A report by the UK care home chain owned by three Irish billionaires has described lower occupancy rates due to a higher than normal death rate last Spring from Covid-19 as an "adverse head wind" in the business's outlook. 

The UK-based Barchester Healthcare is owned by Dermot Desmond, JP McManus and John Magnier.

New accounts show that pre-tax profits at the group last year increased by 25.5 % to £21.78m (€24.11m). 

This followed revenues increasing by 6% from £621.26m to £657.6m last year. 

The group's earnings before interest, depreciation, tax, amortisation and rent (EBITDAR) last year totalled £195.9m compared to £185.1m in 2018. 

The group is amongst the top four long term care providers in the UK with 12,000 registered beds. The largest proportion of its sites are in London and the south-east of England. 

Chairman John Coleman said that: "Unfortunately, the global coronavirus pandemic had a dramatic effect during 2020 and occupancy was reduced both due to a higher than normal death rate in Spring and reduced admissions." 

"The group has performed well despite these adverse head winds due to a strong balance sheet with good cash reserves", Mr Coleman added. 

"In addition, good operational control and delaying capital investment projects has further preserved cash," he stated. 

This is repeated in the directors' Strategic Report elsewhere in the accounts and signed off by Chief Financial Officer, Dr Mark Hazlewood on behalf of the board. 

Mr Coleman said that "the Covid-19 pandemic has had an impact on the cash position of the group mainly through a drop in revenue as sadly occupancy fell sharply in April due to an increase in the number of deaths and new admissions were also reduced." 

"Additional infection control costs have been incurred such as wearing sessional masks and additional cleaning in communal areas," he added. 

"At all times during the crisis, the business has remained cash generative and has paid all suppliers, interest payments, taxes and any rent due to landlords on time," he stated. 

The accounts were only recently lodged with Companies House in the UK but were signed off in September.

Mr Coleman stated that on the date of the accounts "the business has almost eradicated the virus from its facilities and occupancy is growing with death rates returning to normal levels and the number of new admissions increasing".

He also said that the business "is very prepared for a second spike of the virus and therefore any further impact is expected to be much less severe than was seen earlier in the year".

Mr Coleman pointed out that labour costs increased due to a large increase in sick pay, adding that sickness pay rates were augmented by the company to help employees financially.

Mr Coleman stated that the large rise in sick pay was due to regulations on self isolation for staff with symptoms. 

The chairman said that the pressures on cash at the group were mitigated by a series of actions that included a reduction in agency staff and capital expenditure which were primarily infection control measures.

Mr Coleman said the revenue increase last year was underpinned by higher fee rates and improved occupancy year-on-year. 

Numbers employed by the group last year increased from 15,754 to 15,813 as staff costs rose from £323.16m to £341.7m. 

Pay to directors last year totalled £3.4m with pay to the highest paid director more than doubling from £915,000 to £2m. 

Shareholder funds totalled £147.93m that included accumulated profits of £128.19m. 

The business was put up for sale with a reported price tag of £2.5 billion in 2018. 

However, early last year Australian infrastructure bank Macquarie pulled out of a deal to purchase Barchester blaming the uncertainty caused by Brexit.