Potential increase in future demand but Spire says outlook remains uncertain

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Spire Healthcare has said it is unable to provide market guidance for FY20 as the Covid-19 pandemic continues to create ‘significant uncertainty’.

Commenting on the company’s outlook ahead of its AGM today, the Board said the suspension of elective activity during the crisis provides potential for future increases in demand.

However, it remains unclear when ‘normal services’ may be able to resume, and some analysts have suggested that the NHS could ‘requisition’ independent hospital capacity to help clear the backlog of NHS waiting list work even after the pandemic is brought under control.

Along with most other private hospital groups, Spire signed an agreement to turn over its capacity to the NHS during the Covid-19 outbreak in March. The initial contract ends on 28 June, but NHS England has the option to renew on a one-month rolling basis.

Spire is being reimbursed on a cash cost recovery basis, but its lenders have agreed to waive the next two covenant test in June and December in order to provide the group with further flexibility during its partnership with the NHS.

The Board said the agreements with both the NHS and its lenders provide confidence that it has sufficient liquidity and financial stability, allowing the company to focus on preparing for the return to regular operations when the arrangements with the NHS end.

Chairman Garry Watts said: ‘Covid-19 has caused a previously unimaginable impact on the world around us; affecting our patients, our colleagues and our business. I applaud the efforts of everyone at Spire Healthcare during these challenging times and their unwavering commitment to delivering outstanding care for patients.”

The company expects to announce its results for the six months ending 30 June on 17 September 2020.