EMBATTLED care homes operator Southern Cross yesterday said it hopes to turn its fortunes around, despite revealing a £311m half-year loss.
The UK’s largest care homes provider has been squeezed by a fall in the number of patients placed by local authorities and a real terms cut in fees, due to public sector austerity.
Revenues at the Darlington-based business slipped to £464m in the six months to 31 March, down 3.4 per cent on the same period a year earlier.
Southern Cross can no longer afford to pay full rent at its 750 homes and is in talks with landlords over a possible reduction in rates.
Accountant KPMG, financial adviser Greenhill and lawyer Clifford Chance have been brought in to assist in its discussions.
The firm also revealed it had plunged a further £13.5m into its £50m bank borrowing facility in the six months to 31 March, taking it to £21m in debt.
However, creditors Lloyds and Barclays have agreed to waive tests on its banking covenants until the end of June, buying time for the company.
“Southern Cross is now in a critical financial position and cannot afford to meet its future rent obligations in full,” said chairman Christopher Fisher.