Social Care – A Market Perspective

David Potter – Director Manchester Healthcare

17th April 2013

Agenda

Social Care Market – Key Drivers

What our clients are saying?

Key Drivers of Appetite

Future Outlook

Social Care Market- Key Drivers

Private Fee/Top-ups

VsMarket

Pressure

Ageing Popultation,

Health & Social Care Bill

Proposals

Changing Dynamics of

Care

Rationing of Care to the

most needy

Home Care Vs

Care Home

The Social Care Bubble

Key Market Trends 2012

Source: Knight Frank Report 2012.

UK

Fees (pw)£616

Staff Costs 57.1%

Occupancy 87.9%

What our clients are saying?

Internal Analysis/Survey Conducted:

Occupancy

% Customers

Fee Level% Customers

LTV% Customers

<80% 5.3% <£600pw 74.6% <70% 86.5%

80-90% 29.0%£600-£700pw

12.6% 70-75%

7.5%

>90% 65.7% >£700pw 12.8% >75% 6.0%

September 2006

Critical Success Factors

• Strong management team (recognising and managing risk)• Good staff recruitment and retention policies• Strong inspection reports• Investment and re-investment in the business• Good relationships with Local Authorities• Niche/diversification (emerging markets/flexibility/recognising local dynamics)• Size

Experienced Care Home Operators

Reasons for Success

Purpose built care homes

Financials & Costs Excellent CQC Reports

Key Drivers of Appetite

• Asset Quality

• Supply & Demand

• Management

• Regulatory & Operational Strategy

• Staffing

• Fee mix

KPI’s

• Occupancy – and know your break even

• Average Weekly Fee

• Average Length of Stay

• Staff costs % turnover

• Maintenance Capex per bed

• EBITDA per bed

Specialist Care

• Asset Quality

• Complexity of need

Home care

• Working Capital

• Supported/Assisted Living models

Future Outlook

Increased Regulation

Inward Investment Required

Quality FocusTrip

Advisor

Growth in Boutique

Style Homes

Positive Demographics

LA Fee Pressures

Effective Planning &

Strategy

Cost optimisation

product & service

Do nothing!

Strategy

The Keys to Success

3 Q’s

Appendix