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Investing.com -- Shares of Spire (NYSE:SR) Healthcare Group PLC fell sharply by 25% today following the announcement of the company’s second-half results for the fiscal year 2024, which missed consensus revenue and adjusted EBITDA expectations.
The healthcare provider reported revenues that were 2% shy of consensus forecasts and adjusted EBITDA that was 6% behind analyst projections.
Despite the underlying hospitals business seeing a revenue increase of 5.5% for the year 2024, with an adjusted EBITDA margin of 18.0%, the company’s stock was negatively impacted by the performance of its NHS business, which grew 8% in 2024.
This growth in NHS business affected the overall revenue mix and led to an increase in NHS revenues in the fourth quarter, with a 20% YoY volume growth. However, the company’s 2025 guidance indicates expectations of mid-single-digit percentage revenue growth, falling below the consensus estimate of 6.1% and Barclays’ estimate of 5.8%.
The anticipated adjusted EBITDA range of £270-285 million is approximately 7% below the consensus of £297.8 million, suggesting a margin of 17.5% compared to the expected 18.4%.
Factors contributing to the weaker margins in 2025 include a similar trajectory of NHS growth, an increase in private patients driven by private medical insurance (PMI), and a continued mix shift from self-pay to PMI.
Additional financial impacts are expected from National Insurance and minimum wage changes in the UK, which are projected to have a £13-15 million impact in 2025. These costs will be somewhat mitigated by an increased cost savings target of £10 million for the year.
Barclays analysts commented on the results, stating, "Overall, we expect the lower guidance to be in focus and weigh on the shares. We continue to like the medium-term story at Spire Healthcare."
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