Strip-out a £51.8m charge relating to the treatment of future lease increases, and Southern's cash profits reached £72.5m; down on 2008's £78.1m. But the company's turnaround efforts do appear to be working - nebt debt was slashed 49 per cent in the period and management expects to restart dividends next year.
In line with market trends, bed occupancy fell 2.1 percentage points at the mature homes, to 88.4 per cent. Management also acknowledges that reputational issues at some of its homes have affected enquiries, as well as tighter budgets - that's forcing local authorities to be more selective. However, 77 per cent of the homes are now judged as excellent or good compared to 71 per cent in March - even though the group's cash profit margin remained static on the year at 31 per cent. Capital spending reached £46.9m and the group's upgrade programme means that an extra £10m a year in capital spending is expected for the next two years - about £800 a bed. That's designed to boost the quality rating to about 80 per cent of homes judged good or excellent.
Southern's past rate of expansion has left it with £46.5m of freehold property to sell, although management says these will be held until the market firms up. Writedowns on these assets reached £7.7m.
UBS expects adjusted EPS of 19.7p for 2010 (17.8p in 2009).
SOUTHERN CROSS HEALTHCARE (SCHE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 120p | MARKET VALUE: | £226m | |
| TOUCH: | 120-120.5p | 12-MONTH HIGH: | 153p | LOW: 70p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 46p | NET DEBT: | 37% | |
| Year to 27 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005** | 188 | -2.40 | -0.05 | nil |
| 2006 | 611 | -17.4 | -9.35 | 1.10 |
| 2007 | 732 | 3.00 | 0.96 | 7.50 |
| 2008 | 889 | -22.9 | -9.57 | 3.75 |
| 2009 | 937 | -19.8 | -11.7 | nil |
| % change | +5 | - | - | - |
Ex-div:- Payment:- *Includes intangible assets of £219m, or 117p a share **28 weeks | ||||
