Shares in Spire Healthcare Group PLC on Thursday slumped as full-year earnings and guidance fell short of market expectations.
The private healthcare provider blamed a shift away from high-margin business and increased payroll costs for the weak outlook.
In response, shares fell 18% to 184.80 pence each in London on Thursday.
The company said pretax profit rose 11% to £38.3 million in the year ending December from £34.6 million a year prior. Adjusted earnings before interest, tax, depreciation and amortisation rose 11% to £260.0 million from £234.0 million, but was 2.9% below company compiled consensus of £267.6 million.
Revenue increased 11% to £1.51 billion in 2024 from £1.36 billion in 2023, comprised of 5.5% on-year growth in Hospitals and 15% growth from Primary Care services.
Cost savings have accelerated and the company expects to deliver £30 million of savings in 2025, £10 million ahead of original plans.
But the firm flagged a mix shift, with continued switching from its highest-margin area, Self Pay, to private medical insurers.
Reflecting this change in mix, and the impact of national insurance and national minimum wage changes, Spire expects a £30 million Ebitda impact in 2025.
As a result, Spire is guiding to 2025 adjusted Ebitda of £270 million to £285 million, 7.2% below at the mid-point compared with company compiled consensus of £297.8 million.
Spire said it is confident in delivering mid-single digit year-on-year percentage group revenue growth in 2025, driven by the combination of structural market expansion, good growth prospects in Hospitals and the growing demand for Primary Care services.
The firm declared a final dividend of 2.3p per share, up from 2.1p year-on-year.
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