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Irish nursing home groups rack up losses after wave of overseas takeovers

Four of the five largest providers in the State are foreign owned

Fourteen large for-profit nursing home groups are responsible for 38% of long-term residential care beds in the State. Photograph: iStock

Joe Brennan
Fri Jan 26 2024 - 05:09

The largest overseas-owned Irish nursing home groups in the State were loss-making between 2021 and 2022, hit by rising running and finance costs following a wave of takeover deals carried out in an era of ultra-low interest rates.

An Economic and Social Research Institute (ESRI) report published this month highlighted that 14 for-profit nursing home groups, mainly owned by foreign operators and private equity firms, are now responsible for 38 per cent of the almost 32,000 long-term residential care beds in the State.

Four of the five largest providers in the State are now foreign-owned. Each of these racked up losses between 2021 and 2022, according to the latest sets of accounts filed by key companies with the Companies Registration Office (CRO).

French nursing homes group Orpea, which entered the Irish market in 2020 through the €150 million takeover of the TLC Nursing Home portfolio and followed up with the purchases of the Brindley Healthcare care home group and FirstCare, saw its Irish unit accumulate almost €153 million of losses over the two years.

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Orpea Residence Ireland, the largest private operator in the sector, with 2,149 beds spread across 24 homes, attributed most of the losses in its latest set of accounts to the writing down of goodwill associated with peak-of-market acquisitions.

Still, the company, which plans to add a further 231 beds this year with the completion of two new developments, remained profitable on earnings before interest, tax, depreciation and amortisation throughout the period. This was helped by the fact that, unlike several operators that entered the market in recent times, it owns most of its properties, except for four that are held by Paris-based property investment company Primonial Reim.

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A holding company over the Republic’s third-largest nursing home group and second-largest overseas-owned player, CareChoice, said in its 2022 financial statement that it had to rely on a €19 million cash injection from its French parent as it posted losses.

CareChoice Holdings Ltd, owned by Paris-based InfraVia Capital Partners in 2017, posted combined net losses for 2021 and 2022 of €27.3 million. It also had €266.2 million of mainly bank and group company loans at the end of 2022 — leaving it with €37.4 million more liabilities than assets.

The company took aim in its latest report at the National Treatment Purchase Fund, which runs the Fair Deal scheme that pays for much of the costs of residential care, for being “unwilling to agree to sustainable rates”, leaving private operators “chronically underfunded” as public sector homes enjoyed higher rates. The ESRI report said the average State payments a week per bed in a public nursing home amounted to €1,670 in 2022 — 55 per cent more than the €1,075 average Fair Deal payment in private and voluntary homes.

Virtue is the fourth-largest operator, with 1,300 beds. The latest financial report for VIEC Holdings, a parent company, shows its pretax loss widened to €2.45 million in 2022 from €1.49 million in 2021, even as turnover more than doubled to €104 million. French-based elderly care specialist Emera Group, which owns 70 per cent of Virtue, is exploring a sale of its stake.

French care home group DomusVi, the fifth main operator, made its entry in January 2021 by acquiring Trinity Care, then a business comprising six nursing homes and a rehabilitee clinic that was majority owned by businesswoman Anne Heraty and her husband Paul Carroll. Its Irish unit reported a total of €7.14 million of losses for its first two years in the market.

The only Irish-owned player among the top five, Mowlam Healthcare, controlled by Dublin-based Cardinal Capital Group, is an unlimited company and does not publish its financial results.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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