Four Seasons Health Care, which is thought to selling assets worth £60 million to improve its balance sheet, has found a buyer for a £20 million chunk of its property portfolio.
Monarch Alternative Capital, a US hedge fund, has made the offer, according to reports at the end of last year.
Four Seasons has not confirmed the deal, but recently said it was working to improve its profitability. In December it closed seven loss-making homes in Northern Ireland.
This followed its third quarter financial results that reported a pre-tax loss of £25.4 million. During a conference call with investors following that financial statement, the group’s chief executive Ian Smith said: “If the cost burden of the national living wage is not offset by increased local authority funding for elderly social care, then a significant proportion of care beds in Britain will become unviable. A recent report has said there are 37,000 beds at risk as operators close homes or increasingly focus on self-funding residents.”
Four Seasons Healthcare’s Care Home Division did report a slight improvement in its performance for the third quarter of 2015.
Average weekly fees rose to £620 compared to £600 a year earlier. Occupancy ticked upwards from just below 85% in Q2 to just above 85% in Q3, although this is well below the peak occupancy of 88% a year earlier.
The Care Home Division’s profit margin before interest, income taxes, depreciation, amortisation, rent and management fees (EBITDARM) was up from around 18% at the start of 2015 to 20% in Q3.
Four Seasons reported total cash of £52.3 million and net debt of £512.7 million on September 30, 2015. The debt costs the company more than £50 million per year in interest payments. It made a repayment of £26 million in December last year.