Partner Article

Southern Cross takes care of business

BRITAIN’S largest care home operator Southern Cross today said it aims to focus on making its business more efficient amid ongoing cuts in public spending.

The Darlington firm saw its pre-tax loss widen to £22.9m, compared to £12.5m a year ago, while revenue increased 4.3% to £480.7m in the period.

Meanwhile, average occupancy in mature estates dropped from 88% in the first half of 2009 to 86.9% this year.

As what will be a coalition government prepares to make vast cutbacks in spending on public services and infrastructure, Southern Cross has vowed to steel itself for the tight operating conditions that lie in wait.

The company’s ‘new horizons’ programme is a strategy to “re-engineer our delivery of care so that our homes and the communities they serve are placed at the heart of everything we do thereby bringing clarity, focus and operational efficiency to a business where these things were previously lacking.”

It involves cutting running costs by 1%, increasing the proportion of self-funded residents from 18% to 22% and reducing the turnover of home managers.

The group aims to use this strategy as it looks to navigate through the coming months unscathed.

Chief executive Jamie Buchan said: _“_Southern Cross has made good progress with the New Horizons business transformation programme which we believe is necessary to improve operating efficiency and capture the economies of scale available to the business.

“However, we are operating within a challenging environment featuring a combination of public sector funding restraint and significant disparity in the commissioning practices of local authority budget holders.

“Given this backdrop, the successful delivery of New Horizons becomes even more imperative as we set about extracting increased value from within our core operations. By the end of 2011, Southern Cross will be a materially better operational business with an improved brand reputation.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .