Pretax profit at nursing home group owned by three Irish billionaires soars

Pretax profit at the UK nursing home group owned by three Irish billionaires increased sevenfold to £31.84 million (€36.67 million) last year.

Accounts filed by Barchester Healthcare Ltd show the business recorded the sharp rise in pretax profit as revenue increased by £90.9 million or 13.4 per cent from £675.9 million to £766.76 million (€883.23 million).

The group is co-owned by three of the State’s most prominent businessmen, JP McManus, John Magnier and Dermot Desmond.

Barchester is the UK’s second-largest nursing home operator and provides 14,072 registered beds across its portfolio of 215 registered services with the largest proportion located within London and the southeast of England.

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The pretax profit of £31.84 million follow a pretax profit of £4.06 million for 2021 – an increase of 684 per cent.

Numbers employed at the group declined from 14,962 to 14,947 last year.

In his report, chairman John Coleman said the group “traded strongly throughout 2022 and life in our services returned to normality following the Covid-19 pandemic”.

“Enquiries for places in the care homes and hospitals were in excess of pre-pandemic levels and occupancy levels increased levels increased steadily from April onwards,” he said.

The separate directors’ report said the increase in revenues “was driven by an increase in occupancy and fee rate inflation”.

The group’s earnings before interest tax depreciation amortisation and rent (ebitdar) last year increased from £216.8 million to £239.6 million. It recorded an operating profit of £64.17 million and interest charges of £32.32 million reduced profits to a pretax profit of £31.84 million.

The group benefited from £16.68 million in ‘other operating income’ made up of Government grants that included £14.4 million from the State Infection Control Fund and £2.3 million in local Covid support.

The directors said the larger Covid-19-related costs that the group incurred during the year included £16.1 million for agency workers and recruitment to maintain staff rotas, £4.5 million in sick pay and £2.5 million in personal protective equipment (PPE).

The group last year recorded a post-tax profit of £21.9 million after incurring a corporation tax charge of £9.93 million.

Staff costs last year increased by £5 million to £395 million. Directors’ pay increased by £1 million to £2.97 million. Pay for highest-paid director almost doubled from £898,000 to £1.73 million.

The profits also take account of operating lease expenses of £131.48 million.

At the end of December last, shareholder funds totalled £202.37 million which included accumulated profits of £182.63 million. Cash funds declined marginally from £25.54 million to £24.25 million.