Companies need to reduce costs

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

Failure to control costs is behind the poor profitability of many companies in the care home sector, according to company analysts Plimsoll Publishing Ltd. Plimsoll managing director Don Turkington said 88 companies in the sector had been identified, with poor profits or which were loss making because of operating costs that were out of line with the industry norm. “Perhaps new owners could bring a fresh approach to these costs and retain more profit for themselves,” Mr Turkington said. “Most appealing to new owners would be the fact that the earning potential of these companies was fantastic. On average their gross profits were 43.2% of sales, yet the industry average was only 36.3% of sales. “However, after the overheads were paid, these companies were making on average a pre-tax loss of 2.6%.”

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