-3x Short China Regulatory News (SCHE)

11 Aug 2008 07:00



Southern Cross Healthcare Group PLC

Unaudited Interim Management Statement

Monday, 11 August 2008 - Southern Cross Healthcare Group PLC (LSE: SCHE) ("Southern Cross", the "Company" or the "Group"), the largest provider of UK care home services, today publishes an unaudited interim management statement for the 14 week period ended 6 July 2008.

Adjusted EBITDA for the 40 week period to 6 July 2008 increased by 24% to £55.2m compared with the same period last year. Adjusted EBITDA for the 14 week period to 6 July 2008 increased by 8% compared with the same period last year to £24.4m (2007: £22.7m). 

Notes

EBITDAR represents earnings before interest, tax, depreciation, amortisation, profit on disposal of property, plant and equipment and subsidiary undertakings and rent.

Adjusted EBITDA represents EBITDA after adding back charges for future minimum rental increases.

Number at the period end.

Rent cover is defined as Home level EBITDAR before central costs divided by charge for rental amounts currently payable.

Occupancy

Average occupancy for all the homes operated during the period was 89.2% compared with 89.6% during the first half of this financial year.  The average occupancy of the Group's 698 mature homes (which account for 95% of all homes) was 89.8% during the period compared with 90.4% in the first half. The occupancy of the mature homes at the end of July 2008 was 90.4%.

Acquisitions and Developments

During the period under review Southern Cross acquired a 35 bed care home in Scotland and a 15 bed specialist care facility which is to be operated by Active Care. 

Through a combination of turnkey acquisitions and its own development programme, the Group has continued to make progress with its development pipeline, adding 145 beds to its portfolio during the 14 week period to 6 July 2008. A further 304 beds are expected to be added by the end of the financial year.

Together with the 2,780 new beds acquired and developed in the first half of the year, Southern Cross has added a total of 2,975 beds to its portfolio in the 40 week period to 6 July 2008, an increase of 9% in total beds.

Financial position

On 30 June 2008 Southern Cross announced that it was in discussions with its banking syndicate concerning an extension to its loan facilities which would enable it to pursue the sale of certain freehold property assets and/or suitable amendments to its overall longer term funding arrangements. 

Since that time the Group has announced that it has agreed an extension of its current loan facilities until 30 October 2008. Southern Cross is presently in discussions with several potential purchasers of the freehold property assets being divested and the Board is encouraged by the progress made to date.

Southern Cross today confirms that its trading performance is in line with the Board's expectations and the outlook for the year remains unchanged to that announced on 30 June 2008.

Management

As previously announced, Southern Cross appointed Richard Midmer as its new Finance Director and promoted Kamma Foulkes as a new Executive Director and Head of Elderly Care. 

John Murphy, after more than 20 years of front line care home operations management, has decided to retire from the Company with effect from 30 September 2008.  Ray Miles, Chairman of Southern Cross, commented: "John has made a huge contribution in a very demanding role. Without him, Southern Cross would not have become the UK's leading provider of elderly care."

The Group will report its preliminary results for the year ending 30 September 2008 on Monday 8 December 2008.

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About Southern Cross

Southern Cross is, in terms of number of beds, the largest UK provider of care home services for the elderly and a major provider of specialist services for people with physical and/or learning disabilities. The Company's care homes for the elderly operate under two distinct brands: Southern Cross Healthcare and Ashbourne Senior Living. Both brands provide a range of social and personal care services and nursing care services for elderly people with physical frailties and differing forms of dementia. The Company's specialist services operate under the Active Care Partnerships brand and provide long-term care services for people with physical and/or learning disabilities and for younger people with complex forms of challenging behaviour.

Southern Cross is focused on providing high quality care in well invested facilities, seeking to be the home of choice in each local community in which it operates. The Company provides care services for most of the local authorities in the UK which, together with the NHS, represent over circa 70% of the Company's revenues. Its care home portfolio is largely purpose-built with a high percentage of single occupancy rooms and rooms with ensuite bathrooms.

This announcement includes statements that are, or may deemed to be, "forward looking statements". These forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or " should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the outlook on the care home industry. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances.