Market Report: NHS budget constraints mean Spire Healthcare growth will flatline


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The Independent Online

NHS budget constraints mean growth at Spire Healthcare will flatline in the last half of 2015. Britain’s biggest private hospital operator, down 57.1p at 344.5p, had its worst day on the stock market since floating at 210p in July last year as it downgraded expectations for annual revenue and earnings growth to between 4 per cent and 6 per cent.

That compares with previous growth forecasts in the mid to high single digits, which are now a distant memory as the NHS refrains from outsourcing.

The company, which generates around a third of its turnover from the public sector, revealed underlying revenues grew 5.1 per cent in the first six months of the year to £449.8m, with underlying operating profit up 6.7 per cent to £50.6m.

Spire was the biggest casualty on the FTSE 250, which fell 2.1 per cent to 16,876.6. But that slump was dwarfed by the one on the FTSE 100, which crashed 180.24 points, or 2.8 per cent, to 6,187.65 – its lowest point since mid-December – on continued fears over China’s slowing growth.

Royal Mail was the sole riser, up 7.5p at 478.2p, although precious metals only lost a little of their shine as their safe haven appeal rose amid the turmoil. Gold producer Randgold Resources fell just 13p to 4,242p, silver miner Fresnillo lost 3p to 681.5p, and platinum distributor Johnson Matthey shed 22p to 2,669p.

The pharmaceutical company Shire was down 268p at 4,807p as UBS suggested it faces “huge difficulty” in sealing a deal for US rival Baxalta.

The temporary- power provider APR Energy, down 7.75p at 82p, received an $8.4m (£5.5m) payment from its terminated project in conflict-torn Yemen. APR wrote off the project earlier this month, taking a $24m hit, but yesterday it said it will reassess the size of the writedown.

AIM tiddler Rose Petroleum tanked 0.04p, or 16 per cent, to 0.19p as it scaled back risky exploration efforts in light of lower oil prices.

Shares in finance house Marechale Capital rocketed 440 per cent to 10.25p on rumours its planning application for a solar project near Kettering will get the green light.