From Distress to Success

Chris Newell, Managing Director at business advisory firm Quantuma, advises on how best to address any financial issues and stabilise your care home.

Pandemic or not, running a care home is incredibly difficult. Providers have to strike an ethically difficult balance between providing the best care possible to residents and operating as a profitable business so they can continue delivering this level of care.

The sector is very capital intensive, which means that constant investment is needed – not just for the care of residents, but also for key things such as ongoing maintenance of the premises, which ensures that the care home is able to keep its residents safe and secure.

When you couple this with a global pandemic – which threatens the very health of your residents and requires significant investment to protect them – it’s no wonder that many care homes have found themselves in a difficult financial position over the last year.

In fact, healthcare analyst LaingBuisson has predicted that one in ten of the UK's 10,000 care homes are at risk of going bust in the wake of the COVID-19 pandemic. So, what can you do if you’re facing financial difficulties?

When you’re at risk of closure, it can be incredibly hard to see the light at the end of the tunnel, but seeking support and advice as early as possible is paramount.

In cases where all further funding avenues have been exhausted, there are several options available for businesses in distress. The first being a company voluntary arrangement (CVA), which is an agreement between a business and creditors to repay debts over a fixed period of time. This oſten gives companies the opportunity and time needed to address any operational or management issues, along with getting their finances in line.

Another option is a trading administration. This allows a business to continue trading while an administrator secures funding to maintain the business while they seek out a suitable buyer. Continuity of care is crucial in this sector, making this option particularly favourable as it keeps the goodwill alive and ensures the residents’ care remains unaffected during this process.


HOME A recent success we’ve been part of in the care home sector is the sale of Caerleon House Nursing Home, following

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our appointment as administrators in August 2019. Our responsibility was to stabilise the business, make money again and build up income to make the business attractive to a suitable buyer.

While all this was happening, we were also working on the ground with stakeholders, staff, residents and their families to ensure the care provided wasn’t compromised during this period. 14 months on and, despite the COVID-19 pandemic, we secured the sale of Caerleon House Nursing Home to Bal and Bindu Brainch, who also own Pentwyn House Nursing Home in Marshfield, Cardiff.

"Healthcare analyst LaingBuisson has

predicted that one in

ten of the UK's 10,000 care homes are at risk of going bust in the

wake of the COVID-19 pandemic."


TIMES The road ahead is still very much unclear, as the UK continues to battle with rising cases of COVID-19 and care homes work tirelessly to ensure their residents remain safe and secure.

But one thing that businesses across the sector should remember is that advice and support can be sought. And the sooner this is found, the better, so you can stabilise your business and continue providing much-needed care and protection for some of the most vulnerable people in our society.


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