Half-year results come as company expects to benefit from ‘unprecedented’ demand
First published on Thu 9 Sep 2021 08.50 EDT
The private hospital operator Spire Healthcare has returned to profit amid strong demand from self-paying patients who are coming to its hospitals because of long NHS waiting lists.
Spire, which runs 39 hospitals, made a pre-tax profit of £4.7m in the six months to June, against a loss of £231m a year earlier, which was caused by Covid-related costs. Revenues jumped nearly 40% to £558m, with record revenues from private patients who pay themselves, up almost 47% from pre-pandemic levels.
The company said it expects to benefit from “unprecedented” demand as NHS waiting lists continue to grow. It recruited 166 nurse degree apprentices between April and June to deal with the surge in patients.
The group operated under an NHS contract from the start of the coronavirus pandemic until the first three months of this year. Spire and other private hospital providers agreed a deal for the NHS to take over their clinics at cost, and without charging for executives’ time, to help ease pressure on the NHS during the worst of the pandemic.
Spire said it made no profit from the NHS contract, under which it treated more than 260,000 NHS patients since March 2020. It has made total revenues of £486m from the contract, more than expected. Its financial performance improved as private patients returned in the second quarter after the contract ended.
The firm has been hit by the cost of Covid safety measures, increased costs of staff absence and last-minute cancellations because of patients and staff being required to self-isolate by NHS test and trace in July and August as infections increased.
Higher labour costs related to cancellations amounted to £4m a month, while admissions in July and August were also hit by the spread of the Delta variant. Spire expects many of these pandemic-related costs to be offset by improvements in testing.
Its chief executive, Justin Ash, was awarded an annual bonus of £322,000 last year after the business clinched the NHS contract, worth a total £360m. He received a total pay package of £1.2m, up from £1m in 2019. Bonuses were spread across the company, with £7.3m shared by more than 13,500 frontline staff in the form of £500 “thank you” payments.
One expert said the partnership with the NHS acted as a de facto bailout for private hospitals, because it allowed them to cover rent and wage costs at a time when they were unable to carry out elective procedures, or to provide lucrative treatments to foreign customers.
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