This compares with a profit of £29.3m. in the same period last year.

There was an increase of 3% in gross rental income compared to the equivalent period last year. However, the difficulties with Southern Cross both in terms of lost rent and costs incurred combined with some increases in other operating expenses had a major impact.

The underlying net profit before tax, excluding net valuation movements, was £10.4m, down from £13.6m.

Daejan owns nine care homes which had been leased to Southern Cross. Since March, following its collapse, these leases have been terminated and new leases entered into with an alternative established operator of residential care homes.

These arrangements have ensured continuity of care for residents and will generate a rental return for the Group linked to operating performance. In the valuation at 30 September 2011 these properties have been written down by £11.5m to £19.4m.

An interim dividend of 25p per share will be paid.

The company says that the business is financially sound and despite the current economic uncertainties remains confident for the future.