Court Cavendish buoyant in first year after float: Debt repayment and acquisition of new nursing homes offset higher costs

DEBT repayments and contributions from new nursing homes, financed by last year's pounds 39m stock market flotation, have lifted Court Cavendish's pre-tax profits from pounds 194,000 to pounds 3.1m before exceptional items in its first year as a public company, writes Terence Wilkinson.

A combination of higher administrative costs and the impact of community care legislation on average occupancy levels lowered operating profits on its established homes from pounds 2.8m to pounds 2.3m.

This was offset by a contribution of pounds 876,000 from new homes acquired during the year and a cut in interest charges from pounds 2.6m to pounds 144,000. Exceptional charges rose from pounds 134,000 to pounds 600,000, reflecting the cost of repaying borrowings early.

A final dividend of 2.25p makes a total for the year of 4p, covered 2.5 times. The group says it expects this cover to increase, although it will follow a progressive dividend policy. Shares closed 1p up at 215p, compared with a flotation price of 225p.

After falling to 91 per cent in the wake of the new community care legislation in April 1993, occupancy had returned to 93.5 per cent by the end of the year.

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