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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 0.40% | 253.50 | 252.50 | 253.00 | 254.00 | 251.00 | 251.00 | 222,009 | 16:35:04 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Health & Allied Services,nec | 1.36B | 27.3M | 0.0676 | 37.43 | 1.02B |
From May 2021 to May 2024
TIDMSPI
RNS Number : 0346H
Spire Healthcare Group PLC
01 April 2022
Spire Healthcare Group plc
1 April 2022
2021 Annual Report and 2022 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 2021 ("Preliminary Announcement") on Thursday, 3 March 2022.
Further to that Preliminary Announcement, the Company confirms that its Annual Report and Accounts for the year ended 31 December 2021 ("2021 Annual Report"), 2022 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 following documents are available on the Company's website:
2021 Annual Report: www.spirehealthcare.com/AR2021 2022 Notice of Meeting: www.spirehealthcare.com/Notice2022
In accordance with Listing Rule 9.6.1, the Company will submit its 2021 Annual Report and other shareholder documents to the National Storage Mechanism. These documents should then be available for inspection within two working days at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Arrangements for the Annual General Meeting
The Annual General Meeting of the Company will be held at 11.00am on Thursday, 11 May 2022 at 3 Dorset Rise, London EC4Y 8EN (the "2022 AGM").
The Company expects that shareholders will be able to attend the meeting in person but will continue to closely monitor the position in respect of COVID-19 as the health and well-being of our shareholders is vitally important to us. It is intended that the 2022 AGM adheres to the Government's latest legislation and guidance applicable at the time. Shareholders are asked to monitor the Company's website for any changes in requirements on attending the meeting.
The Board always welcomes questions from shareholders and we request that these are submitted by e-mail to companysecretary@spirehealthcare.com . We will ensure that answers to questions are placed on the Company's website ahead of the meeting.
Details of the resolutions to be proposed at the 2022 AGM are set out in the 2022 Notice of Meeting. The voting results of all resolutions put before the 2022 AGM will be announced to the market following the meeting.
Appendix
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 2021 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, 3 March 2022.
Enquiries:
Philip Davies
Company Secretary
Tel: 07803 508348
Appendix
Principal risks
Hot Features
Premium
Principal Risk
============================================================================
1. Patient Safety and Clinical Quality
----------------------------------------------------------------------------
Executive Group Clinical Director Risk Appetite
Owner(s) Group Medical Director VL
Link to Strategy Risk movement
Uncompromising on in 2020
patient -
safety and clinical
care. Risk movement
in 2021
-
------------ -------------------------------------- ----------------------
Risk There is a risk to the provision
Description of high-quality patient care
due to:
A shortage of skilled workforce;
Clinical and non-clinical staff
and Consultants failing to
follow guidelines, standards
and policies resulting in patient
harm
Failing to learn from incidents,
complaints, mortality reviews,
patient feedback and Patient
Notification Exercises
Failure to act on findings
from audits, clinical outcome
measures (including registry
data), peer reviews and external
inspections
Hospital acquired COVID-19
infection
------------ --------------------------------------------------------------
Risk Reputational and financial
Impact loss could occur if we fail
to address adequately issues
identified by incidents, audits,
complaints, PROMs, National
Registries, Raising Concerns,
workforce feedback and the
internal Patient Safety Quality
Reviews and Care Quality Commission.
------------ --------------------------------------------------------------
Risk We maintain the following controls
Mitigation to mitigate against a failure
of patient safety and clinical
quality:
* A reporting culture of openness and shared learning
from Ward-to-Board, with a FTSUG at each site.
* Incident/red flag staffing reporting via a database
with central oversight.
* Continually monitoring clinical standards, reporting
progress via the Board's Clinical Governance and
Safety Committee (CGSC).
* Integrated quality reporting based on a Quality
Assurance Framework with a standard set of KPIs.
* Development of a Board Assurance Framework to assess
risks against clinical and medical strategic
objectives.
* A schedule of robust and regular hospital audits
including the Patient Safety and Quality Reviews,
with an action plan for improvement that is
monitored.
* Standard Operating Procedure for Patient Notification
Exercises that includes learning and continuous
improvement methodologies.
* Colleague induction, clinical competencies
requirements and mandated training.
* Reporting on clinical outcomes with workforce and
Consultants including the Chairs of hospital Medical
Advisory Committees with a view to driving up safety
and performance.
------------ --------------------------------------------------------------
Principal Risk
===========================================================================
2. Workforce
---------------------------------------------------------------------------
Executive Human Resources Director Risk Appetite
Owner(s) B
Link to Strategy
First choice for Risk movement
private healthcare. in 2020
Uncompromising on -
patient
safety and clinical Risk movement
care. in 2021
up
------------ -------------------------------------- ---------------------
Risk There is a global shortage
Description of nursing and allied healthcare
practitioners. As the economy
opened up in 2021, shortages
of staff in new areas, for
example hotel services, have
arisen. In addition, we have
an ageing workforce.
Our ability to attract and
retain clinical and non-clinical
staff is affected by:
* Growth of waiting lists affecting more nurses
required in NHS/IS reducing availability of
colleagues.
* Demand for nursing and healthcare workers increases
resulting in higher or more competitive pay rates.
* UK Government's pay policy in the NHS.
* Government immigration policy and the post Brexit
labour market.
* Our business strategy of increasing complexity of
medical procedures that requires a higher skilled
workforce.
* The requirement of mandatory vaccination (subject to
the outcome of HM Government's consultation) from 1
April 2021 may result in Spire Healthcare having to
release some patient-facing staff.
* The reduction in elective activity within Trusts
reducing the training opportunities for new
Consultants.
* New expectations for hybrid working.
------------ -------------------------------------------------------------
Risk In the short term, we are able
Impact to provide safe patient care
only with delays to treatment
because of scarce resources.
Over the medium to long term,
wage inflation and resource
scarcity could result in a
decline in our profits and
affect expected revenue growth
from more complex surgical
procedures and treatment of
higher-risk patients.
------------ -------------------------------------------------------------
Risk We seek to retain staff through:
Mitigation * A common purpose and a positive workplace culture.
* Maintaining competitive pay and benefits.
* Responding to key staff metrics e.g. staff turnover,
rookie staff levels, and levels of positive
engagement from staff surveys.
* Continuous investment in its equipment, facilities
and services to retain high-quality clinicians.
We seek to recruit staff through:
* A centralised recruitment process.
* An overseas recruitment capability to secure skilled
healthcare workers from outside the EU where
necessary.
* Offering apprenticeship programmes.
-
We manage immediate staff shortages
through the use of agency and
bank workers.
------------ -------------------------------------------------------------
Principal Risk
========================================================================================
3. Climate Change
----------------------------------------------------------------------------------------
Executive Chief Operating Officer Risk Appetite
Owner(s) L
Link to Strategy
* First choice for private healthcare. Risk movement
in 2020
N/A
* Key partner of the NHS.
Risk movement
in 2021
* Uncompromising on patient safety and clinical care. up
------------ ---------------------------------------------------------- --------------
Risk Climate-related risks have
Description been identified through the
emerging risk process. Our
climate-related risks include:
* Severe Storm Weather events e.g. damage to roofs or
flooding.
* Prolonged spells of extreme ambient temperatures.
* Energy price fluctuation (Decarbonisation requires
changing our energy sources: moving to more expensive
zero-carbon electricity tariffs and replacing
gas-fired heat sources with more expensive
electricity).
* Changes in laws and regulation, including failure to
meet net zero targets and obligations (e.g. in
financial covenants).
------------ --------------------------------------------------------------------------
Risk Severe storm weather has the
Impact potential to cause major damage
and disruption to our sites.
Storm events raise the risk
of floods at our buildings
due to rising external water
levels, such as from rivers
run-off and the sea. Our hospitals
would be badly affected by
flooding should it occur, as
water ingress would affect
medical equipment and risk
the hygiene of our premises
and safety of our patients.
Extreme weather events could
also disrupt our patients,
staff and consulting staffs'
ability to attend our facilities,
as well as our supply chains.
Prolonged spells of extreme
ambient temperatures could
lead to an inability of existing
critical Heating, Ventilation
and Air-Conditioning (HVAC)
systems to cope with required
cooling and potentially cause
cancellation of procedures
and operations.
Providing healthcare services
is a relatively energy intensive
business. We are vulnerable
to fluctuations in energy prices.
------------ --------------------------------------------------------------------------
Risk Flood risk mitigation includes
Mitigation a continued periodic review
of our estate in relation to
existing and predicted flood
risk zones.
Extreme ambient temperature
risk mitigation includes an
informed investment plan for
upgrade of failing and vulnerable
plant. Design of the replacement
and upgrade would account for
the predicted increase in ambient
temperature profiles expected
within the lifespan of the
plant. Further mitigation measures
include extreme weather warning
protocol and Business Continuity
Plans to provide emergency
loan HVAC plant.
Energy price risk mitigation
includes energy efficiency
measures to reduce consumption
and the Group's Energy Hedging
strategy that has seen all
our current energy requirements
secured until October 2024.
Net zero targets form part
of the remuneration of the
Executive Directors.
------------ --------------------------------------------------------------------------
Principal Risk
=========================================================================
4. PMI Market Dynamics
-------------------------------------------------------------------------
Executive Chief Commercial Risk Appetite
Owner(s) Officer L
Link to Strategy Risk movement
* First choice for private healthcare. in 2020
-
* Improving revenue, profit and cash. Risk movement
in 2021
-
------------ ------------------------------------------- --------------
Risk The PMI market remains concentrated,
Description with the top four companies
(Bupa, AXA, Aviva and VitalityHealth)
having a market share estimated
at over 85%.
We have individual contractual
relationships for the provision
of its services with all the
major PMI providers. These
contracts come up for renewal
on a recurring basis. There
is a risk that renewal of contract
terms cannot be secured on
historical terms.
Service line tenders and the
introduction of triage services
are expected to continue medium
term as PMIs look to reduce
costs. We also expect an increase
in directional networks.
------------ -----------------------------------------------------------
Risk Loss of, or renewal at lower
Impact tariffs, of an existing contractual
relationship with any of the
key insurers could significantly
reduce revenue and profit for
Spire Healthcare.
A slower recovery of the PMI
market could reduce revenues
and profits in the short term.
------------ -----------------------------------------------------------
Risk We work hard to maintain good
Mitigation relationships and a joint product/patient
health offering with the PMI
companies, which, in the opinion
of the Board, assists the healthcare
sector as a whole in delivering
high-quality patient care.
We ensure we have long-term
contracts in place with our
PMI partners to avoid co-termination
of contractual arrangements.
We believe continuing to invest
in its well-placed portfolio
of hospitals provides a natural
fit to the local requirements
of all the PMI providers long
term.
We continue to invest in efficiency
programmes to ensure that it
can offer the best combination
of high-quality patient care
at competitive prices.
------------ -----------------------------------------------------------
Principal Risk
=========================================================================
5. Macroeconomics
-------------------------------------------------------------------------
Executive Chief Commercial Risk Appetite
Owner(s) Officer B
Link to Strategy Risk movement
* First choice for private healthcare. in 2020
up
* Improving revenue, profit and cash. Risk movement
in 2021
down
------------ ------------------------------------------- --------------
Risk Following the end of the 2020
Description NHS COVID-19 contract, the
business returned to normal
trading channels (Private and
NHS), albeit that these continue
to be impacted by the pandemic
(e.g. access to GP, NHS commissioning
levels due to funding uncertainty).
The wider economic outlook
remains unclear, with the expectation
of inflation remaining higher
than recent levels throughout
2022, increased tax burden,
volatile energy prices, and
GDP affected by social restrictions
because of the Omicron variant.
Despite these macroeconomic
headwinds, the expectation
is that the primary growth
drivers for healthcare will
remain medium term, namely
record NHS waiting lists, stable/growing
PMI lives covered and a growing
self-pay market.
------------ -----------------------------------------------------------
Risk Reduction of Private patients
Impact and associated revenue and
profit contributions.
NHS commissioning volumes remain
below historical levels.
------------ -----------------------------------------------------------
Risk The evidence available to us
Mitigation indicates that the COVID-19
pandemic has left high levels
of pent up demand for our services.
The ability for patients to
access private care does not
appear to be constrained financially
at this time. We understand
that private medical insurance
policy renewals and sales remain
stable, and we have seen strong
growth in 2021 that is expected
to continue while waiting lists
remain at record levels.
In response to macro inflationary
pressure we will continue to
benefit from the inflation
mechanisms built into the PMI
contracts and will benefit
from our ability to change
self-pay pricing quickly via
our new pricing engine.
In addition, the Group will
continue to respond to changing
economic circumstances by optimising
our private and NHS funded
work ensuring the Group is
not over reliant on one income
source, supported by an efficient
cost base.
------------ -----------------------------------------------------------
Principal Risk
=========================================================================
6. Competitor Challenge
-------------------------------------------------------------------------
Executive Chief Commercial Risk Appetite
Owner(s) Officer B
Link to Strategy Risk movement
* First choice for private healthcare. in 2020
-
* Key partner of the NHS. Risk movement
in 2021
-
------------ ------------------------------------------- --------------
Risk We operate in a highly competitive
Description market. New or existing competitors
may enter the market of one
or more of our existing hospitals,
or offer new services.
In the current economic environment,
there is a risk that the pressures
on competitors results in irrational
market behaviour manifesting
itself in low pricing on tenders
or self-pay.
------------ -----------------------------------------------------------
Risk The potential impact would
Impact be the loss of market share
because of aggressive competitor
activity leading to reduced
profitability and cash flow.
------------ -----------------------------------------------------------
Risk We maintain a watching brief
Mitigation on new and existing competitor
activity and we retain the
ability to react quickly to
changes in patient and market
demand.
We consider that a partial
mitigation of the impact of
competitor activity is ensured
by providing patients with
high-quality clinical care
and by maintaining good working
relationships with GPs and
Consultants.
We continue to invest in the
brand and deliver an effective
acquisition capability both
direct and via our partners
in order to protect our market
position. We have also strengthened
our pricing and tendering capabilities.
Despite the COVID-19 pandemic,
we have maintained our investment
in the estate and clinical
equipment to differentiate
our proposition, and will continue
to do so.
We monitor the market for opportunities,
should they arise, to acquire
or open facilities in specific
geographies creating incremental
volume.
------------ -----------------------------------------------------------
Principal Risk
========================================================================================
7. Insurance and Indemnity
----------------------------------------------------------------------------------------
Executive Chief Financial Officer Risk Appetite
Owner(s) (Interim - Chief L
Executive Officer)
Risk movement
Link to Strategy in 2020
* Uncompromising on patient safety and critical care. -
Risk movement
in 2021
-
------------ ---------------------------------------------------------- --------------
Risk We procure insurance from global
Description insurers and syndicates with
a presence in the Lloyds of
London insurance market.
We could be subject 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,
* are not covered by our insurance due to other policy
limitations or exclusions, or
* where we have failed to comply with the terms of the
policy.
------------ --------------------------------------------------------------------------
Risk Our insurance premiums may
Impact increase and, if there is a
significant deterioration in
its claims experience, insurance
may not be available on acceptable
terms.
There may also be costs relating
to damages and defence costs.
As a substantive buyer of corporate
insurance, we could be faced
with increased premiums, reduced
cover or withdrawal of cover
because of hardening global
insurance markets.
------------ --------------------------------------------------------------------------
Risk We review and maintain insurance
Mitigation to mitigate the possibility
of a major loss. Adequacy of
cover is reviewed annually
with our brokers with coverage
being maintained or increased
depending on that advice.
Personal injury claims relating
to patients, third parties
and employees are covered by
insurance once predetermined
deductible levels have been
reached.
We engage in Consultant information
events relating to indemnity,
and have developed a bespoke
affinity insurance product,
MedicaInsure, to provide Consultants
with a high-quality, regulated
alternative to discretionary
cover. We have made robust
representations to HM Government
and the Paterson Inquiry with
regard to the need to end discretionary
indemnity and to regulate the
medical defence organisations.
We are also engaging with medical
defence organisations to explore
how alternative insurance products
could reduce the risk associated
with historic models.
------------ --------------------------------------------------------------------------
Principal Risk
========================================================================
8. Liquidity and Covenants
------------------------------------------------------------------------
Executive Chief Financial Officer Risk Appetite
Owner(s) (Interim - Group VL
Financial Controller)
Risk movement
Link to Strategy in 2020
* Improving revenue, profit and cash. -
Risk movement
in 2021
-
------------ ------------------------------------------ --------------
Risk We may not have sufficient
Description liquidity to meet our financial
liabilities as they fall due,
or breach financial covenants
linked to its borrowings.
We may not be able to refinance
on favourable terms.
------------ ----------------------------------------------------------
Risk Failure to meet our obligations
Impact or covenants would have a substantial
adverse effect on our reputation
and may lead to borrowings
becoming repayable earlier
than contracted.
------------ ----------------------------------------------------------
Risk Our management of cash and
Mitigation capital expenditure is focused
on maintaining or improving
our liquid asset position,
meeting our financial liabilities
falling due, and maintaining
the cover against our loan
covenants.
At the onset of the COVID-19
pandemic, we were able to engage
positively with our banking
group with the result that
we benefited from covenant
waivers in 2020 and for June
2021. As at December 2021,
the banking group enforced
the covenant tests under its
current loan agreements. We
complied with the covenants
as described in note 22 of
the financial statements (see
page 158).
In February 2022, we successfully
refinanced our existing Senior
Facilities that were scheduled
to mature in July 2023, with
a new four-year facility (which
includes the option to extend
by an additional year) that
will mature in 2026. We retain
access to an unutilised GBP100m
revolving credit facility should
our current cash position materially
deteriorate.
We have a solid asset base
with the ability to leverage
promptly in a short timescale,
if required. This was demonstrated
with the sale and leaseback
of the Spire Cheshire Hospital
in December 2021 that has allowed
us to reduce Net Debt.
The Board has considered the
risk in detail as part of its
assessment of the viability
of the Group.
------------ ----------------------------------------------------------
Principal Risk
==========================================================================
9. Government and NHS Policy
--------------------------------------------------------------------------
Executive Chief Commercial Risk Appetite
Owner(s) Officer B
Link to Strategy Risk movement
* Key partner of the NHS. in 2020
-
Risk movement
in 2021
down
------------ ---------------------------------------- ------------------
Risk We expect NHS England (NHSE)
Description to complete the establishment
of regional Integrated Care
Systems (ICS) over the coming
18 months. Meanwhile Scotland
and Wales will broadly remain
unchanged.
It remains unclear what the
new NHSE commissioning models
and/or changes in the tariff
structures will be post pandemic.
Our expectation is this will
become a combination of direct
referrals from GPs, waiting
list transfers and an increasing
use of block contracts.
There is a risk that wider
HM Government policy is unfavourable
to the independent healthcare
sector as a whole, e.g. future
economic or employment policy.
------------ ------------------------------------------------------------
Risk Changes to NHS commissioning
Impact models, if adverse, could lead
to reduced access to patients,
reduced tariffs, or reduced
prices adversely affecting
revenues and/or margins.
A reduction in patient volumes
could lead to a reduction in
the operational efficiency
of our existing hospital network.
Changes in HM Government fiscal
policy or spending policy towards
corporate organisations, or
the healthcare sector in particular,
could materially affect our
profitability.
------------ ------------------------------------------------------------
Risk Historically, we derived 70%
Mitigation of revenues from PMI and self-pay
patients that provided a natural
hedge against exposure to Government
and NHS policy. Post pandemic,
the Group is seeing strong
private revenues that are expected
to continue medium term.
The Group has successfully
secured accreditation on the
NHS Frameworks in England,
Scotland and Wales ensuring
access to tender for future
contracts.
Through the COVID-19 pandemic,
we have deepened our relationships
with HM Government via the
Department of Health and Social
Care and NHS England. Meanwhile
hospitals have also strengthened
their relationships with the
local NHS commissioners. Working
effectively with the new ICS
in each our markets will be
a primary objective for hospital
management teams.
HM Government has announced:
* GBP5.4bn for the NHS to tackle waiting lists in the
period September 2021-March 2022.
* the Health & Social Care levy that will generate
c.GBP12bn/annum.
------------ ------------------------------------------------------------
Principal Risk
========================================================================================
10. Supply Chain Disruption
----------------------------------------------------------------------------------------
Executive Chief Operating Officer Risk Appetite
Owner(s) L
Link to Strategy
* First choice for private healthcare. Risk movement
in 2020
N/A
* Key partner of the NHS.
Risk movement
in 2021
* Uncompromising on patient safety and clinical care. up
* Improving revenue, profit and cash.
------------ ---------------------------------------------------------- --------------
Risk The widely reported disruption
Description in the Global and UK supply
chains because of a variety
of factors, could lead to shortages
of critical components or products
within:
* Medicines
* Consumables
* Prostheses
* Food
------------ --------------------------------------------------------------------------
Risk Spire hospitals are reliant
Impact on a wide range of products
in order to be able to conduct
operations and procedures.
Shortfalls in order fulfilment
of fresh food for example,
could result in hospitals having
to cancel inpatient operations
and procedures.
We are heavily reliant on medical
consumables, which in turn
are heavily reliant on the
availability of plastics, to
carry out even the most basic
procedures (e.g. taking blood
samples). Shortages in raw
materials or disruption in
the supply chain from the manufacturer
could result in hospitals having
to cancel operations and procedures.
------------ --------------------------------------------------------------------------
Risk We maintain a centralised supply
Mitigation chain with a national distribution
centre (NDC) and our own vehicle
and driver fleet.
Medical consumables, medicines
and prostheses are held at
the NDC with an average of
eight weeks' supply.
In 2021, we had to respond
to a number of product shortages
and global recalls, and we
have seen some minor shortfalls
in order fulfilment. In all
cases, our centralised procurement
function, with the support
of the Clinical team, has been
able to find alternative supplies
to maintain hospitals' activities.
Fresh food is supplied through
a national food distributor
who has its own delivery fleet
and directly employs its HGV
drivers. Order fulfilment has
remained in the high 90th percentile.
Because of our Brexit planning,
we have contingency menu plans
in case of fresh food shortages.
NHS Supply Chain manages any
national shortages in critical
medicines. We receive allocations
based on our activity.
------------ --------------------------------------------------------------------------
Principal Risk
========================================================================================
11. Information Governance and Security
----------------------------------------------------------------------------------------
Executive Chief Financial Officer Risk Appetite
Owner(s) (Interim - Chief B
Commercial Officer)
Risk movement
Link to Strategy in 2020
* First choice for private healthcare. up
Risk movement
* Key partner of the NHS. in 2021
-
* Uncompromising on patient safety and clinical care.
* Improving revenue, profit and cash.
------------ ---------------------------------------------------------- --------------
Risk We have to maintain and manage
Description a range of physical and digital
data assets including patient
records, commercial information
and staff data.
Personal data has to be managed
in compliance with the principles
set out in the Data Protection
Act 2018 and the General Data
Protection Regulations (GDPR).
The level of risk to Spire
Healthcare's IT architecture
and systems continues to grow
as the volume of cyber security
threats are increasing and
becoming more sophisticated.
Healthcare and pharmaceutical
organisations saw increased
hostile cyber activity in 2020-21
because of the COVID-19 pandemic.
We anticipate that the Healthcare
sector will remain a higher
risk sector from cyber-attacks.
------------ --------------------------------------------------------------------------
Risk Our business could be disrupted
Impact if its information systems
fail, are breached, destroyed
or damaged.
Staff and patient data could
be stolen or compromised. We
could also be subject to litigation
by third-parties and law enforcement
agencies.
A successful cyber-attack and
a breach of data security could
result in:
* material costs to recover operations;
* material financial penalties for breaches of Data
Protection law;
* compensation for patients or staff if personal data
is compromised; and,
* reputational damage.
------------ --------------------------------------------------------------------------
Risk We have a governance structure,
Mitigation with Board oversight, that
monitors the risk and mitigations
for information governance.
To support the governance structure
we have a range of policies
and practices covering information
governance. The Information
Security environment is subject
to regular Internal Audit.
All staff have to complete
annual mandatory training on
information governance and
data protection.
Our IT team have a cyber security
strategy for continuous improvement
based on industry standards.
In 2021, as part of that strategy
Spire Healthcare undertook
significant capital investment
to increase cyber security
protection.
We work with a number of industry
leading technical partners
to provide:
* multiple layers of business protection through the
use of advanced detection and protection systems,
* Regular third-party penetration testing on new and
existing IT systems.
------------ --------------------------------------------------------------------------
Principal Risk
========================================================================================
12. COVID-19 Pandemic
----------------------------------------------------------------------------------------
Executive The whole Executive Risk Appetite
Owner(s) Committee, L
led by the Chief
Executive Officer Risk movement
in 2020
Link to Strategy up
* Uncompromising on patient safety and clinical care.
Risk movement
in 2021
* First choice for private healthcare. down
* Key partner of the NHS.
* Improving revenue, profit and cash.
------------ ---------------------------------------------------------- --------------
Risk Repeated waves of infection
Description occur from current or future
variants of COVID-19 that risk
overwhelming the NHS and forcing
HM Government to re-introduce
severe lockdown measures regionally
or nationally.
------------ --------------------------------------------------------------------------
Risk Further lockdown measures could
Impact adversely impact Spire Healthcare's
operations and its profitability
by:
* Reducing the amount of elective procedures the
hospitals can carry out because of additional
Infection Prevention Control measures or patients
reluctance to attend hospital.
* Increased costs to support Infection Prevention
Control measures and from staff absence and patient
cancellations.
* A substantive number of staff have to self-isolate
because they or household members show symptoms or
test positive.
* Spire Healthcare hospitals are required to support
local NHS trusts that declare Surge, preventing them
from treating private patients.
* Consultants and anaesthetists are required to support
their NHS trusts to treat COVID-19 patients or the
backlog in waiting lists, reducing their availability
to undertake work in Spire Healthcare facilities.
------------ --------------------------------------------------------------------------
Risk To maximise the utilisation
Mitigation of the hospitals, we have:
* Maintained the Infection Prevention Control measures
to reduce the risk of cross contamination amongst
staff at Spire Healthcare facilities.
* Made the patient pathways as efficient as possible,
particularly for pre-operative assessment and testing
patients for COVID-19.
* Maintained capacity within the contractual
arrangements with the NHS for PMI and self-pay
patients.
* Negotiated national contracts with the NHS to support
them to provide capacity for treating the backlog of
elective procedures.
* Maintained close links with the consultant community
and supported them rebuild their private patient
activities.
* Encouraged all its employees to have both the
COVID-19 and flu national vaccination programmes.
------------ --------------------------------------------------------------------------
Principal Risk
==========================================================================
13. Brand Reputation
--------------------------------------------------------------------------
Executive Chief Commercial Risk Appetite
Owner(s) Officer B
Link to Strategy Risk movement
* First choice for private healthcare. in 2020
-
* Key partner of the NHS. Risk movement
in 2021
up
------------ -------------------------------------------- --------------
Risk The COVID-19 pandemic has resulted
Description in a substantial amount of
positive media coverage for
Spire Healthcare.
Our brand presence within the
consumer, NHS & HM Government
environments is higher than
at any point.
Our brand reputation is interconnected
with a number of other Principal
Risks, e.g. Clinical Quality
and Patient Safety, Information
Governance and Security.
Our future growth depends upon
our ability to maintain, and
continue to enhance, our reputation
amongst patients, clinicians
and other stakeholders.
As our brand presence grows,
the risk increases that adverse
events such as:
* patient notifications and recalls;
* mishandling of patient data; or,
* a breach of law or regulation will have a more
material impact on Spire Healthcare.
------------ ------------------------------------------------------------
Risk If we fail to protect or grow
Impact the brand it may harm our ability:
* to maintain or grow income
* to attract and retain the best staff and clinicians
* to win new contracts
* to raise capital at competitive rates
* to meet our regulatory obligations.
------------ ------------------------------------------------------------
Risk Our primary mitigations against
Mitigation damage to our brand reputation
is through the good management
of our principal risks, in
particular:
* Patient safety and clinical quality;
* Cyber security and data protection; and,
* Compliance and regulation.
In addition, we continue to
invest in the awareness and
health of the brand through
national advertising, public
relations and centrally coordinated
social media. We also continue
to build our reputation amongst
analysts and public commentators.
------------ ------------------------------------------------------------
Principal Risk
========================================================================================
14. Compliance and Regulation
----------------------------------------------------------------------------------------
Executive Risk Appetite
Owner(s) * Lead: Chief Executive Officer VL
Risk movement
* Chief Commercial Officer in 2020
up
* Chief Operating Officer Risk movement
in 2021
-
* Group Clinical Director
* Group Medical Director
Link to Strategy
* First choice for private healthcare.
* Key partner of the NHS.
* Uncompromising on patient safety and clinical care.
------------ ---------------------------------------------------------- --------------
Risk The increasing range and complexity
Description of the legislation and regulation
which impact on Spire Healthcare,
and our expectation that the
legal and regulatory landscape
in which we operate will change
and become more onerous, means
that this is an area of potential
risk for Spire Healthcare.
In addition, as the UK makes
the legal and regulatory transition
from being part of the EU,
there will be flux in legal
and regulatory developments,
potentially arising from the
interpretation of retained
EU law by the UK courts or
from the direction taken by
the UK following the end of
the transition period. It is
not possible to determine with
any degree of certainty the
speed, impact or direction
of forthcoming legal or regulatory
change. This will therefore
require monitoring, compliance
and assurance.
------------ --------------------------------------------------------------------------
Risk Failure to comply with laws,
Impact regulations or regulatory standards
may expose us to claims, fines,
penalties, and damage to reputation,
suspension from the treatment
of NHS patients, loss of hospital
licence and loss of private
patients.
New laws and regulations may
require new compliance programmes
to provide assurance that we
are in compliance increasing
overhead costs.
------------ --------------------------------------------------------------------------
Risk We have a Ward-to-Board system
Mitigation of governance that ensures
compliance with law and regulation
and provides the pathways to
add different elements of compliance,
should regulation or laws change
and thus the need arise.
Key components that support
the ward to board governance
structure for compliance and
regulation include:
* A dedicated legal team that, with external counsel,
monitors legal and regulatory developments and
advises Spire Healthcare thereon.
* Regular, role specific, mandatory training for all
staff (both clinical and non-clinical) across a range
of the most important legal and regulatory compliance
areas, e.g. data protection, health & safety laws and
safeguarding.
* Centralised clinical and non-clinical internal audit
teams that carry out site audits and assists
hospitals in establishing and maintaining a high
level of internal control.
* A range of policies, processes and toolkits guiding
our hospitals in how to meet the required clinical
regulatory standards which are regularly reviewed and
updated.
------------ --------------------------------------------------------------------------
Principal Risk
========================================================================================
15. Transformation
----------------------------------------------------------------------------------------
Executive Chief Financial Officer Risk Appetite
Owner(s) (Interim - Group B
People Director)
Risk movement
Link to Strategy in 2020
* First choice for private healthcare. N/A
Risk movement
* Key partner of the NHS. in 2021
up
* Uncompromising on patient safety and clinical care.
------------ ---------------------------------------------------------- --------------
Risk There is a risk that transformation
Description programmes to digitalise and
standardise processes fail
to deliver on budget, on time
and to scope because of;
* the complex and divergent operating environment
across the hospital and central sites;
* changes to working practices required by both
employees and Consultants (non-employees);
* poor execution of change projects.
------------ --------------------------------------------------------------------------
Risk Expected efficiency gains and
Impact business benefits are not realised
leading to lower profitability
than is forecast.
------------ --------------------------------------------------------------------------
Risk All transformation projects
Mitigation have an individual Executive
Committee sponsor who is accountable
to their colleagues for successful
project delivery.
We utilise external project
management experts to advise
on best-practice change portfolio
management and to lead strategic
projects when required.
All the major change initiatives
have professional programme
managers or directors following
a standard set of programme
management disciplines monitored
by a central Business Programme
Office. The Executive Committee's
sub-committee on Transformation
regularly reviews the progress
of change programmes.
Change programmes that have
a material impact on hospital
operations engage with the
hospital directors to ensure
their input and feedback is
incorporated into the planning
stage before deployment.
------------ --------------------------------------------------------------------------
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report and the Group's financial statements in accordance with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and parent company financial statements in accordance with UK-adopted International Accounting Standards ("UK-adopted IFRS") as issued by the International Accounting Standards Board ("IASB") and in accordance with the Companies Act 2006. Under company law the Directors must not approve the Group's financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the Company and of the profit or loss of the Group and the Company 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 accounting estimates that are reasonable and prudent;
- present information in a manner that provides relevant, reliable, comparable and understandable information;
- provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company financial position and financial performance;
- in respect of the group financial statements, state whether UK adopted International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- in respect of the parent company financial statements, state whether UK-adopted International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements, and
- prepare the financial statements on the going concern basis unless it is appropriate to presume that the Company and/or the Group will not continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's and Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Company and the Group financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and parent company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a strategic report, directors' report, directors' remuneration report and corporate governance statement that comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.
Each of the Directors confirms that, to the best of their knowledge:
- that the consolidated financial statements, prepared in accordance with UK-adopted International Accounting Standards give a true and fair view of the assets, liabilities, financial position and profit of the parent company and undertakings included in the consolidation taken as a whole;
- that the annual report, including the strategic report, includes a fair review of the development and performance of the business and the position of the company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
- that they consider the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy.
Related party transactions
31. Related party transactions
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 120 to 123.
Compensation for key management personnel is set out in the table below:
Key management compensation
(GBPm) 2021 2020
------------------------------------------------ ---- ----
Salaries and other short term employee benefits 4.5 4.4
------------------------------------------------ ---- ----
Post-employment benefits 0.5 0.5
------------------------------------------------ ---- ----
Termination benefits - 0.4
------------------------------------------------ ---- ----
Share-based payments 1.0 0.8
------------------------------------------------ ---- ----
6.0 6.1
------------------------------------------------ ---- ----
Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on pages 146 to 155.
There were no transactions with related parties external to the Group in the year to 31 December 2021 (2020: nil).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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END
ACSUAOVRUBUSRAR
(END) Dow Jones Newswires
April 01, 2022 11:40 ET (15:40 GMT)
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