Profits to fall at Meridian as fee cuts bite
MERIDIAN Healthcare, which owns and operates 30 care homes in Yorkshire and the North West, will see profits fall by up to £3m over the next two years, its chairman has said.
Alan Firth said the projected reduction would be a consequence of the business being forced to take fee cuts by some local authorities it provides services to.
Alan Firth said trading conditions in the care sector were “extremely tough” as a result of the cuts in fees and client placements certain local authorities are imposing on it.
Meridian Healthcare provides care and accommodation for frail, vulnerable and elderly clients.
Mr Firth said: “We always reinvest the bulk of what we make in profits back into the business so, if we make less profits, which is certain over the next two years, we will not be able to invest further in opening new facilities.
“Our focus instead will be on debt reduction and maintaining the high standards of service and accommodation our clients expect in our existing stock.”
Mr Firth, who runs Meridian with his wife Susan, said the company had been most affected by fee and placement cuts in the Tameside local authority area, where 14 out of its 30 care homes (704 out of a total of 1473 single bedrooms) are located.
In the year to the end of March 2012 Meridian Healthcare Holdings saw occupancy levels of 94%, down from 96% in 2011. Occupancy levels throughout 2012 saw a further decrease to around 89%.
Profits fell in the year ended 2012 fell from £7.4m to £6.6m despite turnover marginally increasing from £31.9m to £32.8m.
