Hindered by NHS budget constraints and planned cost increases last year, 2019 was promised to be a “year of stabilisation” for Spire Healthcare (SPI). With lower property impairment charges boosting on statutory earnings, the independent hospital operator swung to a pre-tax profit during the six months to 30 June.
As it focuses more on the private healthcare market – both self-paying patients and those covered by private medical insurance (PMI) – the group enjoyed revenue growth from these services of 4.1 per cent to £336m. Seeking to further boost business from PMI providers, a new partnership with GenesisCare is the first step towards a national end-to-end private cancer treatment pathway.
A return to revenue growth from the NHS of 2.5 per cent reflects the selective opening of new service lines to match local commissioning needs. Average revenue per case has increased by 6 per cent with a shift away from soft tissue repairs to higher-value joint replacements.
Excluding the impact of new lease liabilities accounting standards, net debt came down 5 per cent as Brexit uncertainty meant capital investment reduced by over two-fifths to £19.7m. But a second-half acceleration will see a full-year spend of between £60m and £65m, with Peel Hunt forecasting that year-end net debt will exceed 2018.
Analysts there also expect adjusted pre-tax profit of £26.1m and EPS of 5p for the full year, rising to £33.3m and 6.6p in 2020.
| SPIRE HEALTHCARE (SPI) | ||||
| ORD PRICE: | 125p | MARKET VALUE: | £501m | |
| TOUCH: | 124.3-125p | 12-MONTH HIGH: | 176p | LOW: 95p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 237p* | NET DEBT: | 38%** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 (Restated) | 476 | -2.2 | 0.5 | 1.3 |
| 2019 | 492 | 9.6 | 1.8 | 1.3 |
| % change | +3 | - | +260 | - |
| Ex-div: | 14 Nov | |||
| Payment: | 10 Dec | |||
| *Includes intangible assets of £1.54bn, or 384p a share, **Excludes lease liabilities of £721m | ||||
