Spire Healthcare posts strong first-half growth

Independent hospital operator Spire Healthcare Group reported 13.1% growth in first-half revenue on Thursday, to £676.5m, amid high demand for its services.

The company recorded a 10.4% increase in private revenue, driven by significant growth in PMI and a surge in self-pay sectors, while it saw a 17.1% increase in NHS revenue.

Average revenue per case (ARPC) rose 6.6% to £3,337, and admissions went up 7.4% compared to the first six months of 2022, tallying at 141,347.

Spire Healthcare registered an impressive increase in both adjusted EBIT, which grew by 24.2% to £67.8m, and adjusted EBITDA, up by 11.4% to £117.9m.

Profit before tax stood at £20.3m, a considerable increase from the £3.0m of the first half last year, while profit after tax was £12.7m, swinging from a loss of £0.6m a year ago.

Spire said a significant factor contributing to its first-half financial performance was the notably diminished impact of Covid-19, especially compared the effects experienced between January and April 2022, when the Omicron variant remained a major concern.

In line with its business development strategy, 98% of Spire Healthcare's inspected hospitals and clinics maintained their 'Good' or 'Outstanding' ratings by the CQC or their equivalents in Scotland and Wales.

The company said it remained on target to achieve £15m cost savings this year, while it had invested £36.1m in facilities and equipment.

Additionally, the integration of the Doctors Clinic Group (DCG) had resulted in a 41% like-for-like surge in GP appointments across the in-hospital and newly incorporated DCG business.

From a workforce perspective, Spire Healthcare had announced salary increments of 5.5% effective from 1 September, while colleagues eligible for bonuses would receive a 3% increase.

Additionally, it said the salaries of the lowest-paid employees would be adjusted in accordance with the ‘Real Living Wage’.

Looking ahead, the group remains optimistic, with the latter half of the year set to proceed as expected.

The group said it remained poised for further growth in revenue, earnings, and EBIT margin, aligned with the guidance it provided in its full-year results announcement in March.

“Our strategy is working, as this strong set of results demonstrates, with top-line momentum and strong profit growth,” said chief executive officer Justin Ash.

“Our investments in a high-quality service, partnerships with PMI providers and the NHS, and a compelling self-pay proposition, meant we treated a record number of patients in the first half of this year.

“Our efficiency programmes are on track, and we continue to manage mix to focus on treatment areas most appropriate for our acute hospital environment. This is enhancing our margin.”

Ash noted that, line with its strategy to develop adjacent services, the company acquired the Doctors Clinic Group last year, with the business performing well.

“Demand for easily accessible private GP services continues to soar and our occupational health services are a key platform for employers seeking to retain staff and support their health needs.

“UK healthcare is entering an era of renewed choice as demand for healthcare diagnosis and treatment remains strong.

“By continuing to invest in innovative services, expanded facilities, technology, and our brilliant workforce, Spire is ideally positioned to meet this demand.”

At 0906 BST, shares in Spire Healthcare Group were up 0.96% at 216.06p.

Reporting by Josh White for Sharecast.com.