Bupa profits fall 72 per cent after jobs are slashed in UK

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The private medical group Bupa has reported a 72 per cent plunge in profits after a difficult year in which jobs were slashed in the UK and customer numbers fell further.

The group axed 15 per cent of its workforce – about 500 jobs – at its UK private medical insurance business as wider economic woes continued to weigh on customer numbers, down by two per cent to three million. This helped increase profits at the insurance arm, which drove a 14 per cent increase in underlying earnings in the European and US business.

But this was not enough to offset the impact of spending cuts and healthcare reforms in the US and UK, which left it with a £249m hit as it wrote down the value of a raft of recent acquisitions, including Bupa Home Healthcare and the Cromwell Hospital in London.

Pre-tax profits plummeted to £118m in 2010, from £417m in 2009 after the charge. Bupa said underlying profits rose nine per cent, helped by the UK insurance improvement and a strong performance in Australia and Asia.