Southern Cross shares go south

Shares in care homes group Southern Cross crashed 85% at one point today as it issued a profits warning and admitted it had had to ask its banks for an extra month to pay back a £46 million loan.

It also announced the departure of finance director Jason Lock who was only appointed in March.

Southern's shares tanked in early trading, falling to a record low of just 473/4p before rallying somewhat, but still 207p down at 106p. That values the company at an all-time low of less than £200 million.

Southern said the £46 million it was due to have repaid today was to have been covered by property sales, but these had not gone through yet, although the company has received indicative offers on some of them. It hopes to sell some or all of these assets or amend its loans with the banks by the end of next month.

On the trading side, the group said it suffered lower occupancy than expected in its third quarter, mainly because of delays in funding from central Government to local authorities. It also blamed "higher than normal attrition rates" - deaths, in other words.

Headline earnings are unlikely to be more than £80 million, £9 million less than forecasts.