Carehomesgrowth fund boosted by extra pounds 100m.

Byline: Helen Logan

Care homes operator Southern Cross has added pounds 100m to its pounds 200m war chest for more acquisitions and expansion as it looks to make good its pledge of expanding the business by at least 1,200 beds a year.

The Darlington company, which currently runs 585 homes with a total of more than 29,000 beds, said today it had arranged a further pounds 100m of credit to fund the expansion strategy.

Scotland and Northern Ireland have previously been pinpointed as areas ripe for growth for the plc, which floated on the London Stock Exchange last July in a process which raised pounds 423m.

Southern Cross said it was looking to fulfil its 1,200-beds-a-year expansion target by developing new and current homes and by acquiring groups of homes.

The company is already the UK's largest care home operator and recently expanded its estate with the pounds 18m purchase of four care homes in Yorkshire from United Healthcare.

South Cross said it has seen occupancy across its estate rise from 90.7% last April as more of its beds filled up over the summer.

Southern Cross said it had also seen increased occupancy at its Ashbourne business, which it bought last November, to levels in line with those in the rest of the group.

The back office integration of the Ashbourne business has also been completed.

Southern Cross chief executive Philip Scott said: "The second half of the financial year is traditionally stronger and we are pleased to see increased occupancy levels during the period, both in the Southern Cross and the Ashbourne homes.

"The care home sector in the UK remains an attractive market in which we continue to see good opportunities to expand and add to our portfolio."

At its flotation, Southern Cross said it expected to chalk up revenues of more than pounds 600m this year from its care homes for elderly people and those suffering from dementia or physical and learning disabilities.

The company provides services for most councils in the UK and for the NHS ( the two combined provide more than 70% of its income.

Southern Cross is to sell and lease back the freeholds on the United Healthcare homes using its committed landlord fund.

The company said this fund attracts competitive fixed rental yields, reflecting the quality of its covenant as a tenant and operator.

The company is due to reveal its results for the year to October 1 on December 11.