Queensland aged care provider PresCare has announced it is selling its seven aged care facilities and exiting the residential care sector due to the significant capital investment required to remain.
The sector can except to see more aged care facilities up for sale in line with the ongoing erosion of financial viability, an industry consultant tells Australian Ageing Agenda.
PresCare, which commenced operations in 1929, is part of the ministry of the Presbyterian Church of Queensland.
The organisation has commenced a formal sales process for its six operating residential aged care facilities and a seventh facility, which has been built but not yet in use.
There are approximately 600 licensed beds across the six operating facilities and some independent living units.
PresCare has decided to exit residential aged care sector following a careful review, said CEO Wayne Knapp said.
“The ongoing capital required to be invested by providers is significant,” Mr Knapp said.
“It has been determined it would be better to redirect the church’s resources to a broader range of ministry rather than the current concentration of PresCare’s aged care operations.
“Therefore, the facilities will be sold to suitably qualified and resourced alternative operators,” he said.
A part of any sale agreement, PresCare will seek to ensure existing residents can remain in place where possible and employees are given the opportunity to transfer to the new owner, Mr Knapp said.
Providers focused on sustaining current operations
Bruce Bailey, who is managing director of aged care consultancy Pride Living, said many providers were considering exiting the industry.
“It is unsurprising that anyone involved in residential aged care is seriously considering their future in the sector,” Mr Bailey told AAA.
“For some they’re committed at their current levels, but not prepared to commit any further capital.”
Many providers are focusing on sustaining their current operations, however very few are prepared to take on new facilities, Mr Bailey said.
“There are a lot of people who are actively considering whether they will get out of the industry, and that comes down to the continual erosion of financial viability and the continual increased risk of non-compliance and the consequences that go with it,” he said.
Mr Bailey said he expects to see more aged care facilities up for sale in the future.
“We’re actively working with a number of providers who are considering exiting the industry,” Mr Bailey said.
It is well known that the aged care sector is in significant trouble, he said.
“The real question is, will the royal commission and its findings facilitate the change that is required in a timely manner to prevent a broader collapse of the sector, particularly in light of COVID and its implications?” he said.
“History has shown that policy change is very slow and there is a risk… that the findings of the royal commission won’t get implemented soon enough and we’ll just see a lot of providers become insolvent and become unable to operate,” he said.
PreseCare has appointed chartered accounting firm McGrathNicol Advisory to manage the sale of the facilities, which include:
- Alexandra Gardens in Rockhampton
- Groundwater Lodge in Maryborough
- Yaralla Placce in Maryborough
- Protea by PresCare in Townsville
- Vela in Carina
- Lake Sherrin in Thornlands
- the non-operational WR Black facility in Cordina.
Have we missed a merger or acquisition? Send us the details and an image to firstname.lastname@example.org