Four Seasons Health Care

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Four Seasons Health Care
Industry Healthcare
Headquarters United Kingdom
Number of locations
440

Four Seasons Health Care is an independent British provider of health and social care services. It owns The Huntercombe Group, a provider of inpatient mental healthcare and brain injury rehabilitation. Four Seasons, as it is today, was created by buying out smaller chains of care homes and rebranding them, as evidenced by the takeovers of Tamaris (formerly Quality Care Homes) and Bettercare.

Expansion[edit]

Up until 1997 Four Seasons was a small operator working only in Scotland. The fortunes of the business were changed with the appointment of Hamilton Anstead as Chief Executive Officer. There followed a rapid expansion programme for the business which transformed it within seven years into the largest care home operator in the UK (it was subsequently overtaken). The business was attractive to many suitors and as a result it was sold for £775 million in 2004. Anstead ceased to be CEO in 2005.

The company was acquired in 2006 by Three Delta LLP, the investment fund backed by the state of Qatar, and further expanded. The acquisition was funded by debt which was readily available in a market where investors saw rising property prices and continuing demand for care for the elderly, much of it paid for by the public sector. However, the company was unable to pay its debts and with a downturn in the property markets was unable to refinance and the owners walked away, losing their investment.

Peter Calveley was appointed CEO in 2007 and his senior management team were left to resolve debts of circa £1.5 billion as a result of borrowings by its owners to buy the homes.

The Group completed a financial restructuring in December 2009, with lenders – banks and other financial institutions – agreeing to swap about £780 million debt for equity in the business, so becoming its new shareholders. Maturity of the remaining debt was extended to September 2012. Four Seasons was then trading profitably. Under Calveley’s leadership the quality of care performance changed from below sector average, to having 89% of its homes rated as good or excellent by the Care Quality Commission.

Specialist care[edit]

This turnaround in quality helped to drive up occupancy to levels of circa 88%. Another factor in the Group’s performance was Calveley’s strategy of anticipating market changes in order to provide specialist care. Four Seasons has 80% nursing or high dependency beds and 20% residential in contrast to the sector average of 55% residential. It developed services for people who are physically frail or suffering from the onset of dementia, chronic neurological conditions, respite care, intermediate care and rehabilitation, terminal care. Because there are few readily available alternatives for high dependency care – such as care provision at home – the market for higher dependency care is more resilient than the market for residential care.

Acquisitions[edit]

As of July 2011 the Group had achieved substantial expansion without new borrowings, by acquiring the operations of Care Principles with 17 hospitals and homes – nearly doubling the size of FSHC’s specialist care business and 1,000 additional care home places (c. 6% growth) through acquisitions over the preceding year from Craegmoor and Eton Square Healthcare. As of September 2011 the group was expected to acquire over 100 care homes from the collapsed provider Southern Cross, which would make it the largest provider in the UK.[1] These include 54 owned by Loyd's Property.[2]

In 2012 the company was bought by Terra Firma Capital Partners for £825 million. It has three divisions: brighterkind with 80 private pay-focused care homes; Four Seasons which has around 350 homes; and The Huntercombe Group with around 40 specialist mental health facilities.

Liquidity problems[edit]

In November 2015 the company planned to sell 14 care homes as going concerns, and "a portfolio of homes currently run by third party operators" to assist its liquidity problems, hoping to raise £60 million. It has £500 million worth of debt, with annual interest and rent obligations of about £110 million.[3] It later announced plans to close seven homes in Northern Ireland: Victoria Park and Stormont in Belfast; Antrim; Garvagh; Donaghcloney near Banbridge; Oakridge in Ballynahinch, County Down; Hamilton Court in Armagh.[4]

In December 2015 it was reported that the company had sold £20 million worth of properties to Monarch Alternative Capital, a US investment fund which claims to specialise in swooping on “distressed and bankrupt” companies.[5]

In April 2016 it reported a 39% drop in profits which was blamed on the cuts in the local government social care budget and the introduction of the UK living wage, although its average weekly care fees rose by 3.4 per cent. The company has net debt of £510 million, because Terra Firma borrowed heavily to fund the purchase in 2012. The business has to find annual interest payments of about £50 million. Earnings before interest, tax, debt and amortisation fell from £64.1 million in 2014 to £38.7 million in 2015. Its property portfolio has been revalued down by £224 million to £505 million and its credit rating has plummeted.[6]

References[edit]

  1. ^ Wachman, Richard (4 September 2011). "Four Seasons to take Southern Cross's mantle as biggest care homes operator". The Guardian. Retrieved 6 September 2011. 
  2. ^ Southern Cross wins new rent reprieve worth £18m, This is Money, 4 September 2011
  3. ^ "Four Seasons appoints advisors to sell assets worth £60m". Health Investor. 6 November 2015. Retrieved 12 November 2015. 
  4. ^ "UK's biggest care home provider shuts loss-making homes". Guardian. 24 November 2015. Retrieved 24 November 2015. 
  5. ^ "UK's biggest care home operator sells £20m of assets to US hedge fund". Independent. 27 December 2015. Retrieved 28 December 2015. 
  6. ^ "Care home owner blames living wage for debt talks". The Times. 28 April 2016. Retrieved 3 May 2016. 

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