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Wednesday 25 June, 2014

Spire Healthcare

Intention to Float

RNS Number : 4708K
Spire Healthcare
25 June 2014



Announcement of Intention to Float on the London Stock Exchange's Main Market


This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") to be published by Spire Healthcare Group plc ("Spire", the "Company" or the "Group") in due course in connection with the offer of its ordinary shares (the "Shares") and the proposed admission of its Shares to the premium listing segment of the Official List of the Financial Conduct Authority ("FCA") and to trading on the main market for listed securities of the London Stock Exchange plc (the "London Stock Exchange"). Copies of the Prospectus will, following publication, be available from, subject to applicable securities laws, and at the Company's registered office.

25 June 2014


Spire Healthcare Group plc, a leading private hospital group in the United Kingdom, today announces its intention to proceed with an initial public offering (the "Offer" or the "IPO"). Spire intends to apply for admission of its Shares, issued and to be issued, to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange (together, "Admission").

Spire is the second largest operator in the UK independent acute healthcare sector by revenue with 39 private hospitals and 13 clinics across England, Wales and Scotland. In 2013, the Group delivered tailored, personalised care to approximately 236,000 in-patients and daycase patients, and is the leading private provider by volume of knee and hip operations in the United Kingdom. The Group estimates that it also had more than 1.7 million out-patient episodes (including patient consultations) in the same period. Spire believes that many of the Group's hospitals have earned reputations as centres of excellence delivering successful and award winning clinical outcomes, and that this positions the Group well with patients, consultants, the NHS, GPs and Private Medical Insurance ("PMI") providers. The multi-payor mix of exposure to PMI, self-pay and NHS funded provision has made the Group well positioned to access the expected growth opportunities in the UK healthcare market, which faces significant supply challenges as a result of government budget constraints and increasing demand from a growing population with longer life expectancy.

The Group offers in-patient/daycase procedures in areas including orthopaedics, gynaecology, cardiology, neurology, oncology and general surgery and also diagnostic services including imaging and pathology, as well as out-patient services, such as consulting, minor procedures, treatments, health checks and physiotherapy.

The Group was founded with the acquisition and rebranding of 25 Bupa hospitals in 2007. Since then, the Group has made significant capital investments of £509 million in its estate (including acquisitions) and continues to deliver successful and award winning clinical outcomes and high levels of patient satisfaction. As of 31 December 2013, the Group employed 6,944 people (full-time equivalents) nationwide and had more than 3,500 experienced, self-employed consultant surgeons and other specialists with substantive practices[1] either working in, or referring patients to the Group's facilities.

In 2013, the Group generated revenue of £764.5 million and EBITDAR of £209.0 million, representing a CAGR of 5.4% and 7.8% respectively, since 2009, despite the economic downturn. After rental costs, EBITDA was £154.1million in 2013. Trading for the business for the first quarter of 2014, relative to the first quarter of 2013 has seen strong revenue growth, and underlying performance has continued steadily since 31 March 2014. EBITDAR in the first three months of 2014 was £56.0 million, representing growth of 7.5% relative to the first quarter of 2013.

Garry Watts, Non-executive Chairman, said:

"Spire has gone from strength to strength in recent years. Led by an exceptional management team with a clear agenda to grow and develop the business, it has significantly raised the bar for clinical excellence, making it a leading force in UK private healthcare. Continual investment over the past few years has provided a strong platform for further growth. I am confident that Spire, as a public company, will be able to capitalise on its achievements to date and deliver an increasing share of UK healthcare provision."


Rob Roger, Chief Executive Officer, said:

 "At Spire we have a simple aim: to deliver the highest quality patient care by bringing together the best people and state of the art clinical technology.

I am very proud of our successful clinical outcomes to date which are mirrored through strong Care Quality Commission inspection results. These clinical outcomes help to drive patient demand for services at our hospitals as well as attracting leading consultants to work with us. Our returns to theatre and unplanned readmissions have remained consistently low over the years, and we regularly achieve lower than the national average infection rates at our facilities.

We have already invested £509 million in our hospital estate over the last seven years and have ambitions to grow and invest further. Bringing Spire to the public markets will enable us to access capital, if required, to realise our growth strategy, thereby providing more patients with access to our services.

I am proud of everything our team has achieved to help us deliver the clinical excellence our patients have come to expect. Our future as a public company in this emerging sector is bright and exciting."


·     Spire is one of the leading providers by revenue of private acute healthcare services in the UK. The UK healthcare market has long-term structural growth drivers, where future supply is not expected to meet growing demand, creating significant potential for private sector growth

·     Spire's focus on clinical excellence with a robust risk management system supported by the right people, culture, training and technology is at the heart of Spire's success, and continues to drive demand as well as attracting increasing numbers of leading consultants

[1] The Group considers a consultant's practice to be substantive if the consultant accounted for at least £10,000 of the Group's revenue in 2013  

·     Spire's broad geographic hospital coverage gives it access to patients from PMI, self-pay and NHS funded provision. Patient flow from each payor group is maintained by close relationships with all those involved in patient referral decisions

·     Spire has invested heavily in new theatres, new hospitals and additional services over the past few years, with the existing management team delivering strong growth and building the foundations for future expansion, especially in higher acuity services

·     Spire has a high quality hospital network, service offering, business model and management team ready to support the potential for private sector growth. The Group aims to strengthen its position as a leading UK private hospital group, by growing its network of consultants, hospitals and clinics and continuing to invest to maintain clinical excellence

·     The key components of Spire's strategy to access the UK healthcare market growth opportunity include:

The continued pursuit of a proactive and differentiated engagement approach with all three payor groups

Maximising utilisation through robust theatre schedule management, targeted local demand management and integrated economies of scale

Continued focus on clinical excellence and efficient patient interactions

Development of new service offerings, selectively expanding capacity within the existing network and in new facilities, with an increasing focus on higher acuity

Expansion through greenfield / brownfield development and acquisitions with an identified and focused set of development opportunities

·     Spire benefits from the stability of a focused and dedicated management team with more than 50 years of combined management experience and believes it is well positioned for future growth through the execution of its strategy

Dividend policy

The directors of the Company (the "Directors") intend to adopt a progressive dividend policy based on a payout ratio of around 20%. This dividend policy is intended to reflect the underlying earnings and growth of the business and the cash conversion of the Group. Assuming that there are sufficient distributable reserves available at the time, the Directors intend that the Company will pay an interim dividend and a final dividend in respect of each financial year in the approximate proportions of one-third and two-thirds, respectively, of the total annual dividend. The current intention of the Board is that the first dividend to be paid by the Company will be a pro rata final dividend in respect of the year ending 31 December 2014. The Company may revise its dividend policy from time to time. There are no guarantees that the Company will pay dividends or the level of any such dividends.

Overview of the Offer

The Offer and Admission will position the Group for its next stage of development, providing it with a more flexible capital structure for future growth; it will enhance Spire's profile with patients, referrees and payors, and further improve the ability of Spire to recruit and retain consultants, key management and employees.

The Offer will include a proportion of new Shares to be issued by the Company to raise gross proceeds of approximately £315 million, which together with existing cash resources, will be used to reduce the Group's indebtedness and cover IPO costs (including management and staff accrued bonuses).  This primary raise, together with new debt facilities of £525 million (£100 million undrawn) and strong cash flow generation, will provide the Company with a flexible capital structure and adequate financial headroom to drive the future growth of the business.

The Offer will also include a partial sale by funds managed by Cinven Limited ("Cinven") of their existing holding of Shares. A small percentage of the total Shares to be made available in the Offer is expected to include existing Shares held by certain directors of the Company (the "Selling Directors"). The sale of Shares by Cinven and the Selling Directors will take place through Rozier s.à r.l. (the "Selling Shareholder").

The Offer is being made by way of:

·     an Institutional Offer by the Company and the Selling Shareholder of new Shares and existing Shares, respectively: (i) to certain institutional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S under the US Securities Act of 1933, as amended (the "Securities Act") and in accordance with locally applicable laws and regulations, and (ii) in the United States, only to Qualified Institutional Buyers as defined in, and in reliance on, Rule 144A under the Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; and


·     a Consultant and Staff Offer by the Company and the Selling Shareholder of new Shares and existing Shares, respectively, to eligible consultants and staff of the Group in the United Kingdom. The minimum eligible application size in the Consultant and Staff Offer will be £500, with a maximum application amount of £10,000 per applicant. Full details of the offer will be included in the Prospectus when it is published (expected to be 7 July 2014). Applications in the Consultant and Staff Offer can only be made online at the Offer Website at by submitting an online application.


The Company and Cinven will be subject to lock-up arrangements on new issues and further disposals of Shares, respectively, for a minimum of 180 days following completion of the Offer, subject to certain exceptions. The Directors, including the Selling Directors, will also be subject to lock-up arrangements on disposals of Shares for a longer period of a minimum of 365 days following completion of the Offer, subject to certain exceptions.

Immediately following completion of the Offer (being the new Shares issued and the partial sale by the Selling Shareholder), it is expected that the Company will have a free float of at least 25% of the issued share capital of the Company.  It is intended that an over-allotment option of up to 15% of the total Offer size will be made available by Cinven.  It is expected that Admission will take place in July 2014 and that the Company will become eligible for inclusion in the FTSE UK indices.

In relation to the Offer, J.P. Morgan Securities plc (which conducts its UK investment banking activities as "J.P. Morgan Cazenove") and Morgan Stanley & Co. International plc are acting as Joint Sponsors, J.P. Morgan Cazenove, Merrill Lynch International ("BofA Merrill Lynch") and Morgan Stanley Securities Limited (together with Morgan Stanley & Co. International plc, "Morgan Stanley") are acting as Joint Global Co-ordinators and Joint Bookrunners, and Numis Securities Limited ("Numis") is acting as Co-Lead Manager.



For further information please contact:

Spire Healthcare                                             +44 (0) 20 7427 9160

Antony Mannion

(Director, Investor Relations)


Joint Global Co-ordinator and Joint Bookrunner

BofA Merrill Lynch                                        +44 (0) 20 7628 1000

Dan Rosenfield

Simon Davy

Craig Coben


Joint Global Co-ordinator, Joint Sponsor and Joint Bookrunner

J.P. Morgan Cazenove                                    +44 (0) 20 7742 4000

Laurence Hollingworth

Greg Chamberlain

James Mitford


Joint Global Co-ordinator, Joint Sponsor and Joint Bookrunner

Morgan Stanley                                              +44 (0) 20 7425 8000

Matthew Jarman

Ben Grindley

Henrik Gobel


Co-Lead Manager

Numis                                                              +44 (0) 20 7260 1000

Michael Meade

Rupert Krefting


PR Advisor for Spire

Brunswick Group LLP                                  +44 (0) 20 7404 5959

Justine McIlroy

Simon Sporborg

Notes to Editors


Key strengths

Well positioned to access the expected long-term structural growth in the UK healthcare market

The UK healthcare market is driven by a number of long-term structural growth drivers including demographic trends such as population growth, increasing life expectancy and an ageing population. In addition to these demographic trends, increasing consumer expectations for enhanced care and the availability of more advanced and complex treatment techniques are expected to further drive the demand for healthcare services in the UK.

Against this backdrop of increasing demand, the UK healthcare market, which has historically been dominated by direct provisioning from the NHS, faces supply constraints, primarily resulting from the expected emergence of a public funding gap, estimated according to data provided by Laing & Buisson, PESA and NHS England to be approximately £35 billion by 2020/21, between anticipated demand for NHS services and the expected NHS funding in 2020/21. This expected gap is due to the constrained budgetary ability of the NHS to expand its capacity to meet anticipated healthcare demand and is expected by Spire to drive further outsourcing from the NHS to more efficient independent healthcare providers.

The Group is a leader, delivering superior clinical outcomes in a market with significant barriers to entry

The Group is the second largest operator in the UK private acute healthcare sector by revenue. Spire believes that many of the Group's hospitals have earned reputations as centres of excellence delivering successful and award winning clinical outcomes, and that this positions the Group well with patients, consultants, the NHS, GPs and PMI providers. The Group's returns to theatre, unplanned readmissions, and unplanned transfers to a higher level of care have remained consistently low, and the Group has consistently achieved lower than the national average infection rates at its facilities (as measured by MRSA, C difficile and surgical site infection). The Group's successful clinical outcomes are mirrored through strong Care Quality Commission results, with compliance against essential standards of 99.5% compared with a national average of 85.0%. The Group's experience and reputation for high clinical standards continue to drive demand for services at its hospitals as well as attracting more patients and increasing numbers of leading consultants. This in turn, Spire believes, helps the Group to further enhance its reputation for high-quality care as well as efficiency, to attract the best consultants and to strengthen its relationships within the local community.

Spire believes the Group is well positioned in a market with significant barriers to entry, with high sunk costs and long lead times associated with developing a private hospital. The Group already possesses a well invested estate and national network, combined with its operational knowhow, brand and strong relationships with consultants, GPs and employees to provide a strong platform from which to expand further.

Broad geographic hospital coverage with increasing focus on providing a high acuity service offering

With 39 hospitals and 13 clinics, the Group maintains strong coverage in key urban areas across England (excluding central London), Wales and Scotland, with a particular focus on regions which have strong PMI coverage.  The Group's broad geographic coverage provides an attractive network proposition for insurers, as well as substantial scale benefits including improved purchasing, pathology and supply chain capabilities.

The Group offers a wide range of services across almost twenty specialties and treats patients along every stage of their journey through a combination of in-patient, daycase, and outpatient procedures.  The range of services offered by each hospital within the Group has been developed with a focus on local market demand, high-growth and high-margin specialties, and the availability of consultants. The Group has invested to expand its capabilities in more complex surgical procedures and treatments where the Group is capable of delivering the most value to patients, payors and consultants.

Diversified payor mix with strong stakeholder relationships

Healthcare spending in the United Kingdom is funded by the NHS, PMI providers and individual self-pay patients.  In 2013, PMI providers, NHS and self-pay customers accounted for 54.4%, 25.0% and 17.1% respectively of the Group's revenue, and 3.5% was attributable to other sources. Spire believes this diversity of payor mix provides the Group with a natural funding hedge as improving macroeconomic conditions contribute to an increase in PMI and self-pay patients, while enhanced NHS demand in weaker macroeconomic conditions tends to result in increased levels of NHS outsourcing to Spire's facilities.

To protect and grow the Group's position in each of the three main payor categories, the Group seeks to maintain close relationships among all relevant constituencies.  This includes working with GPs to strengthen the Group's local presence and increase referral flows, while hospital directors work closely with clinical commissioning groups ("CCGs") to understand and help shape commissioning priorities in their respective local areas.  The Group also has good relationships with all of the principal UK PMI providers and works closely with them to support transformational initiatives designed to lead to higher PMI take-up, including promoting "on-demand" self-pay products and helping to increase PMI penetration in the SME segment.

Well-invested and scalable asset base with capacity to take on greater volumes

Since 2008, the Group has invested approximately £300 million (of which approximately £160 million is considered by Spire to be maintenance-related) in new and expanded hospitals, theatres, scanners, equipment, and services to meet the needs of each hospital's local community. The Directors believe that this investment by the Group has laid the foundations for future growth especially in higher acuity services such as oncology, cardiology, and neurosurgery.

The Group has significant existing capacity to take on additional patient volumes, with theatre utilisation across its estate averaging 64.4% in 2013.  The Group has also demonstrated the opportunity to generate attractive returns arising from the expansion of local capacity where warranted by demand and opportunity. The Group considers itself to be different to many other hospital groups in that it operates its own network of pathology laboratories.  This not only brings benefits in terms of cost control, but also enables improvements in terms of turnaround times and support. The pathology network also delivers a number of contracted services to both NHS and other independent hospitals, with capacity to take on further work.

The Group's willingness to invest in its hospitals and to retain control over key support services such as pathology and sterilisation differentiates it from other groups and supports its plans to undertake more services, encourages more referrals from GPs and, Spire believes, makes the Group a more attractive environment for consultants in which to practise. This increases its ability to attract the best consultants and to collaborate with them to offer specialised procedures that would otherwise not be available from acute private hospitals.

Strong management team with decentralised structure allowing focus on local markets

The Group's senior management team, led by its chief executive officer, Rob Roger, and its chief financial officer, Simon Gordon, have, along with their chief operating officer, Andrew Gore, and director of clinical services, Jean-Jacques de Gorter, more than 50 years of combined management experience and have successfully led the expansion of the Group's portfolio and capabilities. They have implemented numerous strategic actions that have been integral to the Group's continued growth. The Group operates under a decentralised organisational structure between senior management and the individual hospital directors, enabling each hospital to offer services in response to local consultant and patient dynamics and any fluctuations in demand, whilst centralising support functions and clerical oversight.

Senior management have kept costs under tight control, leading to increased productivity. A number of key activities such as pathology, sterilisation and supply chain management are managed in-house, improving both quality and efficiency.  There has also been a rigorous focus on KPIs and significant investment in the Group's SAP platform, permitting granular facility performance monitoring and allowing the Group to prioritise its activities on the areas where it can deliver the highest value.

Track record of growth with positive recent momentum

The Group's business significantly outperformed its UK peers during the past few years and has shown consistently positive top line growth throughout the recent economic downturn. From 2009 through 2013, the Group grew revenue from £620.0 million to £764.5 million, a CAGR of 5.4%. The Group's KPI-driven culture and focus on efficiency (through labour and capacity management, improvements in patient yield and treatment pathway conservation and cost control) which maintains and improves clinical outcomes has delivered EBITDAR margin improvement from 25.0% to 27.3% over the same period (although EBITDAR margins from 2011 to 2013 have decreased slightly, from 28.1% to 27.3%).  This performance has been achieved while consistently increasing the percentage of revenue derived from NHS procedures, which are often subject to lower pricing levels. The Group's increased efficiency and higher margins have resulted in stable cash flows over the same period.

This momentum has been carried into 2014, with revenue for the three months ended 31 March 2014 outpacing the corresponding period in 2013 by 10.4%.



Seize UK market growth opportunity through focus on all three payor groups

The Group intends to continue to pursue a proactive and differentiated engagement approach with each payor group, reflecting the multi-faceted nature of healthcare funding in the United Kingdom through private insurance, individual patients and the NHS.

Spire expects the PMI sector to grow meaningfully over the medium term as a result of the economic recovery, making private insurance relatively more affordable and attractive to individuals and employers, while funding pressures on the NHS should further enhance the value delivered by private healthcare providers. Spire believes that the Group is well-positioned to benefit from these trends because of its national coverage, close relationships with insurers and integrated service offering and acuity mix. The Group will continue to focus on deepening its relationships with insurers by building integrated solutions, improving the effectiveness of its clinical pathways, and demonstrating its value proposition through excellent clinical outcomes, all of which are designed to expand the PMI market in a collaborative manner. On the demand side, Spire is seeking to increase PMI patient volumes and revenue by shifting more of its facilities into more complex treatments and procedures (including neurosurgery, complex orthopaedics, cardiac and oncology). Spire is also expanding its GP communication efforts, including through enhanced targeting and marketing to GPs who do not currently refer PMI patients.

Spire believes that growth in self-pay is supported by similar factors to the expected growth in PMI. The self-pay market has also benefitted from the rising price of individual PMI premia and the increasing number of individuals for whom PMI is not available (e.g., elderly populations who are unlikely to obtain private insurance on attractive terms, because the cost of cover is individually risk rated). Spire's strategy for increasing its self-pay revenue includes: continuing to develop relationships with GPs; increasing brand awareness through targeted marketing to potential patients, developing a sustainable and targeted value proposition through competitive and transparent fixed prices for a range of common procedures with demonstrable quality outcomes, and expanding into new services where self-pay demand is present.

Spire believes that the Group's NHS business presents an opportunity for further growth due to the need for greater NHS productivity and the outsourcing opportunities that this is expected to generate due to NHS funding constraints. The Group aims to reinforce its key NHS relationships with CCGs, GPs and regulators, while expanding its service offering to include additional procedural specialties including more complex procedures delivering attractive returns.  In addition, key near-term incremental opportunities for the Group to partner with the NHS include (i) the NHS' increasingly limited ability to cope with rising demands for complex scanning, for example MRI, bringing increasing opportunities for UK independent sector providers with scanning capacity, (ii) the NHS' failure to cope with the recent winter pressures which has led to a strategic focus on developing longer term resilience and contingency planning and which may bring new medium term local contracting opportunities to the Group, and (iii) the rollout of new contracting models such as prime contracting, which is expected to bring increased volume to those providers who are both efficient and clinically effective, areas in which the Group believes it is a leader.

Maximise existing capacity utilisation by leveraging technology to drive efficient scheduling and design optimal workflows

Spire expects to accommodate anticipated growing demand through maximising utilisation of its existing capacity and expanding its capabilities within its existing network.

Various structural trends have favoured out-patient and daycase care in preference to in-patient care, including improvements in surgical practices (e.g. minimally invasive techniques) leading to quicker recovery times and better outcomes and earlier and more widespread use of diagnostic imaging allowing earlier and more targeted treatment. The Group intends to build upon these trends and Spire believes this shift in practice will continue to generate better outcomes for patients while simultaneously making additional capacity available to increase patient volumes. The Group will continue its focus on theatre utilisation, which has increased from 63.0% to 64.4% between 2011 and 2013, and the rollout of its SAP platform will enable the Group to track capacity in a consistent manner across the portfolio and dynamically identify areas of improvement.

Expand existing sites and develop new service offerings, including radiotherapy

The Group plans selectively to expand its capacity within its existing network in areas with strong local demand, with the aim of broadening the Group's range of specialties and its capability to treat patients with higher acuity or requiring more complex procedures. The Group also aims to grow its orthopaedics, cardiac, oncology and general surgery practices and develop more complex capabilities in areas of higher acuity.

Many patients requiring complex procedures can only be treated in locations where consultants not only have the appropriate specialised equipment and facilities, but also have extensive staff and support services such as those commonly found in the NHS. The Group aims to develop partnerships with consultants and to optimise its in-house specialist capabilities, generally to replicate the support structure clinicians have in the NHS, in order to encourage consultants to bring more patients with acute needs to its hospitals. The Group has also added incremental theatre capacity at existing sites to drive additional volume.

The Group plans further to expand theatres at existing sites in the next four years and leverage specialist nursing support employees to support patients with more complex needs, with targeted returns on capital of 20-25%. In addition the Group will continue to invest in cutting-edge equipment, including for example Magnetic Resonance guided Focused Ultrasound Surgery and 3T MRI machines.

The Group seeks to focus on high acuity/complex services to provide a broader range of services for patients with serious illnesses. For example, to enhance its oncology offering, which has grown from approximately 22,000 treatments in 2008 to 31,000 treatments in 2013. The Group is planning on expanding its radiotherapy offering in order to provide care for the entire cancer pathway. In the spring of 2014, the Group opened a radiotherapy facility in Bristol in conjunction with its existing Bristol site, building upon the experience gained through the Group's existing collaboration with CancerPartners UK, who have radiotherapy bunkers co-located with four of the Group's hospitals.

Continued focus on cost management to protect and enhance margins

The Group aims to continue to explore ways to offset the high fixed costs associated with running a hospital, particularly by improving efficiency, reducing variable costs, optimising the utilisation of its theatre and bed capacity, managing overtime and delivering reliable care processes. These efforts focus on locally procured services allowing local management to react quickly to demand patterns in local markets and central services to leverage the Group's scale.

In addition, by relying less on agency staff in favour of a permanent work force, the Group has sought to improve the level of staff quality and has achieved a shift in staff composition which has led to cost savings. In addition, the Group's in-house pathology services has reduced pathology costs and provides a revenue source, as its hub and spoke supply distribution network is able to provide outsourced pathology services to other healthcare providers. The Group's in-house supply chain operates through a national distribution centre providing daily deliveries to all of the Group's hospitals, which Spire believes provides a cost advantage relative to its competitors.

Expand through greenfield and brownfield development and acquisitions

The Group has identified a focused portfolio of greenfield / brownfield opportunities in areas of high PMI cover or where specific market opportunities are created by the weaknesses of competitors. The Group has consistently demonstrated its ability to deliver attractive returns on capital supported by, amongst other things, a thorough, disciplined and analytical approach to project selection, historically targeted on investments delivering a 20% ROCE. The Group is currently evaluating a number of additional brownfield projects.

In addition, the Group aims to continue to grow by taking advantage of selected acquisition opportunities which are complementary to the existing estate and strategy. For example, on 22 May 2014, the Group completed the acquisition of St. Anthony's hospital that was announced in April 2014. Other potential acquisition targets could include hospitals that come up for sale via mandated CMA divestitures, selected regional add-ins and international opportunities, where such opportunities are projected to achieve returns on capital in line with historical acquisitions.

Key financials


Financial year ended 31 December

Three month period ended
31 March













(£ millions)






Total revenue................






Of which:






























Of which:




































In-patient/Daycase discharges......................






Of which:






PMI volumes






NHS volumes






Self-pay volumes


















No. of theatres(1)...........


















(£ millions)



















Source: Company information, based on IFRS consolidated financials

¹ Represents the number of theatres in use at period end

² Utilisation is shown as a percentage and is calculated by dividing utilised theatre hours / maximum theatre hours (defined as 10 hours per weekday and 7 hours per Saturday, for 50 weeks per year);

³ EBITDAR is defined as operating profit adjusted to add back exceptional operating items, depreciation of property plant & equipment and expenses for rent of land and buildings

4 EBITDA is defined as operating profit before exceptional operating items and depreciation of property, plant & equipment. On 17 January 2013, the Group completed the partial refinancing of its loan facilities through the sale of its freehold interest in 12 of the Group's hospitals for £704 million to a consortium of purchasers. The leases of the properties increased the Group's rent expense for 2013 compared to 2011 and 2012, and consequently resulted in a lower EBITDA in 2013 compared to 2011 and 2012. The Group's EBITDAR figures, which reflect results prior to the impact of additional rent expenses, have increased each year from 2011 to 2013 and remain comparable throughout the period



Board of Directors

In connection with the IPO, Spire today announces the appointment of four new experienced Independent Non-executive Directors to complement the existing Board. The members of the Board of Spire as at 25 June 2014 are:


Non-executive Chairman: Garry Watts

Chief Executive Officer: Rob Roger

Chief Financial Officer: Simon Gordon

Senior Independent Non-Executive Director: John Gildersleeve

Independent Non-Executive Director: Tony Bourne

Independent Non-Executive Director: Dame Janet Husband

Independent Non-Executive Director: Robert Lerwill

Non-Independent Non-Executive Director: Simon Rowlands

Non-Independent Non-Executive Director: Dr Supraj Rajagopalan

Board Biographies

Garry Watts MBE (Non-executive Chairman)

Garry Watts, FCA, MBE, has been Non-executive Chairman since June 2014, and prior to this he served as Executive Chairman upon joining Spire in 2011. Prior to joining Spire he was CEO of SSL International plc for seven years (and before that its CFO). SSL was a £2.5 billion international consumer healthcare brands company, which was acquired by Reckitt Benckiser in late 2010. Garry is also Chairman of BTG plc, and of Foxtons Group plc, deputy chairman of Stagecoach Group plc and a non-executive director of Coca-Cola Enterprises, Inc. A chartered accountant and former partner at KPMG, Garry was previously an executive director of Celltech plc and of Medeva plc and a non-executive director of Protherics plc. Other roles have included 17 years as a member of the UK Medicines and Healthcare Products Regulatory Agency Supervisory Board.


Rob Roger (Chief Executive Officer)

Rob Roger has been CEO of Spire since May 2011. Previously he was appointed CFO when Spire Healthcare was formed in 2007. Prior to joining Spire, Mr Roger spent nine years with the Tussauds Group as CFO. During this time, he also had responsibility for business development, was CEO (acting) in 2001/2002 and oversaw the opening of Madame Tussauds in six markets. He oversaw the sale of Tussauds Group to Merlin Entertainment in April 2007. Prior to this, Mr Roger was CFO of First Choice holidays and flights from 1995-1997, and was CFO of Pizza Hut in France from 1992-1995 overseeing the roll out of 150 sites across France. Mr Roger qualified as a chartered accountant with PricewaterhouseCoopers LLP.


Simon Gordon (Chief Financial Officer)

Simon Gordon joined Spire in July 2011 having spent eight years as Group Finance Director of leading international health and fitness club business, Virgin Active. Prior to joining Virgin Active, Simon worked for KPMG on both audit and transaction advisory projects for both listed and private companies. Mr Gordon qualified as a chartered accountant with ICAEW.


John Gildersleeve (Senior Independent Non-executive Director)

John Gildersleeve has been the Deputy Chairman and Senior Independent Director of the Group since June 2014.  He has been chairman of The British Land Company plc since January 2013, prior to which he served as a nonexecutive director of British Land from September 2008 and as senior independent director from November 2010. John is also deputy chairman of Carphone Warehouse Group PLC and a non-executive director of TalkTalk Telecom Group PLC. Until 2004, John was a director of Tesco plc. He was formerly chairman of New Look Retail Group Limited, EMI Group, Gallaher Group and Carphone Warehouse Group and was also a nonexecutive director of Lloyds TSB Bank PLC and Vodafone Group.


Tony Bourne (Independent Non-executive Director)

Tony Bourne has been an Independent Non-executive Director since June 2014.  He is currently a non-executive director at various companies including Barchester, one of the UK's largest residential care home businesses, and Bioquell Plc, a London Stock Exchange-listed company with a leading position in bio-decontamination and in testing, regulatory and compliance services.  Tony was chief executive of the British Medical Association for nine years until 2013.  Prior to this he was in investment banking for over 25 years, including as a partner at Hawkpoint and as global head of the equities division and a member of the managing board of Paribas.  Tony has also previously served as a non-executive director of Southern Housing Group, from 2004 to 2013, and Scope, which focuses on cerebral palsy and is one of the UK's largest charities.


Dame Janet Husband (Independent Non-executive Director)

Dame Janet Husband has been a Non-executive Director of the Group since June 2014. She also currently holds the position of Emeritus Professor of Radiology at the Institute of Cancer Research and serves on the boards of Royal Marsden NHS Foundation Trust and Nuada Medical Group as a non-executive director. Prior to her appointment with the Group, she also served as a Specially Appointed Commissioner to the Royal Hospital Chelsea, was president of the Royal College of Radiologists and chaired the National Cancer Research Institute in the UK. She obtained her education at Guy's Hospital Medical School and was appointed as Professor of Diagnostic Radiology at the University of London, Institute of Cancer Research in addition to more than twenty years as a practising consultant radiologist.


Robert Lerwill (Independent Non-executive Director)

Robert Lerwill is a chartered accountant and has been a Non-executive Director of the Group since June 2014. He spent 13 years with Arthur Andersen and 10 at WPP as CFO. He then joined Cable & Wireless as CFO in 1996 and subsequently became deputy CEO and CEO of Cable & Wireless Regional, leaving in 2003.  In 2000, Robert joined Aegis plc as a non-executive director and chair of the audit committee and then served as CEO of Aegis Group from 2005 to 2008. Robert also served as a non-executive director at Synergy Health plc from 2005 to 2012, becoming chairman of the board in 2010, and at British American Tobacco plc from 2005 to 2013, where he was also chair of the audit committee.  Robert currently serves as a non-executive director of ITC Limited, a large Indian conglomerate and DJI (Holdings) plc.  Robert has a BA degree from Nottingham University (industrial economics) and has also attended the Advanced Management Program at Harvard Business School.


Simon Rowlands (Non-Independent Non-executive Director)

Simon Rowlands has been a Non-executive Director since June 2014 and has served as a non-executive director of Spire Healthcare since its formation in 2007. His other current appointments include non-executive directorships at MD Medical Group and Avio. Simon is a Founding Partner of European private equity firm Cinven which he joined in 1986. At Cinven, Simon established and led the healthcare team and was involved in a number of transactions including General Healthcare Group, Amicus and Partnerships in Care in the UK; USP in Spain; and Générale de Santé, Aprovia and MediMedia in France. In July 2012, Simon became Senior Adviser at Cinven. Prior to joining Cinven, Simon worked with an international consulting firm on multi-disciplinary engineering projects in the UK and southern Africa. He has an MBA in business, a BSc in engineering and is a chartered engineer.


Dr Supraj Rajagopalan (Non-Independent Non-executive Director)

Dr Supraj Rajagopalan has been a Non-executive Director since June 2014 and has served as a non-executive director of the Group since 2012.  He is a Partner at Cinven, where he leads the firm's activities in the healthcare sector. During nearly 10 years at Cinven, he has been involved in a wide variety of transactions, most recently leading the firm's investments in AMCo and Medpace. He has sat on the board of several other Cinven portfolio companies, including Phadia and Ahlsell. Prior to joining Cinven in 2004, Supraj worked at the Boston Consulting Group in London, advising corporate clients in the healthcare and financial services sectors. Before this, he was a doctor in the NHS. Supraj graduated with undergraduate and postgraduate degrees in Medical Sciences from the University of Cambridge.


Forward looking statements

This announcement contains "forward-looking" statement, beliefs or opinions. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of Spire and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "projects", "anticipates", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or Spire with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth and strategies of Spire and the industry in which it operates. These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing Spire. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement. The Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Rules and Transparency Rules of the FCA.


Each of J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statements contained in this announcement whether as a result of new information, future developments or otherwise.



Important notice


This announcement, has been prepared by and is the responsibility of Spire, and has been approved by J.P. Morgan Securities plc (which operates its investment banking business in the UK under the name J.P. Morgan Cazenove) and Morgan Stanley & Co. International plc solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 ("FSMA")


Neither this announcement nor any copy of it may be made or transmitted into the United States, or distributed, directly or indirectly, in the United States. Neither this announcement nor any copy of it may be taken or transmitted directly or indirectly into Australia, Canada or Japan or to any persons in any of those jurisdictions, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. This announcement is not an offer of securities for sale, or a solicitation of an offer to purchase securities in the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.


The securities to which this announcement relates have not been and will not be registered under the Securities Act or with any regulating authority or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be offered or sold within the United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. There will be no public offer of the securities in the United States.


The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to any national, resident or citizen of Australia, Canada or Japan.


In any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") other than the United Kingdom, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.


This announcement is an advertisement and not a prospectus. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the Prospectus intended to be published by Spire in due course in connection with the proposed admission of its Shares to the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange. Copies of the Prospectus will, following publication, be available from, subject to applicable securities laws, and at the Company's registered office.


Any purchase of Shares in the proposed Offer should be made solely on the basis of the information contained in the final Prospectus to be issued by the Company in connection with the Offer. Before purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.


This announcement does not constitute a recommendation concerning the Offer. The price and value of securities and any income from them can go down as well as up. Past performance is not a guide to future performance. Before purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks that will be set out in the Prospectus, when published. Information in this announcement or any of the documents relating to the Offer cannot be relied upon as a guide to future performance. There is no guarantee that Admission will occur and you should not base your financial decisions on Spire's intentions in relation to Admission at this stage. Acquiring Shares to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Potential investors should consult a professional advisor as to the suitability of the Offer for the entity or person concerned.


J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc and Morgan Stanley Securities Limited, which are authorised by the Prudential Regulation Authority ("PRA") and regulated by the FCA and the PRA in the United Kingdom, and Numis Securities Limited, who are authorised and regulated by the FCA in the United Kingdom are acting exclusively for Spire and no-one else in connection with the Offer. They will not regard any other person as their respective clients in relation to the Offer and will not be responsible to anyone other than Spire for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offer, the contents of this announcement or any transaction, arrangement or other matter referred to herein.


In connection with the Offer, each of J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of Spire or related investments in connection with the Offer or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited or any of their respective affiliates acting as investors for their own accounts. In addition they may enter into financing arrangements and swaps with investors in connection with which they may from time to time acquire, hold or dispose of shares. J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited and their respective affiliates do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.


Apart from the responsibilities and liabilities, if any, which may be imposed on any of J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited or any of their respective affiliates, directors, officers, employees, advisers or agents accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this document or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Shares or the Offer and nothing in this announcement will be relied upon as a promise or representation in this respect, whether or not to the past or future. Each of J.P. Morgan Securities plc, Merrill Lynch International, Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited and Numis Securities Limited and their respective affiliates accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this announcement or any such statement.


In connection with the Offer, a stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, overallot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. The stabilising manager will not be required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the stabilising manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither the stabilising manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.


Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.


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