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Spire Healthcare blames NHS for weaker core profit view

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By Reuters

(Reuters) – Spire Healthcare Group Plc <SPI.L> sees full-year core earnings declining sharply, as Britain’s second-largest healthcare firm takes a hit from its business linked to the UK’s publicly funded healthcare system, which is facing a record deficit.

Spire gets a third of its revenue from work carried out on behalf of the National Health Service (NHS), which has been operating with an about 1 billion pound ($1.30 billion) deficit and a shortage of beds and staff.

Companies such as Spire, BMI Healthcare and Nuffield Health have helped NHS with the shortage, but their earnings also have been hurt in the process.

“The current difficult market conditions – also seen by other operators – had a greater impact on our business in the seven months to July 31, 2018 than we had expected,” Chief Executive Officer Justin Ash said in a statement on Monday.

But the company has started cost saving initiatives in other areas of its business and now expects capital expenses for 2018 at 90 million pounds, 10 million pounds lower than a previous forecast. It posted capital expenses of 118 million pounds in 2017.

Australia’s biggest private hospital operator Ramsay Health Care <RHC.AX> took a charge and cut its outlook for profit growth in June on a slump in business from NHS – which is a competitor of Spire.

Spire Healthcare said on Monday its revenue fell 1.1 percent to about 475 million pounds in the first half of the year.

(Reporting by Justin George Varghese in Bengaluru; Editing by Amrutha Gayathri, Bernard Orr)