REG - Spire Healthcare Grp - Spire Cheshire Hospital sale and leaseback

Spire HealthcareAnnouncement

22/12/2021 07:00

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RNS Number : 4136W  Spire Healthcare Group PLC  22 December 2021

Spire Healthcare Group plc

 

("Spire Healthcare", "the Company" or "the Group")

 

Spire Cheshire Hospital sale and leaseback

 

22 December 2021

 

Spire Healthcare Group plc (LSE: SPI), a leading UK independent hospital
group, announces it has agreed terms to sell the freehold assets of Spire
Cheshire through the sale of the shares in a wholly owned subsidiary in which
the property is held to NWI Jersey Ltd. for £89m in cash before costs,
generating a book profit of approximately £23m on gross assets of £66m.
Spire Healthcare will continue to operate the hospital and will lease the
property at an initial rent of £3.8m, with annual rent inflation linked to
CPI and capped at 4%.

 

Net proceeds after deal costs and applicable taxes are expected to be £85m.
In FY22, Spire Healthcare's lease liabilities under IFRS 16 will increase by
£56m to c.£800m, and net finance costs will rise by £3m with negligible
impact to depreciation.

 

Spire Cheshire is a medium-sized hospital rated Outstanding by the CQC,
comprising 46 beds, 3 main theatres and a minor operations room. The hospital
generates an EBITDA margin in line with the Group average and the transaction
will have no impact on the operation of the hospital or patient care.

 

The sale proceeds of the transaction will be used to provide financial
flexibility for post COVID opportunities, and an improved cash position while
COVID-19 uncertainty continues and the Company undertakes to re-finance its
existing bank debt in 2022, which is due to mature in mid-2023. The freehold
sale also presents an excellent opportunity to demonstrate the value of the
Group's freehold property portfolio.

 

Following the transaction, the acquisition of the Claremont hospital, which
completed on 30 November 2021, and the sale of the Sussex hospital, which is
due to complete in Q1 2022, Spire Healthcare will comprise 19 freehold and 20
leased properties. Spire Healthcare has always maintained a proactive approach
to portfolio management. The Company fully considers the risks and benefits of
freehold versus leasehold properties and seeks to maintain a prudent balance
between the two.

 

Supplementary information update

The supplementary information provided at the interim results on 9 September
has been updated. In Q1, the Company operated under an NHS contract. The
updated supplementary information provides a breakdown of costs in Q2 to go
alongside revenue breakdowns already provided. This breakdown shows a gross
margin of 42.2% in Q2. The supplementary information in respect of Q2 can be
found on the Spire Healthcare website at
https://investors.spirehealthcare.com/investors/reports-and-accounts/

 

Spire Healthcare will report its FY21 results on 3 March 2022.

 

- Ends -

 

For further information please contact:

 

 Spire Healthcare

Angus Prentice

                                                                                                                +44 (0)7974 982 512

 Instinctif Partners

Damian Reece

                                                                                                                +44 (0)7931 598 593
 Guy Scarborough

                                                                                                                +44 (0)7917 178 920
 Jeremy Durrant

                                                                                                                  +44 (0)7792 918 648

Registered Office and Head Office:

 

Spire Healthcare Group plc

3 Dorset Rise

London

EC4Y 8EN

Registered number 09084066

 

About Spire Healthcare

 

Spire Healthcare is a leading independent hospital group in the United
Kingdom, with 40 private hospitals and eight clinics across England, Wales and
Scotland.

 

Working in partnership with around 7,500 experienced consultants, Spire
Healthcare delivered tailored, personalised care to almost 750,000 in-patients
and daycase patients in 2020, and is the leading private provider, by volume,
of knee and hip operations in the United Kingdom.

 

The Group's well-located and scalable hospitals have delivered successful and
award-winning clinical outcomes, positioning the Group well with patients,
consultants, the NHS, GPs and Private Medical Insurance ("PMI") providers. 90%
of Spire Healthcare's hospitals are rated 'Good' or 'Outstanding' by the CQC
(or the equivalent in Scotland and Wales).

 

Spire Healthcare treats patients through a variety of routes including PMI,
Self-pay and the NHS, providing the Group with diversified access to the
expected growth opportunities in the UK healthcare market, which faces
significant supply challenges as a result of NHS budget constraints and
increasing demand from a growing population with longer life expectancy.

 

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