Those familiar with hospital operator Spire Healthcare (SPI) will know that it earns revenues in two ways – from the NHS and from private patients. The former has been under pressure due to tighter budgets and what the group described as “dispersed” decision-making and priorities that vary by geography. However, revenues from the latter – who are either self-funded or paid for by insurance companies – has helped offset the damage.
That helps explain flat revenues in 2018, although cash profits still fell by a fifth to £119m following a contraction in margins – the result of new site start-up costs and higher central overheads. This year, management expects to see a slight improvement in the top line, although analysts at Liberum labelled this guidance “ambiguous” in terms of costs – which ultimately leaves margin growth in doubt.
Chief executive Justin Ash told us he wouldn’t talk about margins “specifically”, but said recent management changes had “improved visibility over where costs are coming from” and even allowed for weekly forecasting of the profit & loss account.
Analysts at Numis expect EPS of 7.3p for the year ending December 2019, compared with 6.8p in 2018.
| SPIRE HEALTHCARE (SPI) | ||||
| ORD PRICE: | 126.5p | MARKET VALUE: | £ 507m | |
| TOUCH: | 126.3-126.7p | 12-MONTH HIGH: | 259p | LOW: 96p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 256p* | NET DEBT: | 44% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 856 | -7.0 | 1.9 | 1.8 |
| 2015 | 885 | 73.6 | 15.0 | 3.7 |
| 2016 | 926 | 73.2 | 13.4 | 3.8 |
| 2017 | 932 | 22.7 | 4.2 | 3.8 |
| 2018 | 931 | 8.2 | 2.8 | 3.8 |
| % change | - | -64 | -33 | - |
| Ex-div: | 30 May | |||
| Payment: | 25 Jun | |||
| *Includes intangible assets of £518m, or 129p a share | ||||
