Spire Healthcare Group Faces Headwinds Despite Transformation Progress

Spire Healthcare, a leading UK independent healthcare group, announced a trading update indicating full-year adjusted Group EBITDA for FY25 is expected to be around the bottom end of its guidance range of £270m to £285m.

This comes despite positive trading since the interim results in July, with Group revenue growth of 3.6% year-over-year in the four months leading up to October 2025.

The company has actively responded to inflationary pressures and increased labor costs through a transformation program.

This program is on track to deliver £30m of new savings during the year, including an uplift identified earlier in the year to offset rising National Insurance and Minimum Wage contributions. These savings will offset half of the additional costs, with further savings expected in 2026.

The launch of Patient Support Centres (PSCs) aimed to centralize patient booking and administrative functions, initially caused some disruption. However, these centers are now gaining efficiency and contributing towards improving private patient trends, serving as a platform for future growth. Primary Care expansion remains on track with a new outpatient clinic in Kings Lynn.

Self-pay trends have improved, and PMI trends remain stable. However, a slowdown in NHS commissioning activity has impacted the group due to Integrated Care Board budgetary restrictions. Spire is working with local commissioners to address this near-term challenge.

Looking ahead to FY26, Spire anticipates continued improvement in Self-Pay and PMI trends as the PSCs mature operationally. The company is prioritizing investments to strengthen PMI partnerships, self-pay marketing, and patient experience. Further expansion in Primary Care, supported by strategic M&A, is also planned to drive referrals to its hospital business.

Spire expects to deliver an additional £30m of new savings in FY26, supported by a detailed plan. However, the company acknowledges material uncertainty regarding NHS volumes, particularly in Q1. Proposed NHS Payment Scheme prices for 2026/27 fall short of the prevailing inflation rate, prompting Spire to actively engage in consultations to support the partnership between the NHS and the Independent Sector.

Given the current market visibility, Spire expects FY26 Group adjusted EBITDA to be broadly in line or slightly ahead of 2025. The company remains confident in its medium-term outlook, anticipating further growth in private patient volumes.

Spire has successfully extended its existing banking facilities of £425 million to August 2028, with terms unchanged. This provides financial stability and supports ongoing operations.

The company continues to evaluate actions to drive long-term shareholder value, including potential sale of the company, value generation from the hospital property estate, and increased strategic focus on private payers. The process is ongoing, and there is no certainty that any offer will be made.