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Spire Healthcare agrees with NHS England to go back to normal business

Spire will continue providing NHS elective care to reduce waiting lists but it will increase private activity in its 35 English hospitals

Spire Healthcare Group - Spire Healthcare agrees with NHS England to go back to normal business

Spire Healthcare Group PLC (LON:SPI) has agreed terms with NHS England (NHSE) to transition back to normal business.

The private hospital operator had agreed in March to make its facilities and services available to NHSE during the pandemic in exchange for cost recovery, excluding primary care such as private GPs.

READ: Spire Healthcare finally a ‘buy’ for Liberum over long-term prospects

Spire treated 46,500 NHS admissions in total in the six months to June 30 compared to 46,800 a year ago.

Half-year adjusted earnings (EBIT) are expected to be £13-18mln but the group expects to swing to adjusted loss before tax of £24-29mln before impairments.

Net debt at the end of the period is estimated to be £330mln.

With the variation of the contract, Spire will continue providing NHS elective care to reduce waiting lists but it will increase private activity in its 35 English hospitals.

Each hospital will guarantee a certain minimum capacity for privately funded patients, while Spire commits to a minimum private rebate.

The contract is in place until at least the end of October but will have a definitive expiry date at the end of December.

Positive outlook

Looking ahead, the firm expects to help the NHS reduce its waiting list and said indications from insurance partners show a steady return of the private market.

“Today's update strengthens our conviction that the demand for Spire's services will be stronger than ever from 2021 and its balance sheet will enter the year more robust than expected,” analysts at Liberum commented.

Shares rose 6% to 91.6p on Thursday morning.

Quick facts: Spire Healthcare Group

Price: 95.1 GBX

LSE:SPI
Market: LSE
Market Cap: £381.43 m
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