Hobson: I'm Wary of Spire but Upbeat on Kier

THE WEEK: Morningstar columnist Rodney Hobson looks at the contrasting fortunes of healthcare provider Spire and construction group Kier

Rodney Hobson 21 September, 2018 | 12:34PM
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healthcare pharmaceutical stock ageing population

There was nothing dreamy about first half profits from Spire Healthcare (SPI). It’s not just that the cash-strapped NHS made a reduced use of its services, private patients were also less in evidence. This at a time when an ageing population should be requiring more treatment.

The trouble is that Spire has heavy fixed costs, so any fall in revenue drops through to the bottom line with a vengeance. Revenue slipped just 1.1% yet pre-tax profits dropped by more than half, from £12.1 million to £5.1 million. Current trading sees flat group revenue, which is not great but actually a bit of an improvement on the first half.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Kier Group PLC108.40 GBX-1.45
Kingfisher PLC338.00 GBX-1.77Rating
Spire Healthcare Group PLC240.00 GBX2.56
Stagecoach Group PLC80.00 GBX-3.67

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.