Spire Healthcare swings to profit but warns over second-half revenue

21st Aug 2015 07:22

(ShareCast News) - Shares in Spire Healthcare tumbled after the company said it swung to a profit after tax in the first half as revenue grew across the business, but cut its revenue guidance for the year, citing weaker demand from the NHS.The private healthcare group posted a profit of £30.8m compared with a loss of £7.8m in the same period last year, as revenue rose 7.8% to £449.8m with growth across all payor groups.However, the company said it now expects flat NHS revenue in the second half, compared with a previous forecast of low single-digit growth due to a slowdown in the flow of cases from the NHS.Chief executive officer Rob Roger said: "Because of recent actions taken in response to the NHS Trusts' estimate of aggregate deficits for 2015/16, we recognise that there may be some near-term weakness in NHS demand over the remainder of this financial year."However, we are confident that the medium-to-long term trends in this business remain very positive for Spire and that, when combined with our growing strength in PMI and Self-Pay, the opportunity to deliver value to shareholders remains compelling."Spire said in-patient and daycase discharges were up by 8% in the period to 138,000 patients from 128,000 and theatre utilisation increased from 64% in the first half of last year to 65%.In addition, the company said construction of its major new cancer radiotherapy centre next to the Baddow Hospital at the Essex Healthcare Park in Chelmsford is now well underway with opening scheduled for November.Numis said the revenue warning is likely to weigh on the shares in the near term, particularly given the strong recent share price performance. However, it noted that NHS waiting lists are at the highest level seen since February 2008, which should drive self-pay markets.Numis rates the stock at 'add' with a 390p price target.At 0912 BST, Spire shares were down 11.9% at 4.87p.