Spire Healthcare saw profits plummet by 50% while revenues from private medical insurance (PMI) remained flat as claims processes tightened in the first half of 2025.
The healthcare group introduced a major staff cutting programme in June as part of a multi-year transformation and digitalisation strategy, and on-going efficiency and savings programme for this year.
According to interim results for the six months ended 30 June, profit before tax fell 52.4% to £10.8m largely driven by restructuring costs associated with the reduced roles in hospitals.
Similarly, profit after tax fell 50.4% over the period to £7m from £14.1m in the same period last year, however group revenue grew 4.9% to £796.7m, driven largely from NHS work.
The healthcare provider said it reduced staffing in its hospital booking function by around 10% and cut about 400 permanent colleague roles in its hospitals, potentially saving it almost £30m.
“We consolidated the administration and bookings functions of 36 hospitals into three patient support centres,” the firm said.
“This complex change was completed with minimal disruption and we are operating with a c.10% reduction in staffing and call response five times quicker than before.
“We also implemented clinically-led more flexible resourcing in hospitals, reducing c.400 permanent colleague roles.”
Claims tightening generates softer PMI volumes
In terms of payor mix, private patient revenue including private medical insurance (PMI) and self pay grew just 0.8% year-on-year to £511.1m.
PMI volumes were softer. This it said was due to tightening in claims access and ongoing proactive tendering, plus growth in younger lives covered needing less treatment.
The group noted self-pay volume trends were similar to its exit rate for last year, improving in recent months.
NHS revenue grew 16.2% to £206.8m, which the group said was supported by the government’s commitment to reduce waitlists.
Turning to the group’s hospitals, Spire saw revenue grow 4.7% year-on-year to £732.3m, with adjusted EBITDA growth of 3.3% on the previous year to £130.0m, with a margin of 17.8%.
When it comes to growth within its primary care business, revenue grew 6.5% to £64.4m supported by successful contract growth and wins.
Group adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at £133.8m, up 2.8% year-on-year with a margin of 16.8% which was down year-on-year.
The group said this primarily reflected higher national insurance (NI) and national minimum wage (NMW) rates introduced from April, and the phasing of savings benefits largely expected in the second half of the year.
Adjusting for NI and NMW rises, group adjusted EBITDA grew 5% year-on-year, it added.
The group delivered new savings of under £10m in H1 2025, and expects a further £20m in the second half of the year, primarily due to the headcount reductions.
Looking ahead, the group added its guidance for the financial year is unchanged and is currently trading in line with market expectations.
Performance in line with expectations
Justin Ash, chief executive officer of Spire Healthcare, said: “We have delivered performance in line with expectations in the first half of the year and are on track to do so in the second half. Our business continues to operate successfully in a fast-changing market.
“Our strategy has progressed on many fronts. We continue to manage our mix with discipline through our diversified three-payor strategy, focusing on more complex care. Our transformation programme is helping us deliver with greater flexibility and efficiency and we implemented two significant initiatives.
“Our patient support centres and new flexible resourcing model are improving consistency, agility and responsiveness while reducing our cost to serve and maintaining our high quality standards.
“These changes included a material reduction in permanent colleague roles and I would like to thank our colleagues and consultant partners for their professionalism and commitment throughout.”
Strong growth
Ash added the group’s primary care division saw strong growth through its existing and new occupational health clients, including a new contract with John Lewis Partnership.
“We strengthened our network via bolt-on acquisitions. Investment in new robotics platforms and MOUs with med-tech companies supported our continued focus on quality and innovation,” Ash continued.
“Put simply, the foundations we have laid in H1 do more than underpin £20m of savings in the second half. They support a fundamental shift towards our vision of an integrated healthcare business, giving us greater control over the patient journey.
“We have made strong strategic progress and have a valuable business, backed by a freehold property portfolio valued at more than £1.4bn and a well invested estate.
“The market will remain dynamic and challenging throughout H2, but our ability to use all the levers at our disposal to flex what we offer our patients and payors, and where we offer it, is the highest it has ever been.”