UK's largest care home operator Four Seasons suffers £263.5m loss

Four Seasons Health Care, which cares for more than 18,000 older people across Britain, has reported an operating loss of £263.6m in 2015.

Up from a £70.1m loss in 2014, last year's loss of almost £264m at the group, which employs 30,000 staff, signals a dramatic increase in Four Seasons' financial woes.

With debts of 509.9m, Four Seasons reported that earnings before interest, tax, depreciation slumped by 39 per cent to £38.7m for the year to December 31, 2015, down from £64m the previous year.

Four Seasons has 20,000 residents in its care homes and patients in its Huntercombe hospitals and specialist care units.

While average weekly care fees increased by 3.4 per cent compared to 2014, the group said that there had been a real term fall of five per cent in care home fees over the last five years. Elli Investments bought Four Seasons for £825m in 2012.

A spokesman for Four Seasons said “The auditors have signed off the 2015 accounts, which are prepared on a going-concern basis, meaning the directors and auditors consider that Elli Investments will continue to operate as a going concern for the next 12-18 months.”

Robbie Barr, the chairman of Four Seasons Health Care Group, said: “In a market environment that is extremely challenging because of the under-funding of social care, the group’s financial performance remains below the levels of recent years.

“As a result of funding constraints on social care there has been a real terms five per cent reduction in fees over five years. This is before the introduction of the National Living Wage. We want to pay our people more for doing a challenging job very well but the first increase from April requires an increase of about five per cent in council funding, if providers are to be compensated for the extra cost.

"We welcome that in acknowledgement of the funding pressures, the government has enabled local authorities to raise a two per cent social care precept on council tax bills. It is encouraging that over 90 per cent of councils have raised a social care precept and we are waiting to see the extent to which this funding flows into the elderly care sector.”

Four Seasons sold off 18 care homes last year.

As well as renting sites from a landlord, the group owns just over half of its 440 care home sites and is continuing to get rid of properties that are 'underperforming or not core to the business strategy'.

Mr Barr said: "During 2015 we disposed of 18 freehold properties, a development site and a portfolio of investment properties (homes that the group owned as landlord but did not operate) realising £44m. In addition six properties have been sold in 2016 realising £4.3m."

Four Seasons has invested more than £46m in the business in 2015, an increase of £8m over 2014 and the group said it had seen satisfaction ratings of 96-97 per cent across the 340 Four Seasons’ homes and improved Care Quality Commission inspection outcomes.

"Operational improvements have begun to benefit our customer satisfaction, occupancy levels and financial results and we see encouraging signs that this positive momentum will continue into 2016.”

Four Seasons announced, last October, the appointment of financial and legal advisers to consult on improving the group’s financial position.

The chairman of the group added "Following their work over the last six months, FSHC Group Holdings Ltd has started to engage with certain key stakeholders, or their advisors, to explore a long term solution for the debt and capital structure of the group which we hope to resolve during the course of 2016.

“Whatever the outcome, the group continues to have medium term finances for its needs and we don’t envisage this process having any effect on the day to day care provision in our homes, hospitals and specialist care centres.“