Spire profits up as it expands to meet the private healthcare boom

In early 2020, when we reviewed Spire Healthcare’s (SPI) prior year results, we noted that “history shows us that healthcare groups and excess leverage do not mix”. That statement still holds true, and it’s an important consideration if you’re weighing up investing in the private healthcare group. The bulk of that leverage falls within lease liability obligations under the IFRS 16 accounting standard, although it is noticeable that net bank debt increased by a quarter last year. Cash payments of £117mn linked to financing costs and interest on leases accounted for 54 per cent of net operating cash flow through the year – a significant and largely unavoidable burden.