Barchester profits rise by 68%

BARCHESTER, the British nursing home group owned by JP McManus and John Magnier, saw its profits increase by 68% last year.

The company, chaired by former Kerry Group chief executive Denis Brosnan, recorded pre-tax profits of £6.58 million (€9.96m) for the year to the end of December, 2003, accounts just filed at the Companies Office in London show.

Turnover rose by a third to just under £60m, with £9.3m added from acquisitions during the year. Barchester owns and manages 63 nursing homes across Britain and just over 3,700 beds.

Acquisitions in 2003 added 17 nursing homes to the company and 888 beds with the potential to add a further 105 beds through expansion of these properties.

Barchester focus mainly on private clients and specialist care, which means it is not affected by funding shortfalls in the public sector.

In additions to acquisition, the company said plans to use its existing property landbank to grow with planning permission granted last year to add 247 beds. The company retained profits of £12.7m and shareholder funds of £32.4m.

The business is hugely labour intensive with 3,200 care staff of a total workforce of 3,376. The wages and salary bill for the year came to £33.2 million. This gives and average annual salary of £9,837.

The company’s directors were paid a total of £528,000 in salary and pension contributions, with the highest paid director earning £307,000. This is believed to have been paid to managing director Mike Parsons.

The company has just £1.3 million in cash and long-term creditors of £109m. At the end of the 2002 credits due after one year were just £51m.Mr Brosnan said the outlook for the group in the coming years is very encouraging. “The operating environment is improving with a dramatic shrinkage of supply, a more enlightened government view on fees, and more affluent and demanding elderly residents insisting on higher standards in long-term care. The group stands to benefit form all these influences,” said Mr Brosnan in the accounts. “The group will continue to focus on building up occupancy and increasing fee rates by targeting the private pay market and through the introduction of more specialist care.”