A rest home that houses more than 100 residents in Remuera is to close after running into financial difficulties.

The Caughey Preston home lost $1.1 million last year, up from more than $600,000 the previous year, according to the accounts.

The Caughey Preston place is home to more than 100 residents who now need to find new places.

Accounts filed with the Charities Services by the Marianne Caughey Smith-Preston Memorial Rest Homes Trust Board showed how the red ink was flowing.

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Although the trust received fees of $13m in the year to September 30, 2016, it paid suppliers and employees $16m.

The trust has announced the closure of the 108-bed facility saying that since it opened in 1950, its objective had been to deliver care "second to none" in an environment where clients and their families have been the key focus.

The Caughey Preston home in Remuera. Photo/Doug Sherring
The Caughey Preston home in Remuera. Photo/Doug Sherring

"Sadly that time is now coming to an end and the trust will be exiting residential care service provision," it said on its website, thanking staff who had worked there.

The trust's accounts show that it loss $1,176,526 in the latest period. Revenue fell from $14,267,471 in the September 30, 2015 year to $11,521,333 last year. Expenses rose from $18.1m in 2015 to $18.7m last year. That resulted in a deficit climbing from $3.1m in 2015 to $6.1m last year.

One industry expert today described the accounts as "dire" and revealing an extremely sorry situation. Such losses could not be sustained, he said.

However, he also noticed how the trust owned 48 per cent of Smith & Caughey Holdings, valued in the latest accounts as being worth $40,473,613, up from $36,989,766 in 2015. That showed the elderly rest home's relationship to the Queen St department store, he said.

The accounts said the trust's principal activity was providing rest home and hospital facilities for the elderly.
In 2010 its income was $13.2m and its expenditure was only $12.8m. It made more in 2013, earning $18m and spending only $16.8m. But that position has now changed.

Newstalk ZB yesterday reported how more than 100 rest home residents face an uncertain future when the place closes in October. It employs nearly 200 staff and houses 128 residents.

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E tu union organiser Sharryn Hough said a lack of Government funding was behind the closure. A number of dementia patients live at the facility, and re-homing them will come at a great cost, she said. Efforts are being made to find new jobs for the rest home staff.

Aged Care Association chief executive Simon Wallace said up to 100 rest homes were under financial pressure because of the new wage settlement in the sector.

Some places are considering closing, others are reducing staff rosters and some are making staff redundant, he said.

Wallace supports pay equity, but said the Government needs to step in to assist in the short-term.