pounds 43m cure for Vaux headache yes

Sunderland-based regional brewer Vaux finally sold its St Andrews nursing home business for pounds 43.2m yesterday, confirming the worst-kept secret in the care home business. The disposal to Highfield, a Scottish care home group, had been rumoured since before Christmas and the price achieved was in line with expectations.

Vaux has been trying to get out of nursing homes for some time, having abandoned the idea that running a care business was essentially similar to its existing hotel operations, only with nurses. Vaux's Swallow chain is well-regarded, but the company found running nursing homes rather more difficult than it expected when it started building up the chain in the early 1990s. The sale leaves it focused on its core booze and snooze operations, brewing and hotels.

Highfield will pay pounds 35m in cash on completion, up to pounds 5.2m in loan notes, repayable after five years, and an earn-out of up to pounds 3m, payable three years after completion. The earn-out is based on the number of beds in excess of 1,550 occupied at the end of that third year with the full pounds 3m payable if occupancy reaches 1,650 beds. Currently St Andrews has about 1,470 beds in 38 care homes in the Midlands, the North of England and Scotland.

Commenting on the sale, Sir Paul Nicholson, chairman, said: "This is an excellent result for our shareholders. We have achieved full value for St Andrews which will release resources for investment in our core businesses of brewing and pubs and hotels."

Despite its failure to capitalise on nursing homes, Vaux reported record profits last December, driven mainly by its successful Swallow operation. Profits of pounds 34.8m in the year to September were 9 per cent higher after a 22 per cent rise in Swallow profits to pounds 24m.

The company has struggled to shake off its image as a small regional brewer supplying a tired chain of tenanted pubs in a depressed area of the country.

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