Realist, not conformist analysis of the latest financial, business and political news

The Guardian Doesn’t Really Understand The Concept Of Profit, Does It?

The Guardian’s inability to get this concept of profit is somewhat puzzling. Sure, they’re the standard issue lefties – rather the definition of them – but given that this perfectly describes the manner in which Guardian Media Group itself operates they should be able to get this. Yet, clearly, they don’t.

The background is that people running care homes make a profit. Worse, some of those care homes aren’t very good, yet the people running the not very good care homes make a profit. Naughty capitalism!

Well, yes and no, yes and no:

Some of the country’s worst care homes are owned by companies that have made a total profit of £113m despite some of the vulnerable people they are supposed to look after being neglected, it can be revealed.

An investigation by the Guardian has found that companies owning homes that care for elderly people with dementia, disabled people and those with learning difficulties – and have been rated “inadequate”, the lowest possible rating by the Care Quality Commission – are turning over a healthy profit.

Tsk eh, tsk.

“It is simply unacceptable that both taxpayers and self-funders are collectively paying millions for the worst standards of care while the shareholders and directors of care home companies pocket enormous profits.”

Naughty. So, what is it that this investigation has revealed?

Mulberry Manor, a care home for elderly patients in Rotherham, South Yorkshire, is owned by Minster Care Management, which made a pre-tax profit of £41.6m in 2017. The company paid out dividends worth £44.2min the same year.

On its website, the company says it provides “an excellent standard of care 24 hours a day”.

However, inspectors placed Mulberry Manor in special measures after finding that people were put at risk because medicines were not safely managed, patients were at risk from dehydration and malnutrition, and staff failed to uphold residents’ dignity and treat them with respect.

Very naughty.

He said Minister Care Management underwent a restructuring in May last year to repay bank debt, and property assets were sold.

“An exceptional profit before tax of £41.6m included £14.6m of gains from property disposals and £31.5m of dividends from subsidiaries which had in turn disposed of their property assets.”

Ah. The care home being criticised does not make a profit. In fact, the profits didn’t come from running care homes at all. They came from selling capital assets.

How is it that The Guardian works? The paper makes vast, huge, stonking, losses. £70 million in the last year that we can recall the numbers for. This is paid for by selling off assets like Autotrader. The difference between this and what the care home company is doing is what?

And if the care home company are naughty boys ‘n’ gals for their actions then what is The Guardian? Especially given that The Guardian uses offshore to protect the proceeds of those capital asset sales, an option not available to the care home company.

Tsk, really, tsk, eh? But then asking people at The Guardian to understand anything about money is to be unreasonable, no?

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