Nursing homes group plans flotation

Westminster Health Care, one of the UK's largest nursing home operators, is planning a public offering of its shares at the end of March. The flotation is expected to raise pounds 50m and will value the company at more than pounds 100m.

Private investors will be able to take part via a clawback option on about half the shares to be placed by BZW with institutions.

Westminster, which is 90 per cent owned by National Medical Enterprises, the US healthcare business, operates 39 nursing homes, providing 2,620 beds. A further nine homes, providing 737 beds, are under construction and should be completed by May.

Takare, the largest quoted competitor, has fewer, but larger, homes so the two will vie for top spot in a highly fragmented sector.

The homes, most of which are purpose-built, rather than conversions of big old houses, cover most of the country from Aberdeen to Swansea and Essex.

Britain's long-term healthcare market is estimated to be worth about pounds 7bn a year, of which private sector nursing homes account for about pounds 2.2bn. The number of registered beds has grown at 16 per cent a year since 1980.

A spokesman for the company said this growth was likely to continue because a further 100,000 beds would be needed to cope with the expected increase in people over the age of 85 during the next 10 years.

Another boost to low-cost companies could come in April when the Government's Care in the Community Act comes into force. Many local authority-run homes are expected to fail to meet quality standards that will force patients into private establishments. These, say the operators, make better financial sense for authorities than paying for nurses to visit patients at home.

Westminster made profits before interest and tax of pounds 5.3m in the year to May 1992 on sales of pounds 23.4m. In the six months to November, it made profits of pounds 4.3m on sales of pounds 17m.

After the placing, Westminster's parent, NME, which had sales last year of about dollars 4bn, is expected to retain a stake of less than 50 per cent.

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