Leading UK independent hospital group Spire Healthcare (SPI) said it continued to see strong demand from both the NHS and private sector as it delivered 24% growth in first half adjusted operating profit.

Investors welcomed the positive update with the shares gaining 2% to 218.5p in early trading. Over the last year the shares are down around 7%.

Revenue for the six months to 30 June increased 13% to £676.5 million with private sector up 10.4% driven by strong growth in private medical insurance and continued growth in self-pay.

NHS revenue grew 17% as it continued to work through record waiting lists with strong growth in orthopedics volumes which jumped 17.8% year on year.

Overall hospital admissions were up 7.4% compared with the same period in 2022 while average revenue per case was 6.6% higher at £3,337.

Adjusted operating profit increased 24% to £67.8 million driven by operating leverage (higher proportion of revenue turning into profit), higher prices and cost efficiencies. The company is targeting ‘at least’ £15 million of savings in 2023.

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RECORD NUMBERS 

CEO Justin Ash commented: ‘'Our strategy is working, as this strong set of results demonstrates, with top-line momentum and strong profit growth.

‘Our investments in a high-quality service, partnerships with PMI providers and the NHS, and a compelling self-pay proposition, meant we treated a record number of patients in the first half of this year.

‘UK healthcare is entering an era of renewed choice as demand for healthcare diagnosis and treatment remains strong. By continuing to invest in innovative services, expanded facilities, technology, and our brilliant workforce, Spire is ideally positioned to meet this demand.’

CONFIDENT OUTLOOK

The company said momentum has continued into the second half and progress is in line with its expectations with sustained growth in revenue, operating profit, and operating margin.

Consequently, the board is ‘confident’ of achieving guidance provided at the time of the 2022 full year results in March 2023 which called for continued revenue growth, improving profitability and higher returns on capital employed.

According to Refinitiv analysts are expecting full year revenue to grow by around 9% to £1.3 billion and for a net profit of £23 million compared with £8.6 million last year.

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