Spire Healthcare shares plummet as delays at St Anthony's lead to flat outlook

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Spire said group revenues would be £925m for the year to December (Source: Getty)

Spire Healthcare shares fell nearly nine per cent after the firm announced delays in the redevelopment of one its flagship hospitals.

The figures

Excluding the problems at St Anthony's, Spire said in its trading update that performance would be at the "top end" of revenue and earnings guidance for 2016.

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Overall group revenues will be £925m, up from £885m, while earnings would be £2m higher compared with 2015 at £162m.

Why its interesting 

Work at the Spire St Anthony's in south London is "expected to take longer than initially anticipated by management", meaning trading performance was hit. The hospital delivered negative earnings of £1.5m during 2016 and the majority of the losses were racked up in just the last two months of the year.

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Looking forward, while not putting specific numbers on how the UK's second largest healthcare group would fare in 2017, the firm said earnings growth would be flat.

Problems at St Anthony's would linger and weigh on performance over the next 12 months, together with start-up costs associated with the launch of two new hospitals in Manchester and Nottingham.

With these issues put to bed, Spire said it expected "mid to high single digit" earnings growth from 2018 onwards.

What the company said

"While it is disappointing that St Anthony's return to profitability has been delayed, we are nevertheless pleased with the robust underlying performance of our established hospitals and remain very positive about the prospects for Spire's business overall," said executive chairman Garry Watts.

Spire's fundamental business proposition is solid and we continue to be well placed to benefit from opportunities arising from constrained NHS funding and capacity.