CARE home operator Southern Cross is trading in line with expectations and will continue to expand next year.

Updating the market yesterday, the Darlington company said the trading environment remained favourable and "strong continuing growth" is anticipated next year.

During the financial year to September 30, Southern Cross acquired Avery Healthcare Limited for £96.5m, and increased bed capacity by 25 per cent.

It also added 132 homes and 7,298 beds to its portfolio by:

* Acquiring 93 homes with 4,840 beds;

* Entering into management agreements for 39 homes with 1,911 beds;

* Opening 15 homes with 807 beds;

* Selling six homes with 260 beds.

Southern Cross, the UK's largest care home operator, now has 712 homes and 36,215 beds and said it expected to have a further 1,200 beds next year.

It said: "The care home sector in the UK remains highly fragmented and, despite the significant growth in our business, this year, we still have only an eight per cent market share. There are numerous opportunities to continue to consolidate the sector and add to our bed capacity with acquisitions of high-quality, modern, purpose-built care homes.

"The flexibility of our model has been highlighted by the recent transactions that we have undertaken and we expect to be able to continue to make similar bolt-on acquisitions for the foreseeable future."

Southern Cross yesterday announced the appointment of Bill Colvin, presently non-executive chairman, as chief executive with effect from January 1.

He will replace Philip Scott who, after six years with the company, is to step down to pursue personal interests.

The company has appointed Ray Miles as non-executive chairman.

Mr Miles said: "We are delighted that Bill has accepted the role of chief executive at this exciting time in Southern Cross's development."