Spire Healthcare buoyed by increased NHS referrals

Hospital operator Spire Healthcare has swung to a first-half profit after it was buoyed by cost-cutting measures and increased numbers of NHS referrals.

The group, which owns 39 hospitals and treats NHS patients as well as those paying privately or through medical insurance, is the UK’s second-largest private healthcare business.

Spire reported a £9.6 million pre-tax profit for the six months to June 2019, rising from a £2.2 million loss in the same period in 2018.

Last year, Spire was hit by lower revenue and tumbling profits as budget cuts at the NHS meant it spent less on referrals to large private providers.

In the first half of 2019, revenue from the NHS “outperformed expectations” as it opened new services alongside local trusts and clinical commissioning groups.

Revenue for the period jumped 3.4% to £491.6 million as it was also boosted by a 5.1% increase in its personal medical insurance arm.

The firm, which maintained its outlook for the rest of 2019, has been working on reducing capital spending to drive its turnaround in performance.

As a result, Spire said that capital expenditure in the half-year plummeted by 41%.

Justin Ash, chief executive officer of Spire, said: “This was a good performance with clear signs of our strategic and operational initiatives bearing fruit.

“We promised 2019 would be a year of stabilisation with revenue growth, continued quality improvement, cash generation and net debt reduction.

“We saw growth in both private insurance and self-pay, with a particularly strong result in private insurance reflecting rising consumer awareness following our marketing campaigns.”

Analysts at Numis said the figures represented a “solid” first half and showed it was “delivering operational progress”.

Shares in the company dipped 0.8% to 124.1p in early trading.