Loss-making home care firm HC-One pays £1.8m dividend to private equity owners

Britain’s biggest nursing home chain paid out a £1.8m dividend to private equity owners last year, despite losses widening to £83m.

HC-One, which serves more than 14,000 residents in 321 homes under the Kind Care Company brand, has increased its average weekly charge by £22 to £792 in the year to September 2021.

The average resident pays more than £41,000 a year – most of it with help from the local authority. But losses still widened to £83m from £68m a year earlier.

HC-One, which serves more than 14,000 residents in 321 homes under the Kind Care Company brand, paid out a £1.8m dividend to its private equity owners last year

Despite slipping further into the red, HC-One forked out £592,000 for its highest-paid director – almost double the £332,000 handed out a year earlier.

The package is believed to have gone to chief executive James Tugendhat – a cousin of Tom Tugendhat, the MP who is running to be the next Tory leader – although HC-One does not disclose the recipient in its accounts.

Tugendhat took over the reins of HC-One in 2020 from Sir David Behan, who became executive chairman following the departure of boss Justin Hutchence.

HC-One said the £332,000 paid a year earlier was not comparable because it was not for a full year of service.

Hutchence was paid £809,000 in 2019, up from £469,000 the year before. But HC-One also paid out £1.8m in dividends to its backers in the year to September 2021.

Its majority owner is the American private investment company Safanad. Investment company Court Cavendish and another private company, Formation Capital, own minority stakes.

Former Tory Work and Pensions Secretary Baroness Altman said: “It is astonishing that a company that is making huge losses in an industry that is responsible for the lives of some of the most vulnerable and frail people in our society should be taking money offshore when the sector is in crisis.

There must be a risk that some elderly people may lose their homes if the company is forced to either close the homes or restructure in some way.’

A spokesman for HC-One said: “We have not paid cash dividends to shareholders since 2017.”

The £1.8m payment was an “inter-company transfer” used to “repay a previous loan”, the spokesman added.

HC-One said its results for the year were hampered by a fall in occupancy as nursing homes slowed admissions during the “second peak” of Covid from January to March 2021.

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