Q1 2021 Chartwell Retirement Residences Earnings Call
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This conference is being recorded so it's of course the homes at the old as you see.
All participants please standby your conference is now ready to begin <unk>.
Good morning, ladies and gentlemen, and welcome to the Chartwell retirement residences Q1, 2021 financial results Conference call I would now like turn the meeting over to the feel glad Bulldog ski.
Please go ahead Sir.
Thank you Paul.
And thank you for joining US today, there is a slide presentation to accompany this conference call are available on our website at Chartwell Dot com under the Investor Relations tab.
Joining me today are Karen and Sullivan, President and Chief Operating Officer, Sherry Harris, Chief Financial Officer, and Jonathan Blackout, Chief investment and Chief Legal Officer.
Let me remind everyone that during this call we may make statements containing forward looking information and non-GAAP measures I direct you to our MD&A and other security filings for information about the assumptions risks and uncertainties inherent in such forward looking information and details of such non-GAAP measures.
And specifically I direct you to the added disclosures in our Q1 2021 of the MD&A under the heading of COVID-19 business impact and related risks for a discussion of risks and uncertainties related to the pandemics.
These documents can be found on our website for at SEDAR Dot com.
While our financial results continued to be impacted by the pandemic and Q1, 2021 with the increasing vaccination rates.
And the employees and of the community at large every day, we're getting closer to the easing of various restrictions that have been significant barriers for new residents moving into our residences. Charles people have been doing extraordinary work for almost 15 months now.
And the most difficult circumstances, providing much needed services care engagement and compassion to our residents I'm proud of the efforts of our people and grateful for their unwavering dedication and commitment to making People's lives better.
No. The these extra ordinary people are now ready and excited to welcome and deliver exceptional personalized experiences to new residents as we began our path to recovery.
I will now turn over the call to care and to provide more inside of their operations.
Thanks, a lot and turning to slide four and I'm pleased to report that the number of outbreaks and our properties across the country have reduced significantly currently we have three long term care homes and retirement.
The retirement homes and outbreak with only six residents affected.
Prioritization of the vaccine to a vulnerable population has been a true game changer.
Vaccine rates for our residents are between 92% and 97% and all provinces and we are continuing to see increases and staff vaccination rates with over 70% of our stop having received at least the first dose and B C, Alberta, and Ontario, and the number of staff vaccinated, and Quebec is lower but only because of access for <unk>.
These essential workers occurred later than in the other provinces.
Our infection prevention and control leads from a long term care and retirement have collaborated to develop a vaccine hesitancy campaign and managers and our homes are in the midst of having one to one conversations with stopped the soundness and encourage vaccinations.
We're also seeing a trend where certain changes and directives are being applied to fully vaccinated stuff such as the removal of the single site order in Ontario.
In addition, we've been asked of pilot on site vaccination programs delivered by our staff and to long term care homes. We believe that these initiatives along with the increasing access to vaccines and the coming weeks will lead to continued increases in staff vaccination rates the.
Safety and wellbeing of.
Of our residents remains our number one focus with high community spread and the introduction of variance of concerns during the wave two of the pandemic.
And I've said due to the reduced outbreaks and our homes and the need to assist with the hospital overcrowding. We have also began to see reduced restrictions, including the elimination of the 14 day isolation period for new resident admissions who were fully vaccinated.
And and not have Ontario, and in addition, and Quebec, our residents our backs eating of the dining room and lots of the homeless and outbreak again, we expect to see these restrictions continue to ease in the coming weeks and months as vaccination rates and the community increase and.
And the community spread decreases.
Turning to slide five our support for our homes continues with daily meetings of our critical incident command and daily interpretation and update my most of our homes and weekly communications and residence and families.
We also continue to have 24, seven COVID-19 support hotline that has now fielded over 10000 calls since the beginning of the pandemic recently and Ontario, We introduced a nurse on call program for retirement residences, and so that the health and wellness managers and our RPM have access and access to support me evenings and on the weekend.
Yes.
And April we hosted our first ever virtual leadership conference, which gave us the opportunity to not only provide updates to our general managers and administrators and corporate office leadership teams, but also to think of them for their significant contribution over the past 14 months, including presenting both leadership and frontline staff Awards. This.
Weak Ah we also held our annual sales training sessions again in a virtual fashion to assist our sales force as they continue to adapt to the new online sales technology solutions that we've introduced and to focus on the occupancy recovery and our retirement residences.
Turning to slide six these recovery efforts also include our current multimedia marketing campaign and safe just got safer, which addresses moving hesitancy with and additional incentive for prospects to book of virtual personal to her the access or exclusive digital and why now guide with valuable information and videos to help.
People in the research or to start the conversation with a loved one.
We are also enhancing our approach to and focus on social media efforts, including sharing the multitude of positive stories that are happening in our residences every day I'm pleased to say that we have seen a significant increase and our Google reviews and that our rating is on average $4 seven and three out of five.
Given the importance of referrals the marketing team is heavily focused on supporting the sales enablement and strategies such as the refresh national referral program and business development tools, including and online business to professional digital strategy.
The latter is focused on families and physicians Realtors and financial planners. All of these efforts are beginning to bear positive results with our leading indicators both calls and e-mails having increased 29% from Q4 also our initial contacts and Q1 are the highest volume since the pandemic started although personalized tours are still down due to a.
Fiction and this is the first indication that there is in fact pent up demand.
I'd now like to turn it over to Sherri to discuss our financial results.
Thank you Karen.
As shown on slide seven and Q1, 2021 and our net loss was $4 9 million compared to a net income of $11 4 million.
And the 2020.
For Q1, and 2021 F and O was $35 1 million or 16 cents per unit compared to 45 of 23 million for 'twenty, one seven for unit in Q1, 2020.
The decrease is primarily due to lower same property adjusted NOI due to lower occupancy and continued investments and resident care and infection prevention and control of that.
Yeah.
Turning to slide eight I will discuss our same property operating platforms for adults.
Our same property adjusted NOI decreased by $12 2 million or 16, 4% and Q1, 2020 one and.
Parents of Q1, 2020.
Same property occupancy was 78, 8% and Q1, 2020, one compared to 89, 3% in Q1, 2020.
Same property of retirement occupancy was 78, 7% for Q1, 2020 one and.
And 287, 8% for Q1, 2020.
Or a decline of nine one percentage points.
This resulted in lower revenue of approximately $17 8 million compared to Q1, 2020.
Occupancy and all of our retirement platform with significantly reduced by lower move in activity as a result of the COVID-19 pandemic.
And associated restrictions that Karen has discussed.
This was partially offset by lower and move out activity.
Primarily due to reduced departures to long term care spaces.
In addition to the impact of lower Occupancies on our Q1, 2020 one resolve.
The following factors affected our same property and retirement operations for adults.
We continue to make investments and initiatives to enhance resident and staff safety.
We have maintained and enhanced our staffing levels.
And we have experienced higher insurance cost.
We partially offset these negative impacts by generating increased revenue from inflationary and market base rental and service increases.
And also from the provision of additional care and services as evident as residents age in place longer with fewer departures over the last year or two long term care their needs and increase.
Our food costs were lower due to lower occupancies and supplies and expenses were lower due to restrictions on actually.
Our same property and long term care home occupancy was 79% compared to 98, 5% and Q1, 2020 a decrease of $19 five percentage points of.
The result of.
The reduced move and activity and capacity limitations affecting b and C class share and accommodations, which limit of occupancy each of two individuals and those friends.
Occupancy and protection provided by the Ontario government has been extended to August 31, 2020 one.
There are approximately 38000 individuals and need of long term care services on waiting list today.
This is an increase of over 8% from pre pandemic levels, we expect occupancies to recover and our L. T fees due to the demand for this essential care services and.
And we will do our part to assist the government with hospital capacity where appropriate.
For Q1 2021.
The same property adjusted long term care of NOI decreased four point of 2 million for 58, 8%.
Maryland, due to increased investments and resident care and infection prevention and control measures, which exceeded a lot of government funding by $3 3 million and cumulatively since the onset of the pandemic have exceeded funding by $6 5 million.
Our preferred of accommodation revenues were also lower by 0.6 million and we experience higher insurance costs.
As Karen mentioned the introduction of highly effective vaccines has been a game changer, we do anticipate that the level of our unfunded investment will decrease over the course of 2021.
Turning to slide nine you will see on monthly Occupancies.
Pandemic related restrictions and government directives and affecting operations have resulted in reduced and reduced moving activity and our retirement residences and as a result lower occupancy.
The pandemic and the corresponding and part of such restrictions and directives are likely to continue for some time in 2020 one.
We expect the out of the vaccination programs and each of the provinces and which we operate proceed and as restrictions and our retirement residences and and the community are lifted.
Moving and Occupancies will begin recovering and our retirement residences.
Our forecast occupancy for May 2021 shows the pace of decline and occupancy is slowing and as Karen mentioned, our leading indicators are beginning to improve.
We collected substantially all of rent and the service fees for April and May consistent with our past experience.
And you can see on slide 10, our interest coverage ratio was two eight times at March 31, 2021.
And our debt to gross book value calculated using the historical cost of our assets was 52 six percentage at March 31, 2021 and our net debt to adjusted EBITDA ratio lift nine nine times.
As you can see on slide 11 at March 31st 2021, our liquidity amounted to $444 9 million, which included $75 9 million of cash and cash equivalents and $368 9 million of available borrowing capacity on our credit.
Ladies and.
In addition, our share of cash and cash and equivalents held and our equity accounted and Chinese list for $7 million.
At March 31st for 'twenty, and 'twenty, one of our unencumbered asset how the value of approximately $1 billion.
Our mortgage maturities for me and well staggered with the average terms of maturity of six six years of March 31st 2021.
Turning to slide 12 at May six 2020 one on.
The liquidity amounted to $466 $1 million, which included 19, seven point and 2 million of cash and cash equivalents and $368 9 million of borrowing capacity on our credit facilities.
And that means six 2020, one we had $89 9 million of mortgage maturities remaining in 2020, one that are proceeding and the normal course.
In addition in terms of share of the remaining mortgage maturities in 2021 Hell of a and it's equity accounted of J D.
And is 41 5 million refinancing of which is also proceeding and the normal of course.
Turning to slide 13, we currently have three development projects, which are budgeted to require 81 5 million that are currently under construction.
In addition, we regularly read enough capital and our owned property portfolio with the goal of growing our property NOI and protecting and maintaining our properties. We expect to continue to be selective and our capital allocations in 2020 one.
Turning to slide 14, we are pleased to announce the expansion of our partnership with well tower through the joint acquisition of Chartwell. The Teasdale Chartwell, let she's dealt to achieve stabilized occupancy in 2020 and on April 14th 2021, Chartwell acquired of 42, 5% of ours.
And that trust.
Simultaneously well the tower acquired of 42.5 per cent of Chartwell the T cell to.
And purchased 42.5 per cent for 50% of our 85% of interest and chartwell of the T cell one from us.
Bottom on retained their 15% interest and both phases of law.
Mining ownership across the campus.
The contractual purchase price for Chartwell, and the T cells to and our share was approximately $30 3 million and used.
Settled the purchase price through assuming 42, 5% of the related construction financing of $18 7 million and for the settlement of the outstanding mezzanine loan of $4 million with the balance of paid in cash well towers acquisition of the 42, 5% interest and terminal the T cell to from US was completed.
At $30 7 million and well tower of assumed is shown on the related mortgage.
As noted on slide 15, our distribution reinvestment program. The drip was temporarily suspended beginning of March 2020.
We'll be reinstated effective with the May 2020, one distribution payable on June 15th for 2021.
Our drip offers for unit holders the opportunity to receive their distributions and new Chartwell unit with a 3% discount and no commissions.
Unit holders can contact their investment adviser and two involved.
I will now turn the call back to black to wrap up.
Thank you Sherry.
Turning to slide 16, while Ontario long term care represents less than 10% of chartwell business, we have a longstanding and deep expertise and the sector I'm extremely proud of our 5000 people strong L. D C team, especially during the spend on it they stop at nothing to support our residents and families.
During these most challenging times and we're also grateful to our provincial government and public health system partners for their support, especially during the second wave of the pandemic it.
It is because of these extra ordinary efforts of our teams and collaboration with public health system partners. None of our LTC homes requires support from Canadian Armed forces, the Red Cross or had to request hospital of managerial assistance for voluntary management contracts and our teams received numerous expressions of praise and recognition for.
Our public health partners for the speed of the response and durability of the stabilized situations and the holes that did suffer outbreaks and.
And the past few weeks, the Ontario of COVID-19, 19 Commission and Ontario, Auditor General released the reports on the Ontario, LTC sector experience and the government's response during the pandemic and provided the recommendation for improving the sector.
As we expect that most of the recommendations have been consistent with those race and the numerous previous studies reports and submissions to the government, including those made by the military of long term care of association and Chartwell over the years.
These include among others improved predictable and sustainable funding to the sector redevelopment program for all of their beds, and hence I pack and medical expertise and long term care of homes better integration of long term care with the broader health care system, including partnerships with hospitals and solving starfish.
Sure the juice, including easier pathway to attaining DSW designation.
As we previously pointed out we're pleased to see that the government has proactively address the number of these important recommendations of already.
There are some recommendations from the commission that would require more analysis and review.
For example.
While we're fully supportive of the drive to increase the proportion of full time jobs and our homes, achieving the 70% of full time workforce target and our 24 seven business would likely require the implementation of 12 hour shifts based on would require collaborative work of operators employees and unions.
Well a lot of part of the 85 number of recommendations and the idea of a separation of construction and service delivery and the long term care of sector hasn't been mentioned throw out the Commission's report.
The report discusses a model where the government types of the private sector to invest and construction of new LTC homes and effect of the buys real estate from the bills are over time, allowing the developer to achieve a return on their investment.
The government that it would be directly responsible for delivery of care and services. The residents by contracting with one of the report called mission driven entities either for profit or not for profit the.
Idea of it seems to be to eliminate the profit from care delivery. However, as we know there is no profit and the current model of care delivery due to the floor for the nature of funding for rather than the current programs.
It is not clear how this approach would result in the better care of delivery or more efficient use of resources.
Chartwell is a purpose driven company, we're here to make People's lives better and everything we do is evaluated through this lens.
We are and experienced LTC, operator, whose quality of care indicators have consistently exceeded provincial averages were also and experienced developer we know our customer and have proven that we can build a high quality long term care of residences. We were one of the very few companies can rebuild some of our older homes and three of our older Ontario.
The old T C homes, where we build for the new design standards and 2013, we also rebuilt to all of their long term care of residences in British Columbia, and clearly we can do both construction and operations successfully it is not clear how amazing companies like us choose one or the other activity would benefit our health care system for society.
Turning to slide 17.
Over the years, we built the company that is purpose driven has a strong culture clear strategy and exceptional people.
We also put a strong foundation in place to sustain disruptions brought by crisis by being prudent in our capital allocation decisions and maintaining strong liquidity and the current crisis has certainly test of this foundation I am proud of how the childhood responded and persevere through it.
While the current and fight is not over we are looking to the future of with optimism.
We deliver much needed services and care to Canada seniors. This need has not gone away likely it has been exacerbated by the pandemic, creating a pent up demand for our services, which will support eventual occupancy of recovery.
Long term prospects for our business remains bright the girlfriend population of people over the age of 75 is beginning to accelerate with 'twenty 'twenty two of growth projected of five 3%. This growth will remain robust over the next 20 plus years supporting demand for our services.
And it continues to be a shortage of long term care of beds across the country and while various governments are taking steps to reduce the shortage. It is unlikely that they will be able to fund new beds to fully satisfy the existing and growing demand and retirement residences are well positioned to fulfill that void.
And the medium term the slowdown of new construction starts during the pandemic will resolve into your building for openings in 2020, two and 'twenty 'twenty three further supporting occupancy recovery.
Chartwell has always had a strong call it for corporate culture, I believe they spend them and because only further strengthened with it.
It struck this strength of the culture combined with our focus on delivering exceptional personalized experiences to our residents our knowledge of customers and our strong national brand are the key ingredients of our future success I'm confident with the strength of our people combined with the accelerated growth of the seniors population and slowdown of supply growth.
And our markets, we will recover our occupancies and continue creating sustainable value for our stakeholders for years to come.
I want to finish by thanking our employees from residences, the corporate offices people, who have demonstrated tremendous drive ingenuity and commitment and these most challenging circumstances people, who volunteered to work and our homes and outbreaks often staying in hotels for weeks and months people, who stopped at nothing to keep our residents.
And their families and staff safe.
And what are people accomplished through this pandemic will live in the thousands of individual stories of courage and sacrifice and and the thousands of expressions of gratitude and encouragement from our residents and families to our target of employees. Thank you for everything.
Thank you for your time and attention. This morning, we would now be pleased to answer your questions Paul.
Thank you.
We will now take questions from the telephone line. If you have a question and you are using the speaker phone.
Lift truck before making a selection of did you have a question. Please press star one on the devices keypad.
Thank God for your questions and he told me personally and you start to.
So please press star one at this time of the other question and there will be a brief pause while the participants register.
We thank you for your patience.
The first question is from the true.
True Gupta from Scotiabank.
Please go ahead your line is open.
Thank you and good morning.
Okay.
Just hold on the time at home and I'll keep on C O.
Oh the CPA.
Of the Cline.
Expected to slow of the month of me and I'll spell of projection.
What is causing that change or are you seeing the need of moving activity and growing despite the lockdown.
Yeah, and I sat in my remarks are our leading indicators are definitely better and so we are beginning to see that pent up demand and all.
Not having in person tours is still an issue.
But I would tell you is these and you know we're pretty pleased this week to hear about them the increases and vaccines that are being delivered.
Across Canada, and I think as we see that will obviously then the C community spread decrease and and we will see those restrictions come off and Ah, that's certainly going to help us with that that pent up demand.
Got it so and you'll meet occupancy assumption what is the person the drove a decline and move ins and move outs are you assuming for the month of May.
And we're seeing and increased month over month, and I'm sure good morning, and and trends for move and activity I move out of the activities is trending up out of the same as it has been and through the the last months of the pandemic.
Okay.
And I actually meant you don't want and you see them and obviously the month of months of Goldman but in terms of puts and takes the blind coupled with the normalized movements can you share any number of how bad is it like 60% of the pace or is it more of the glass.
Yeah, I mean, I think we're running them out just under 15% reduction year to date and move out activity and we're running out of about 60% of move in activity compared to last year.
Got it okay. That's very helpful. Thank you and.
And then in terms of seawater tea on the wood.
And you can see that summer months of all usually slow the just spoke to the woods. So it's sort of your September October is when we start seeing them of course positive occupancy recovers.
Yeah, I mean, I think we feel that as community restrictions ease and as restrictions ease and around aren't residences that with and the announcements are then July 1st just want everyone, who would like the shot and would have a shot and so I think it's reasonable to assume through July and August that hopefully of restrictions.
We'll be ease into the September October and November.
Oh, Okay. Okay, and then maybe just turning to the operating margins are and if I look at you know the same property NOI to decline in Q, but was much larger than the old team to do and with some data.
What is causing a cubo operating expenses to be high or low what's the kind of the Quebec, which is why the children's and stuff.
And agency and overtime costs, and so as you know coming into the pandemic, we get hot on number of Quebec markets were tight in terms of employment and.
And that would have been resulting and some increased cost pressures there and through the winter months.
Okay.
And if I look at overall on the operating cost and be the dominant home segment the <unk>.
Property operating expenses were actually down 20% on.
One of your pieces.
But if you just look at the labor cost of insurance costs, how much would be up on the year over year basis.
And so we are over all of the seeing labor costs generally and the two and a half per cent range and that is what we are consistently and addressing it.
In terms of the insurance costs, there was an increase year over year on the insurance is a relatively small components of our overall cost structure, but still did have an impact year over here.
Okay. Thank you. Thank you I'll turn the box and so.
Yeah.
Thank you the.
Next question is from Lorne Kalmar from TD Securities. Please go ahead. Your line is open.
Thanks, Good morning, maybe just going back to the occupancy discussion at a it looks like a few of your counterparts, who have operations and the U S and the U K where box. The nations are a little bit further ahead, and we are here and have already started to see occupancies and begin to trend up do you guys think theres any read through for your portfolio.
Yeah.
No I, that's thanks, very much Lorne and and welcome to the call and we are certainly I'm cautiously optimistic on pent up demand parents and talked about our leading indicators being up and we're continuing to see that trend and despite the current community restrictions. So we're hopeful that we will fall.
Out of that pattern and in the fall of the up we do think for about three to four months behind where were they on.
Okay. That's helpful. And then maybe just looking at developments I guess completed developments in this case meadowbrook and it looks like the yield came down a little bit a quarter.
Quarter over quarter and the stabilization date was pushed out could you maybe give us a little bit of color around that.
Yes, so yields.
You'll see that came down a little bit as of course, we're up we're seeing increased cost and construction.
Hum pretty much everywhere. So yes of course did go up and it was a little bit over in terms of the stabilization day.
And on part of the development, we do have to push it with the occupancy day and because of some issues of getting some servicing things do slow down and sometimes with approvals and permitting for so that was because of the.
Okay, and then maybe to stick and with this train of thought here and it didn't look like any development yields changed on the and progress developments, but would you expect those to get the come under pressure with the broader theme of Verizon and development cost.
Right and that we're keeping a very close eye on that and and so we are sensitive to that but a good.
To date, we're not we're not anticipating them and preschool.
Go ahead for us.
Removes the completion.
Thanks, so much for the call of I'll turn it back.
Thank you the net.
The question is from Frank the O for BMO capital markets. Please go ahead. Your line is open.
Hi, good morning on one so are the first question is around the dispositions. So I wonder do you see any capital recycling opportunities in 2020, one and two are critical to each of the I'll sweep off your on non core assets.
Yes, Frank as usual, we always look at our portfolio to identify assets that do not fit our long term strategy and we've done as you can see them some dispositions over the years and you.
You should expect us to continue to do this work and identify assets that do not fit our long term profile and we will attempt to dispose of these and he said all for understand that these dispositions, usually take time and predicting timing and the valuation of these properties is really hard on until.
And you actually get on the process.
Yep Yep, that's one of the car and Oh I just out.
So I wanted to and if you are good for them.
Any color you true and they are.
The active board discussion at this point or.
So it's quiet on this point at this point and if there is nothing to update you on.
Okay. Thank you and for my next question and turns to be on the you're on that that's the EBITDA range. So do you expect any improvement this year and on what's the main driver for the for any improvements in 2021.
I mean, I think we're certainly looking for improvement and improving EBITDA over time.
I've mentioned in his remarks, we had really come into the pandemic building. This company to be strong through a storm that has been a very significant storm on them and we will look to continue to improve as occupancy recovers.
Yeah.
Okay.
Thank you. So my last question and it's kind of broad. So you know the budget 2020 one proposal of spanning out of $3 billion for over the next five years and the old T. E systems. So so could you provide your view of all you know the.
This new bunch of AR and in part to your L. P C operations and the future and the long term.
I'm sure I mean, we certainly are pleased to see the attentions of governments at all levels are now of putting on the long term care system that as well and they'll have been neglected for a long period of time and by various previous governments and so these investments both on the side of the level of unconventional.
Oh, it will be and positive.
Positive for the sector and may not generate additional profitability for operators and that certainly will improve resident experience in these homes and you know purely from the sort of business perspective, you can achieve same returns with lower risk, it's a better proposition and we've been advocating for these changes.
For a long period of time. So we are very pleased to see those additional investments that will go into improving experience of the residents in for these homes.
Okay. Thank you very much. That's all my question is do they have no I'll turn it back.
Yeah.
Thank you the.
Next question is from.
Oh Boy for National Bank Financial. Please go ahead on the line is open.
Hi, good morning, everyone.
And right.
And just maybe of a bigger picture of you.
And you've talked about how are you know you expect that you will be able to recover occupancy of the community spread declines like do you have a sense of like what percentage of for our assets.
That's a really within like.
And like the highest the highest spread of areas I mean, I've got a good idea of myself of where they are better just trying to think of like Oh do you in terms of the overall proportion of them.
No. It's a it's really a difficult question and.
I think you know the whole of Ontario's now and locked down and so I guess you know we have 90 of the time of holes here and they're all in this high risk area and so.
So I.
I think the the these lifting of restrictions that already started right and and we have some.
The release and Ontario, there's some lifting of restrictions and other provinces that are happening in Quebec and in Alberta and so.
And as these continue to roll throughout the country and that that's where we believe the occupancy will begin to recover as people are and you know.
And free to come for the tours and Ken and then have activities that are less restrictive and and pass dining and the dining room, and and have more social and social activities with the with our peers.
Would it be fair to say that like if the you know if things get a lot better the GTA and appeal area things are kind of got you know your prospects of local operator.
Definitely the first day of that though.
Just given where you'll have to pay for it.
Yep.
As things start to improve I'm, just wondering if theres been much thought given to how your marketing message and will change coming out of the pandemic in terms of and you're trying to start to rebuild the occupancy and the like or do you think the messaging and everything will be pretty consistent with where it was before.
Well I think the messaging that we've been.
Putting out there is the one of testimonials from our residents families and employees and I think fundamentally I believe that these are the best voices to explain the experience that people have and the retirement living and particularly of Chartwell and we have.
And thousands of those and our portfolio across the country and its the amplification of these voices is what's important and you know we've.
Been talking for a while now that it's a strange situation that we operate the and where people who do not live with us and whole bunch of studies show that prefer to stay in the age at home.
Those who do move and live with US tell US things like these are best five years of my life and I wish I moved here of five years earlier. This is my home and I will never move out of here by the way that last comment is by the person who one for and a half million dollars and lottery.
And so it's those voices that are true authentic voices that speak on behalf of those who experienced chartwell debt needs to be heard out there for those who are thinking of you were considering retirement living and that's our goal and amplify those voices and make them hard.
And I wonder when you're thinking about like planning sort of how the recovery of evolved like how.
Do you guys or are you working on like sort of a timeframe of when you think you'll start to step up out of her.
Yes, we have mapped out of our marketing plan throw all of the ear and there is a program and messaging is out there today and so this will continue throughout the year.
Okay.
And then you'd made the reference to some.
Some of the findings from the lots of them for the Commission report and particularly the talking about achieving the 70% of full time employee ratio are not having had the.
Schedule of labor for.
Thousands of employees and the 'twenty for southern operation before and myself can you just explain to me why are you would need to move to 12 ourselves for.
Well right today because of the 24, seven and nature of the business just think about one fifth let's take one eight hour shift and you have five days of week that would be full time equivalents and at least two days of week for somebody else to work. So by just pure that definition and you have to have 50% of your workforce being.
Part of time right. They have one time person for five days of week and part time person for two days of week.
In addition to that if either of fulltime person or a part time person takes a day of vacation sick leave you have to have somebody else filling into the ship. So there is another component of it of the workforce, what we'll call the casuals and that will have to come and help out. So for every full time employee you effectively have one part time employee plus.
Some people who come and as a casual so that's why you have more than 50% of our workforce today being in part time and casual structure. So the change that requires some changes and how the schedule and gets done and 12 hour shift can you can achieve high percent.
And that your full time employment, if you moved to 12 hour shifts the issue with the 12 hour shifts is that the work, particularly on the long term care that are tiring.
And is a physical and heart and the average age of our employees in the sector is close to 50 years old. So it's not easy for them to do 12 hour shifts and historically it was not really accepted the true with the unions and so that's why I'm, saying the collaboration and the work of operators unions and employees together would be.
The required to increase the full time staffing complement and having said all of that at Chartwell, we already particularly on the retirement side would have a project that is ongoing that is looking at various ways and our abilities to increase full time jobs and in our sector.
Some of the midst of that's being propagated through all of this pandemic was debt it's cheaper to employ part time and casual employees and that's why we have this high percentage of these people that is not true in fact, part time and casual employees because of higher turnover and these jobs is more expensive for us because we have to invest and recruitment and then when people.
I'll turn it over and have to bring new people in and recruit and onboard them that requires time and money. So we much prefer to have more of a full time employment and it should.
It's not as easy to execute as some headlines would suggest.
Got it and then a.
Finally, just of your colleagues with respect of splitting some of the physical capital somewhat some of the delivery of care and and long term care overtime.
And I'm sort of reading between the lines of your statement. It seems to me first but you you really think of like the first priority here is like.
The funding and then you know to provide more care and.
And then what's sort of see how it goes from there like it feels like you're really kind of like Bob kind of priority number one for US I don't think it's just me who's saying, that's the priority number one and all of these reports are saying the same thing that's the priority number one we all said that the sector has been neglected for decades by various governments, where the funding net.
For a kept up with the inflationary increases and more important with increases and frailty and the acuity of the people that we're asked to look after in the sector and so for sure you need to increase investments in care and and then that's we'll see how that fixes the system I'm pretty called for.
And that with more investments, we will have more staff, we will have more expertise of it we'll have better experience for our residents no matter what side of profit there not profit there and municipal home, you're you're in and Charles specifically as I mentioned and my remarks, we have for years now our quality indicators there.
Our way of box the provincial averages and we've been receiving praise and and recognition by various public health system partners for our response to this pandemic and the work that we've done our long term care team have done in these homes. So for sure funding will improve outcomes and proof rather than the experience and then.
You know whatever decisions to come after that will be should be based on the on on that basis.
Okay. That's helpful. Thank you.
Thank you.
Thank you once again.
The press Star one on your telephone keypad or of your devices keep up for the question for your next question for Bobby <unk> from RBC capital markets.
Please go ahead your line is open.
Thanks, and good morning.
Just sticking with that.
And that line of thinking on the condition report.
And it just considering.
The.
I guess you know all of the announcement of the government has already made with respect to funding for the projects or for the rebuilt and me.
What are your thoughts on perhaps the prospects of the I suppose than even I guess the.
Adopting that recommendation.
On the separate.
And of care.
At three minutes and he's seen a for for sure. If there is any kind of indication I think from the government the or anybody else. The this is being consider that will certainly put a significant pause and these redeveloped and efforts because without certainty I mean.
You're all of the lessons people. If you don't have certainty, it's very hard to figure out how to invest capital and new initiatives. So I am pretty.
And I hope and the and I think I'm confident that these projects that have been announced will continue in the format debt being promised the people who started these investments and we will continue with the redevelopment program and the reality is this is the first time in decades. The government came up with the program that is actually the viable non.
For every project, but for many and Youll see already so many approval has been given to the projects that I expect will proceed as you know chartwell is and construction of one property and Ajax and it's it's in progress. We also received approvals for for other projects that we are proceeding with and so my expectation is of the government.
And we'll stand by their promise to allow these redevelopments and bringing new capacity that is much needed into the system.
Oh, Yeah, no that makes sense certainly for the.
For the projects that are already underway.
Just maybe switching gears looking at the the occupancy again in April and May and the slower pace of erosion.
Was that driven by you know particular markets or was it more so broad based across the portfolio.
We're seeing uptick and leading indicators across the portfolio of about where things are needs based I would say, it's picking up faster and so I don't think it's by jurisdiction and it's by need.
Okay.
And then just looking at long term care again for for a minute the.
The pandemic related expenses.
And were pretty heavy in Q1 of.
Just any thoughts as to you know.
And the recoveries of any of those amounts and are in the subsequent quarters and or was there anything you'd been received to date in Q2.
And nothing and in Q2 as you know, we certainly are cautiously optimistic and these are the incremental expenses for additional infection control and prevention and additional staffing and some of that is intended to be funded by the government and sometime in Q2 Q3 and while they work.
Three of the allocations of how that will be managed and we are cautiously optimistic on that.
All of them and just coming back to the comments around I guess, the assisting hospitals with providing additional capacity I'm just curious would there be any positive impact on the retirement portfolio.
And I guess, the long term care with the with that program.
I guess I I see that they would.
The more focused and we were seeing that for sure in terms of moving people to long term care. So that will then.
And if those people are appropriate and they'll.
Come to us and that will help us get to our back to our 97% are so so that would be positive on the retirement side of it it would be on a one off basis that we would have to assess whether that is something that we could we could do but I don't see it as being you know.
Broad based as a way to address the occupancy.
Got it up just maybe one last one.
Yeah, we have seen some transactions pick up and the private market and the retirement space.
Just actually I guess recently of course, you've done a few transactions with your partners as well.
Where are you seeing any change.
One of the best the appetite out there for for whether it's a private or other public players just given the the progress now that we've seen and vaccines and you know again, the perhaps the the pent up demand that should start to.
Surface slips you don't think towards the back half of the year.
Yeah. So we are obviously, keeping our eye on what's going on and the market, we haven't really observed for much change.
And transaction volume or volume.
But we continue to bear for whether either of them.
Okay. Thanks, very much I will turn it back.
Okay.
Thank you there are no further questions registered at this time of.
And I'll turn the call back to Mr Bulldogs.
Thank you Paul this wraps up today's conference call. Thank you very much for joining us our virtual AGM will be held on Thursday may 20th at 430 P. M. We're looking forward to you of joining us at our AGM further details will be posted on our website today as always if you have any further questions.
And do not hesitate to give us the call goodbye.
Thank you the calling for instance, though and the please disconnect your line, but this time and we.
Thank you for your participation.
Yeah.