While Spire Healthcare (SPI) reducing its revenue guidance for 2015 is blamed on short-term issues, investors still desert the private hospital operator. Its shares are 12.2% lower at 315.4p.

Analysts at Numis have their earnings forecasts under review after management lower sales expectations for the year to a maximum of £880 million from previous expectations of between £890 million and £907 million.

Numis’ latest forecasts point to earnings before interest, tax, depreciation and amortisation (EBITDA) of £167.5 million, a 5.2% rise on 2014’s result. This is expected to change.

Abolishing fines linked to NHS waiting lists is hitting Spire’s figures with local contract revenues down 39% since June as less work is referred to the company’s hospitals. Other issues have been insurance companies adopting a more rigorous approach to assessing claims.

Spire expects strong growth in people paying for treatment and services when they need it during 2016, instead of standing in the NHS' queue. The health service could also provide a boost as it works to clear its backlog.

Web - Spire - 12 November 2015

Analysts at investment bank Berenberg agree. ‘We do not believe the situation is sustainable with the 40,000-patient increase in the national waiting list in August representing the largest-ever increase for that month on record. We expect this situation to come to a head over the winter months as pressure on the NHS and in turn the clinical commissioning groups (CCG) grows.’

Numis’ Sally Taylor adds: ‘Medium term dynamics remain favourable and we continue to believe Spire maintains a strong market position although [we] expect consensus downgrades to put pressure on the shares in the near term.’


Issue Date: 12 Nov 2015