Southern Cross 1Q income rises

By Anastasia Tomazhenkova: An independent provider of health and social care services Southern Cross Healthcare Group Plc announced that first-quarter income surged 61% as the company boosted bed capacity, and added that an aging UK population means demand for care services will remain strong.

Photo: Southern Cross 1Q income rises

The company, which derives 70% of its revenues by providing care services on behalf of most UK local authorities, said demographic trends suggest many thousands of new long-term care beds were needed over the next 25 years to meet growing demand.

Adjusted earnings before interest, income taxes and depreciation and amortization increased to 18.2 million pounds (35.8 million dollars) in the 16 weeks ended January 20 from a year earlier, the Darlington, England-based company said in a statement today.

The group, which at January 20 operated 715 care homes with 36,401 beds for the elderly and people with disabilities, reported a 29.6% rise in first-quarter revenue to 262.6 million pounds (514.1 million dollars) from 202.6 million in 2007.

"Trading remains strong and in line with our expectations, and we are pleased with the outcome during this seasonally affected period," the company said in a statement. The company said they opened one new development in Windsor, adding 68 beds, and expect to open a further 13 facilities with 700 beds by the end of the current financial year.

"We have agreements in place for the development of a further 1,400 new beds to be delivered by September 2009," the company said.

Shares in the company were up 2.9% at 379 pence at 08:30 GMT, valuing Southern Cross at around 713 million pounds (1.4 billion dollars).