Care UK fearful of what the future may hold

Linda J. Dodson

Accounts for the year ending September 2019, published last week, show Care UK made sales of £352.7m and a pre-tax loss of £61m, with finance expenses of £61.7m.

Directors said occupancy improved between July and September, but were still below pre-Covid levels. They have prepared financial forecasts out to the end of September 2023 on the basis of occupancy returning to pre-Covid levels by August next year and strict management of labour costs. But they said that, if occupancy fell below base case by a “not unreasonable amount”, then banking covenants could be breached.

A Care UK spokesman said the material uncertainty clause was “not unusual” and was down to accounting requirements to reflect operating conditions. Andrew Knight, chief executive of Care UK, said the group had incurred extra costs of about £2m due to coronavirus, but was “financially well-positioned” to operate through the pandemic and was “confident in the long-term future of our company”.

He added: “This, coupled with the experience we have gained from operating over the past six months, will ensure we build an even stronger business for the future.

“A number of our homes are still performing extremely well and we are continuing with plans to open several new homes over the coming months and years.”

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