Interim Management Statement (6917M)

TIDMSCHE

RNS Number : 6917M

Southern Cross Healthcare Grp PLC

19 August 2011

Q3 2011 Interim Management Statement

19(th) August 2011 - Southern Cross Healthcare Group PLC (LSE: SCHE) ('Southern Cross' or the 'Group'), today issues its Interim Management Statement for the nine months ended 30 June 2011 ("Q3").

Background

This statement is made in the context of recent announcements, most notably:

-- The Company's interim results for the six months ended 31 March 2011 on 19(th) May, in which a loss before tax of GBP310.9m was reported.

-- A joint statement issued by the Group, its lenders and its landlords on 16(th) June 2011 in which the Group and its landlords agreed to work towards a consensual solution to the Group's financial problems in the ensuing four months. This process has since been overseen by a Restructuring Committee made up of representatives of a Landlords' Committee and the Company.

-- A restructuring update issued on 11(th) July 2011, in which all landlords indicated their intention to leave the Group in favour of adopting a plan formulated by the Restructuring Committee to facilitate the smooth transition of homes to landlords and, where appropriate, their new operators.

o At that point, it was envisaged that the existing Group would cease to be an operator of homes at the end of the restructuring period.

o It was also anticipated that landlords, lenders and, where appropriate, other residual stakeholders would agree the necessary measures to facilitate the orderly closure of the Group's affairs and that little or no value would be attributable to shareholders.

o Given these statements, and in agreement with the UKLA, the Board took the decision that trading in the Company's shares be temporarily suspended with immediate effect. This remains the case at the time of this interim statement.

-- At the time of the Restructuring Update, Jamie Buchan, Chief Executive, stated that it is the objective of the Group to continue to provide excellent care to every resident and to manage the programme of transition professionally.

Against this background, the following points relate to the ongoing Group trading in the nine months ended 30 June 2011.

Key Financial Points

-- Revenue decreased 2.1% to GBP696.1m (2010 restated - GBP710.9m)

-- Home level EBITDAR of GBP188.8m (2010 restated - GBP207.4m)

-- Home level EBITDAR margin of 27.1% (2010 restated - 29.2%)

-- Adjusted EBITDA of GBP12.0m (2010 restated - GBP39.7m)

-- Operating Loss of GBP39.1m (2010 restated - loss of GBP26.9m)

-- Average occupancy in the mature business for the last nine months was 86.5% (2010 restated - 89.5%)

-- Average occupancy for the mature estate was 83.9% for the week ended 24(th) July 2011

Occupancy and Admissions

During the 3(rd) quarter, like-for-like admissions reduced by 7.5% compared to Q3 2010, with a 10.5% reduction for Local Authority funded residents; an 8.1% reduction in NHS funded residents and a 1.5% increase in self funded residents. A similar pattern is shown for the year-to-date: like-for-like admissions for the YTD have reduced by 9.3% from the same period last year, with a 14.8% decrease in Local Authority funded residents, a 2.4% decrease in NHS funded residents and a 9.1% increase in Self Fund residents. When compared against the 2(nd) quarter, admissions have reduced by 2.9%, with Private admissions reducing by 12.2%, NHS admissions reducing by 5.3% and social services remaining static.

Average weekly fees for the three month period ended 30 June 2011 increased 0.4% to GBP566 (2010: GBP564). On a year to date basis average weekly fees increased 0.7% to GBP561 (2010: GBP557).

The Company continues to reduce the number of homes under embargo, currently at 16, down from 18 as reported at our half-year results in May.

-Ends-

Enquiries:

 
Southern Cross Healthcare Group 
 PLC                                  [phone] 
Jamie Buchan, Chief Executive 
David Smith, Group Finance Director 
 
 
Financial Dynamics            [phone] 
John Waples/ Ben Brewerton 
 

This announcement includes statements that are, or may be 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 Group's intentions, beliefs or current expectations concerning, among other things, the Group'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.

This information is provided by RNS

The company news service from the London Stock Exchange

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