Shares in Spire Healthcare fall despite posting revenues in line with expectations

LONDON (ShareCast) - Hospital group Spire Healthcare (LSE: SPI.L - news) saw its shares go down on Tuesday despite posting full-year results in line with expectations. Revenue rose 12% to £856m, which was better than its previous forecasts. The group said in January that it expected revenues to be between £850 and £855m. The increase was helped by NHS revenues up 27.3% to £245.9m during 2014.

Despite loss before tax declining by 86.5% to £7m, profit for the year fell 94% to £6m, driving earnings per share to decline from 40.9p to 1.9p.

The group's profits were hurt by a reduction of 3% in NHS tariff applicable to the 2013/2014 fiscal year and a further 2.25% NHS tariff reduction applicable from 1 April 2014 for the 2014/15 period.

Furthermore, cash and equivalents also dropped to £74.5m from £111.5 the year before.

During the period, Spire (Stuttgart: SIZ.SG - news) received planning consent to open new hospitals in Manchester and Nottingham and a radiotherapy centre in Chelmsford, Essex.

The group opened its first radiotherapy centre in Bristol in 2014 and acquired St. Anthony's Hospital in Cheam.

As a result, costs associated to investments grew 95% to £105.1m.

Chief executive Rob Roger said: Spire is ideally positioned for its next phase of development.

"We are well capitalised and ready to capture a growing share of the UK's expanding independent healthcare market and provide much needed additional capacity in areas such as radiotherapy and cancer care." Numis downgraded Spire from 'buy' to 'hold' and reduced its price target to 390p from 380p as it expects a "slower ramp-up of private medical insurance revenues in 2016" and "more rapid growth capex deployment".

Shares (Berlin: DI6.BE - news) were down 4.87% to 371p on Tuesday at 08:53.