Renaissance Care sets sights on care home growth

A CARE home operator owned by industry veteran and serial entrepreneur Robert Kilgour has laid out plans to double in size in a move that will see it build three facilities to help meet the needs of an ageing population.

The expansion of Musselburgh-based Renaissance Care is also likely to involve the acquisition of a number of existing homes in the east of Scotland.

Kilgour founded and built up the Four Seasons Health Care business in the late 1980s and 1990s before stepping down in 1999, having created a UK-wide group with more than 100 care homes.

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Four Seasons is now the sector’s biggest player with some 500 properties, employing more than 30,000 staff.

Kilgour stressed that he was not setting out to create another industry heavyweight but planned to boost Renaissance’s seven-strong estate by constructing or acquiring at least two care homes a year over the next three years.

The firm has tripled its annual turnover to £9 million and doubled profits to £600,000 in the first year since taking over the running of four former Southern Cross Healthcare properties north of the Border. Its headcount has also tripled to more than 400 full and part-time staff, following the deal.

Southern Cross, which had been the UK’s biggest care home operator and was listed on the stock exchange, ran into crippling financial problems after it was unable to pay its rent bills to its landlords.

Kilgour said it was realistic to target a doubling of current turnover to £18m over the next three years, with profit pushing comfortably through £1m. A deal for the first additional care home is expected to be concluded by the end of the calendar year.

“Our three-year plan should see us doubling in size,” said Kilgour. “We are working on some new builds, though that tends to be a longer process. We would reckon to do three of those over the next three years.

“We are also receiving a steady stream of enquiries from care home landlords about whether we can take on and run their homes.”

He added: “It makes sense to build up in the two clusters we already operate in – around Edinburgh and Aberdeen. At some point we might look at a push west, but the timing would have to be right.”

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Kilgour, who owns more than 90 per cent of the business, said funding was “always an issue”. Much of the backing for the expansion drive will come from cashflow and personal investment from the founder.

“The current funding backdrop is tough and I don’t see that improving any time soon,” added Kilgour.

During the past year, the company has overseen landlord capital expenditure in excess of £500,000 to upgrade facilities at the four former Southern Cross homes – two of which are located in Aberdeen, with the others in Edinburgh and Forres.

It has also spent a further £100,000 upgrading its IT system and on recruiting a senior management team, which includes managing director Claire Docherty – previously head of Four Seasons Healthcare in Scotland.

Kilgour added: “The talented and hard-working staff we have taken on from Southern Cross have become a valuable asset for the company.”

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