Four Seasons Health Care has hit back at analysts who suggest that its financial structure and debt is a threat to its entire care home business.
Justin King, the former Sainsbury’s chief executive, who now oversees Four Seasons on behalf of its owner Terra Firma, says that financial analyst and media reports about the company have been misleading.
“The narrative about Four Seasons and Terra Firma’s ownership is deeply inaccurate. We have invested a lot of capital and halved the debt,” King said in an interview with The Guardian.
“The business is perfectly equipped to pay debt and the rent bill. I think we can now point to a long list of things moving in the right direction. We are investing a lot in this business today and this [Avery House care home] is evidence of that.”
The Guardian was interviewing Mr King at Avery House, a Peterborough care home operated under the Brighterkind brand, a Four Seasons’ subsidiary that targets more affluent self-funded resident.
Fees at Avery House are around £800 per week, a level that Mr King says is far above what some local authority CCGs pay.
“Some local authorities are paying as little as £330 per week for each resident. At that level you cannot stay in a Premier Inn for a week. Nothing below £400 is viable any more,” he asserted.
There have been structural as well as personnel changes at Four Seasons. The company now operates as three distinct businesses: Four Seasons is the largest, with most of its residents being funded by local authorities. The upmarket Brigherkind business unit focuses on self-funders who can afford fees of £800 per week or more. Huntercombe homes provide services to residents with mental health issues.
Mr King has been brought in by Terra Firma as vice-chairman and head of portfolio businesses. The investor has also appointed one of its partners, Robbie Barr, as the new chairman of Four Seasons. Current chairman Ian Smith will stay on as an adviser.
Mr King admits that the financial situation dominated strategic thinking when Terra Firma took over the business in 2012, but the operator is now much more focused on strengthening its management teams and improving care for residents. “Most of it is about people and their leadership,” he said. “People who feel more empowered to do the best for the residents.”