NHS England contract update and trading update
Spire Healthcare Group plc
("Spire Healthcare", "the Company" or "the Group")
NHS England contract update and trading update
21 December 2020
Spire Healthcare Group plc (LSE: SPI), a leading UK independent hospital group, today announces the following update on its contract with NHS England and provides a trading update.
NHS contract update
Further to its announcement on 8 December that it had been approached by NHS England (NHSE) to agree a new contract, Spire Healthcare, along with other independent providers, has now signed a contract (the "New Contract") with NHS England to provide a volume-based commitment aimed at reducing NHS waiting lists when the existing contract with NHS England (as varied on 13 August 2020) ends on 31 December 2020.
This New Contract aims to provide a smooth transition for NHS services in England from the current cost-based contract to the new NHS framework for purchasing additional activity from the independent sector. It also allows for the continuation of certain vital services not covered by the NHS framework until the end of January 2021 and ensures the safe repatriation of patients and services back to their NHS Trusts. The New Contract has a definitive end date of 31 March 2021 and can be terminated before this by NHSE with six weeks' notice; the contract also allows NHSE to access further capacity, under certain conditions, in locations where there are a high concentration of COVID cases.
The New Contract provides for payment by activity, based on NHS tariff, with minimum value underpins. This agreement will allow Spire Healthcare to continue to treat private patients, whilst supporting the NHS through the winter months, and to transition smoothly to the NHS framework in April 2021.
In recognition of the outstanding contribution of all Spire Healthcare colleagues during this challenging year, the company has decided to award an exceptional thank-you payment of £500 to every colleague not already on a bonus scheme. The £8m cost of this payment will be met by the company and will not be charged to the NHS.
Separately, whilst very few Spire Healthcare colleagues were furloughed during the pandemic, the Group has decided to refund all payments received under the furlough scheme back to the Government.
Trading update
Since the interim results on 17 September, Spire Healthcare has continued to deliver a high level of NHS activity whilst private revenue has recovered more quickly than anticipated due to a greater proportion of self-pay and more complex procedures. Whilst the Board expects the Group to report a loss before tax for the full year, based on trading to end 30 November, the Board now anticipates FY 20 adjusted operating profit significantly above previous guidance of at least £30m but still materially below that reported in FY 19 (£97.6m). The precise outcome will depend on final reconciliations with NHSE of the out turn of the 2020 contract, which should be concluded in Q1 21. The Board anticipates 2020 year-end net bank debt position at the lower end of the £320m-£360m range indicated in the interim results.
Strong demand for both private and NHS procedures has continued to date, which supports the Board's cautious optimism for 2021, although uncertainty remains due to the unpredictable impact of COVID-19 on both patient volumes and costs. As previously stated at the interim results, the Board anticipates trading returning to 2019 levels in 2021, although it continues to remain challenging to set future expectations, and the Group expects to publish its preliminary results for the year ended 31 December 2020 on 4 March 2021.
Spire Healthcare is proud to have supported the NHS across England, Wales and Scotland in responding to the pandemic throughout 2020 and has treated over 200,000 NHS patients in total since March. The Group looks forward to continuing to play an important role in 2021 and beyond as it works with the NHS to look after patients who need cancer and other urgent care, and to reduce the NHS waiting list.
Justin Ash, Spire Healthcare Chief Executive, said: "It has been an extraordinary year for the country's healthcare professionals and I would like to pay tribute to the hard work and commitment of our colleagues during this very difficult period. They have shown the high levels of quality and professionalism that make Spire Healthcare an important partner to the NHS and we look forward to continuing to work with our NHS colleagues in responding to the pandemic."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information please contact:
Spire HealthcareCora McCallum, Head of Investor Relations
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+44 (0)7967 109 731 |
Instinctif PartnersDamian Reece Guy Scarborough Jeremy Durrant |
+44 (0)7931 598 593 +44 (0)7917 178 920 +44 (0)7792 918 648 |
Registered Office and Head Office:
Spire Healthcare Group plc
3 Dorset Rise
London
EC4Y 8EN
Registered number 09084066
About Spire Healthcare
Spire Healthcare is a leading independent hospital group in the United Kingdom, with 39 private hospitals and 8 clinics across England, Wales and Scotland.
Spire Healthcare delivered tailored, personalised care to approximately 810,000 in-patients, out-patients and daycase patients in 2019, and is the leading private provider, by volume, of knee and hip operations in the United Kingdom. The Group's well located and scalable hospitals have delivered successful and award winning clinical outcomes, positioning the Group well with patients, consultants, the NHS, GPs and Private Medical Insurance ("PMI") providers. Spire treats patients through a variety of routes including PMI, Self-pay and the NHS, providing the Group with diversified access to the expected growth opportunities in the UK healthcare market, which faces significant supply challenges as a result of NHS budget constraints and increasing demand from a growing population with longer life expectancy.
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