Focus Tie-Up Sees Southern Cross Grow

Southern Cross Healthcare (SCH), the UK’s largest care home operator, said it had struck a deal with rival Focus Healthcare Group to manage 29 additional homes.

SCH, which has more than 50 homes in Scotland, including seven across the Lothians, said the deal would add 1313 beds to its portfolio, taking its total to 32,420 beds across its 640-home estate.

The group announced the deal in its latest trading update ahead of first-half results on May 19. Chief executive Philip Scott said: “Operating performance is ahead of our original expectations, principally driven by the expansion in bed numbers and effective control of running costs.”

He said occupancy rates remained strong at 91 per cent in the first half despite the anticipated seasonal fall during the winter period. Mr Scott said the group saw “many opportunities” amid a consolidating sector which could see SCH add further to its capacity.

Since the start of the current financial year, SCH has added 3503 beds to its business, which it said “significantly exceeds” the target set for 2007 and 2008.

Investec Securities analysts said they were raising their full-year pretax profit forecast for SCH by seven per cent to £52 million on the back of the better-than-expected trading and the Focus deal.