Shares in Spire Healthcare, a private healthcare provider for the NHS, plummeted nearly a quarter in early trading today following a warning that increased costs could slash earnings by up to 10%.
The firm anticipates a £30m impact on earnings before interest, tax, depreciation and amortisation (EBITDA) in the coming year due to hikes in National Insurance and minimum wage, as well as the expiration of its energy hedge, as reported by .
While Spire expects to offset some of these costs through efficiency measures, pricing adjustments, and a higher-margin case mix, it predicts adjusted EBITDA will range from £270m to £285m for 2025, only slightly above the £260m reported for 2024.
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In 2024, the group saw a 6.2% rise in revenue due to robust NHS demand and growth in private patients.
The company recorded an 8.8% increase in revenue from NHS work and achieved a 20% volume surge in the fourth quarter, with orthopaedic procedures accounting for over 60% of this NHS work.
Private patient revenue also rose by 4.3%, bolstered by strong contributions from Private Medical Insurance (PMI) and self-pay.
Chief executive Justin Ash has commended the company's performance, noting a robust financial showing in a variable market: "This is a good set of results, delivering all core guidance measures in a changing market. We saw revenue growth of 6.2 per cent year-on-year and adjusted profit before tax growing 29.4 per cent. Market fundamentals remain strong, with private medical insurance coverage growing significantly and a strong partnership with the NHS."
He is optimistic about the impact of their strategies stating, "Our strategy is delivering. We broadened our range of services to meet more healthcare needs in our hospitals, our clinics, in the community and at home; welcomed more NHS patients and invested significantly in our Hospital staff."
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Ash attributed part of this success to the workforce: "We are playing a pivotal role in helping employees stay in work or return to work; all whilst maintaining and improving our quality of care and levels of patient safety, which remain our number one priorities. I thank all our colleagues and consultant partners for their expertise and commitment."
The chief executive also expressed his positive outlook: "We are excited about the future. We remain confident in the combination of structural market growth, supplemented by the potential of new Primary Care services to complement our hospitals, and a continued strategic partnership with the NHS helping to deliver waiting list reductions."
Despite upcoming economic challenges, he assured stakeholders that the company is prepared: "In the year ahead, we will see pressure on costs as a result of National Insurance and Minimum Wage changes. However, we already have a successful efficiencies programme in place and intend to drive self-help measures even faster, partly offsetting the impact to operating costs."