Spire healthcare shares plummet on lowered full-year outlook
Shares in UK-based hospital group Spire Healthcare fell in trading this morning, after it cut its revenue guidance for the full year.
The company said it expects revenue for 2015 to grow by between three and 3.7 per cent compared to last year, which is a decline from its previous forecast of between four and six per cent.
Under the revision, total revenue will rise by between £882m and £888m. Investors reacted very badly to the news, with shares in the London-listed firm currently down 12.1 per cent at 316 pence.
The cause of the downward revision was a 39 per cent decline in revenues from NHS Local contracts over the four months to the end of October. The damage caused by this could not be offset by a 4.1 per cent increase in total group revenue over the 10 months to the end of October. For the full year, the group expects earnings before interest and tax to remain above 18 per cent.
In a statement, chief executive Rob Roger said: "Despite challenging short term conditions, underlying market dynamics remain highly favourable for Spire, with overall UK healthcare demand outstripping supply, necessitating increased NHS outsourcing over time to the independent sector.”
"Therefore, while we are still in the very early stages of an overall market shift that will move demand significantly into the independent sector, Spire's financial resilience, extensive regional network and development projects underway put us in a strong position to gain market share as this systemic change unfolds."