I am doubtful that this management team can walk (improve operational performance from existing sites) & chew gum (open green/brown field sites) at the same time. In my mind improving operational performance should come first then be leveraged for outcompeting others for new sites / expansion. "Lazy" management rely on doing it the other way round & get hit when there is a change in the external environment - e.g. drop in demand, increased competition & regulatory changes.
Personally I don't buy the influenza excuse for drop in occupancy in 2017. Were JHC homes unable to combat spread of influenza due to poor hygiene / operational procedures? Proactive waiting list management, accepting more residents for respite care & being first choice for new residents should have mitigated impact. When demand drops it should be the "worst" facilities that lose out first. I trust JHC doesn't fall into the worst category.
Overall there are a number of issues for this industry. First is demographics (aka aging population) are slow moving allowing time for competitors to grow with demand. On the cost side labour & food costs are very hard to disrupt - paying employees less & providing cheaper food will directly impact on customer experience & attractiveness of JHC to future residents. Reliance on government for revenue (aka subsidies) when government financial position is set to decline in line with aging population will further squeeze revenue. Finally there are a large number of not for profit players to compete against. All of these issues rely on JHC to be the best operator to win long term.
Lets hope the management team is capable of doing the hard yards now.
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