Investors unimpressed by downbeat update from care firm Southern Cross

EARNINGS at care home group Southern Cross fell nine per cent in its third quarter, the firm said yesterday, after room occupancy dipped 2.3 per cent.<br /><br />The group posted adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of &pound;22.4m, against &pound;24.4m a year earlier, on revenue of &pound;254.8m, up 3.7 per cent.<br /><br />The company said the average occupancy of its mature portfolio was 87.5 per cent, down from 89.8 per cent a year ago, but it rose by 0.6 percentage points between the start of the third quarter and 5 July.<br /><br />&ldquo;While the group is benefiting from the expected seasonal increases in occupancy, management continues to take action to address the overall shortfall. Since the end of the period, mature occupancy has continued to increase and now stands at 88.4 per cent, as at 7 August&rdquo;, the firm said. <br /><br />&ldquo;It is expected that the trend in occupancy levels for the remainder of the year will continue to follow a similar, improving pattern to last year,&rdquo; it added.<br /><br />Meanwhile, the company increased its weekly fees by 4.9 per cent, which will see its care home occupants paying an average of &pound;556 a week.<br /><br />Southern Cross said it would continue to focus on occupancy and service quality. <br /><br />The shares closed six per cent down at 140.25p.