Southern Cross, the troubled care home group, today reported a 18 per cent rise in revenue after raising the weekly fees it charges to its elderly patients.

The company said revenue for the 14 weeks to July 6 rose from £207.6 million to £245.6 million, while earnings before interest, tax, depreciation and amortisation (Ebitda) rose by 6.9 per cent to £24.4 million.

Over the period, Southern Cross's average weekly fee rose from £506 to £530.

In June, the healthcare group issued a profit warning and announced that it was seeking an extension to its loan facilities from its banks, which it has now secured until October 30.

Southern Cross also announced that its finance director, Jason Lock, had resigned and was replaced by Richard Midmer.

Mr Midmer worked with Bill Colvin, chief executive at Southern Cross, at NHP, another care home group.

Southern Cross's problems arose after a deal to sell the property assets of some care homes acquired with borrowed money fell through.

As the value of commercial property decreased due to the downturn, it became more difficult to sell the assets.

The company said this morning that it is in discussions with several potential purchasers of the assets, adding that "the board is encouraged by the progress made to date".

Shares in the company rose 3 per cent to 127.75p today, but are trading well below their peak of 599.5p of nine months ago.

Despite an ageing population, the care homes industry has suffered as a result of local authorities finding it cheaper to keep elderly people at home.

Average occupancy of Southern Cross homes was down to 89.2 per cent for the 14 weeks to July 6, compared with 89.6 per cent during the first half of the year.

Despite its problems in selling property, the company bought an additional 145 beds during the 14-week period and hopes to add another 304 by the end of the year.

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