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Spire forecasts earnings drop on unprecedented NHS cutbacks

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By Reuters

(Reuters) – Spire Healthcare Group Plc <SPI.L> forecast a 25-30 million pound fall in 2018 core earnings on Tuesday after a 21 percent drop in first-half profit due to an unprecedented fall in referrals from the National Health Service.

Its first-half earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped to 66.1 million pounds as a prolonged decline in NHS volumes eroded margins at Britain’s second-largest healthcare firm.

To mitigate the hit from fewer NHS referrals, Spire has been cutting costs by reducing its capital spending and focusing on self-paying patients and its own general practitioners.

Spire forecast full-year EBITDA to be in the range of 120 million pounds to 125 million pounds, much lower than the 150 million pounds reported last year.

It added that eReferrals and local contract work in the year will be significantly lower than the second half of 2017.

In a separate statement, the company also named John Forrest, former chief operating officer of pub operator Greene King’s <GNK.L> retail operations, as its new chief operating officer.

(Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Amrutha Gayathri)