MY BIGGEST mistake was diversifying from our main business and getting involved in something I didn't really have the experience to run.
I had trained as a doctor in St Thomas's Hospital but in 1982 left to set up a nursing home. I saw a potentially huge demand for long-term care and realised the NHS was not going to be able to cope, and I was a bit frustrated working in the NHS and felt I could do more outside.
The business grew and we kept adding homes, raising money through a Business Expansion Scheme and then getting a quote on the Unlisted Securities Market.
But in 1988-9 we diversified into a medical supplies distribution business called Weston & Ross. The logic was that nursing homes are capital-intensive and we thought we could generate cash through the medical supplies business, then re-invest it in the homes. In theory it was a good idea; in practice it just didn't work. We didn't have the management experience to run it and things started going wrong. We ended up incurring losses of about pounds 2m.
This brought the overall company into loss for 1990-91 and it took a rights issue to dig us out of the hole.
Eventually we called in the receivers at Weston & Ross because we didn't see any future in it. It turned out to be a rather expensive mistake - and, I must admit, I think it was my idea.
We also had taken a minority shareholding in a ski company, Vacances Elite, which had chalets in Verbier and operated some heli-skiing in the Himalayas. The business was not as unrelated as it sounds. We were hoping to use the chalets as sites for holidays for elderly people in the summer, when they would normally be empty.
But we were a bit unlucky. From 1988, when we took the stake, the snow was not very good in Verbier for a few years, and a war broke out in Kashmir. Because of what had happened with Weston & Ross, we decided we would stop messing around and back away from that business, too. All I really got out of it was a good ski jacket.
We do still have some other businesses. We operate an in-house design and project management division and a home-care subsidiary that looks after people after they leave the nursing homes, but these are directly related to our core business.
Since we let the medical supplies business go, things have really turned round. We now have 25 nursing homes with 1,400 beds. Other homes under development mean we should have more than 2,200 beds by March 1995. We are back in profit ( pounds 1.8m last year) and managed to pay a dividend last year for the first time since 1991.
We have signed three joint ventures with BZW, where they provide the majority of the finance for new homes in exchange for a joint share in each.
There have been some amusing moments recently. Before Christmas, one of our homes in Battersea was inundated with calls after reports that Michael Jackson was holed up there. Given that the average age of the residents was about 90, this caused us some amusement. We do try to lay on some entertainment for residents but I don't think out budget would stretch quite that far.
The lesson of my mistake, I suppose, is to stick to what you know.
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