(Corrects to specify that company is Britain’s largest independent hospital group by revenue, not the country’s largest independent hospital group)
By Muvija M and Shashwat Awasthi
Sept 18 (Reuters) - Core earnings at UK private hospital operator Spire Healthcare Group sank 21 percent in the first half of 2018, driven by belt-tightening at the National Health Service that cut referrals to its big private providers.
Shares of Britain’s largest independent hospital group by revenue dropped 12 percent to an all-time low 148.6 pence after the report, which also predicted full-year core earnings would fall by up to a fifth, to 120-125 million pounds.
Spire, BMI Healthcare and Nuffield Health have helped the NHS cope with pressures on services in recent years, but their earnings and revenue have taken a hit as the NHS prioritises emergency cases and makes cuts elsewhere, focusing on essential health services.
Spire shares have now fallen 40 percent this year.
To mitigate the hit from fewer NHS referrals, Spire - founded in 2007 as a network of 25 Bupa hospitals - said it was reducing capital spending further and focusing on self-paying patients and its own general practitioners.
Chief Executive Justin Ash, who took charge last September, told Reuters after the results he was cutting his forecast for full-year investment for the second time in two months, by another 10 million pounds to 80 million pounds.
“We are investing in to what is a relatively difficult market largely because of the NHS,” Ash said, calling the decline in NHS admissions at Spire hospitals and clinics “unprecedented”.
Ash said in the release the company expected other private providers to suffer similarly from the changing environment, and as one of the UK’s big providers saw opportunities in that.
He said revenue from the company’s private business was up 2.5 percent while self-pay revenue at the firm rose 8.3 percent to 87.3 million pounds in the first half.
NHS revenue, by contrast, fell 10 percent to 140.3 million pounds, pulling down overall revenue by 1.1 percent to 445.6 million pounds in the six months ending June 30.
Spire’s first-half earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped to 66.1 million pounds ($86.97 million).
The company’s forecast for full-year EBITDA compared to the consensus of 134.8 million pounds estimated by 11 analysts, according to Thomson Reuters I/B/E/S.
In a separate statement, the company named John Forrest, former chief operating officer of pub operator Greene King’s retail operations, as its new chief operating officer.
The appointment is the latest in a string of top management changes at Spire, as it looks to combat constraints from the NHS-linked business.
Difficult trading conditions and belt-tightening by the NHS led Australian rival Ramsay Health Care to post a 21 percent fall in annual profit last month. ($1 = 0.7601 pounds) (Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Amrutha Gayathri and David Evans)