28th Aug 2014 13:53
LONDON (Alliance News) - Employee co-owned hospital group Circle Holdings PLC Thursday posted a widened pretax loss in the half year to end-June due to and an impairment charge, but it reported growth at its CircleBath and CircleReading independent hospitals and its underlying operating loss narrowed.
The company posted a pretax loss of GBP10.6 million, widened from GBP9.7 million in the first half of 2013, despite seeing revenue rise to GBP48.9 million, from GBP43.9 million. Cost of sales rose and it booked a GBP2.8 million exceptional impairment charge relating to design development costs that were spent on its Manchester site.
Circle Holdings said it was re-evaluating its options over the type of operation it develops in Manchester, as competitors including Spire Healthcare Group PLC had all recently announced plans to expand into Manchester.
Excluding the impairment charge, its operating loss narrowed to GBP7.2 million, from GBP10.0 million.
Including revenue generated by its managed Hinchingbrooke site, the company saw revenue under management rise to GBP102.9 million, from GBP97.5 million.
The company's independent hospitals CircleBath and CircleReading posted revenue increases of 23% and 60%, respectively, in the first half due to higher activity and demand from the National Health Service.
The company said that its growth has come from a new musculoskeletal services contract in Bedfordshire, offsetting its renewed Nottingham National Health Service Treatment Centre contract under which the pricing paid by commissioners was rebased. Excluding the Nottingham contract, revenue under management growth was 19.4%.
Circle said that it was committed to implementing its corporate restructuring in the fourth quarter of 2014, which it calls 'Project Reset'. It plans to give all partners including National Health Service staff access to its shares for the first time. It expects this will be completed towards the end of the year, at an estimated cost of around GBP1 million.
As a result of option schemes, it will book a large share-based payment charge in the second half, Circle said.
"We consistently face new hurdles as our business expands and enters new territory. We believe the Circle model of engaged staff, clinical leadership and a relentless pursuit of excellence continues to overcome these hurdles and deliver world-class, efficient care. We are confident this will continue in the future," said Chairman Michael Kirkwood in a statement.
Shares in the company were down 1.5% at 65.00 pence Thursday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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