Care home operator offers reassurance to Brighton and Hove residents and relatives

Britain’s biggest care home operator has said that it currently has no plans to sell or close either of its two homes in Brighton and Hove.

The future of Four Seasons homes has been the subject of speculation since a downgrade by the credit rating agency Standard and Poor’s (S&P).

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The agency said last week that the outlook was negative, citing poor earnings which are reliant on council and NHS funding which are also under pressure.

Four Seasons owns and operates two homes locally – Dane House, in Dyke Road Avenue, Brighton, and Bon Accord, in New Church Road Hove.

The company bought Bon Accord when Southern Cross collapsed four years ago.

Brighton and Hove City Council social care bosses said that they were aware of the credit rating agency’s report and added: “We have no immediate concerns but are making further inquiries.

“Neither Terra Firma (the ultimate owner), Four Seasons nor the CQC (Care Quality Commission) have informed us of any financial difficulties or raised any concerns.

“Dane House and Bon Accord are the only two home in the city which are owned and run by Terra Firma/Four Seasons.

“Thirty-six people are currently residing at Dane House and Bon Accord. Of these, 23 are funded by the council.”

S&P said: “We believe the UK-based health and social care provider Elli Investments, parent company of Four Seasons Health Care (FSHC), will continue to face a challenging operating environment in 2016.”

As a result of the group’s poor earnings potential, S&P said: “We view its capital structure as unsustainable over the short term.

“The negative outlook reflects our view that, in the absence of material disposals, FSHC will face a liquidity deficit in the next six months as a result of the pace of cash consumption.

S&P also said: “FSHC relies on public funding in the UK as the majority of revenues are derived from reimbursement by local authorities and the NHS, both of which remain under substantial pressure to realise cost savings amid the government’s deficit-cutting measures.

“We do not expect any significant improvement in fee rates for 2016 and believe any increases will continue to lag cost inflation, characterised by rising staff costs as a result of regulatory scrutiny, upward revisions to the national minimum wage and a shortage of qualified nurses throughout the sector.”

Four Seasons said: “We are confident that we have sufficient medium-term financial flexibility for our needs and we have appointed advisers to help us to conduct a review to improve that flexibility.

“We have said on numerous occasions over recent years that the group is disposing of non-core properties that do not fit its long-term strategy. This is not a new development.

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“The possible disposals include homes in a portfolio of investment properties that we do not operate and are simply the landlord, so residents are already being cared for by another provider.”

A spokesman pointed out that the sale of an “investment property” would simply mean a change of landlord, not a change of care provider.

“Across the UK, in the event of a sale of any home as a going concern, the staff would transfer under TUPE provisions to the new owner and so residents would continue to be cared for by the people who are looking after them now.”