LSE:SPI

Stock Analysis Report

Spire Healthcare Group

Executive Summary

Spire Healthcare Group plc, together with its subsidiaries, owns and operates private hospitals and clinics in the United Kingdom.

Rewards

Trading at 10.8% below its fair value

Earnings are forecast to grow 22.49% per year

Earnings grew by 63% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 2.78% is not well covered by earnings



Snowflake Analysis

Solid track record with moderate growth potential.


Similar Companies

Share Price & News

How has Spire Healthcare Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SPI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.2%

SPI

1.6%

GB Healthcare

-0.5%

GB Market


1 Year Return

17.8%

SPI

-6.5%

GB Healthcare

12.4%

GB Market

Return vs Industry: SPI exceeded the UK Healthcare industry which returned -6.6% over the past year.

Return vs Market: SPI exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

SPIIndustryMarket
7 Day-3.2%1.6%-0.5%
30 Day-2.2%-5.2%0.2%
90 Day9.7%-12.0%6.0%
1 Year21.7%17.8%-5.0%-6.5%18.3%12.4%
3 Year-54.5%-57.4%-22.0%-25.4%22.6%6.9%
5 Year-54.1%-57.9%57.8%48.9%40.9%8.3%

Price Volatility Vs. Market

How volatile is Spire Healthcare Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Spire Healthcare Group undervalued compared to its fair value and its price relative to the market?

11.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SPI (£1.37) is trading below our estimate of fair value (£1.53)

Significantly Below Fair Value: SPI is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SPI is poor value based on its PE Ratio (33.6x) compared to the Healthcare industry average (24.1x).

PE vs Market: SPI is poor value based on its PE Ratio (33.6x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: SPI is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: SPI is good value based on its PB Ratio (0.6x) compared to the GB Healthcare industry average (1.5x).


Next Steps

Future Growth

How is Spire Healthcare Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

22.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPI's forecast earnings growth (22.5% per year) is above the savings rate (0.5%).

Earnings vs Market: SPI's earnings (22.5% per year) are forecast to grow faster than the UK market (11.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SPI's revenue (2.8% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: SPI's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SPI's Return on Equity is forecast to be low in 3 years time (2.9%).


Next Steps

Past Performance

How has Spire Healthcare Group performed over the past 5 years?

4.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPI has high quality earnings.

Growing Profit Margin: SPI's current net profit margins (1.7%) are higher than last year (1.1%).


Past Earnings Growth Analysis

Earnings Trend: SPI has become profitable over the past 5 years, growing earnings by 4.1% per year.

Accelerating Growth: SPI's earnings growth over the past year (63%) exceeds its 5-year average (4.1% per year).

Earnings vs Industry: SPI earnings growth over the past year (63%) exceeded the Healthcare industry 19.8%.


Return on Equity

High ROE: SPI's Return on Equity (1.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Spire Healthcare Group's financial position?


Financial Position Analysis

Short Term Liabilities: SPI's short term assets (£209.2M) exceed its short term liabilities (£182.3M).

Long Term Liabilities: SPI's short term assets (£209.2M) do not cover its long term liabilities (£1.1B).


Debt to Equity History and Analysis

Debt Level: SPI's debt to equity ratio (44.6%) is considered high.

Reducing Debt: SPI had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: SPI's debt is well covered by operating cash flow (26.2%).

Interest Coverage: SPI's interest payments on its debt are not well covered by EBIT (1.9x coverage).


Balance Sheet

Inventory Level: SPI has a high level of physical assets or inventory.

Debt Coverage by Assets: SPI's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Spire Healthcare Group's current dividend yield, its reliability and sustainability?

2.83%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.8%markettop25%5.0%industryaverage1.8%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: SPI's dividend (2.78%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: SPI's dividend (2.78%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: SPI has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SPI's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (93.4%), SPI's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SPI's dividends in 3 years are forecast to be well covered by earnings (48.2% payout ratio).


Next Steps

Management

What is the CEO of Spire Healthcare Group's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Justin Ash 0

2.3yrs

Tenure

UK£732,400

Compensation

Mr. Justin J. Ash, BA (Hons), has been the Chief Executive Officer and Executive Director of Spire Healthcare Group Plc since October 30, 2017. Mr. Ash served as the Chief Executive Officer at Oasis Healt ...


CEO Compensation Analysis

Compensation vs Market: Justin's total compensation ($USD952.34K) is about average for companies of similar size in the UK market ($USD1.13M).

Compensation vs Earnings: Justin's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.3yrs

Average Tenure

Experienced Management: SPI's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

2.9yrs

Average Tenure

62yo

Average Age

Experienced Board: SPI's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£49,00009 Aug 19
Garry Watts
EntityIndividual
Role
Chairman of the Board
Non Executive Chairman
Shares50,000
Max PriceUK£0.98
BuyUK£50,00009 Aug 19
Justin Ash
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares49,554
Max PriceUK£1.01

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Justin Ash

    CEO & Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£732.40k
  • Jitesh Sodha

    CFO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£417.00k
  • JJ de Gorter

    Chief Medical Officer

    • Tenure: 1.2yrs
  • Dan Toner (50yo)

    General Counsel & Group Company Secretary

    • Tenure: 12.3yrs
  • John Forrest

    Chief Operating Officer

    • Tenure: 1.3yrs
  • Mat Mason

    Head of Supply Chain & Purchasing (Central)

    • Peter Corfield

      Chief Commercial Officer

      • Tenure: 2yrs
    • Philip Davies

      Deputy Company Secretary

      • Cora McCallum

        Investor Relations Director

        • Shelley Thomas

          Group Human Resurces Director

          • Tenure: 0.8yrs

        Board Members

        • Simon Rowlands (62yo)

          Non-Executive Director

          • Tenure: 5.6yrs
          • Compensation: UK£50.00k
        • Tony Bourne (65yo)

          Independent Non-Executive Director

          • Tenure: 5.6yrs
          • Compensation: UK£69.00k
        • Garry Watts (61yo)

          Non Executive Chairman

          • Tenure: 9yrs
          • Compensation: UK£529.50k
        • Martin Angle (69yo)

          Deputy Chairman & Senior Independent Director

          • Tenure: 0.7yrs
        • Justin Ash

          CEO & Executive Director

          • Tenure: 2.3yrs
          • Compensation: UK£732.40k
        • Jitesh Sodha

          CFO & Executive Director

          • Tenure: 1.3yrs
          • Compensation: UK£417.00k
        • Adèle Anderson (54yo)

          Independent Non-Executive Director

          • Tenure: 3.5yrs
          • Compensation: UK£66.20k
        • Dame Janet Husband (79yo)

          Independent Non-Executive Director

          • Tenure: 5.6yrs
          • Compensation: UK£89.10k
        • Ronnie van der Merwe (56yo)

          Non-Executive Director

          • Tenure: 1.7yrs
          • Compensation: UK£30.30k
        • Jenny Kay

          Independent Non-Executive Director

          • Tenure: 0.6yrs

        Company Information

        Spire Healthcare Group plc's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Spire Healthcare Group plc
        • Ticker: SPI
        • Exchange: LSE
        • Founded: 2007
        • Industry: Health Care Facilities
        • Sector: Healthcare
        • Market Cap: UK£539.115m
        • Shares outstanding: 400.83m
        • Website: https://www.spirehealthcare.com

        Number of Employees


        Location

        • Spire Healthcare Group plc
        • 3 Dorset Rise
        • London
        • Greater London
        • EC4Y 8EN
        • United Kingdom

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        SPILSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 2014
        S00DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2014
        SPIlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJul 2014
        SRRH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2014

        Biography

        Spire Healthcare Group plc, together with its subsidiaries, owns and operates private hospitals and clinics in the United Kingdom. It provides a range of integrated surgical, medical, and diagnostic services. The company offers various treatments in the areas of allergy and infectious diseases, blood tests, bones and joints, bowel treatments, breast screening and surgery, cancer investigations and treatments, cosmetic surgery, cyst removal, and dental surgery, as well as ear, nose, and throat treatments. It also provides eye surgery and treatments, family planning, foreign visa medical exams, gastroenterology, general medicine, general surgery, haematology, hand surgery, and heart and kidney treatments. In addition, the company offers treatments in the areas of men's health, neurosurgery and neurology, paediatrics, pain management, rehabilitation, sports, physiotherapy, podiatry, respiratory medicine, and rheumatology; and scans and investigations, skin treatments, spinal surgery and treatments, sports science, urology, vascular surgery, weight loss, and women's health. Further, it owns and operates Perform, a sports medicine, physiotherapy, and rehabilitation brand; and offers MRI/CT scanning, pathology, and consulting services. As of March 2, 2018, the company offered diagnostics, in-patient, daycase, and out-patient care services through 9 private hospitals, 11 clinics, and 1 Specialist Cancer Care Centre across England, Wales, and Scotland. Spire Healthcare Group plc was founded in 2007 and is headquartered in London, the United Kingdom. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/22 22:18
        End of Day Share Price2020/01/22 00:00
        Earnings2019/06/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.