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SPI Spire Healthcare Group Plc

232.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Spire Healthcare Group Plc LSE:SPI London Ordinary Share GB00BNLPYF73 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 232.00 232.00 232.50 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Health & Allied Services,nec 1.36B 27.3M 0.0676 34.32 937.58M

Spire Healthcare Group PLC Annual Financial Report and Notice of Meeting (2777D)

25/04/2017 1:32pm

UK Regulatory


Spire Healthcare (LSE:SPI)
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TIDMSPI

RNS Number : 2777D

Spire Healthcare Group PLC

25 April 2017

Spire Healthcare Group plc

25 April 2017

Annual Report and Notice of Annual General Meeting

Spire Healthcare Group plc (the "Company") released its preliminary announcement of its annual results for the year ended 31 December 2016 ("Preliminary Announcement") on Thursday, 1 March 2017.

Further to that Preliminary Announcement, the Company confirms that its Annual Report and Accounts for the year ended 31 December 2016 ("2016 Annual Report"), 2017 Notice of Annual General Meeting and Form of Proxy have now been published. Printed copies have been posted to shareholders who have requested hard copies.

The Annual General Meeting of the Company will take place at 11.00am on Friday, 26 May 2017 at the offices of J.P. Morgan at 60 Victoria Embankment, London EC4Y 0JP.

Documents are available on the Company's website as follows:

   2016 Annual Report:               www.spirehealthcare.com/AR2016 
   2017 Notice of Meeting:          www.spirehealthcare.com/Notice2017 

In accordance with Listing Rule 9.6.1, the Company will submit its 2016 Annual Report and other shareholder documents to the National Storage Mechanism. These documents should then be available for inspection within two working days at www.hemscott.com/nsm.do.

The Appendix to this announcement contains information required for the purposes of compliance with DTR 6.3.5 (1) of the Disclosure and Transparency Rules, including a Statement of Directors' responsibilities This information is extracted, in full unedited text, from the 2016 Annual Report and should be read in conjunction with the Preliminary Announcement, which contained other information required by DTR 6.3.5 (1), released to the market on Thursday, 1 March 2017.

Enquiries:

Antony Mannion, Director, Strategy and Investor Relations

Philip Davies, Deputy Company Secretary

Tel: +44 (0) 20 7427 9000

Appendix

Principal risks

Principal risks

The Group's financial and operational risks, how they have changed and how they are managed are shown below.

 
 Risk Theme        Risk description and impact       How we manage the risk 
----------------  --------------------------------  -------------------------------------- 
 Availability      Growing demand for healthcare,    The Board focuses on staff 
  of key medical    changes to the working            retention, evidenced by high 
  staff             requirements and a limited        levels of staff satisfaction 
                    supply of appropriately           and, hence, low staff turnover. 
  Risk increased    qualified key medical             Management deploy productivity 
                    staff, leads to a shortage        tools and pursue opportunities 
                    of medical staff. Profitable      to reduce clinical nursing 
                    growth, in line with the          time spent on non-clinical 
                    Group's strategy, requires        activities to optimise the 
                    an expansion of clinical          effectiveness of its clinical 
                    services in hospitals,            staff base. 
                    particularly including            We have introduced a new 
                    more complex surgical             solution for the recruitment 
                    procedures and ongoing            of clinical staff, partnering 
                    treatment of higher-risk          with an external provider. 
                    patients, which could             The Group believes consultants 
                    be impacted by a shortage         are attracted by its advanced 
                    of key medical staff.             facilities, technology and 
                    In order to expand our            equipment, excellent brand 
                    directory of services             and reputation, the availability 
                    at hospital level, in             of a broad range of treatments, 
                    line with our strategy,           skilled nursing staff and 
                    it is vital to have access        medical support staff, and 
                    to appropriately qualified,       the efficiency of administrative 
                    clinical staff.                   support. The Group undertakes 
                    The market may see salary         continuous investment in 
                    rates rise as competition         its equipment, facilities 
                    for staff increases and,          and services to retain high-quality 
                    as a result, the Group's          consultants and also provides 
                    costs may increase and            theatre capacity to new consultants. 
                    its profits may reduce.           This is confirmed by high 
                                                      consultant satisfaction levels. 
----------------  --------------------------------  -------------------------------------- 
 Clinical          The Group's future growth         Spire Healthcare continually 
  care              depends upon its ability          monitors its clinical standards, 
                    to maintain its reputation        policies and procedures through 
  Risk remained     for high-quality services         the Board's Clinical Governance 
  stable            by meeting its quality            and Safety Committee. 
                    goals. Poor clinical outcomes,    During 2016, regular management 
                    negative media comment            information and associated 
                    or patient, GP and/or             reporting has been provided 
                    consultant dissatisfaction        to the Executive Committee. 
                    could reduce the quality          Management information is 
                    ratings, which could lead         subject to continuous improvement 
                    to a loss of patient referrals    to best leverage underlying 
                    and lost earnings.                clinical data. 
                                                      A number of key performance 
                                                      indicators are used in the 
                                                      assessment of clinical standards 
                                                      and these may be found in 
                                                      the Clinical review. 
                                                      The Group reviews and maintains 
                                                      insurance to mitigate the 
                                                      possibility of a major loss. 
                                                      Adequacy of cover is reviewed 
                                                      annually with the Group's 
                                                      brokers. 
----------------  --------------------------------  -------------------------------------- 
 Macroeconomic     Approximately 68% of the          The Board manages this risk 
  conditions        Group's revenue is dependent      by regularly reviewing market 
                    on private patients having        conditions and economic indicators 
  Risk increased    private medical insurance         to assess whether actions 
                    (PMI), paid by their employer     are required. 
                    or paid by the individual,        As successfully employed 
                    or being able to afford           in the recent economic downturn, 
                    its services (Self-pay).          if the private market contracts, 
                    In an economic downturn,          the Group can try to reduce 
                    the number of insured             costs and future investment 
                    individuals falls with            to improve profit and cash 
                    the level of employment           flow, and may be able to 
                    and individuals have reduced      offer the released capacity 
                    real income to fund insurance     to the NHS at its lower tariff, 
                    or Self-pay for procedures.       reducing the impact on profit. 
                    This would have an adverse 
                    effect on the business, 
                    the results of its operations 
                    and prospects. 
----------------  --------------------------------  -------------------------------------- 
 
 
 Risk theme        Risk description and impact            How we manage the risk 
----------------  -------------------------------------  -------------------------------------- 
 Government        Change in the medium-term              The Group believes that the 
  policy            public funding of NHS                  private sector has become 
                    services provision, and/or             a fundamental partner of 
  Risk remained     the prioritisation of                  the NHS across the UK. The 
  stable            this funding to particular             continued use of private 
                    service lines over time                facilities is, in Spire Healthcare's 
                    (elective healthcare,                  view, the best way to meet 
                    A&E, community care, etc.),            the challenges facing the 
                    could adversely reduce                 NHS, particularly as there 
                    the flow of NHS patients               is limited capacity within 
                    to Spire Healthcare.                   the NHS to take back work 
                    Changes in the service                 currently undertaken by the 
                    level requirements for                 private sector. 
                    providers of NHS services,             The Group's service levels 
                    and service level commitments          are confirmed by regular 
                    to members of the public               surveys of patients, GPs 
                    served by the NHS, could               and consultants, which provide 
                    adversely impact the attractiveness    ongoing feedback to ensure 
                    of privately funded treatment.         NHS requirements (whether 
                    Changes in fiscal policy               as providers or as commitments 
                    could increase the burden              to its patients) are met. 
                    of welfare resulting in                In addition, the Board regularly 
                    a reduction of NHS-funded              reviews the competitiveness 
                    options.                               of its patient offering (both 
                    A fundamental change in                NHS and private patients). 
                    the tariff structure (pricing          The Board continually monitors 
                    arrangements) associated               Government policy, NHS requirements 
                    with the provision of                  and associated tariff structures 
                    services to the NHS could              to consider the need for 
                    result in reduced access               cost and/or investment reduction, 
                    to patients, reduced tariffs,          whether in the short, medium 
                    or reduced prices leading              or long term. 
                    to reduced revenues and/or 
                    margins. 
----------------  -------------------------------------  -------------------------------------- 
 Compliance        The Group operates in                  The Group continues to strengthen 
  with laws,        a highly regulated environment,        its Group-wide risk management 
  regulations       including complying with               framework (and associated 
  and other         the requirements of, for               policies and procedures) 
  applicable        example, the CQC, Monitor              to ensure that risks are 
  requirements      and the CMA.                           mitigated as far as possible, 
                    Failure to comply with                 the Executive Committee has 
  Risk increased    laws, regulations or regulatory        appropriate visibility to 
                    standards may expose the               ensure robust decision-making, 
                    Group to patient claims,               and the Group has the ability 
                    fines, penalties, damage               to monitor and react to the 
                    to reputation, suspension              changing regulatory framework 
                    from the treatment of                  of a listed company in the 
                    NHS patients, loss of                  healthcare sector. 
                    hospital licence and loss              The Group has a significant 
                    of private patients, such              centralised clinical team 
                    that the Group may not                 which assists hospitals in 
                    be able to operate one                 establishing and maintaining 
                    or more of its hospitals,              a high level of clinical 
                    causing a significant                  performance. 
                    reduction in profit.                   Emerging legal or regulatory 
                    The CQC has continued                  changes are monitored by 
                    its new inspection regime              the Board, the Executive 
                    which assesses and rates               Committee, the Audit and 
                    hospitals and makes these              Risk Committee and the Clinical 
                    results publicly available.            Governance and Safety Committee, 
                    If a hospital fared badly              in addition to consultations 
                    in one of these inspections,           with external advisers and 
                    it could result in that                industry briefings. 
                    hospital being assessed 
                    as 'Inadequate' which 
                    could have significant 
                    regulatory and reputational 
                    impacts. As at the end 
                    of 2016, no Spire Healthcare 
                    hospitals have received 
                    an 'Inadequate' rating. 
                    In addition, the Group 
                    could fail to anticipate 
                    legal or regulatory changes 
                    leading to a significant 
                    financial or reputational 
                    impact. 
----------------  -------------------------------------  -------------------------------------- 
 
 
 Risk theme        Risk description and impact           How we manage the risk 
----------------  ------------------------------------  ------------------------------------- 
 Competitor        Spire Healthcare operates             The Group maintains a watching 
  challenge         in a highly competitive               brief on new and existing 
                    market. New or existing               competitor activity and retains 
  Risk remained     competitors may enter                 the ability to react quickly 
  stable            the market of one or more             to changes in-patient and 
                    of our existing hospitals,            market demand. 
                    or offer new services.                The Group considers that 
                    The potential impact would            a partial mitigation of the 
                    be the loss of market                 impact of competitor activity 
                    share due to a new competitor         is ensured by providing patients 
                    and reduced profitability             with high-quality care and 
                    and cash flow.                        by maintaining good working 
                                                          relationships with GPs and 
                                                          consultants. 
----------------  ------------------------------------  ------------------------------------- 
 Insurance         Healthcare companies,                 The Group holds third-party 
                    including Spire Healthcare,           liability insurance to partially 
  Risk remained     are sometimes subject                 cover patient, third-party 
  stable            to actions alleging negligence,       and employee personal injury 
                    malpractice and other                 claims, and is partially 
                    legal claims that may                 self-insured up to predetermined 
                    involve large potential               levels, above which its third-party 
                    damages and significant               liability insurance applies. 
                    defence costs, whether                The Group reviews and maintains 
                    or not the defendant                  insurance adequacy of cover 
                    is ultimately found liable.           annually with the Group's 
                    The Group could be subject            broker. 
                    to litigation for actions 
                    by third parties or may 
                    be found liable for damages 
                    which may not be covered 
                    by its insurance policies, 
                    if the claims are in 
                    excess of cover or claims 
                    are not covered by the 
                    Group's insurance due 
                    to other policy limitations 
                    or exclusions or where 
                    it has failed to comply 
                    with the terms of the 
                    policy. 
                    The Group's insurance 
                    premiums may increase 
                    and, if there is a significant 
                    deterioration in its 
                    claims experience, insurance 
                    may not be available 
                    on acceptable terms. 
----------------  ------------------------------------  ------------------------------------- 
 Cybersecurity     The Group's information               Spire Healthcare's technical 
                    technology platform supports,         IT teams continually monitor 
  Risk increased    among other things, management        these developments as a business 
                    control of patient administration,    as usual activity. Working 
                    billing and financial                 with a number of specialist 
                    information and reporting             and industry leading technical 
                    processes. In common                  partners, Spire Healthcare 
                    with other corporate                  has created multiple layers 
                    organisations, the Group              of business protection through 
                    faces the challenges                  the use of advanced intrusion 
                    of a continually evolving             detection and protection 
                    external cyberthreat                  systems, web access firewalls 
                    landscape, and could                  and advanced content filtering 
                    become vulnerable to                  to combat denial of service 
                    computer viruses, break-ins           attacks. 
                    and similar disruption                Business processes are also 
                    from unauthorised tampering.          kept under review and user 
                    The Group's business                  education regularly carried 
                    could be disrupted if                 out to minimise the possibility 
                    its information systems               of ransomware incidents. 
                    fail or if its databases              Regular third-party penetration 
                    are breached, destroyed               testing is performed on Spire 
                    or damaged. This could                Healthcare's core IT systems. 
                    cause financial and reputational      New IT system developments 
                    impacts.                              are subject to rigorous penetration 
                    The level of risk to                  testing prior to release. 
                    Spire Healthcare's IT 
                    architecture and systems 
                    continues to grow as 
                    the volume of cybersecurity 
                    threats are increasing 
                    and becoming more sophisticated. 
----------------  ------------------------------------  ------------------------------------- 
 
 
 Risk theme        Risk description and impact         How we manage the risk 
----------------  ----------------------------------  ------------------------------------- 
 Concentration     The PMI market is concentrated,     The Group works hard to maintain 
  of PMI market     with the top four companies         good relationships and a 
                    (Bupa, AXA, Aviva and               joint product/patient health 
  Risk remained     VitalityHealth (formerly            offering with the PMI companies, 
  stable            PruHealth)) having a                which, in the opinion of 
                    market share estimated              the Directors, assists the 
                    at over 85%.                        healthcare sector as a whole 
                    Loss of an existing contractual     in delivering high-quality 
                    relationship with any               patient care. 
                    of the key insurers could           The Board believes continuing 
                    significantly reduce                to invest in its well-placed 
                    revenue and profit.                 portfolio of hospitals should 
                    Further consolidation               provide a natural fit to 
                    of the PMI market could             the local requirements of 
                    adversely impact Spire              all the PMI providers. 
                    Healthcare's relative               The Group has looked to ensure 
                    bargaining power in any             that all significant contracts 
                    ongoing commercial arrangements.    run for a minimum of a year 
                                                        to avoid co-termination of 
                                                        contractual arrangements 
                                                        across its PMI base. 
----------------  ----------------------------------  ------------------------------------- 
 Investment        The capital investment              The Group conducts a detailed 
  plans and         programme (which includes           financial and operational 
  execution         IT system developments              appraisal process to evaluate 
                    and the construction                the expected returns on capital 
  Risk increased    of two new hospitals)               during the evaluation phase 
                    at any time consists                of the project. 
                    of a number of individually         Robust project management 
                    significant projects                is employed throughout the 
                    simultaneously in progress.         project, from the evaluation, 
                    With any major project              to the bid process, agreement 
                    there are risks, such               of contract terms and conditions, 
                    as major cost overrun               cost forecasting, as well 
                    or substantial delay                as regular monitoring and 
                    in delivery, which could            management of progress. 
                    impact upon the expected            Regular reporting of all 
                    returns, the Group's                significant projects to the 
                    planned profit growth               executive sponsor and the 
                    and future cash flow.               Board is provided. 
----------------  ----------------------------------  ------------------------------------- 
 Liquidity         The Group may have insufficient     The Group actively monitors 
  and covenant      liquid resources to meet            and manages its liquid asset 
  risk              its financial liabilities           position, its financial liabilities 
                    as they fall due, or                falling due and the cover 
  Risk remained     breach financial covenants          against its loan covenants. 
  stable            linked to its borrowings.           The Board has considered 
                    Failure to meet its obligations     the risk in detail as part 
                    or covenants would have             of its assessment of the 
                    a substantial adverse               viability of the Company 
                    effect on the Group's               (see page 49). 
                    reputation and may lead 
                    to borrowings becoming 
                    repayable earlier than 
                    contracted for. 
----------------  ----------------------------------  ------------------------------------- 
 

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report and Accounts for the year ended 31 December 2016, including the Consolidated financial statements and the Parent Company financial statements, Directors' Report, including the Directors' Remuneration Report and the Strategic Report in accordance with applicable law and regulations. Under that law, the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union and Article 4 of the IAS Regulation and have elected to prepare the Parent Company financial statements in accordance with IFRS, as adopted by the EU.

Company law requires the Directors to prepare such financial statements for each financial year. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company on a consolidated and individual basis, and of the profit or loss of the Company on a consolidated basis for that period.

In preparing these financial statements, the Directors are required to:

-- select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

   --      make judgements and estimates that are reasonable and prudent; 

-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-- provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the EU is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's and Company's financial position and financial performance;

-- state that the Group's and Company's financial statements have complied with IFRS as adopted by the EU, subject to any material departures disclosed and explained in the financial statements; and

-- prepare the financial statements on a going concern basis, unless it is not appropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions, and disclose, with reasonable accuracy at any time, the Company's financial position and enable them to ensure compliance with the Companies Act 2006. They are also responsible for safeguarding the Company's assets and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the Directors, whose names and functions are listed on pages 54 and 55, confirms that:

-- to the best of their knowledge, the Consolidated financial statements and the Parent Company financial statements, which have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Company on a consolidated and individual basis;

-- to the best of their knowledge, the Strategic Report and the Directors' Report include a fair review of the development and performance of the business and the position of the Company on a consolidated and individual basis, together with a description of the principal risks and uncertainties that it faces; and

-- they consider that the Annual Report and Accounts for the year ended 31 December 2016, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

Related party transactions

Transactions with key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly. They include the Board and Executive Committee, as identified on pages 54 to 57.

Compensation for key management personnel is set out in the table below:

 
(GBP million)                   2016  2015 
=============================   ====  ==== 
Short-term employee benefits     3.2   2.6 
Retirement benefits              0.4   0.4 
Share-based payments             0.3   0.7 
==============================  ====  ==== 
Total                            3.9   3.7 
==============================  ====  ==== 
 

Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on pages 76 to 91.

There were no transactions with related parties external to the Group in the year to 31 December 2016 (2015: nil).

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSLELFLDZFLBBK

(END) Dow Jones Newswires

April 25, 2017 08:32 ET (12:32 GMT)

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