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Southern Cross - Could eliminate debt

March 2009

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • SCHE
  • Price:
  • 87p
Shares in the UK's largest care home operator, Southern Cross, which now has 37,575 beds across 734 homes, reacted positively to its Q1 statement, which mentioned a surprise £25m reduction in net debt since the year end. This was driven by a £16.9m tax rebate and £4.8m of property disposals. This meant that period net debt as at 12 February was down to £73.9m.  Aside from reducing net debt, the statement also included a number of operational key metrics. The average occupancy across mature and immature homes was down 90 basis points to 89.8% mainly due to the impact of the flu virus in November/December. That decline in occupancy appears to be only a small percentage decline but with each resident worth around £28 ...

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Related Articles

Southern Cross (September 2009)
Southern Cross - Rapidly paying down debt (June 2009)
Southern Cross - Sale and leaseback of 16 homes (September 2008)
Southern Cross Healthcare - IMS later this month (August 2008)

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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