Four Seasons bonds suffer as profit slides
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Higher payroll costs and sustained regulatory and fee pressure has led to a 31% fall in profits for at the UK’s biggest care home group, Four Seasons Health Care.
The slide refers to the second quarter of the year, when compared to the same period in 2013. Profits for the calendar year 2013 stood at £93.9m, dropping to £79.1m for the last 12 months.
Private equity Terra Firma bought Four Seasons two years ago in a deal worth £825m and the financial results for the quarter ended 30 June 2014 of Elli Investments, the umbrella company created to service the £525m in high yield bonds issued following the acquisition, confirms that EBITDA fell by £7.9m to £17.5 million for the quarter.
In response, ratings agency Moody’s has downgraded the bonds and cautioned a negative outlook. In a statement, Moody’s said the downgrade largely reflected the recent deteri-oration in earnings in the first half of 2014 over 2013, and the expectation that the full year earnings would fall significantly short of 2013 as well.