Four Seasons reports steady improvement despite funding pressures
In reporting its financial performance for the second quarter of 2017, major provider Four Seasons Health Care says there has been across-the-board
improvement in earnings, occupancy and quality ratings.
Four Seasons chairman Robbie Barr said that in the second quarter of this year, EBITDA of £13.5m was 14% higher than in the first quarter, bringing EBITDA for the first half of this year to £25.3m, 11% ahead of the comparative period last year.
Turnover for the second quarter was £164.5m (£163.9m in Q1). Turnover for the first half of this year was £17.5m or 5.7% ahead of the comparative period last year, on a like for like basis, after adjusting for closures and disposals.
Occupancy across the group’s care homes in Q2 was 89.4%, compared to 87.5% during the comparative period in 2016.
Mr Barr said the group’s care quality ratings continued to improve, with more than 66% of its care homes rated as good or outstanding, or broadly equivalent inspection outcomes under the different regulators who have different approaches to ratings. This is a 2.5% increase since the end of Q1.
“We continue to invest in the estate, with an annualised maintenance spend of just under £1,300 per bed in the quarter,” said Mr Barr.
“Work continues on the intended restructuring of the group towards a sustainable capital structure for the long term. The wellbeing of our residents, patients and colleagues will not be adversely affected as we work towards that goal.”
Commenting on the sector overall and the political and economic context in which the group operates,Mr Barr said Four Seasons’ positive results had been achieved in the face of the continuing challenges facing the sector, the foremost of which was the severe funding pressure facing government-funded services and the national shortage of nurses.
“The continuation of the Social Care Precept gave local authorities the ability to increase Council Tax by up to 3% to support social care funding and the cost of the National Living Wage increases for carers,” said Mr Barr.
“It is essential that they pass on the precept to front line operations. Some local authorities decided not to raise the full 3%, so on average the precept raised council tax by 2.6% from April of this year. Within our Four Seasons business, we have so far managed to reach agreement for 2017/18 with around 60% of local authorities who have recognised the cost pressures within the sector. However, even this far into the funding year, around 14% of local authorities have still made no offer for fee settlements. Some councils are still using their dominance to try to impose “take it, or leave it” fee settlements that are not sustainable.”
Mr Barr said Four Seasons had previously called on the Government to address the regulatory oversight of commissioning practice in much the same way that there is regulatory oversight of the quality of care provision.
“Commissioning should take account of a fair cost of care and ensure that additional funding flows to the frontline where it is needed,” he said. “We welcome that the Care Quality Commission has been asked to undertake reviews of Local Authority commissioning practices.
“The £2bn of additional funding that the Chancellor announced in the March budget to support the integration of Health and Social Care will be delivered over the next three years to support the reduction in delayed transfers of care. To date, we are yet to see this funding flow through to front line services but we remain well positioned to help address the issue of Delayed Transfers of Care.”