Profits up 25% at Greenacre: Nursing home operator to boost acquisitions and building plan

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The Independent Online
GREENACRE Group, the nursing home operator, plans to accelerate its growth programme through acquisition and by building new homes, after lifting pre-tax profits by 25 per cent to pounds 1.7m in the year to 31 January and increasing its dividend by 18 per cent.

Tony Acton, chairman, said Greenacre had been able to hold its occupancy unchanged at more than 95 per cent, despite the changes brought about by the new Community Care Act a year ago, which shifted responsibility for funding patients from central government to local authorities.

'It played to our strengths,' he said. 'We have a high-quality operation and we have always kept very close contact with local authorities in all the areas where we operate as we do with the local community.'

Last year Greenacre added 168 beds, lifting the total number in operation from 410 to 578 and the number of homes to 12. Together with an average 5 per cent increase in fee levels, this pushed turnover 54 per cent higher to pounds 7.4m.

Overheads rose by 40 per cent as new management was recruited to match the growth in the scale of operations, but operating profit still increased by 58 per cent to pounds 1.9m.

Mr Acton said the board was comfortable with gearing of 70 per cent. It is currently 31 per cent, so this left room for a further pounds 6m of capital spending equivalent to a further 250 beds.

Greenacre will look at a mixture of equity and operating leases, which Mr Acton believes will become a more significant source of finance in the nursing home sector this year.

After a final dividend of 0.18p, up 20 per cent, the total is 0.33p against 0.28p. Shares were unchanged at 14p.