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Posted: 07 Oct, 2020

On 29th September TMA UK and Christie & Co hosted a webinar on the healthcare, childcare and education sectors to discuss how the sectors have been affected by Covid-19. The insightful webinar saw two of Christie & Co’s department heads discuss the operational challenges facing their sectors, buyer interest, and the prospects for the sector over the coming year. We thank Stephen Jacobs, Christie & Co’s Director of Bank Support & Business Recovery, for moderating this webinar.


Courteney Donaldson - Managing Director, Childcare & Education, Christie & Co.
Michael Hodges - Managing Director, Healthcare Consultancy, Christie & Co.

Michael Hodges on the Elderly Care Sector

Operational Challenges

The elderly care sector has been heavily impacted by Covid-19 and the high death rate seen in care homes back in April and May impacted occupancy, although the degree of impact has varied considerably based on geography.

Now, with better access to testing, those homes that have managed to reduce their number of Covid cases are starting to recover with Michael saying that ‘the speed of recovery will be determined by how quickly homes can become Covid free’.

While it is clear that care homes have faced many challenges due to Covid-19, Michael did say that there has been one upside for the sector to come out of the pandemic. Pre-Covid, there was a shortage of nurses and many care homes relied on agency workers which is a costly way to staff their operations. But Covid-19 has elevated the status of those working in care and operators have been pleased to see an influx of job applications from people looking to redefine their futures and move into social care.

Another positive is that operators have recently been seeing an increase in enquiries and are optimistic that occupancy will recover over the coming months with the speed of recovery dependent upon localised circumstances. Michael emphasised that the sector is needs driven, with the UK having extremely strong demand drivers due to an ageing population which is living longer and with an increasing range of acute needs.


When the year began, Christie & Co were optimistic that 2020 would be a busy year for transactions. Very positively, and despite the operational challenges associated with the pandemic, Michael said that the transaction market did not stop during lockdown. During the first lockdown period, Christie & Co received 113 offers on care home businesses and agreed over 50 deals. Development activity has also been very strong as operators, investors and developers take a longer term view given the strength of the underlying demographic trends. Michael advised that it is only at the very top of the market where there has been an understandable pause in major M&A processes.

In terms of valuations, Michael explained that the approach most commonly being adopted is an assessment of sustainable trade following recovery from the impact of the Covid pandemic. This underpins the basis of valuation with buyers then making an end adjustment based on the quantum and length of likely trade recovery.

To summarise, Michael said the sector is already making good progress although the winter months may present some short term challenges due to the increasing number of Covid cases and seasonal flu.

Courteney Donaldson on the Childcare and Education Sector

Operational Challenges

In the day nursery sector, Courtney began by saying that circa 80% of the UK sector comprises independent operators. Therefore the impact of the initial direction from government to close nurseries to the public, but remain open for the children of key workers, all of which happened with virtually no notice, created some significant and immediate challenges that providers sought to conquer. Information released by government came thick and fast, with limited time for business owners to fully digest, before the next set of guidance notes were released often at the 11th hour. Many providers found it a real challenge to deal with the ever-changing nature of the government’s guidance during those first few weeks of lockdown and one of the most notable issues related to mixed messaging about continued provision of funding and furloughing alongside issues regarding insurance cover and claims against the backdrop of the government’s closure directions.

Initially, a large number of operators stayed open to provide care for the children of key and front line workers, but demand was patchy. While some settings stayed open, incurring significant financial losses, but feeling ethically bound to ‘do their bit’ to aid front line workers fighting the pandemic, others saw little demand by front line workers for their services and they subsequently closed, furloughing colleagues.   

Independent schools, too, faced a host of challenges. Schools with international students faced the challenge of repatriating students to their families overseas, which proved difficult due to cancelled flights and some countries deciding to close their boarders. Mid-term, and with little notice, independent schools, in need of delivering a service to students, faced the challenge of transitioning students to online learning. Some already had virtual classroom platforms and were able to make the transition smoothly, even offering their full tuition programmes and whole school assemblies online, while others struggled.

By Easter when the summer term’s tuition fees were due, schools had to decide if they would charge the full amount with some deciding to simply deduct catering costs, thus reducing fees by a very small percentage, whereas others implemented 10% or 20% fee reductions, and some implemented far more sizeable discounts.

Some smaller schools, already experiencing financial challenges before Covid, found it challenging to gain additional financial support from their lenders, who while wanting to support, were unable to do so because of prior financial sustainability challenges and demand being placed on them from such a wide array of business banking customers nationwide. This, following the Easter holidays, led to an increase in the number of schools making the decision to close at the end of the Sumer term.

But despite the challenges, the beginning of the Autumn term in September gave confidence to some schools who saw an increase in student numbers. In many cases this was due to parents choosing to take their children out of state schools in favour of smaller classes with better access to online lessons and activities should schools have to close again. Some independent boarding schools also reported a rise in students from the US and Hong Kong, with parents' nervousness associated to potential social unrest being cited.


Moving on to discuss transaction activity, Courteney said that Christie & Co began the year with huge levels of demand for child centric businesses, much of which came to a juddering halt in late March as the UK went into lockdown and buyers’ attentions were immediately diverted away from acquisitions, to focus on their existing business interests. Thankfully, Courteney said the market didn’t stagnate for long with Easter proving to be a turning point, following which buyers began to reaffirm to Christie & Co their appetite to acquire and their confidence in the longer term prospects and resilience of the child centric sector.

At present, it is very difficult to draw occupancy comparisons between nursery settings or schools, with each being so individual, catering for different demographics and being in different locations. Some nurseries located in City centre central business districts, may not as of yet have seen the return of local office workers whose children would ordinarily use that setting, while nurseries in affluent commuter belts, may have seen a full return of children.

Christie & Co are appointed as agents in relation to the sale of a number of independent schools that closed during the Summer, and Courteney shared that for some of these assets, being sold with vacant possession, demand from specialist childcare providers seeking premises for educational use has been high, and competition between buyers has underpinned very competitive bidding and deals being swiftly agreed.

Courteney also said that as of yet, she hasn’t seen any significant diminution of values in the child centric sectors and she is comforted by the fact that she hasn’t seen a significant increase in sales driven by distress thus far.

Overall, while each sector has faced its challenges due to Covid-19, Courteney and Michael painted an overall positive picture for the sectors in the coming months and years.

We thank Michael and Courteney for giving us an insight into their respective sectors and for offering to lend their expertise to any webinar listeners or TMA members that require it. You can contact Michael at and Courteney at

For more TMA webinars, and to join the next one, visit the events section on TMA’s website here.

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