £1 spent on investment. If this band of companies were to fully exploit their capital base, they would need to raise sales by 50%. Plimsoll says that, of the 24% of companies in

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