Westminster to sell off 15 nursing homes
Friday 15 August 1997
Speaking after the company reported a strong set of annual results yesterday, Pat Carter, chief executive, said his target for Westminster was to make around a third of its profits from non-nursing home activities by next year.
News that Westminster was broadening its activities sent the group's shares up 4 per cent to 275p. Pre-tax profits rose 14 per cent to pounds 20m in the year to May, excluding pounds 2.7m costs of last year's failed bid for Goldsborough and a one-off charge of pounds 3.1m to reduce investment in the nursing home sector.
Mr Carter said that pressures in the nursing home market, which has been dogged by overcapacity and cuts in local authority budgets, were difficult, but showed signs of easing: "Things are beginning to stabilise. Operators have stopped building more homes and wage costs are showing signs of easing, but this is still a mature market."
Mr Carter said that occupancy remained under pressure, but at 89 per cent, the group's rates were already significantly higher than the sector average. The company plans to complete three new nursing homes, but does not expect to open further beds while conditions are tough.
Paul Saper of Laing & Buisson, healthcare consultants, said the moratorium on building new nursing homes, together with the pounds 7m Westminster received from its stake in Goldsborough, would release funds to redirect to growth areas.
"Westminster is seen as one of the top management teams in the sector. It is way ahead of the game in assisted living and areas like brain injury while the others are staring at their navels and complaining how bad the nursing home sector is."
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