Spire Healthcare swings to profit in 2015

FSTE 250 hospital group Spire Healthcare swung to a profit in 2015 as revenue edged higher.

In the year to the end of December, Spire made a pre-tax profit of £73.6m compared with a £7m loss in 2014 as revenue pushed up 3.4% to £884.8m.

The year before, Spire had incurred £54m in exceptional costs relating to the business reorganisation, hospital closure and regulatory and governance costs. This fell to £15.7m in 2015.

Adjusted earnings before interest, taxes, depreciation and amortisation were up 2.2% to £160.1m while adjusted earnings per share rose to 18.3p from 17.9p the previous year.

The company said in-patient and day-case admissions grew 3.7% to 270,000 cases, with growth across all payor groups.

Net debt fell to £419.5m from £424.3m and Spire proposed a final dividend of 2.4p per share, taking the total dividend for 2015 to 3.7p, up from 1.8p in 2014.

Chief executive officer Rob Roger said: "We believe Spire's business proposition is more valid than ever. NHS waiting lists have continued to lengthen and NHS funding is increasingly tight. The target of £22 billion of savings and cost efficiencies by 2021 continues to look very challenging and Hospital Trust capital budgets have been constrained to help fund trading deficits.

"We anticipate continued growth in 2016, with sales ahead by 3% to 5% and EBITDA margins in line with 2015. We continue to expect growth rates in the medium term to exceed this range as demand from all three of our payor groups rises."

Spire said the construction of its two new hospitals in Manchester and Nottingham is on schedule, with both expected to open in the first quarter of next year.

Meanwhile, the integration and development of Spire St Anthony's Hospital is ahead of plan, with a new six theatre block to open this summer.