Spire Healthcare expects performance to hit 2019 levels by end of year

(Alliance News) - Spire Healthcare Group PLC reiterated Tuesday its financial guidance as private ...

Alliance News 15 June, 2021 | 9:53AM
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(Alliance News) - Spire Healthcare Group PLC reiterated Tuesday its financial guidance as private enquiries overtake 2019 levels.

Spire operates 39 private hospitals and 8 clinics across England, Wales and Scotland.

Underlying trends in the first five months of the year include higher private enquiries than those seen in 2019, a strong waiting list of private surgery and "anticipated significant national demand for both NHS and private diagnostics and procedures".

"The Spire board remains confident in Spire's long-term fundamentals and its robust financial position, and is pleased with its recent performance," Spire said.

Spire said it expects its performance to return to 2019-levels this year. In 2019, the company reported pretax profit of GBP9.6 million, while earnings before interest, taxes, amortisation and depreciation came in at GBP189.0 million. Revenue in 2019 was GBP980.8 million.

Spire added that it will publish Tuesday the scheme circular for the takeover offer announced earlier this year.

In late May, Spire announced that it had agreed to a GBP1 billion takeover offer from clinical practices operator Ramsay Health Care Ltd.

The offer of 240 pence per share in cash values Spire's entire share capital at GBP999.6 million and gives the hospital operator an enterprise value, including debt, of GBP2.06 billion.

Spire shares were down 0.6% at 249.50 pence each in London on Tuesday morning.

"The proposed combination builds a broader platform to take advantage of the opportunity for sustained growth in the GBP5.8 billion UK private hospital sector, with the aim of delivering best-in-class healthcare to all patients," said Ramsay Chief Executive & Managing Director Craig McNally.

Spire shareholders are set to vote on the scheme on July 12.

Notable shareholders include private hospitals group Fidelity International which has an interest of just under 8.7%. Mediclinic International PLC is Spire's largest shareholder at 29.9%.

Last Thursday, Sky News reported that Fidelity will reject a takeover offer as it believes the offer "materially undervalues" the business.

On the other hand, Mediclinic - a Stellenbosch, South Africa-based private healthcare provider - has accepted Ramsay's offer.

Mediclinic said the funds received from the sale of its shareholding in Spire, which would come to around GBP287.8 million, will reduce leverage, providing additional financial flexibility to pursue growth opportunities.

"The Spire board considers the scheme to be in the best interests of the Spire shareholders taken as a whole. Accordingly, the Spire board unanimously recommends that Spire shareholders vote or procure votes in favour of the scheme," Spire said Tuesday.

Mediclinic shares fell 1.3% at ZAR64.25 each in Johannesburg. The stock was down 0.5% at 333.00p each in London.

By Greg Roxburgh; gregroxburgh@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Spire Healthcare Group PLC 224.02 -
Mediclinic International PLC 280.00 GBX -1.34 -

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