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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
  -0.30 -0.31% 95.00 92.10 93.80 97.50 90.60 97.50 1,024,776 16:35:08
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Health Care Equipment & Services 931.1 8.2 2.8 33.9 381

Spire Healthcare Group PLC Annual Report and Notice of Annual General Meeting

06/04/2020 2:33pm

UK Regulatory (RNS & others)


Spire Healthcare (LSE:SPI)
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From Mar 2020 to May 2020

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TIDMSPI

RNS Number : 9370I

Spire Healthcare Group PLC

06 April 2020

Spire Healthcare Group plc

Annual Report and Notice of Annual General Meeting

6 April 2020

Spire Healthcare Group plc (the "Company") released its preliminary announcement of its annual results for the year ended 31 December 2019 ("Preliminary Announcement") on Thursday, 5 March 2020.

Further to that Preliminary Announcement, the Company confirms that its Annual Report and Accounts for the year ended 31 December 2019 ("2019 Annual Report"), 2020 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:

   2019 Annual Report:              www.spirehealthcare.com/AR2019 
   2020 Notice of Meeting:         www.spirehealthcare.com/Notice2020 

In accordance with Listing Rule 9.6.1, the Company will submit its 2019 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 in light of COVID-19

The Annual General Meeting of the Company will take place at 9.00am on Thursday, 14 May 2020 at 3 Dorset Rise, London EC4Y 8EN (the "2020 AGM").

On 26 March 2020, the Government's Stay at Home Measures (Measures) were passed into law in England and Wales with immediate effect to deal with the COVID-19 pandemic. These Measures prohibit public gatherings of more than two people, except where the gathering is 'essential for work purposes'. The FRC and ICSA published supplemental guidance on 27 March 2020 in response to the Measures, advising that attendance at a general meeting by a shareholder (other than one specifically required to form the quorum for that meeting), does not meet that criterion. Please note that, in order to comply with the Measures, shareholders will not be permitted to attend the Meeting in person and should instead vote by appointing the Chairman of the Meeting by way of proxy.

We expect only one Director and one other shareholder to be in attendance in person at the Meeting to ensure that the 2020 AGM is quorate and to conduct the business contained in the 2020 Notice of Meeting. No other Directors will be present in person. We intend to reduce the length of the 2020 AGM by limiting it to the formal business required and no presentations from management will be provided. The voting results of all resolutions put before the 2020 AGM will be announced to the market following the 2020 AGM. Any questions that shareholders have on the business of the 2020 AGM should be sent by e-mail to companysecretary@spirehealthcare.com.

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 2019 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, 5 March 2020.

Enquiries:

Philip Davies, Deputy Company Secretary

Tel: 07803 508348

Principal risks

 
Principal                             Risk      Risk      Link to         Risk Description                                           Risk Impact  Risk Mitigation 
 Risk and                             movement  movement  Strategy 
 Executive                            in 2018   in 2019 
 Owner(s) 
                                      ========  ========  ==============  =========================================================  ===========  =========================================================== 
1. Workforce 
====================================  ======================================================================================================================================================================= 
(previously:                          Increase  Increase  Strategic       There is a                                                 The Group    The Group seeks 
Availability                                              priority:       global shortage                                            is           to retain staff 
of Key                                                    First choice    of nursing                                                 able to      through: 
Clinical                                                  for private     and allied                                                 provide       *    a common purpose and a positive workplace culture. 
and Medical                                               healthcare      healthcare                                                 safe 
Professionals)                                                            practitioners.                                             patient 
 *    Group Human Resources Director                      Uncompromising  In addition,                                               care only     *    Maintaining competitive pay and benefits. 
                                                          on patient      the Group has                                              with 
                                                          safety and      an ageing workforce.                                       delays to 
 *    Group Clinical Director                             clinical        The Group's                                                treatment     *    Responding to key metrics such as staff turnover, 
                                                          care            ability to                                                 because of         rookie staff levels, vacancy rates and levels of 
                                                                          attract and                                                scarce             positive engagement from staff surveys. 
 *    Chief Operating Officer                                             retain clinical                                            resources. 
                                                                          practitioners, 
                                                                          in particular,                                             Over the      *    Continuous investment in its equipment, facilities 
                                                                          is affected                                                medium             and services to retain high-quality clinicians. 
                                                                          by:                                                        to long 
                                                                           *    Government immigration policy and the post Brexit    term 
                                                                                labour market                                        this could 
                                                                                                                                     result in a  The Group seeks 
                                                                                                                                     decline in   to recruit staff 
                                                                           *    The impact of the NHS 'Agenda for Change' causing    the Group's  through: 
                                                                                inflationary wage pressure                           profits and   *    A centralised recruitment processes 
                                                                                                                                     affect 
                                                                                                                                     expected 
                                                                           *    Our business strategy of increasing complexity of    revenue       *    An overseas recruitment capability to secure skilled 
                                                                                medical procedures that requires a higher skilled    growth             healthcare workers from outside the EU where 
                                                                                workforce                                            from more          necessary. 
                                                                                                                                     complex 
                                                                                                                                     surgical 
                                                                           *    The changing Pensions and Tax (IR35) landscape that  procedures    *    Offering apprenticeship programmes to support the 
                                                                                might reduce the availability of consultants, bank   and                development of clinical and non-clinical teams across 
                                                                                and agency staff.                                    treatment          the business. 
                                                                                                                                     of 
                                                                                                                                     higher-risk 
                                                                           *    The reduction in elective activity within trusts     patients.     *    Working with the Royal Colleges to offer consultant 
                                                                                reducing the training opportunities for new                             training opportunities in the private sector. 
                                                                                consultants. 
 
                                                                                                                                                   *    Building of local bank staff pools 
 
 
 
                                                                                                                                                  The Group manages 
                                                                                                                                                  immediate staff 
                                                                                                                                                  shortages through 
                                                                                                                                                  the use of agency 
                                                                                                                                                  and bank workers. 
====================================  ========  ========  ==============  =========================================================  ===========  =========================================================== 
 
 
Principal                       Risk       Risk       Link to         Risk            Risk Impact     Risk 
 Risk and                        movement   movement  Strategy        Description                     Mitigation 
 Executive                       in 2018    in 2019 
 Owner(s) 
                                =========  =========  ==============  ==============  ==============  ============== 
2. Government 
 and NHS 
 Policy 
==============================  ====================================================================================== 
(previously:                    Increase   Increase   Strategic       Short to        Reduction of    The Group 
Government)                                            priority:      medium-term     NHS patients    derives 
 *    Chief Commercial Officer                         Key partner    changes in      and associated  revenues from 
                                                       of the NHS     government      revenue and     three 
                                                                      policy that     profit.         primary payor 
                                                                      directly or                     groups 
                                                                      indirectly      Reduction in    (PMI, NHS and 
                                                                      impact NHS      the             Self-pay) 
                                                                      commissioning.  operational     which provides a 
                                                                                      efficiency      natural 'hedge' 
                                                                      Public funding  of our          against exposure 
                                                                      of NHS          existing        to this risk. 
                                                                      services        hospital 
                                                                      provision,      network.        The Group 
                                                                      and/or the                      regularly 
                                                                      prioritisation                  monitors changes 
                                                                      of this                         in government 
                                                                      funding                         policy 
                                                                      to particular                   and the impact 
                                                                      service lines                   that 
                                                                      over time                       these have on 
                                                                      could                           the 
                                                                      adversely                       business. 
                                                                      reduce 
                                                                      the flow of                     It has direct 
                                                                      NHS patients                    engagement 
                                                                      to Spire                        with government 
                                                                      Healthcare.                     via the 
                                                                                                      Department 
                                                                      A material                      of Health and 
                                                                      change in NHS                   Social 
                                                                      commissioning                   Care, NHS 
                                                                      models and/or                   England, 
                                                                      change in the                   NHS Improvement 
                                                                      tariff                          and closely 
                                                                      structure                       monitors 
                                                                      could result                    government 
                                                                      in reduced                      thinking 
                                                                      access to                       on Healthcare. 
                                                                      patients,                       The 
                                                                      reduced                         Group is an 
                                                                      tariffs,                        active 
                                                                      or reduced                      member of the 
                                                                      prices                          Independent 
                                                                      adversely                       Healthcare 
                                                                      impacting                       Providers 
                                                                      revenues                        Network, 
                                                                      and/or                          contributing 
                                                                      margins.                        across all 
                                                                                                      associated 
                                                                      Changes in                      specialist 
                                                                      taxation, laws                  working 
                                                                      and government                  groups. 
                                                                      policy for 
                                                                      providers of                    The Board 
                                                                      NHS services,                   continually 
                                                                      and service                     monitors NHS 
                                                                      level                           requirements 
                                                                      commitments                     and associated 
                                                                      to members                      tariff 
                                                                      of the public                   structures to 
                                                                      served by the                   consider 
                                                                      NHS, could                      the need for 
                                                                      adversely                       cost 
                                                                      impact                          and/or 
                                                                      the                             investment 
                                                                      consultants,                    reduction, 
                                                                      the workforce,                  whether 
                                                                      supply chain.                   in the short, 
                                                                                                      medium 
                                                                                                      or long term. 
 
                                                                                                      The Board 
                                                                                                      regularly 
                                                                                                      reviews 
                                                                                                      consultant 
                                                                                                      and employee 
                                                                                                      feedback 
                                                                                                      to ensure our 
                                                                                                      propositions 
                                                                                                      remains 
                                                                                                      competitive. 
==============================  =========  =========  ==============  ==============  ==============  ================ 
 
 
Principal                       Risk       Risk       Link to        Risk             Risk Impact     Risk Mitigation 
 Risk and                        movement   movement   Strategy      Description 
 Executive                       in 2018    in 2019 
 Owner(s) 
                                =========  =========  =============  ===============  ==============  =============== 
3. PMI market 
 dynamics 
==============================  ======================================================================================= 
(previously                     Remained   Decrease   Strategic      The PMI market   Reduction of    The Group works 
Concentration                     stable               priority:     is               PMI patients    hard to maintain 
of PMI market)                                         First choice  concentrated,    and/or          good 
 *    Chief Commercial Officer                         for private   with the top     associated      relationships 
                                                       healthcare    four companies   revenue and     and a joint 
                                                                     (Bupa, AXA,      profit.         product/patient 
                                                       Improving     Aviva and                        health offering 
                                                       revenue,      VitalityHealth)  Reduction in    with the PMI 
                                                       profit        having a market  the             companies, 
                                                       and cash      share estimated  operational     which, in the 
                                                                     at over 85%.     efficiency      opinion 
                                                                                      of our          of the Directors, 
                                                                     Loss of an       existing        assists the 
                                                                     existing         hospital        healthcare 
                                                                     contractual      network.        sector as a whole 
                                                                     relationship                     in delivering 
                                                                     with any of                      high-quality 
                                                                     the key                          patient care. 
                                                                     insurers 
                                                                     could                            The Group ensures 
                                                                     significantly                    we have long-term 
                                                                     reduce revenue                   contracts in 
                                                                     and profit.                      place 
                                                                                                      with our PMI 
                                                                     Growth in                        partners 
                                                                     Service                          to avoid 
                                                                     line tenders                     co-termination 
                                                                     beyond                           of contractual 
                                                                     traditional                      arrangements, 
                                                                     Imaging and                      recently 
                                                                     Cataract. E.g.                   announcing 
                                                                     MSK, & Hernia.                   new and extended 
                                                                                                      long term 
                                                                                                      contracts 
                                                                                                      with the top two 
                                                                                                      insurers in 2019. 
 
                                                                                                      The Board 
                                                                                                      believes 
                                                                                                      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. 
==============================  =========  =========  =============  ===============  ==============  ================= 
 
 
Principal                      Risk       Risk       Link to          Risk             Risk Impact      Risk 
 Risk and                       movement   movement  Strategy         Description                       Mitigation 
 Executive                      in 2018    in 2019 
 Owner(s) 
                               =========  =========  ===============  ===============  ===============  ============== 
4. Cyber 
 Security 
=============================  ======================================================================================= 
                               Remained   Remained   Strategic        The Group faces  The Group's      The Group's 
 *    Chief Financial Officer    stable     stable    priority:       the challenges   business could   technical 
                                                      First choice    of a             be disrupted     IT teams 
                                                      for private     continually      if its           continually 
                                                      healthcare      evolving         information      monitor these 
                                                                      external         systems fail     developments 
                                                      Key partner     cyber threat     or if its        as a business 
                                                      of the NHS      landscape,       databases        as 
                                                                      and could        are breached,    usual 
                                                      Uncompromising  become           destroyed or     activity. 
                                                      on patient      vulnerable       damaged. This 
                                                      safety and      to computer      could cause      Working with a 
                                                      clinical        viruses,         financial and    number of 
                                                      care            break-ins        reputational     specialist 
                                                                      and similar      impacts.         and industry 
                                                      Improving       disruption                        leading 
                                                      revenue,        from             The Group could  technical 
                                                      profit and      unauthorised     also be subject  partners, 
                                                      cash            tampering.       to litigation    multiple 
                                                                                       by               layers 
                                                                      The level of     third-parties.   of business 
                                                                      risk to Spire                     protection 
                                                                      Healthcare's                      have been 
                                                                      IT architecture                   created 
                                                                      and systems                       through the 
                                                                      continues to                      use 
                                                                      grow as the                       of advanced 
                                                                      volume of cyber                   intrusion 
                                                                      security                          detection and 
                                                                      threats                           protection 
                                                                      are increasing                    systems, web 
                                                                      and becoming                      access 
                                                                      more                              firewalls and 
                                                                      sophisticated.                    advanced 
                                                                                                        content 
                                                                                                        filtering 
                                                                                                        to combat 
                                                                                                        denial 
                                                                                                        of service 
                                                                                                        attacks. 
 
                                                                                                        Business 
                                                                                                        processes 
                                                                                                        are also kept 
                                                                                                        under 
                                                                                                        review and 
                                                                                                        user 
                                                                                                        education 
                                                                                                        regularly 
                                                                                                        carried out to 
                                                                                                        minimise the 
                                                                                                        possibility 
                                                                                                        of ransomware 
                                                                                                        incidents. 
 
                                                                                                        Regular 
                                                                                                        third-party 
                                                                                                        penetration 
                                                                                                        testing 
                                                                                                        is performed 
                                                                                                        on 
                                                                                                        Spire 
                                                                                                        Healthcare's 
                                                                                                        core IT 
                                                                                                        systems. 
                                                                                                        New IT system 
                                                                                                        developments 
                                                                                                        are subject to 
                                                                                                        rigorous 
                                                                                                        penetration 
                                                                                                        testing prior 
                                                                                                        to 
                                                                                                        release. 
 
                                                                                                        This approach 
                                                                                                        allows 
                                                                                                        the Group to 
                                                                                                        keep 
                                                                                                        pace with the 
                                                                                                        increasing 
                                                                                                        risk profile, 
                                                                                                        ensuring 
                                                                                                        the risk to 
                                                                                                        Spire 
                                                                                                        Healthcare 
                                                                                                        remains 
                                                                                                        stable. 
=============================  =========  =========  ===============  ===============  ===============  ============== 
 
 
Principal                       Risk          Risk       Link to       Risk           Risk Impact     Risk Mitigation 
 Risk and                       movement       movement   Strategy     Description 
 Executive                      in 2018        in 2019 
 Owner(s) 
                                ============  =========  ============  =============  ==============  ================ 
5. Macroeconomics 
==============================  ====================================================================================== 
                                  Increase    Increase   Strategic     Approximately  Reduction of    Health is 
 *    Chief Commercial Officer                           priority:     70% of the     Private         generally 
                                                         First choice  Group's        patients        not as sensitive 
                                                         for private   revenue        and associated  to economic 
                                                         healthcare    is dependent   revenue and     downturns 
                                                                       on private     profit          as other retail 
                                                                       patients       contributions.  environments. 
                                                                       having                         However, 
                                                                       PMI, paid      Reduction in    as successfully 
                                                                       by their       the             employed in the 
                                                                       employer       operational     last recession, 
                                                                       or paid by     efficiency      if the private 
                                                                       the            of our          market contracts 
                                                                       individual,    existing        the Group can 
                                                                       or being able  hospital        reduce 
                                                                       to afford      network.        costs and future 
                                                                       its services                   investment to 
                                                                       (Self-pay).    The early       improve 
                                                                                      stages          profit and cash 
                                                                       In an          of new disease  flow, and is 
                                                                       economic       outbreaks are   able 
                                                                       downturn,      characterised   to offer the 
                                                                       the numbers    by a high       released 
                                                                       of insured     degree          capacity to the 
                                                                       individuals    of uncertainty  NHS at its lower 
                                                                       falls with     where it is     tariff, reducing 
                                                                       the level      impossible      the impact on 
                                                                       of employment  to predict      profit. 
                                                                       and            the impact 
                                                                       individuals    on the Group.   Macroeconomic 
                                                                       have reduced   In worst-case   conditions 
                                                                       real income    scenarios,      may put 
                                                                       to fund        the financial   comparable 
                                                                       insurance      consequences    finance strain 
                                                                       or Self-pay    of a major      on competitors, 
                                                                       for            worldwide or    who may not be 
                                                                       procedures.    UK epidemic     as well 
                                                                       This would     could be        positioned 
                                                                       have an        material        to respond. 
                                                                       adverse        on the Group    Opportunities 
                                                                       effect on      from lost       may arise from 
                                                                       the Group's    revenue         reduced 
                                                                       business,      or increased    competition 
                                                                       the results    costs.          or market 
                                                                       of its                         consolidation. 
                                                                       operations 
                                                                       and                            Spire Healthcare 
                                                                       prospects.                     will follow the 
                                                                                                      guidance and 
                                                                       A major flu                    requirements 
                                                                       pandemic or                    set out by 
                                                                       outbreak of                    Public 
                                                                       an infectious                  Health England 
                                                                       virus (e.g.                    to help contain, 
                                                                       a                              delay and then 
                                                                       Coronavirus)                   mitigate any 
                                                                       could lead                     spread 
                                                                       to                             of a virus. A 
                                                                       cancellation                   central 
                                                                       of patient                     incident 
                                                                       appointments                   management 
                                                                       because of                     team comprising 
                                                                       clinical                       clinical and 
                                                                       staff                          operational 
                                                                       shortages,                     senior leaders 
                                                                       disruption                     taking advice, 
                                                                       to supply                      where necessary, 
                                                                       chains and                     from external 
                                                                       disruption                     specialist 
                                                                       to support                     clinicians e.g. 
                                                                       services                       microbiologists, 
                                                                       (e.g.                          controls Spire 
                                                                       pathology                      Healthcare's 
                                                                       services).                     response 
                                                                       In extreme                     to such 
                                                                       but highly                     situations. 
                                                                       unlikely                       In a serious 
                                                                       scenarios,                     epidemic, 
                                                                       HM Government                  Spire Healthcare 
                                                                       could                          staff and 
                                                                       requisition                    patients 
                                                                       Spire                          are as exposed 
                                                                       Healthcare's                   to a virus as 
                                                                       facilities.                    are 
                                                                                                      any members of 
                                                                                                      public, and 
                                                                                                      therefore 
                                                                                                      the mitigation 
                                                                                                      activities may 
                                                                                                      only reduce, 
                                                                                                      rather 
                                                                                                      than avoid, 
                                                                                                      operational 
                                                                                                      disruption. 
==============================  ============  =========  ============  =============  ==============  ================ 
 
 
Principal Risk                  Risk      Risk      Link to     Risk           Risk Impact                                                Risk 
 and Executive                  movement  movement  Strategy    Description                                                               Mitigation 
 Owner(s)                       in 2018   in 2019 
                                ========  ========  ==========  =============  =========================================================  ============== 
6. Brand Reputation 
 (New) 
==============================  ======================================================================================================================== 
                                  N/A       N/A     Strategic   The Group's    If we fail                                                 The group has 
 *    Chief Commercial Officer                      priority:   future growth  to protect                                                 a strategy of 
                                                    First       depends upon   or grow the                                                developing 
                                                    choice      its ability    brand it may                                               Spire 
                                                    for         to maintain,   harm our ability:                                          Healthcare's 
                                                    private     and continue    *    to maintain or grow income                           brand as a 
                                                    healthcare  to enhance,                                                               private 
                                                                its                                                                       healthcare 
                                                    Key         reputation      *    to attract and retain the best staff and clinicians  provider 
                                                    partner     amongst                                                                   and to promote 
                                                    of the NHS  patients,                                                                 its 
                                                                clinicians      *    to win new contracts                                 uncompromising 
                                                                and other                                                                 patient safety 
                                                                stakeholders.                                                             culture. 
                                                                                *    to raise capital at competitive rates 
                                                                                                                                          Spire 
                                                                                                                                          Healthcare 
                                                                                *    to meet our regulatory obligations                   has a strategy 
                                                                                                                                          in place to 
                                                                                                                                          protect and 
                                                                                                                                          grow its 
                                                                                                                                          reputation 
                                                                                                                                          amongst 
                                                                                                                                          stakeholders. 
                                                                                                                                          This includes 
                                                                                                                                          its medical 
                                                                                                                                          and clinical 
                                                                                                                                          governance, 
                                                                                                                                          and capital 
                                                                                                                                          investment 
                                                                                                                                          programme 
                                                                                                                                          in the 
                                                                                                                                          hospital 
                                                                                                                                          estate. 
 
                                                                                                                                          Across all 
                                                                                                                                          elements 
                                                                                                                                          of the 
                                                                                                                                          principal 
                                                                                                                                          risks we have 
                                                                                                                                          a 
                                                                                                                                          well-developed 
                                                                                                                                          strategy and 
                                                                                                                                          risk policy. 
 
                                                                                                                                          We conduct 
                                                                                                                                          audits 
                                                                                                                                          of our key 
                                                                                                                                          stakeholders 
                                                                                                                                          to contribute 
                                                                                                                                          to plans for 
                                                                                                                                          protecting and 
                                                                                                                                          enhancing our 
                                                                                                                                          reputation. 
==============================  ========  ========  ==========  =============  =========================================================  ============== 
 
 
Principal                       Risk       Risk       Link to          Risk            Risk Impact      Risk 
 Risk and Executive              movement   movement  Strategy         Description                      Mitigation 
 Owner(s)                        in 2018    in 2019 
                                =========  =========  ===============  ==============  ===============  ============== 
7. Competitor 
 Challenge 
==============================  ====================================================================================== 
                                Remained   Remained   Strategic        Spire           The potential    The market has 
 *    Chief Commercial Officer    stable     stable    priority:       Healthcare      impact would     seen increased 
                                                       First choice    operates in     be the loss      pressure in 
                                                       for private     a highly        of market share  2019 and the 
                                                       healthcare      competitive     due to a new     Group 
                                                                       market. New     competitor       maintains 
                                                       Key partner     or existing     and reduced      a watching 
                                                       of the NHS      competitors     profitability    brief 
                                                                       may enter the   and cash flow.   on new and 
                                                                       market of one                    existing 
                                                                       or more of                       competitor 
                                                                       our existing                     activity 
                                                                       hospitals,                       and retains 
                                                                       or offer new                     the ability 
                                                                       services.                        to react 
                                                                                                        quickly 
                                                                       This could                       to changes in 
                                                                       lead to                          patient and 
                                                                       uncertainly                      market demand. 
                                                                       if a new 
                                                                       strategy                         The Group 
                                                                       materially                       considers 
                                                                       changed the                      that a partial 
                                                                       existing                         mitigation of 
                                                                       operating                        the impact of 
                                                                       model. In turn                   competitor 
                                                                       this could                       activity 
                                                                       potentially                      is ensured by 
                                                                       impact the                       providing 
                                                                       way in which                     patients 
                                                                       the NHS and                      with 
                                                                       PMI providers'                   high-quality 
                                                                       commission                       clinical care 
                                                                       work.                            and by 
                                                                                                        maintaining 
                                                                       There is also                    good working 
                                                                       a risk that                      relationships 
                                                                       the                              with GP's and 
                                                                       competitive                      consultants. 
                                                                       environment 
                                                                       results in                       Spire 
                                                                       irrational                       continues 
                                                                       market                           to invest in 
                                                                       behaviour                        the brand and 
                                                                       manifesting                      deliver an 
                                                                       itself in low                    effective 
                                                                       pricing on                       acquisition 
                                                                       tenders or                       capability 
                                                                       self pay.                        both 
                                                                                                        direct and via 
                                                                                                        our partners 
                                                                                                        in order to 
                                                                                                        protect our 
                                                                                                        market 
                                                                                                        position. 
                                                                                                        We have also 
                                                                                                        strengthened 
                                                                                                        our pricing 
                                                                                                        and tendering 
                                                                                                        capabilities. 
 
                                                                                                        In addition 
                                                                                                        we will 
                                                                                                        maintain 
                                                                                                        our investment 
                                                                                                        into the 
                                                                                                        estate 
                                                                                                        and clinical 
                                                                                                        equipment to 
                                                                                                        differentiate 
                                                                                                        our 
                                                                                                        proposition. 
 
                                                                                                        Finally, we 
                                                                                                        expect 
                                                                                                        opportunities 
                                                                                                        to continue 
                                                                                                        to arise as 
                                                                                                        competitors 
                                                                                                        close 
                                                                                                        facilities 
                                                                                                        in specific 
                                                                                                        geographies 
                                                                                                        creating 
                                                                                                        incremental 
                                                                                                        volume. 
==============================  =========  =========  ===============  ==============  ===============  ============== 
 
 
Principal Risk                 Risk      Risk      Link to         Risk Description                                         Risk Impact          Risk 
 and Executive                 movement  movement  Strategy                                                                                      Mitigation 
 Owner(s)                      in 2018   in 2019 
                               ========  ========  ==============  =======================================================  ===================  =========== 
8. Patient 
 Safety & Clinical 
 Quality 
=============================  ============================================================================================================================= 
                               Decrease  Decrease  Strategic       There is a                                               Avoidable harm       A programme 
 *    Group Clinical Director                      priority:       risk to patient                                          to patients          of 
                                                   Uncompromising  safety and                                                                    continuous 
                                                   on patient      clinical quality                                         Unsatisfactory/poor  improvement 
 *    Group Medical Director                       safety and      because of:                                              outcomes             across all 
                                                   clinical         *    a shortage of skilled workforce (see Risk 1);                           areas with 
                                                   care                                                                     Regulatory           active 
                                                                                                                            enforcement          focus 
                                                                    *    clinical and non-clinical staff failing to follow  and reputational     on areas 
                                                                         guidelines, standards and policies resulting in    damage.              identified 
                                                                         patient harm; and                                                       not meeting 
                                                                                                                            Adverse regulatory   required 
                                                                                                                            inspection           standards. 
                                                                    *    poor execution of patient recall and notification  ratings. 
                                                                         exercises.                                                              A reporting 
                                                                                                                            Increase in          culture of 
                                                                                                                            legal claims.        openness 
                                                                                                                                                 and 
                                                                   Reputational                                             Failure to           honesty 
                                                                   and financial                                            attract and          from 
                                                                   loss could                                               retain high          Ward to 
                                                                   occur if Spire                                           quality staff        Board. 
                                                                   Healthcare                                               and consultants 
                                                                   fails to address                                                              Quality 
                                                                   adequately                                               Reduced future       metrics 
                                                                   issues identified                                        earnings.            in place, 
                                                                   by incidents,                                                                 including 
                                                                   audits, complaints,                                                           Board. 
                                                                   PROMs, National 
                                                                   Registries,                                                                   Continually 
                                                                   Whistleblowing,                                                               monitoring 
                                                                   Freedom to                                                                    clinical 
                                                                   speak up, workforce                                                           standards, 
                                                                   feedback and                                                                  reporting 
                                                                   the internal                                                                  progress 
                                                                   Patient Safety                                                                via the 
                                                                   Quality Reviews                                                               Board's 
                                                                   and Care Quality                                                              Clinical 
                                                                   Commission.                                                                   Governance 
                                                                   .                                                                             and Safety 
                                                                                                                                                 Committee 
                                                                                                                                                 ('CGSC'). 
                                                                                                                                                 A schedule 
                                                                                                                                                 of robust 
                                                                                                                                                 and 
                                                                                                                                                 regular 
                                                                                                                                                 hospital 
                                                                                                                                                 audits 
                                                                                                                                                 including 
                                                                                                                                                 the Patient 
                                                                                                                                                 Safety and 
                                                                                                                                                 Quality 
                                                                                                                                                 Reviews, 
                                                                                                                                                 with an 
                                                                                                                                                 action 
                                                                                                                                                 plan for 
                                                                                                                                                 improvement 
                                                                                                                                                 that is 
                                                                                                                                                 monitored. 
 
                                                                                                                                                 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                                     Risk      Risk      Link to         Risk           Risk Impact  Risk Mitigation 
 and Executive                                     movement  movement  Strategy        Description 
 Owner(s)                                          in 2018   in 2019 
                                                   ========  ========  ==============  =============  ===========  ================ 
9. Compliance and Regulation 
=================================================================================================================================== 
                                                   Increase  Increase  Strategic       The Group      The Group    The Group 
 *    General Counsel and Group Company Secretary                      priority:       operates       may          continues 
                                                                       Uncompromising  in a highly    not be able  to strengthen 
                                                                       on patient      regulated      to operate   its Group-wide 
 *    Group Clinical Director                                          safety and      environment,   one or more  risk management 
                                                                       critical        including      of its       framework (and 
                                                                       care            complying      hospitals,   associated 
                                                                                       with the       due to       policies and 
                                                                                       requirements   regulatory   procedures) 
                                                                                       of, for        breaches     to ensure that 
                                                                                       example,       which        risks are 
                                                                                       the CQC, NHS   could lead   mitigated 
                                                                                       Improvement    to loss of   as far as 
                                                                                       and the CMA.   licence to   possible, 
                                                                                       The intensity  practice at  with the 
                                                                                       and frequency  one or more  Executive 
                                                                                       of regulatory  sites        Committee having 
                                                                                       inspections    causing      appropriate 
                                                                                       (particularly  a            visibility 
                                                                                       those by the   significant  to ensure robust 
                                                                                       Group's        reduction    decision-making. 
                                                                                       principal      in 
                                                                                       regulator,     profit.      The Group has 
                                                                                       the CQC)                    the ability 
                                                                                       continues                   to monitor 
                                                                                       to increase.                and react to 
                                                                                       Failure to                  the changing 
                                                                                       comply with                 regulatory 
                                                                                       laws,                       framework of 
                                                                                       regulations                 a listed Group 
                                                                                       or regulatory               in the 
                                                                                       standards                   healthcare 
                                                                                       e.g.                        sector. 
                                                                                       CQC/HIS/HIW, 
                                                                                       GMC, HSE, CMA               The Group has 
                                                                                       NHS                         a significant 
                                                                                       Improvement,                centralised 
                                                                                       NHS England,                clinical 
                                                                                       HMRC, DPA                   services 
                                                                                       2018                        team which 
                                                                                       (GDPR) may                  assists 
                                                                                       expose the                  hospitals 
                                                                                       Group to                    in establishing 
                                                                                       patient                     and maintaining 
                                                                                       claims,                     a high level 
                                                                                       fines,                      of clinical 
                                                                                       penalties,                  performance. 
                                                                                       damage to 
                                                                                       reputation,                 Emerging legal 
                                                                                       suspension                  or regulatory 
                                                                                       from the                    changes are 
                                                                                       treatment                   monitored by 
                                                                                       of NHS                      the Board, 
                                                                                       patients,                   the Executive 
                                                                                       loss of                     Committee, 
                                                                                       hospital                    the Audit and 
                                                                                       licence and                 Risk Committee 
                                                                                       loss of                     and the CGSC, 
                                                                                       private                     in addition 
                                                                                       patients.                   to consultations 
                                                                                                                   with external 
                                                                                                                   advisers and 
                                                                                                                   industry 
                                                                                                                   briefings. 
 
                                                                                                                   Identification 
                                                                                                                   and reporting 
                                                                                                                   of data 
                                                                                                                   protection 
                                                                                                                   and associated 
                                                                                                                   risks are 
                                                                                                                   managed 
                                                                                                                   by responsible 
                                                                                                                   officers and 
                                                                                                                   brought to 
                                                                                                                   the attention 
                                                                                                                   of the board 
                                                                                                                   by the Data 
                                                                                                                   Protection 
                                                                                                                   Officer. 
=================================================  ========  ========  ==============  =============  ===========  ================ 
 
 
Principal Risk                                     Risk      Risk      Link to         Risk Description                 Risk Impact   Risk 
 and Executive                                     movement  movement  Strategy                                                       Mitigation 
 Owner(s)                                          in 2018   in 2019 
                                                   ========  ========  ==============  ===============================  ============  ============= 
10. UK-EU Trade Negotiations 
=================================================================================================================================================== 
                                                   Increase  Decrease  Strategic       The Group potentially            The Group     The Group has 
 *    General Counsel and Group Company Secretary                      priority:       faces significant                may           undertaken 
                                                                       First choice    implications                     experience    a Brexit risk 
                                                                       for private     if there is                      major         assessment 
                                                                       healthcare      a 'no deal'                      disruption    and has 
                                                                                       or disruptive                    in key        comprehensive 
                                                                       Key partner     Brexit.                          function      plans across 
                                                                       of the NHS                                       areas         all key risk 
                                                                                       If the UK-EU                     impacting     areas to 
                                                                       Uncompromising  have not agreed                  on pricing,   minimise 
                                                                       on patient      a UK-EU trade                    tariffs and   disruption, 
                                                                       safety and      deal by 31                       costs, and    including: 
                                                                       clinical        December 2020,                   see a         utilising its 
                                                                       care            or the UK-EU                     significant   national 
                                                                                       have agreed                      reduction in  supply 
                                                                       Improving       a trade deal                     patient       chain and 
                                                                       revenue,        but the terms                    numbers.      distribution 
                                                                       profit and      of the deal                                    centre to 
                                                                       cash            are such that                    The group     efficiently 
                                                                                       it will cause                    may           utilise 
                                                                                       disruption                       find supply   stock; 
                                                                                       to our business                  of            undertaking 
                                                                                       post-31 December                 medicines,    supplier 
                                                                                       2020, the delivery               consumables;  assurance; 
                                                                                       of health care                   drugs         liaising with 
                                                                                       services may                     (especially   NHS England 
                                                                                       be impacted,                     those with    and the 
                                                                                       including:                       short-life    Department 
                                                                                        *    supply chain;              spans) and    of Health and 
                                                                                                                        other key     Social Care. 
                                                                                                                        items         Brexit 
                                                                                        *    medicines;                 are not       planning 
                                                                                                                        available     team and 
                                                                                                                        or severely   promoting 
                                                                                        *    consumables;               restricted,   the EU 
                                                                                                                        which may     settlement 
                                                                                                                        impact        scheme to 
                                                                                        *    prostheses;                the group's   relevant 
                                                                                                                        ability to    staff. Brexit 
                                                                                                                        trade.        planning is 
                                                                                        *    food;                                    overseen by 
                                                                                                                                      the Group's 
                                                                                                                                      Brexit 
                                                                                        *    patients;                                Preparation 
                                                                                                                                      Committee. 
 
                                                                                        *    transport disruption; and 
 
 
                                                                                        *    cash-flow. 
=================================================  ========  ========  ==============  ===============================  ============  ============= 
 
 
Principal Risk                                     Risk      Risk      Link to         Risk         Risk Impact    Risk Mitigation 
 and Executive                                     movement  movement  Strategy        Description 
 Owner(s)                                          in 2018   in 2019 
                                                   ========  ========  ==============  ===========  =============  =============== 
11. Insurance & Indemnity 
================================================================================================================================== 
                                                   Remained  Decrease  Strategic       Spire        The Group's    The Group 
 *    General Counsel and Group Company Secretary   stable             priority:       Healthcare   insurance      reviews 
                                                                       Uncompromising  could be     premiums       and maintains 
                                                                       on patient      subject      may increase   insurance to 
                                                                       safety and      to           and, if there  mitigate the 
                                                                       critical        litigation   is a           possibility 
                                                                       care            for actions  significant    of a major 
                                                                                       by third     deterioration  loss. Adequacy 
                                                                                       parties      in its claims  of cover is 
                                                                                       or may be    experience,    reviewed 
                                                                                       found        insurance may  annually 
                                                                                       liable for   not be         with the 
                                                                                       damages      available      Group's 
                                                                                       which        on acceptable  brokers with 
                                                                                       may not be   terms.         coverage being 
                                                                                       covered by                  maintained 
                                                                                       its          There may      or increased 
                                                                                       insurance    also           depending on 
                                                                                       policies,    be costs       that advice. 
                                                                                       if           relating 
                                                                                       the claims   to damages     Personal injury 
                                                                                       are in       and defence    claims relating 
                                                                                       excess       costs.         to patients, 
                                                                                       of cover or                 third-parties 
                                                                                       claims are                  and employees 
                                                                                       not covered                 are covered 
                                                                                       by the                      by insurance 
                                                                                       Group's                     once 
                                                                                       insurance                   predetermined 
                                                                                       due                         deductible 
                                                                                       to other                    levels have 
                                                                                       policy                      been reached. 
                                                                                       limitations 
                                                                                       or                          The Group 
                                                                                       exclusions                  engages 
                                                                                       or where it                 with 
                                                                                       has failed                  consultants 
                                                                                       to comply                   in relation 
                                                                                       with                        to indemnity 
                                                                                       the terms                   and has 
                                                                                       of                          developed 
                                                                                       the policy.                 a bespoke 
                                                                                                                   affinity 
                                                                                                                   insurance 
                                                                                                                   product 
                                                                                                                   MedicaInsure 
                                                                                                                   to provide 
                                                                                                                   consultants 
                                                                                                                   with a 
                                                                                                                   high-quality, 
                                                                                                                   regulated 
                                                                                                                   alternative 
                                                                                                                   to 
                                                                                                                   discretionary 
                                                                                                                   cover. The 
                                                                                                                   Group has made 
                                                                                                                   robust 
                                                                                                                   representations 
                                                                                                                   to government 
                                                                                                                   and the 
                                                                                                                   Paterson 
                                                                                                                   Inquiry with 
                                                                                                                   regard to the 
                                                                                                                   need to end 
                                                                                                                   discretionary 
                                                                                                                   indemnity and 
                                                                                                                   to regulate 
                                                                                                                   the medical 
                                                                                                                   defence 
                                                                                                                   organisations. 
=================================================  ========  ========  ==============  ===========  =============  =============== 
 
 
Principal Risk                 Risk movement  Risk       Link to         Risk            Risk Impact     Risk 
 and Executive                  in 2018        movement  Strategy        Description                     Mitigation 
 Owner(s)                                      in 2019 
                               =============  =========  ==============  ==============  ==============  ============= 
12. Liquidity and Covenant risk 
====================================================================================================================== 
                                 Remained     Decrease   Strategic       The Group may   Failure to      The Group has 
 *    Chief Financial Officer      stable                priority:       not have        meet its        a solid asset 
                                                         First choice    sufficient      obligations     base with the 
                                                         for private     liquidity to    or covenants    ability to 
                                                         healthcare      meet its        would have      promptly 
                                                                         financial       a substantial   leverage 
                                                         Key partner     liabilities     adverse effect  in a short 
                                                         of the NHS      as they fall    on the Group's  timescale, 
                                                                         due, or breach  reputation      if required. 
                                                         Uncompromising  financial       and may lead 
                                                         on patient      covenants       to borrowings   The Group 
                                                         safety and      linked to its   becoming        actively 
                                                         clinical        borrowings.     repayable       monitors and 
                                                         care                            earlier than    manages its 
                                                                                         contracted      liquid asset 
                                                         Improving                       for.            position, its 
                                                         revenue,                                        financial 
                                                         profit and                                      liabilities 
                                                         cash                                            falling due 
                                                                                                         and the cover 
                                                                                                         against its 
                                                                                                         loan 
                                                                                                         covenants, 
                                                                                                         is actively 
                                                                                                         focused on 
                                                                                                         cash 
                                                                                                         management 
                                                                                                         and capital 
                                                                                                         expenditure, 
                                                                                                         and continues 
                                                                                                         to maintain 
                                                                                                         close working 
                                                                                                         relationships 
                                                                                                         with a highly 
                                                                                                         supportive 
                                                                                                         banking 
                                                                                                         group. 
 
                                                                                                         The Board has 
                                                                                                         considered 
                                                                                                         the risk in 
                                                                                                         detail as 
                                                                                                         part 
                                                                                                         of its 
                                                                                                         assessment 
                                                                                                         of the 
                                                                                                         viability 
                                                                                                         of the Group. 
=============================  =============  =========  ==============  ==============  ==============  ============= 
 

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report and Accounts for the year ended 31 December 2019, 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 96 and 99, 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 2019, 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

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 96 to 99.

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

Key management compensation

 
(GBP million)                                     2019  2018 
------------------------------------------------  ----  ---- 
Salaries and other short term employee benefits    3.6   2.9 
Post-employment benefits                           0.5   0.3 
Share-based payments                               0.8   0.4 
------------------------------------------------  ----  ---- 
                                                   4.9   3.6 
------------------------------------------------  ----  ---- 
 

Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on pages 113 to 121.

There were no transactions with related parties external to the Group in the year to 31 December 2019 (2018: 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.

END

MSCIFMJTMTJMBBM

(END) Dow Jones Newswires

April 06, 2020 09:33 ET (13:33 GMT)

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