Nursing home group gains from new beds

COURT CAVENDISH, the nursing home operator, has spent pounds 11m of the pounds 13.9m it raised on its stock market flotation last July, and the 488 beds it has acquired are making a contribution of pounds 1.9m to pre-tax on an annualised basis, according to its chairman, Dr Chai Patel.

Dr Patel was speaking as Court Cavendish reported pre-tax profits of pounds 450,000 in the six months to 31 October, compared with pounds 85,000, and a maiden 1.35p interim dividend.

Profits were struck after a pounds 600,000 exceptional charge, forecast on flotation, to meet the costs of unwinding and interest rate hedge.

Dr Patel said that although the introduction of the Community Care Act last April pushed occupancy rates down by 2 points to 91 per cent, they were back to 93 per cent by the end of October.

At the same time Court Cavendish, which has predominantly privately financed patients, had been able to secure a 4 per cent increase in fee rates.

The company's exposure to the South-east had been a help because fee rates had been firmer in that region compared with the rest of the country, said Dr Patel.

Last year operating profits fell by 7.8 per cent from pounds 1.45m to pounds 1.33m. As predicted at the time of flotation, this reflected an increase in administrative costs including the recruitment of senior management and flotation.

Since flotation, Court Cavendish, which is aiming to acquire 400 to 500 beds a year, has bought six nursing homes and bought outright three previously managed or leased, taking the total homes under operation to 30.

Court Cavendish shares made a disappointing stock market debut last summer dropping to a 10 per cent discount on the 225p issue price on the first day of dealings. Yesterday they closed 1p higher at 251p.