Priory Group grows profits on flat turnover

Recently posted results for Priory Group No.3 plc show that turnover across all of the group’s four divisions (healthcare, education, specialist services and older people) edged upwards by just 1.7% to reach £463.1m in calendar 2012 (2011: £455.4m on a pro forma basis, assuming the acquisition of Priory Group and Craegmoor Group took place on 1 January 2011). This was against a backdrop of challenging market conditions for this diversified health and care services group which derives the great bulk of its revenue from the public sector. Meanwhile the group managed to push EBITDAR up by a creditable 7% to £144.3m, or 31% of revenue (2011: £134.8m on the same comparative basis) mainly due to central cost savings arising from the successful integration of Craegmoor, Older People growth and three Specialist Services acquisitions’ – Harbour Care, Pensinsular Autism Support and High Quality Lifestyles’. The Healthcare division remains the group’s largest one, incorporating all of Priory’s mental health hospitals and generating turnover of £215m in 2012, followed by Education (£97m), Specialist Services consisting mainly of Craegmoor’s learning disabilities and mental health services (£89m) and Older People (£62m). After rent on leased premises, group EBITDA came in at £130m for 2012. Charges for depreciation, amortisation and exceptional items took the operating profit (profit before interest and tax) line down to £77.6m for the year. For full group interest charges and tax, it is necessary to await the statutory accounts of the head company, Priory Group No.1 plc, which have yet to be posted at Companies House.