Spire Healthcare (SPI) came to market after a long line of London IPOs in the first half of 2014. Despite the company's 17 per cent share of Britain's private hospital market, the flotation did not grab headlines. But as public sector funding fails to keep up with demand – leaving an estimated budgetary shortfall of £30bn by 2021 – Spire looks well-placed to grow further its share of the marketplace.
In the six months to June, double-digit sales growth translated into an 8 per cent improvement in operating profit to £57.3m – excluding £11m of exceptional costs. The reported swing into the red was the result of disposal gains on a number of property sales in 2013 as well as £67.5m of finance costs, reflecting the company's debt-heavy balance sheet under its previous owner, private-equity group Cinven.
Growth should be driven by new openings - specifically of new operating theatres. Five new theatres opened during the first half, boosted by the purchase of St Anthony’s hospital in Sutton, Surrey, and a further two should open by the year-end. Spire also plans to start developing a new hospital in Manchester in 2015, partnering with the healthcare division of engineering giant Siemens.
Analysts at Investec expect full-year pre-tax profits of £31.5m for 2014, giving EPS of 7.8p, rising to £112m and 25.1p in 2015 (reflecting the capital restructuring).
| SPIRE HEALTHCARE (SPI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 246p | MARKET VALUE: | £ 987m | |
| TOUCH: | 246-246p | 12-MONTH HIGH: | 248p | LOW: 208p |
| DIVIDEND YIELD: | Nil | PE RATIO: | NA | |
| NET ASSET VALUE: | * | NET DEBT: | £467m** | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 378 | 43.8 | 0.0 | 0 |
| 2014 | 417 | -1.7 | 8.43** | 0 |
| % change | +10 | - | - | - |
Ex-div:n/a Payment:n/a *Negative shareholder funds **Pro-forma based on capital restructuring post-IPO | ||||
