Covid 'net effect' costs aged care provider $1M to June

A local aged care provider has reported that the coronavirus has cost it at least one million until June alone.

Peninsula Villages' annual report, to June 30 this year, has attributed expenses of more than one million dollars to the "Covid-19 net effect".

While reporting an operating surplus of $1.38 million on a turnover of $27.8 million, the surplus would have been $2.41 million without coronavirus, the financial statement showed.

This compares to an operating surplus of $2.27 million on a turnover of $26.8 million last financial year.

The Villages' assets were reported to have increased by $10 million, from $119 million last year to $129 million this year.

However, after liabilities, the net assets increased by $1.38 million, equivalent to the surplus for the year.

Villages' treasurer Mr Daniel Smith said: "The organisation has reported a healthy asset and cash position, while progressing with the key strategy of improving the quality of the facilities, including the recent completion of new residential aged care facility, Pozieres House.

"During the year, $28.4m was committed to our new facility, Pozieres House and improvements to existing facilities throughout the Village and our seniors living.

"Cash reserves held reduced throughout the year to fund the improvements.

"However, cash reserves held exceed the forecasted requirements, keeping Peninsula Villages in a healthy financial position.

"Positive cash flow was achieved through operational activities, as well as through financing activities, a great achievement in an environment where the profitability of the aged care sector has been in continual decline over recent years.

"Industry trends highlight a trend toward DAP's instead of RAD's resulting in cash flow issues associated with many operators within the industry.

"I note that the strong asset position of Peninsula Villages is solely due to the Bonds and Residential Aged Care Deposits (RAD's) held on behalf of the residents, which totaled $67m as at 30 June 2020.

"There are strict regulations restricting the use of these deposits, to ensure that these funds cannot be used to fund the operations of the Village, and can only be invested, or used to improve and maintain the facilities," Mr Smith said.

SOURCE:

Website, 22 Oct 2020

Daniel Smith, Peninsula Village