CONCLUSION NURSING AND PERSONAL CARE
Our latest KPIs show a contrasting picture across the elderly care sector, with a mixed year for personal care and an overall positive picture for nursing care. This contrasts with the broadly negative pattern witnessed last year.
The personal care sector has continued to come under pressure this year. Occupancy levels have remained static, but fees have shown signs of good growth both in real and nominal terms. Overall, this suggests a positive trend across the year for notional ‘total income’ levels. Wage costs have continued to increase, albeit at a slightly lower rate than seen last year and whilst there has been a reduction in non-payroll costs, the overall picture has seen a fall in terms of profitability of 0.7 percentage points, to stand at 30.1%. Whilst rising income levels appear to have created a positive picture for overall profitability in actual terms, this remains a sector to monitor.
The nursing sector has experienced a strong year, with all KPIs seeing positive changes. Whilst the increase in occupancy levels was modest, fee growth was the strongest of all three sectors, driving up income levels. Wage costs have adjusted downwards, eliminating the increase noted last year and there has been a significant reduction in non-payroll costs. Overall, profitability has increased to 29.3% suggesting strong growth in profitability in actual terms.
SPECIALIST CARE
Recently, the specialist sector has generally experienced some challenges although this year, the picture is a little more positive.
Whilst occupancy levels have again seen a small increase, fee growth has lagged behind the elderly sector and after allowing for inflation, there has been a decline in fees in real terms. Wage costs have remained static over the year and in line with the elderly sector, non-payroll costs have fallen, driving EBITDAR levels up 0.8 percentage points to 29.9%. The sector actually broke through the 30% threshold in H2 2017, a level not seen since 2014.
COLLIERS INTERNATIONAL
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