March 2, 2018 / 7:27 AM / 2 years ago

Spire Healthcare core earnings fall, CFO steps down

(Reuters) - Spire Healthcare Group Plc, Britain’s second-largest healthcare firm, reported a 7.4 percent drop in 2017 core earnings, hurt by weakness in its business linked to NHS online referrals, and said Chief Financial Officer Simon Gordon would step down.

Spire also said 2018 underlying earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to be in line with 2017.

Shares of the company fell 4.4 percent in early trading on the London Stock Exchange.

The company said Gordon was leaving after seven years in the role and that a successor would be named in due course. Gordon will remain in the role until March 31.

The company, which generates 30 percent of its revenue from work carried out on behalf of the National Health Service (NHS), the UK’s publicly funded healthcare system, reported 2017 EBITDA of 150 million pounds.

It was in line with Spire’s forecast of EBITDA between 149 million pounds to 151 million pounds, which it revised down last year from 162 million pounds, citing weakness in the online NHS referrals business.

NHS, which has been operating with an over 1 billion pound deficit with shortage of beds and staff, has been seeking assistance from companies such as Spire, BMI Healthcare and Nuffield Health.

Spire’s referrals coming in through NHS weakened, with revenue from the business falling 1.9 percent to 287.8 million pounds in 2017.

Total revenue rose marginally to 931.7 million pounds in the period.

Analysts were expecting EBITDA of 151.77 million pounds and revenue of 938.84 million pounds according to Thomson Reuters I/B/E/S.

Australian hospital chain Ramsay Health Care reported a weak first-half on Wednesday after its British business, a competitor of Spire, was also hit by NHS weakness.

Reporting By Justin George Varghese in Bengaluru; Editing by Amrutha Gayathri

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