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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 |
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
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(END) Dow Jones Newswires
April 25, 2017 08:32 ET (12:32 GMT)
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