Helping
to build
a healthier
Britain
Annual Report and Accounts
For the year ended 31 December 2023
2
Helping to build a healthier Britain
High-quality experiences
From the moment I entered the hospital, I was
looked after by every person I came in contact
with. I was treated with the utmost respect
and made extremely comfortable. I felt
completely safe”
Patient
Spire Healthcare hospital
I wasn’t coping with work for months but now
I’m back at work and thriving. I know I can reach
out if I need to and I have tools and techniques
to help myself”
Patient
Vita Health Group, part of Spire Healthcare
Spire gave me a lot of flexible working. I feel
like anything I’m going through; I can speak to
them. We have time to have person-centred
care, there is lots of training”
Colleague
Spire Healthcare
They provide a responsive and personal service
to us and service levels are excellent...they can
be relied upon to provide a service above and
beyond their remit and I would have no
hesitation in recommending them”
Corporate client
Spire Occupational Health
Fantastic service, same-day appointment,
very helpful doctors and swift treatment.
What more could you ask for?”
Patient
London Doctors Clinic
We give people the resources and tools they
need. Everyone is different and we look at
what’s going to be most beneficial for
the patient”
Senior talking therapies practitioner
Vita Health Group, part of Spire Healthcare
The critical incident support is very helpful,
colleagues have found them to be supportive,
compassionate and easy to access at work.
The managers have found the responsiveness
to be very timely”
Critical incident support client
Vita Health Group, part of Spire Healthcare
Management and staff’s unwavering
dedication to patient care and commitment
to facilitating practitioners in providing the
best possible care makes it my first choice
for my private practice”
Consultant
Spire Healthcare hospital
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 3
Contents
Overview
2
3
4
5
6
7
8
Helping to build a healthier Britain
Contents
Our purpose
About us
The value we create – 2023 financial highlights
The value we create – 2023 highlights: building
a healthier Britain
The value we create
Strategic report
10
13
14
15
16
20
36
54
61
64
75
81
82
Chief executive officer’s strategic review
Delivering new care to new markets
Our business model: How we create value
Our business model: How we generate revenue
Our market
Our strategy
Sustainability report
Engagement with stakeholders
Our key performance indicators
Risk management and internal control
TCFD report
Compliance reports
Chief financial officer’s review
linkedin.com/company
spire-healthcare
x.com/
spirehealthcare
spirehealthcare.com
Governance report
88
89
95
98
99
101
104
110
114
121
129
132
Chairman’s governance letter
Corporate governance report
Board of directors
Executive committee
Nomination committee report
Clinical governance and safety committee report
Audit and risk committee report
Remuneration committee report
Remuneration policy report
Annual report on remuneration
Directors’ report
Statement of directors’ responsibilities
Financial statements
133
141
144
171
Independent auditor’s report
Consolidated financial statements
Notes to the financial statements
Notes to the parent company financial
statements
Other information
175
177
178
Shareholder information
Alternative performance measures definitions
Glossary and forward-looking statements
Our strategy
1 Driving hospital
performance
2 Building on quality
3
Investing in our workforce
4 Championing sustainability
5 Expanding our proposition
20
Sustainability
– Respect the environment
– Engage our people and
communities
– Operate responsibly
36
54
Engaging with
our stakeholders
– Patients
– Colleagues
– Consultants
– Suppliers
– Private Medical Insurers (PMI)
– NHS
– GPs
– Employers and corporates
– Regulators
– Investors/lenders
– Community
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 4
Our purpose
Making a positive
difference to people’s
lives through outstanding
personalised care
Brand campaign
We launched a targeted, multi-channel
brand campaign in September with the
theme, ‘The sooner you’re better, the
better’, which has seen strong results.
Scan here to watch our
TV advert
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 5
About us
Our purpose
Making a positive difference to
people’s lives through outstanding
personalised care
Our strategy
Helping to meet Britain’s healthcare needs by running great
hospitals and developing new services
Who we are
Britain’s largest independent healthcare company by turnover, operating
across England, Wales and Scotland
What we provide
Spire Healthcare group offers a range of diagnostics and medical treatments from hospital
and clinic to home. We have a nationwide network of independent GPs through Spire GP and
London Doctors Clinic, offer a range of mental health, musculoskeletal and dermatological
services via Vita Health Group and provide occupational health services to over 800 corporate
clients through Spire Occupational Health and Vita Health Group.
For private patients
We offer treatments for patients
who have private health
insurance or wish to pay for their
treatment. They are able to
choose when and where they are
treated, and benefit from
excellent clinical outcomes.
For the NHS
We offer capacity, capability and
flexibility, supporting the NHS
by taking thousands of patients
off waiting lists nationally at
the same tariff prices as local
NHS Trusts, and by delivering
NHS services.
For businesses
We provide corporates with
tailored, flexible support for their
employees through occupational
health and employee assistance
programmes, helping employees
to recover and stay healthy.
Our values
Driving clinical
excellence
Doing the
right thing
Caring is
our passion
Keeping
it simple
Delivering on our
promises
For more information see our
business model on page 14
Succeeding
and celebrating
together
Where we operate
Spire Healthcare in numbers
We provide people with more choice, and the
opportunity to access the healthcare they need
quickly and safely. Our dedicated and highly trained
colleagues work hard to help them back to good
health from a wide range of locations across
the country.
Clinical locations
1.05m+
patients across the group
989,300
self-pay, insured and NHS
patients cared for in
39 hospitals
16,800
colleagues across the group
99,000
GP appointments
24
clinic sites in Vita
Health Group
800+
corporate occupational
health clients
50+
clinics, consulting rooms
and medical centres
8,650
consultants with whom
we work in partnership
15
Macmillan accredited
cancer centres in
39 hospitals
137
GPs
46,000+
people cared for
by Vita Health Group since
acquisition
1,120
musculoskeletal clinicians
in Vita Health Group
12.6m
population able to access NHS
services delivered by Vita
Health Group
5
critical care units
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 6
The value we create
2023 financial highlights
£1,359.0m
revenue up 13.4% from 2022 including £31.4m
from acquired new services
6.8p
basic earnings per share 2.1p in 2022
£126.2m
operating profit up 32.3% from £95.4m
in 2022
2.1p
dividends per share up from 0.5p in2022
17.6%*
adjusted EBITDA margin up 0.6 percentage
points from 2022 for the hospital business,
and 0.2 percentage points for the total
group after acquired new services
£234.0m*
adjusted EBITDA up 15% from 2022
7.5%*
ROCE up from 6.2% in 2022
£15m
in efficiency savings delivered in 2023
£84.4m
invested in upgrading and maintaining our
estate, down from £90.1m in 2022
Largest UK private healthcare provider
by turnover
*
Refer to page 85 for a reconciliation of
non-GAAP financial measures
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 7
The value we create
2023 highlights: building a healthier Britain
1.05m+
patients cared for across the group
(2022: 926,500)
989,300
self-pay, insured and NHS patients cared for
in 39 hospitals (2022: 926,500)
99,000
private GP consultations at Spire GP
and London Doctors Clinic
(2022: 32,900 Spire GP only)
3%
ahead of 2023 target emissions (27,017
tCO2e achieved, target 27,750 tCO2e)
(2022: 9% ahead, 25,854 tCO2e achieved,
target 28,163 tCO2e)
£40,000
donated in corporate charity fundraising
week (2022: £20,000)
430+
apprentices in Spire Healthcare
and Vita Health Group (2022: 550 in
Spire Healthcare only)
46,000+
people cared for by Vita Health Group
since acquisition (2023 full year: 225,380,
2022: 168,906)
98%
of locations rated Good or Outstanding or
the equivalent by regulators in England,
Scotland and Wales (2022: 98%)
23.5%
dry mixed waste recycled at sites only
(2022: 18%)
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 8
The value we create
We’re providing
the highest quality
care to patients
and people
Quality and patient safety is at
the heart of everything we do,
and we receive excellent
feedback from our patients
and regulators.
Our governance, culture and
systems for overseeing the
practice of consultants has been
transformed in recent years, while
98% of our inspected locations are
rated ‘Good’ or ‘Outstanding’,
or the equivalent by health
inspectors in England, Scotland
and Wales.
We have Freedom to Speak Up
Guardians at clinical and
non-clinical sites and available
for remote colleagues, and have
led the sector in this important
safeguarding measure. 94% of
patients in 2023 said they felt
‘cared for’ or ‘looked after’ in
our hospitals.
Read more in Our strategy on
page 20
We’re helping to
create a healthier
and more
productive Britain
Everything we do is geared up
to help people return to good
health, so they can get back
to work and to what they
love doing.
That’s why we have evolved from
being purely a hospital-based
business to become a more
integrated healthcare provider,
able to care for people’s physical
and mental health needs, offering
GP appointments and
occupational health, as well as
community and hospital care.
We also support the NHS to
reduce waiting lists, particularly
helping those waiting the
longest, and contributed to the
government’s Elective Recovery
Taskforce, which was set up to
make better use of the country’s
healthcare capacity
Read more in Our market on
page 16
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 9
The value we create
We’re boosting
the UK economy
We support the UK economy by
investing in skills, technology and
infrastructure, boosting
productivity and contributing to
net zero.
We run one of the largest nurse
apprenticeship programmes, and
almost 4% of our permanent
workforce – over 430 people – are
apprentices. By growing and
developing talented people, we
are helping to address the
shortage of skilled professionals in
our sector.
We have committed over
£360 million capital investment
over the last five years, working
closely with suppliers to develop
partnerships that will deliver
value for the wider community
as well as our people, patients
and their families
Read more in our Sustainability
report on page 36
We’re delivering
sustainable
shareholder value
We have delivered another strong
financial performance in 2023, in
line with our plans, with
sustained growth in revenue,
earnings and EBIT margin.
Looking ahead, our strategy is
designed to achieve continued
momentum in top-line growth,
margin improvement and
ROCE improvement.
Read more in our Financial
review on page 82
With our track-record as a fast-
growing company, Spire
Healthcare represents a real
opportunity for pension funds and
other long-term capital to invest
in much needed UK healthcare
services and a sector that
is resilient.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 10
Chief executive officer’s strategic review
Delivering on our strategy
to create wider value
Highlights
96%
of patients rated their experience
as ‘Good’ or ‘Very Good’, unchanged
from 2022
13.4%
overall revenue increase
compared to 2022
Our strategy is working, helping us
deliver a strong set of results and
strong profit growth, while enabling us
to contribute in even greater measure
to the nation’s health, caring for over
one million patients for the first time
in 2023 and creating value through
our hospitals and new services.
Our number one priority will always
be quality of care and patient safety.
I thank all our colleagues and
consultant partners for their
tremendous contribution.”
Justin Ash
Chief Executive Officer
Helping to create healthier workplaces and a
healthier Britain
I am delighted to report on another year of strong
progress across the group. Our strategy is helping us
to meet the changing demands for healthcare, as we
expand our reach beyond our hospitals and clinics to
support Britain’s healthcare system. For the first time,
we cared for over one million patients in 2023. It is
well known that there are long NHS waiting lists, and
this is clearly a backdrop to the demand that we can
help with, both through partnering with the NHS and
offering high-quality private care. But the picture
more broadly in the UK is of general ill health, which
is leading to economic inactivity. Around 35 million
working days are lost each year due to self-reported
work-related ill health or injuries, and more than 60%
of people say they have attended work despite their
mental health being poor1.
1. Sources: Nuffield Trust and Health and Safety Executive
In that context, while hospital treatment will
remain at the core of our activity for the foreseeable
future, we are determined to be effective and
relevant across all of the UK population’s healthcare
needs. That means helping to prevent ill health,
through occupational health and primary care,
supporting people if they need healthcare in the
community and or a stay in hospital, right through
to assisting people to recuperate, and returning to
work and a normal healthy life.
Strong performance backed by greater efficiency
Our business is performing well, which is reflected
in our strong financial performance. Our overall
revenue in the year was £1,359.0 million, up 13.4%
on 2022, while adjusted EBITDA was £234.0 million,
up 15.0% compared to 2022. The growth in demand
for self-pay healthcare has softened in 2023, and
some of those customers are moving to PMI. We
have altered our service mix to focus on more
complex, usually insurance-based, services like
complex cardiac care. The stand-out growth area in
2023 was insurance-based care with revenue up
14.3%, driven by partnerships with PMI providers
and a growing market. You can read a full
breakdown of these results in our financial review
on page 82.
Our efficiency programmes are well on track, with a
further £15 million in savings delivered in 2023.
Inflation has raised costs, and wage pressure issues
face all businesses, including in administrative and
healthcare roles in some parts of the country. But
we are committed to achieving 21% EBITDA margin
by 2025, are well resourced and we have made
sound investments that will enable us to grow. We
have a structured digitalisation plan which will
improve our interactions with patients, make life
easier for our colleagues and practising consultants
and remove costs. As we move into 2024, we will
make further investments that deliver efficiencies
both financially and in our working practices.
Following the successful introduction of a hub
model for administration in the south east,
we will roll this out across the country in 2024,
improving call handling, bookings and
management of resources.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 11
Chief executive officer’s strategic review continued
2023 saw another £84.4 million invested in the
business. We opened a new outpatients and
diagnostic centre at Spire Yale in Wales, following
investment of £5.0 million. Spire Manchester and
Spire Nottingham started to offer cardiac surgery,
following investment of £3.4 million. We introduced
our latest ophthalmic service at Spire Cambridge,
following investment of £1.6 million. We also began
or continued major hospital refurbishment
programmes at sites including Portsmouth for £6.0
million, Claremont in Sheffield for £2.4 million,
Cambridge for £1.5 million and Clare Park in Surrey
for £1.5 million.
Safety and quality care
Something that will never change at Spire
Healthcare is our ongoing investment in quality and
patient safety. This is the bedrock to our operations
and embedded in our purpose and culture.
In our latest survey, 96% of patients rated their
experience as ‘Very good’ or ‘Good’, and I am
pleased to confirm that 98% of our inspected
locations are currently rated ‘Good’ or ‘Outstanding’,
or the equivalent, by regulators in England, Scotland
and Wales. We are awaiting reinspection of Spire
Alexandra in Kent, our one remaining site which has
a ‘Requires Improvement’ rating but has not been
inspected since 2016/17.
We are making excellent progress in implementing
the new NHS England Patient Safety Incident
Response Framework (PSIRF). PSIRF promotes a new,
more proportionate approach to responding to
patient safety incidents within a wider system of
improvement, with compassionate engagement
and involvement of those affected by patient safety
incidents. PSIRF is the biggest change for over a
decade in how all NHS and independent medical
settings review, investigate and share learnings
from patient safety incidents. We are only obliged
to implement this framework for NHS patients but
are going much further to introduce it for everyone
we care for and have worked with our teams
throughout 2023 to trial new tools and techniques
to deliver this well. We regularly consider all risks;
you can read more in our Risks section on page 64.
Maximising our capacity to enable patient choice
Demand remains strong in the UK market. That’s why
it’s so important that we invest in our people, our
facilities and new services. Many people are looking
for faster diagnosis and treatment, and healthcare is
no longer an ‘either or’ choice between the NHS and
private, as many people are making the most
appropriate choices to suit their needs at different
times of their lives. Our self-pay services provide
patients with urgent access to specialists when they
need them, while private medical insurance is
becoming ever more desirable as a workforce benefit,
both for responsible employers and individuals who
are more conscious of their health.
We’ve also been pleased to launch a major new
multichannel brand building campaign this year, with
the key message ‘The sooner you’re better, the better’.
We want to put our brand at the front-of-mind for
people aged 35+ in particular, who are open to the
idea of private healthcare or making a choice with
their GP, positioning Spire Healthcare as the ‘fast-
track health service’, getting people back to their lives,
loved ones and the things they love, sooner.
Adding new services and expanding our proposition
Our journey towards becoming an integrated
healthcare provider has moved on apace in 2023,
with more than 4% of the group’s revenue now from
new services, through growth in our private GP,
occupational health, musculoskeletal and NHS talking
therapies services. We are supporting individuals, as
well as employers looking to improve their
employees’ health and wellbeing, which ultimately
reduces the strain and cost in the NHS. Prevention is
becoming increasingly important to the overall
healthcare agenda and we’re moving into that space,
which I believe lays the groundwork for exciting times
ahead for Spire Healthcare.
We started this journey with the acquisition of The
Doctors Clinic Group late last year, which increased
our presence in private GP services and gave us access
to the occupational health market. Good
occupational health can enhance the health and
wellbeing of people at work. The support we provide
in workplaces helps to support many health issues,
allowing early treatment of heart disease, diabetes
and hearing loss for example, which might otherwise
have gone undetected and potentially worsen.
Equally important is the support we provide to people
returning to work after a period of ill health, such as
advising employers on adjustments they can make to
enable employees to settle back into work safely and
comfortably, and stay in work. Our plan is to invest in
occupational health through organic and inorganic
growth, building pathways to the hospital business.
We have now restructured our two occupational
health businesses, Soma Health and Maitland
Medical, into Spire Occupational Health, while the
GP business has been concentrated in London
and is branded: London Doctors Clinic – part of
Spire Healthcare.
In the last quarter of 2023, I was delighted with the
acquisition of Vita Health Group (VHG) for a net cash
consideration of £73.2 million, which takes us into
critical new areas, covering both physical and mental
health, expands further our occupational health
capabilities, and makes Spire Healthcare the UK’s
largest independent sector healthcare provider by
turnover. Revenue for VHG, since acquisition, was
£18.3 million. I welcome Derrick Farrell, chief
executive officer of VHG, who will continue to
run the business.
VHG is the largest independent provider of NHS
talking therapies, a fast-growing area, which makes
a real difference to people’s lives. Previously called
Improving Access to Psychological Therapy (IAPT),
but changed following NHS consultation in early
2023, NHS talking therapies provide counselling and
effective psychological therapies to people
experiencing the most common mental health
problems: anxiety and depression. The business also
provides mental health and employee assistance
services for over 200 corporate employers and
offers musculoskeletal support to relieve back, neck
and limb problems. There are huge synergies with
our existing businesses, for example referrals from
musculoskeletal care to orthopaedics or, in cancer
care, where we will now be able to provide
much-needed mental health support to our
patients. Much of VHG’s business is through
insurance, which increases our capabilities to our
PMI customers; its occupational health business is
also synergistic to Spire Occupational Health.
In December, we convened a roundtable event with
the Institute for Public Policy Research and a variety
of opinion formers to debate and explore the
complex issues facing population health and the
increasing role that occupational health services
can play.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 12
Chief executive officer’s strategic review continued
continuous improvement in this area. In that context,
no company can outsource the job of being a good
employer – and that’s very much our philosophy. We
continue to need to manage vacancies, especially as
the business grows, rising hourly rates for agency
workers and a need to invest in colleague pay and
reward to attract and retain the best talent. Read
more on pages 18 and 27.
salary increase from September 2023, on top of a 5%
rise in 2022 for most eligible colleagues. At that point,
our lowest paid colleagues moved in-line with the
Real Living Wage. I am also delighted that our
colleague engagement score rose by 1 percentage
point to 81% this year, with a fantastic response rate
of 86%. VHG colleagues received an average salary
rise of 5% in April. Read more on page 28.
We seek to provide an inclusive environment,
encouraging colleagues to thrive and celebrate their
differences. Working hard to recruit and retain the
best people, we offer colleagues the best working
experience we can, with genuine opportunities to
grow and develop their careers.
I am proud that the first graduation from our
sector-leading nurse degree apprenticeship
programme took place in November. We run the
programme in partnership with the University of
Sunderland, aiming to build a talent pipeline for our
business and the broader healthcare sector. A new
cohort of 12 nurses joined in December 2023 for
2024. The group has over 430 apprentices in all, 160
of which are nurse apprentices, representing around
4% of our total permanent workforce.
I was also delighted that we launched our new
Driving Clinical Excellence in Practice Programme for
existing nursing colleagues towards the end of the
year. The programme is a bespoke educational
initiative that includes a comprehensive framework
of competencies and skills aligned to our values,
quality objectives and priorities. It will also support
nurse revalidation, promote better patient outcomes,
patient experience and better use of resources.
Since 2021, we have recruited over 670 colleagues
from overseas, including 115 overseas nurses
recruited in 2023. Our overseas colleagues make a
fantastic contribution to our business. We only
actively recruit in ‘green’ countries under the World
Health Organization definition, providing training and
development to support their career.
We recognise and value the hard work and dedication
of all our colleagues, and I believe it is vitally
important that everyone is properly rewarded. That’s
why we supported eligible colleagues with a 5.5%
Sustainability – adding value for our environment
and communities
Having integrated sustainability into our business
strategy, we continue to develop and advance our
sustainability strategy, setting out specific goals for
us to work towards. We are making good progress,
and our aim is to lead the health sector in championing
environment, social and governance issues.
We furthered our ambition to achieve net zero
carbon status by 2030, with investment during the
year in the removal of piped nitrous oxide systems,
the installation of new solar panels (in all hospitals by
2024), increasing recycling and generating carbon
reduction through the effective management of our
waste, and the optimisation of our building
management systems. Waste is managed more
efficiently with 23.5% of dry mixed waste now
recycled at our sites, carbon emissions are 3% ahead
of target, despite green energy being harder to
source, and we have saved 27,000 litres of water in a
trial at two hospitals. VHG is progressing towards
their targets in line with the 2015 Paris Agreement.
You can read more about these efforts in our
sustainability report on page 36.
When it comes to our communities, Spire Healthcare
and its people always seek to make a difference that
includes, but also goes beyond, the healthcare
services we provide. That’s why colleagues from our
clinics, hospitals and central functions forge
relationships with local communities and fundraise
for local charities. Every year, we take on company-
wide charity challenges and other community
initiatives, raising thousands for good causes. Our
charity week in June this year raised over £40,000 for
a range of local and national charities.
Looking ahead
I’d like to thank the management team, all our
leaders across the business, our hospital teams and
support services, as well as all our consultant
partners for their tremendous contributions to
another impressive performance this year. I would
also like to take this opportunity to welcome
Professor Lisa Grant, our new group clinical director
and chief nurse, who joined us following a
successful 25-year career in the NHS holding a
number of leadership and management roles; and
Rachel King, who joined us as group people director,
having most recently led the transformation of
former national lottery operator Camelot’s people
strategy and culture.
2024 will be a key year as we continue to transform
the business. Through our programme of
investments in digital platforms, we will be driving
further change and improvement, benefiting
patients and colleagues, and generating significant
efficiencies. Our new services will become material
contributors to our operations and financial results,
as we strive to provide a more integrated healthcare
offering. I am excited about our prospects for 2024
and look forward to contributing in even greater
measure to the nation’s health in the year ahead. It
should be an exciting year and I look forward to
leading these programmes and updating
shareholders on our progress.
Jitesh Sodha will be stepping down from the board
at the AGM on 9 May 2024. Following the AGM,
Jitesh will initially support the transition to his
successor, before focusing on a number of strategic
initiatives for the remainder of his notice period. I
would like to take this opportunity to thank Jitesh
for leading the transformation of our financial
performance and his immense contribution to the
group during his tenure. Jitesh will be succeeded by
Harbant Samra. Harbant has been with the group
since 2018, having most recently served as the
deputy chief financial officer. Having worked closely
with Harbant for many years, I am delighted to see
him join the board.
Justin Ash
Chief Executive Officer
We are also opening new daycase clinics to meet
the growing healthcare needs in our communities.
The first of these, our Spire Healthcare Abergele
Clinic in north Wales, opened in early 2024, offering
diagnostic services, as well as orthopaedic,
ophthalmic, dermatological, and gynaecological
treatments. A second clinic in Harrogate will open
later in 2024.
Helping relieve the burden on the NHS
We continue to support the NHS in reducing
waiting lists, providing care for some of those
patients who have been waiting the longest. Our
NHS talking therapies, delivered through our VHG
brand, cover 12 million people in England and we
also now offer NHS musculoskeletal services.
I am pleased that Spire Healthcare contributed to
the government’s Elective Recovery Taskforce for
England, the outcome of which was a set of
measures designed to help the independent sector
play its part in reducing the backlog in healthcare. A
key outcome which we welcome, was a
commitment, by the government, to promoting
patient choice, where all patients have the right to
select a hospital – NHS or independent – where
they can receive their care the quickest.
Supporting and developing our people
It is well reported that there is a chronic shortage of
healthcare professionals in the UK and competition
for talent in the workplace. Reducing colleague
leaver rates and filling vacancies is a key challenge
for all healthcare companies and much of our
organisational focus and strategy is devoted to
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 13
Delivering new care to new markets
Strengthening our integrated healthcare offer
We are more than just our hospitals – we are
becoming an integrated healthcare provider, looking
after people’s whole health and wellbeing with
a range of private GP, occupational health,
musculoskeletal and talking therapies services.
We are seeking new ways to tackle the causes of
ill health and low productivity, supporting choice,
supporting the NHS while offering synergies to
our hospital business.
We acquired The Doctors Clinic Group in December
2022, a provider of occupational health and private
GP services that included London Doctors Clinic,
Soma Health and Maitland Medical. Then in October
2023, we acquired Vita Health Group for £73.2
million, a market-leading provider of NHS talking
therapies, musculoskeletal and dermatology services,
as well as corporate and occupational health services.
During the year, we have worked to reorganise and
rebrand many of these offerings, creating distinct
and focused businesses with separate websites
and new branding:
Spire Occupational Health
London Doctors Clinic, part of Spire Healthcare
Vita Health Group, part of Spire Healthcare.
Vita Health Group,
Part of Spire Healthcare (VHG)
With over 30 years’ experience delivering quality
services, Vita Health Group is dedicated to
improving lives both physically and mentally – it:
– Provides NHS, corporate and private mental and
physical health services, offering insights and
treatments in holistic, person-centred care
– Works with a variety of companies to help their
teams stay fit, healthy, and happy
– Provides a range of musculoskeletal services to
NHS, private and corporate patients
Physical health services range from physiotherapy
to group exercise classes and more specialist
treatments such as acupuncture and injection
therapy, while mental health services include
cognitive behavioural therapy (CBT), guided
self-help and group therapy sessions.
Note: Private includes self-pay and PMI customers, corporate
includes PMI, employee assistance and occupational
health provision.
Spire Occupational Health
Spire Occupational Health is a dedicated partner to
hundreds of businesses, helping them to build a
healthier, more productive, and resilient workforce.
We offer robust clinical advice and high-quality
corporate healthcare services including targeted
interventions, health maintenance and preventative
measures to provide fully-integrated,
comprehensive occupational health and wellbeing
solutions for businesses.
London Doctors Clinic,
Part of Spire Healthcare (LDC)
Offering same-day London private GP appointments,
our consulting rooms provide health screens, blood
tests, STI tests, prescriptions, certificates, sick notes,
referrals and much more. With experienced doctors,
convenient locations and a range of extended
opening times, LDC is ideal for busy commuters,
residents and visitors to London. It’s a one-stop-shop
for private GP appointments, testing, medicals, advice
and support. Five new locations opened in 2023 –
Bank, Chiswick, Fulham, Hampstead and Islington.
spireoccupationalhealth.com
londondoctorsclinic.co.uk
vitahealthgroup.co.uk
600+
corporate clients (2022: 600)
7
days a week service
7,600
occupational health management referrals completed
(2022: 6200)
18
consulting rooms in Greater London
46,000+
people cared for by Vita Health Group
since acquisition (2023 full year: 225,380, 2022: 168,906)
97%
of patients in corporate musculoskeletal services
returned to work after treatment in 2023 (2022: 86%)
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 14
Our business model
How we create value for the
business and our stakeholders
Spire Healthcare helps people return to good health,
providing more health choices, quickly and safely,
through our dedicated and highly trained colleagues,
at a time of unprecedented healthcare demand.
Our drivers and resources
What we do and key trends
Our objectives
The value we create
Our purpose
Making a positive difference to
people’s lives through
outstanding personalised care.
Our resources
– A highly motivated and
skilled team of clinical and
non-clinical colleagues
– GPs, consultants and other
health professionals who are
experts in their field
– Hospitals, critical care units,
Macmillan-accredited cancer
centres, clinics and consulting
rooms
– Our digital infrastructure and
the latest medical facilities
and equipment
See more detail on how we
generate revenue on page 15
Our offer: from prevention to
complex care
– A nationwide network of
private GPs with rapid access
clinics in London
– Occupational health and
employee assistance
programmes
– Diagnostics
– Treatment and surgery: from
orthopaedics to cancer and
complex care
– Physiotherapy, recovery and
rehabilitation
– NHS talking therapies and
corporate and private mental
health
Market trends
– Population profile
– NHS waiting lists
– Private market
– Healthcare workforce
– Economic environment
– Role for employers in
healthcare
Read more on this in Our
market page 16
Our strategy
We’re helping to meet Britain’s
healthcare needs by running
great hospitals and developing
new services through the five
pillars of our strategy:
– Driving hospital performance
– Building on quality
– Investing in our workforce
– Championing sustainability
– Expanding our proposition
Which together deliver strong
financial performance.
We discuss our strategy in
detail on page 20
Risk management
We ensure we achieve our
strategic objectives by
identifying, quantifying, and
monitoring risks to Spire
Healthcare in terms of
consequence and likelihood.
See our Risks and internal
control report on page 64
Sustainability
We want to become recognised
as a leader in sustainability in
our industry. Through our
sustainability strategy, we seek
to drive positive change in the
workplace, local communities,
and the environment.
See our Sustainability report
on page 36
For
patients
We provide fast access to high-quality,
personalised clinical care with world-
class experts
For
shareholders
We aim to create value by delivering
strong total shareholder returns
989,300
patients seen in hospitals in 2023 (2022:
926,500) 96% say their care was ‘Very
Good’ or ‘Good’
During the three-year period 2021-23,
Spire Healthcare’s share price rose by
45.8% and outperformed the FTSE
All-Share Index by 30.6 percentage
points. Our Total Shareholder Return for
the same period was 46.1%
For
colleagues
We provide our colleagues with high job
satisfaction, a competitive reward and
recognition framework, and the chance
to learn, develop and grow
16,800
colleagues
2022: 14,500
For the
consultants
We invest in the best people, facilities,
patient safety and equipment to make
Spire Healthcare the partner of choice for
our consultants
8,650
expert consultants we worked
with in 2023
2022: 8,760
For
NHS and
government
We help the NHS reduce waiting lists, work
closely with the NHS centrally and in local
communities, with commissioners and
trusts, and provide NHS talking therapies,
physiotherapy and dermatology services
195,950
NHS patients seen in our hospitals in 2023
2022: 182,000
For
society and
the economy
We support the UK economy and
employers by investing in skills,
technology and infrastructure, while
boosting productivity by helping people
get back to work
12
new nurse apprentices joined in
December 2023 (2022: 24)
For the
environment
We aim to reduce our impact on the
environment and work with our
suppliers to align our goals and develop
healthcare services sustainably
3%
ahead of 2023 target emissions (27,017
tCO2e achieved, target 27,750 tCO2e)
(2022: 9% ahead)
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 15
Our business model continued
How we generate revenue
Spire Healthcare group revenue
43
2023
2
43
2022
2
1
1
1. PMI 45.3%
2. Self-pay 25.3%
3. NHS 25.1%
4. Other 4.3%:
Vita Health Group
The Doctors Clinic Group
Non-patient revenue
1. PMI 44.9%
2. Self-pay 28.2%
3. NHS 24.6%
4. Other 2.2%:
The Doctors Clinic Group
Non-patient revenue
1. Private patients
We offer assessment, diagnostic tests and treatments
for patients who have private health insurance or wish
to pay for their own care. We offer them a choice of
when and where they are treated, in hospitals and
clinics that combine excellent clinical outcomes
and levels of infection control with ‘hotel-style’
levels of service.
PMI
We have long-term relationships with all the major
private medical insurance providers, with Aviva, AXA
Health, Bupa and Vitality having combined market
share estimated at over 90%*. We market a Spire-
branded insurance product, inSpire, underwritten by
AXA Health which gives easy access to affordable
private care at Spire Healthcare hospitals.
Self-pay
We enable patients to take control of their own health
by directly booking appointments with consultants
without the need for a GP referral or an appointment
with one of our private GPs through Spire GP or London
Doctors Clinic, or talking therapies and musculoskeletal
services through the Vita Health Group (VHG) brand.
2. NHS
Spire Healthcare offers the NHS capacity, capability and
choice. We perform high volumes of routine elective
surgery, including a proportion of complex surgery.
Most work comes directly from GPs, allowing waiting
NHS patients to access care. The activity is at the same
tariff prices as local NHS Trusts and the capital we
invest in our sites, at no charge to the NHS, allows us to
increase capacity through expanded clinical teams,
theatre time and bed availability. This means we can
increase capacity aligned to NHS commissioning
requirements. Most NHS work comes from NHS GPs via
the Electronic Referral System (eRS) which allows
patients to book appointments with providers of their
choice with the shortest waits.
VHG is the biggest independent provider of NHS talking
therapies and offers NHS musculoskeletal services.
Services are free to patients, and they can self-refer to
many of our services with no need to see their NHS GP.
VHG also provides some NHS dermatology services and
works in partnership with the NHS across the UK to
provide physiotherapy and musculoskeletal services.
3. Corporates
VHG and Spire Occupational Health deliver services to
employers through occupational health contracts and
employee assistance programmes which support
corporates to keep employees healthy, protect and
promote good health and provide services such as
health surveillance, training and mental health support.
VHG has more than 200 corporate clients and Spire
Occupational Health has over 630.
* Source: LaingBuisson Health Cover 18th Edition June 2023
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 16
Our market
Key trends
The demand for healthcare remains
strong – from GP and diagnostic services
to hospital treatment, occupational
health and NHS talking therapies.
More people are making different
choices about their health, seeking the
services we can provide sooner than
may be available through the NHS or
through their employer. However,
many haven’t had experience of
private healthcare before, so we want
to help patients make informed
choices, understand their options, and
get them back to their normal lives.
Demand for private healthcare remained strong in
2023, with patients seeking prompt, safe and
effective diagnosis and treatment. There is softening
demand from self-paying patients, while the growth
in our private medical insurance (PMI) business is
being driven by more awareness of the benefits to
employers and employees, even among younger
demographics, and the deepening of cover.
Our new integrated marketing campaign, launched in
2023, has seen good results. Recent acquisitions have
expanded our offer into new markets.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 17
Our market continued
Key trends that affect our market today
01
Population profile
The growing and ageing population and greater
prevalence of long-term conditions continue to be
underlying factors putting pressure on the UK’s
healthcare resources. Treatment and care for people
with long-term conditions accounts for a large
proportion of the nation’s total health and social
care expenditure, while the number of people who
are economically inactive has grown to 2.6 million,
with those experiencing long-term ill-health rising
by almost 500,0001 since the start of the pandemic
in early 2020. In addition, 3.7 million working-age
people are in work with a health condition that is
‘work-limiting’2.
Mental health issues are growing and yet have been
traditionally underserved and less recognised than
physical health issues. Around one in six adults and
26% of late teens have a common mental health
condition3. Demand is set to rise faster than other
health services3. Talking therapies are effective and
confidential treatments, delivered by trained and
accredited practitioners for conditions like
depression, worry and anxiety4.
To help improve the country’s health, relieve
pressure on the healthcare system, and support
those with long-term ill-health, we are committed
to delivering a range of vital services. That’s why
alongside investments in our hospitals, we are also
developing care services such as occupational
health, wellbeing, musculoskeletal therapy, mental
health services and NHS talking therapies – creating
an integrated healthcare offer.
1. Office for National Statistics (ONS) indicated an increase of 27,208 people on the previous month to hit 491,433 as of July 2023.
2. The Health Foundation analysis of the ONS’ Labour Force Survey, 2023.
3. Committee of Public Accounts, ‘Progress in improving NHS mental health services, July 2023.
4. NHS England, NHS talking therapies for anxiety and depression, January 2022.
02
NHS waiting lists
NHS waiting lists have been long since before the
pandemic, but they have grown to record levels, rising
to 7.6 million pathways. The problem is not only the
length of the lists, but also the length of time people
are waiting for diagnoses and treatments and people
waiting on more than one pathway. In 2019, there
were around 1,600 people waiting longer than
a year for a procedure. Today, this number is in
excess of 337,000.
337,000+
patients waiting over a year, down from over 400,000 in
November 2022
Source: NHS waiting times data for December 2023,
published February 2023.
7.6mpatient pathways on waiting lists, up from 7.2 million
in 2022
Source: NHS waiting times data for December 2023,
published February 2023.
58%of Spire Healthcare target consumers would be more
likely to consider using a private hospital, given growing
waiting lists
Source: Proprietary Spire Healthcare research conducted
with 2,416 target consumers during November 2023, up from
57% in 2022.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 18
Our market continued
Key trends that affect our market today continued
03
Private market
Demand for private care continues; it grew overall,
driven primarily by private medical insurance (PMI),
and penetration has grown significantly. The most
recent LaingBuisson data5 states that around 7.4
million lives are now covered by private medical
cover, and 3.5 million each by health cash plans and
dental benefit plans. Corporates are also looking to
extend cover deeper into their workforces beyond
senior employees, as a defence against NHS waiting
times and a cost-effective additional offer to
employees. Revenue from PMI is much higher due
to more people using their insurance and our
management of case and price mix.
The growth in demand for self-pay is down slightly,
but remains significantly above pre-pandemic
levels. PHIN data shows self-pay admissions down
by 4% at quarter two in 2023.
Our target customer base – the number of people
willing and able to use private healthcare in the
areas in which we operate – is around 5.2 million
people. The profile of our customers has remained
similar in terms of age and wealth profile. Some
people who previously might have defaulted to the
NHS before the pandemic are turning to us to
receive care, however some people on the edges of
our audience are seeing a decline in affordability
owing to the cost-of-living, which acts against them
turning to us. Our new integrated and targeted
marketing campaign, launched in 2023, focuses on
the desire of patients to get back to their lives by
having their health conditions diagnosed and
treated swiftly and safely, with the message: ‘The
sooner you’re better, the better’.
Read more about how we are ‘Driving hospital
performance’ on page 21 and ‘Expanding our
proposition’ on page 34
04
Healthcare workforce
The UK healthcare sector continues to face a severe
skills shortage, with a large number of healthcare
professionals leaving the industry each year. This is
why the board considers workforce to be outside
of our risk appetite – read more in our risks section
on page 64.
Attracting and retaining the best people remains a
challenge for all healthcare providers, both public
and private, and this is the case for Spire Healthcare
too. Rates for agency staff and specialist clinical
roles are rising owing to both shortages and
inflation, presenting a further challenge, but we are
managing this well and agency spend is down.
We welcomed the government’s announcement
this year of the first comprehensive workforce plan
for the NHS, putting staffing on a more sustainable
footing and aimed at improving patient care. The
plan focuses on retaining existing talent in the NHS
and making the best use of new technology
alongside a major recruitment drive.
The combination of recent high inflation and labour
shortages means businesses like ours have to be
competitive in the reward we offer colleagues, to
attract and retain the best people, and we have
addressed that again in our salary awards in 2023.
To counteract shortages, we run one of the largest
nurse apprenticeship programmes run by a single
organisation and offer a range of clinical and
non-clinical apprenticeships, along with many
training opportunities and student placements. We
seek to be a positive contributor to the healthcare
workforce. We continue to make progress in
improving colleague retention, increasing hire rates
and, as a result, are starting to reduce agency spend.
74%of 25-34 year olds would consider using private healthcare
if they needed treatment in the future
Source: IHPN polling ‘Going Private’, 2023.
People are also experiencing longer waits to see their
NHS GPs and struggling to access community
services for long-term conditions or other health
issues. Spire Healthcare has increased the size of its
GP services including Spire GP and the London
Doctors Clinic, and new services including Spire
Occupational Health. Most recently, through the
acquisition of Vita Health Group, we now offer
mental and physical therapies for private, corporate
and NHS customers. Many of these services are
increasingly part of the value chain into hospitals, as
they refer to our clinicians and therapists who can
help patients back to health.
5. LaingBuisson Health Cover UK Market Report, 18th Edition, June 2023.
At Spire Healthcare, we offer a range of apprenticeship
programmes and training opportunities. Read more on
page 29 and on page 44
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 19
Our market continued
Key trends that affect our market today continued
05
06
Economic environment
Following sharp rises in inflation in the UK last year,
the rate has fallen in 2023, but remains much higher
than the Bank of England’s target of 2%. Cost-of-
living pressures are still having a major impact on
many people’s disposable income, and higher
interest rates have become a factor for individuals
and businesses everywhere. This has the potential
to temper growth in our market, but we have some
resilience to these pressures in the private
healthcare sector. Our core customer is generally
more affluent and more insulated against rising
costs, while our older self-funding customers, are
mostly far less affected by mortgage increases.
The economic climate and financial concerns have
resulted in a slight slowing of our enquiries, though
this is, to some extent, being offset by our
brand-building and advertising campaigns and the
underlying demand due to NHS waiting lists. The
inflationary environment we are in is quite complex,
affecting our supply chain, our operational costs,
and salary expectations, but we continue to remain
competitive on price. We continue to hedge our
energy prices, currently until autumn 2024, as
energy costs have been a huge driver in increasing
pressure for most businesses and families. We have
planned for mitigating the impact of energy costs
from 2024 onwards. The largest rise in our costs is
colleague salaries, with increases to address the
cost-of-living in 2022 and 2023, and remain a
competitive employer on reward. Read more on
pages 12, 28, 68 and 113.
UK inflation rate
4.0%in December 2023
10.5%
in December 2022
Source: UK Consumer Price Index (CPI), ONS.
Role for employers in healthcare
It is increasingly understood that employers have a
role to play in preventing, maintaining and
improving the health of their employees, through
occupational health and wellbeing interventions.
The Chartered Institute of Personnel and
Development6 notes that ‘Employee health is a core
driver of a business’s performance and employers
should support employees not already covered by
disability legislation’ and the role that employers
can play in health and wellbeing has risen up the
public policy agenda during 2023.
As noted above, employers are increasing the
provision of PMI for their employees7. Meanwhile,
our occupational health services are seeing
continued demand for employee health support.
Mental health and musculoskeletal services
provided to employers through Vita Health Group
are allowing employees to remain healthy at work
or aid those off work to recover and return to their
duties, helping to improve productivity for
employers. Prioritising occupational health yields
benefits like reduced absenteeism, improved
morale, and helps employers comply with the law. It
attracts and retains top talent, enhancing overall
business success.
6. Chartered Institute of Personnel and Development, ‘Health is everyone’s business: Proposals to reduce ill-health-related job loss’, 2019.
7. Healthcare and Protection, ‘Corporate wellbeing demand here to stay as services continue expanding – analysis’ 2023.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 20
Our strategy
Helping to meet Britain’s healthcare needs
At Spire Healthcare, quality and patient
safety always come first. This has been
the cornerstone of a strategy that has
proved successful in recent years
But in this time of unprecedented demand for
healthcare, both in our hospitals and elsewhere, we
evolved our strategy in 2022 to help us meet this
demand, not simply by caring for patients in our
high-quality hospitals, but also by developing and
offering a range of vital healthcare services to
improve the health of the nation in clinics,
communities and workplaces. In 2023 we continue to
deliver this strategy.
Our purpose drives our strategy
Our purpose is ‘Making a positive difference to
people’s lives through outstanding personalised care’.
That’s why we have a strategy that helps us to meet
more of Britain’s healthcare needs. A strategy that
works by focusing on quality and safety, champions
sustainability throughout the organisation,
recognises the vital role our colleagues play, helps us
to expand into new areas of healthcare to meet more
people’s needs, and delivers a strong financial
performance for our shareholders while generating
value for all our stakeholders.
Driving hospital performance
Continue to grow across our existing
hospital estate with increasing margins
See page 21-23
Building on quality
Maintain strong quality and safety
credentials for patients and as a
competitive advantage
See page 24-26
Investing in our workforce
Aspire to attract, retain and develop the
most talented people to our business
See page 27-30
Championing sustainability
Become recognised as a leader in
environmental, social and governance (ESG)
in our industry
See page 31-33
Expanding our proposition
Selectively invest to attract patients
and meet more of their healthcare needs
See page 34-35
Which together delivers a strong financial performance for our shareholders
and the fiscal strength we need to invest in future growth
Our key performance indicators
(KPIs) are explained in detail on
page 61
Read about our engagement
with stakeholders
on page 54
Read about our alignment to the
United Nations Sustainable Goals
(UN SDGs) on page 36
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 21
Our strategy continued
1. Drive hospital
performance
Continue to grow across our existing hospital
estate with increasing margins.
As a preferred provider and partner, we aim to
offer an outstanding patient experience in our
hospitals, and ensure we are easy to do
business with.
Our goals
Highlights and priorities
– Provide people with rapid access to
diagnosis and treatment
– Provide market-leading offer to private
patients, with targeted growth in NHS
treatments
– Outperform the UK’s overall hospital
market growth
– Improve our hospital margins and
maximise opportunities
Highlights of 2023
– Increased private revenue by 9.5% to £959.7
Priorities for 2024
– Drive further digitalisation, automation
million from £876.7 million in 2022
– £84.4 million investment across our estate,
including major projects at Spire Yale and
Spire Cambridge
– Launched our new marketing campaign,
‘The sooner you’re better, the better’
– Enhanced our cyber security to strengthen
information governance and our data
security position
and efficiency in our business processes to
deliver improved margins
– Continue to increase our private revenue
and build the Spire Healthcare brand in
new areas
– Maintain investments in the business at
approximately 6-7% of revenue
– Work with our NHS partners to help
address waiting lists
Maximising our capacity
In our first full ‘normal’ post-COVID year since 2019,
we delivered a strong performance, demonstrating
that our strategy is working, despite having to
navigate other issues, such as high levels of seasonal
absence and consultant strike action in the NHS.
While we have faced many challenges over the last
three years, we have come through them well, and
Spire Healthcare is a more resilient business than
ever today.
Demand remains strong. Our hospital directors,
directors of clinical services and other hospital leaders
have continued to focus on maximising our capacity
and increasing utilisation at our sites – back-filling
cancelled appointments with patients ready to bring
an appointment forward, making Saturdays more of
a normal working day, taking work out of theatre
where possible, creating new clinical space within our
estate, being more disciplined on patient mix, and
holding capacity meetings to make the most of our
resources. We cannot control when colleagues,
consultants or patients get sick or when cancellations
occur, but we manage capacity closely and well and
ensure patients are pre-assessed early so others can
be offered any cancelled slot.
Efficiency and digitalisation
We continue to improve the efficiency of our
business, delivering a further £15 million savings this
year. Acting for the whole organisation, rather than
individual hospitals or sites, our professional
procurement team is leveraging the power of the
group to mitigate cost increases.
However, our big focus in 2023 has been developing a
plan to modernise our whole IT system, update our
data strategy, and digitalise what we do today to
make improvements for our patients. The first step
has been to benchmark our systems, put foundations
in place for our plan, and scope out the size of the
savings opportunity. We have a clear plan to deliver
material savings, efficiencies and customer service
improvements over the next three years.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 22
Our strategy continued
An important part of laying the foundations of our
plan is upgrading Wi-Fi in hospitals and at our head
office locations; this is currently in progress, and will
mean patients, colleagues and consultants can easily
access services on mobile devices. Next, we will be
improving the performance of core digital platforms
like our hospital management system, optimising our
processes for everyone, and refreshing our website to
provide a more streamlined, convenient and
consistent experience. Digitalisation will support
better appointment management, clear
communications, and improved electronic prescribing
systems and observations that help to improve
patient safety and clinical outcomes.
Ultimately, it’s all about making every patient’s
journey a seamless one, from booking an
appointment to accessing treatment, and helping
them build an ongoing relationship with Spire
Healthcare. By embracing data and fostering
innovation right across our organisation, our
colleagues will be even better placed to provide
personalised patient care, with reliable access to all
the tools they need, while we are proactively
exploring the opportunities presented by emerging
artificial intelligence technologies to improve those
tools. All these changes will remove cost from the
hospital business to deliver a stronger financial
performance.
Investing in our estate
Our focus on digitalisation doesn’t detract from the
continued investments we are making in quality
across our core estate, as we committed a further
£84.4 million in capital expenditure this year, a level
of investment that stands out in the private
healthcare sector. This included investments in
diagnostic imaging of £14.1 million for a further five
MRI and CT scanner replacements, and around £7.5
million on three ‘cath labs’ (equipped rooms used for
non-surgical heart procedures), two x-ray/fluoroscopy
rooms, five mammography units, and three ‘C-Arm’
medical imaging devices used during procedures.
These investments in state-of-the-art technology
benefit both our patients and our hospitals, helping
to provide the best environment for the consultants
who work with us.
Major projects in 2023 that have supported
expanded services to patients and revenue growth,
have included:
– The opening of a £9.5 million outpatients centre
and diagnostic unit with MRI facilities at Spire Yale
Hospital in Wrexham. We have committed a
further £1.25 million to a new sterile services
facility that will serve Spire Yale, due to open in
early 2024
– A new £1.6 million ophthalmology theatre facility
at Spire Cambridge
– A new £2.4 million daycase theatre suite at Spire
Claremont in Sheffield
– And a combined investment of £3.4 million to
enable us to provide robotic assisted cardiac
surgery at Spire Nottingham and Spire Manchester
In line with our five-year refurbishment programme,
we have spent almost £10.0 million improving many
of our sites this year, including highly-visible
patient-facing reception areas. We have also invested
more than £8.0 million on important engineering and
fire safety projects at our sites.
Patients say their experience of our service was
‘Very Good’ or ‘Good’
96%
2022: 96%
Source: Patient Discharge Survey 2023.
Private inpatient revenue up 6%
£355.5m
2022: £335.3m
Strategy in action
New outpatient and diagnostic centre at
Spire Yale Hospital
An ambitious £9.5 million development at Spire Yale
Hospital in Wrexham has seen us convert former
administrative buildings into an outpatient centre.
This has created a more comfortable environment
where people can receive much-needed diagnoses.
The new Chesney Court Imaging, Orthopaedic and
Outpatient Centre will increase the number of
patients the hospital can treat per year by up to
20%, expand the patient services we offer, and
provide faster care for daycase patients.
Chesney Court was part of an ongoing investment
project at Spire Yale, which expanded the hospital’s
existing ward space from 18 beds to 24 to allow
more patients to receive the overnight care
they need.
Chesney Court’s outpatient and diagnostic centre
offers state-of-the-art MRI, X-ray and ultrasound
facilities, as well as orthopaedic and physiotherapy
rooms. The centre also includes nine consulting and
treatment rooms, and provides people with rapid
access to orthopaedic, urology, ophthalmology,
gynaecology, general surgery and ear, nose and
throat surgery, as well as diagnostic services for
cardiac disease and chronic and acute
pain conditions.
Through a mix of inpatient and outpatient services,
this increases patient choice and in turn will help to
address waiting lists in and around north Wales.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 23
Our strategy continued
Building on our self-pay and PMI business
Our self-pay revenue grew by 1.8%, while the private
medical insurance (PMI) market has continued to
expand, as employers seek to secure cover on a wider
group of their employees. PMI revenue grew by 14.3%
in 2023. We are building on our partnerships with
insurers, demonstrating the value we provide
through our effective operational performance and
collaborative initiatives. We have value-based
contracts with all four of the main PMI providers –
Bupa, AXA Health, Aviva and Vitality – that are
founded on clinical quality, patient experience and
price. We continue to expand our marketing of the
Spire-branded InSpire insurance product which gives
easy access to private care at Spire hospitals and is
underwritten by AXA Health. In 2024 we will grow
capacity further to ensure prompt access for private
patients, supported by online and digital
improvements to enhance referrals.
To drive growth and build on our brand awareness,
we launched a new multi-channel targeted
marketing campaign in September 2023, developed
in partnership with M&C Saatchi London and entitled
‘The sooner you’re better, the better’. The campaign
focuses on the themes of accessing expert care
quickly to make a swift recovery, getting back to
being yourself, and returning to what you love doing.
A 30-second TV spot spearheaded the campaign,
with more media buy booked for early 2024. The
campaign is designed to attract and retain
customers, while appealing to consultants,
employees, and NHS patients who may have an
option to choose us. Since launch in September, we
have recorded our highest-ever brand awareness and
consideration scores. Since our first major campaign
in 2021, we have seen a strong marketing return
on investment.
Supporting the NHS and its elective recovery plan
We believe private healthcare has an important role
to play in tackling waiting lists by working in
partnership with the NHS. We were pleased to
support the government’s Elective Recovery
Taskforce, which aimed to increase the volume of
elective consultations and procedures for NHS
patients carried out by the independent sector, to
help tackle the backlog. We welcomed the Taskforce’s
recommendation, accepted by the government, of an
increased role for the independent sector, more
choice for NHS patients when first referred, and
choice for anyone waiting longer than 52 weeks for
treatment – static at around 337,000 patients
according to NHS England – of hospitals with
shorter waiting times.
We look forward to many NHS patients taking
advantage of this newly promoted choice, to opt
for a Spire Healthcare hospital or service, to receive
their care.
Our volume of NHS work increased again during
2023, and we continued to help the NHS to treat
patients waiting the longest. We have now cared for
more than 623,800 NHS patients in our hospitals
since the start of the pandemic in March 2020 with
195,950 in 2023. We also continued to engage closely
and develop our relationships with the Integrated
Care Systems (ICS) that bring together providers and
commissioners of health and care services across
geographical areas.
Services for children and young people
Children and young people are an important part of
our patient mix. We offer a broad range of paediatric
services in a hub and spoke model, from initial
consultation and diagnosis through to treatment and
surgery, including dermatology, orthopaedics,
gastroenterology and ear, nose and throat services
with the latter the busiest service. In 2023 we saw
more than 48,000 children in our outpatient
departments and cared for over 5,000 on our
inpatient wards.
Digitalisation will remove cost from
the hospital business to deliver a
stronger financial performance, and
make every patient’s journey a
seamless one, from booking an
appointment to accessing treatment,
and helping them to build an ongoing
relationship with Spire Healthcare.”
Private new outpatient consultations 2023
+7.8%
626,173 in 2023 vs 580,981 in 2022
Private revenue growth 2023
+9.5%
£959,700 in 2023 vs £876,600 in 2022
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 24
Our strategy continued
2. Building
on quality
We remain fully focused on quality and
patient safety across the organisation,
underpinned by an open, learning and
quality improvement culture.
Our goals
Highlights and priorities
– 100% of our inspected locations achieve
‘Good’ or ‘Outstanding’ ratings from
regulators in England, Scotland and Wales
– Sector-leading patient satisfaction
– Above average patient reported outcomes
Highlights of 2023
– Started implementing the NHS England
Patient Safety Incident Response Framework
(PSIRF)
Priorities for 2024
– Complete the implementation of PSIRF
– Continue to use our Quality Improvement
strategy to maximum effect
– Quality Improvement strategy fully
embedded across our sites
– Continued to strengthen our governance
standards including increased compliance
with the National Joint Registry
– Launched our new Driving Clinical Excellence
in Practice programme
– Use our new patient experience and
engagement framework to further
enhance patient experience
– Work with our new services to ensure we
have excellence in governance and learning
across the group
Outstanding clinical quality
Quality underpins everything we do, with the delivery
of patient safety and high-quality patient care central
to Spire Healthcare’s operations and embedded in our
purpose and culture. 96% of our patients rated their
experience as ‘very good’ or ‘good’, while 98% of our
inspected hospitals and clinics are currently rated
‘Good’ or ‘Outstanding’ or the equivalent by
regulators in England, Scotland and Wales. We are
still awaiting reinspection of Spire Alexandra, our one
remaining site which has a ‘Requires Improvement’
rating, which has not been inspected since 2016/17.
Inspected VHG locations are currently rated 100%
‘Good’ by CQC.
Achieving 100% ‘Good’ or ‘Outstanding’ ratings
across the group is a key target for us, and we aim to
deliver care to the highest possible standards at all
sites, all the time. This means being uncompromising
on patient safety, and we aspire to the highest levels
of incident reporting and the lowest level of patient
harm incidents. We work hard to support our
colleagues and consultants to ensure they have
the skills and the facilities they need to ensure
patient safety.
Driving clinical excellence
During the year, we developed a new Driving Clinical
Excellence in Practice programme, to support our
registered nurses and allied health professionals’
continuing professional development and the
requirements of their professional revalidation. Read
more on page 28. Aligned to this programme, in early
2024 we are rolling out the national Diseases
Attacking the Immune System (DAISY) award to
recognise extraordinary registered nurses and
nursing associates who go above and beyond, and the
Inclusive Recognition of Inspirational Staff (IRIS)
award, recognising registered allied health
professionals’ excellent care to our patients.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 25
Our strategy continued
Our framework for continuous improvement
We speak with patients every day to better
understand their experience in our care. We want to
find out more about their experience with us, their
outcomes, and their broader patient experience
before and after they came into our care. We use
online feedback and patient forums with a direct loop
to our hospitals and clinics so we can learn across all
parts of the patient pathway. We have introduced a
new Patient Experience Framework which provides a
toolkit for listening to patients, standardised
guidance on running effective patient forums and
support with responding to issues raised. We
relaunched and strengthened our hospital’s patient
forums in 2023.
Hospital leaders attend a daily safety briefing with a
standard agenda, to share key developments, and
determine any improvements we can make. This is
complemented by a weekly 10@10 meeting – 10
minutes at 10 am – for all our central function
colleagues. Another fortnightly meeting for senior
leaders is hospital focused and supported by a
detailed weekly briefing for cascade. We think it is
important to create safe spaces for our leaders to
reflect on these matters and hold professional
conversations and coaching discussions when
required. All this means that vital information is
shared swiftly to improve safety and encourage
continuous improvement, and that conversations are
happening across the organisation to make sure all
lessons are learned.
Governance and oversight
We continue to strengthen our governance
standards, assurance and board oversight, using data
to support hospitals through comprehensive
reporting processes on quality and rigorous ward-to-
board assurance. We are extending our governance
approach to all parts of the business, including the
services we provide outside of hospitals, seeking to
share learning as we integrate newly acquired
services and develop new ones.
Our integrated quality assurance framework includes
a suite of key performance indicators (KPIs) that is
reported monthly to the board. Our framework is
based on the NHS National Quality Board framework,
with KPIs grouped under safe, effective, experience,
well led, and money and people. An expanded report
with a full suite of KPIs is used to provide information,
context and actions to board members to support
robust conversations around assurance. The
committee reviews all KPIs and forensically probes for
themes, trends or opportunities for patient safety
improvement. It scrutinises consultant performance;
identifies quality outliers by consultant, hospital, or
procedure; ensures full compliance with our policies
around multidisciplinary meetings, especially in
cancer; and reviews specialist services such as cardiac
and young people’s services. It reviews any learnings
arising from mortality reviews and always receives a
presentation from hospitals on patient safety
improvement. To read more, see page 101.
Quality and safety
We continue to ensure that we benchmark our
quality standards against best practice, including
using appropriate accreditation programmes. We
have earned JAG accreditation for our endoscopy
services at 14 sites – two hospitals achieved first-time
accreditation in 2023, three were reaccredited. This
accreditation is awarded by the Royal College of
Physicians’ Joint Advisory Group on Gastrointestinal
Endoscopy. In addition, 15 of our 16 chemotherapy
sites have Macmillan Quality Environment Mark
(MQEM) accreditation, which champions cancer
environments that go above and beyond to create
welcoming and friendly spaces for patients.
We continue to build our capacity to provide more
complex care for patients in our hospitals. This opens
up new areas of care we can provide, and makes Spire
Healthcare more self-supporting, by ensuring that we
need to do fewer transfers out where critical care
needs arise.
Regulatory inspections (with 6 reports published in 2023)
72022: 10 inspection reports
Net promoter score among corporate customers towards
VHG’s employee assistance plans
97Source: NPS scores, Vita Health Group.
Patient Safety Incident Response Framework
We are implementing the new NHS England Patient
Safety Incident Response Framework (PSIRF). PSIRF
promotes a new, more proportionate approach to
responding to patient safety incidents within a wider
system of improvement, with compassionate
engagement and involvement of those affected by
patient safety incidents. It recommends a system
approach to learning from incidents, with considered
and proportionate responses, with supportive
oversight focused on strengthening response
systems and improvement.
PSIRF builds on our open and learning culture, and we
have trained all the people who need to be trained in
our hospitals, ready for the full implementation in
2024. Ahead of full rollout, we have trialled the new
PSIRF processes at three sites: Spire Bristol, Spire
Wellesley in Southend-on-Sea, and Spire St Anthony’s
in Sutton.
Quality improvement
Our Quality Improvement (QI) Strategy reflects our
continuous improvement approach to safety and
quality, with a standard QI methodology we use
across the business to enhance our quality
improvement culture.
The strategy is underpinned by Spire Healthcare’s QI
principles:
– Pursue value and quality as defined by our
customers and our stakeholders
– Understand through observation – go, look, see
and measure
– Remove waste – work or systems and processes
that add no value and increase workload
– Create flow – optimise efficiency in all that we do
– Make it visible so you can see what is happening
– Standardise, document and continuously improve
operations
We put in place a QI framework in 2023 confirming
our QI priorities, and all our hospitals have agreed
their own QI priorities based on these. To date, we
have run more than 200 QI projects, which have
improved patient outcomes and experience, driven
efficiency and reduced waste.
Projects have included a nurse-led approach to
reduce incidences of hyponatraemia which was a
finalist in the Nursing Times Awards 2023, a project
to reduce the average length of stay for hip and knee
surgery patients, efforts to use fewer opiates for pain
relief at discharge for orthopaedics, a nationwide
project to improve resuscitation skills which was a
finalist at the LaingBuisson Awards 2023, and a
multi-year project to improve patient discharge
scores across the group.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
26
Our strategy continued
Strategy in action
Resuscitation quality improvement
Colleagues receive training in our QI methodology
through our QI Academy. To date, more than 13,000
colleagues have accessed the QI training, either
virtually or in face-to-face sessions, and we now have
more than 280 QI trained practitioners. We also
deliver bespoke QI training to our medical advisory
committee chairs, business unit directors, directors of
clinical services, finance managers, and Freedom to
Speak Up Guardians.
Freedom to speak up
Like everyone working in healthcare, we have
reflected on the terrible crimes of Lucy Letby,
committed at an NHS Trust. It has reinforced the
importance of our Freedom to Speak Up (FTSU)
culture, and we are proud of our network of 58 FTSU
Guardians across Spire Healthcare locations, with
90% of colleagues knowing who their FTSU guardian
is, plus a network of ambassadors who can receive
concerns. But having that culture in place does not
mean we are ever complacent. We regularly
re-emphasise to our colleagues and consultant
partners that we encourage them to speak up, and
inform them that they will always be listened to
and supported. We believe that having the right
culture where people feel psychologically safe is a
prerequisite for improving quality and providing
safe care.
Up and Follow Up’, aimed at building awareness of
the importance of speaking up. ‘Speak Up’ is
mandatory for all colleagues, we will be adding it to
our mandatory training for consultants who practise
at Spire Healthcare and VHG will be introducing in
2024. ‘Listen Up’ and ‘Follow Up’ are for managers.
Colleagues also have access to a confidential
whistleblowing helpline, managed by an independent
third-party provider, enabling them to raise any
concerns anonymously.
In 2023 Vita Health Group (VHG) updated their Speak
Up policy and enriched their established Freedom to
Speak Up Guardian roles to embed a culture where
individuals confidently raise concerns in confidence
and identify opportunities to improve standards of
care, working environments, and colleague wellbeing.
The Doctors Clinic Group has two guardians who
have started their National Guardian’s Office training
programme. Spire Healthcare and VHG both hold a
dedicated FTSU month each October – aligned to the
National Guardian’s Office national campaign – to
raise the profile of speaking up and of the guardians,
and to offer further support and training to ensure
colleagues know who they are and how to contact
them. In 2023 the theme was overcoming barriers.
Our resuscitation quality improvement (RQI)
programme was delivered as part of a
collaborative partnership with Netherlands-based
Laerdal Medical.
They are a world leader in resuscitation initiatives,
such as simulation skills, and worked with us to
develop our clinical colleagues’ skills.
We adapted what we learned from Laerdal to create
a new centralised training overview, which has led
to a standardised approach to resuscitation
throughout our hospitals nationally. This has
brought a level of consistency and clinical skill
across the group that would normally be seen
as a challenge for one large hospital site alone
to achieve, never mind a series of sites across
the country.
Colleagues can submit a Freedom to Speak Up
concern via a dedicated module on Datix, our risk
management software. The concern is managed by
one of our trained FTSU guardians. We also have 31
consultant ambassadors to receive concerns.
The RQI initiative has been recognised as an
example of ‘Excellence in Training’, having
been selected as a finalist in the 2023
LaingBuisson Awards.
We surveyed our Spire Healthcare Limited FTSU
guardians in 2023 and used their responses and
feedback alongside listening sessions to shape our
speak up strategy. We have issued clear
communications from our Chief Executive Officer,
Justin Ash, and Group Medical Director, Dr Cathy
Cale: ‘Whatever method you use, our message to you
is this – if you have a concern about patient safety,
please raise it immediately. We will protect anyone
who raises a concern they reasonably believe to be
true (proven or not) from suffering any form of
reprisal or other detriment as a result.’ To support this
message we have launched the National Guardian’s
Office Speak Up training modules, ‘Speak Up, Listen
Inspected locations rated ‘Good’ or ‘Outstanding’ or
equivalent by regulators England, Scotland and Wales
98%
2022: 98%
Patients say they felt ‘cared for’ or ‘looked after’
when receiving care at Spire Healthcare hospitals
94%
2022: New question for 2023
Source: Patient Discharge Survey
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 27
Our strategy continued
3. Investing in our
workforce
Recruit, retain and develop great people.
With the shortage of clinical staff across the
healthcare sector, we aspire to attract, retain,
train and develop the most talented people to
our business.
Our goals
Highlights and priorities
– Sector-leading colleague satisfaction
– Sector-leading consultant satisfaction
– Sector-leading private hospital
apprenticeship programmes
Highlights of 2023
– Brought our recruitment service in-house
to improve attraction and efficiency, saving
£0.5 million
– Launched a new Speak Up training module
from the National Guardian’s Office
– Welcomed a new cohort into our nurse
apprenticeship programme
– Held our first colleague survey
champions’ day
Priorities for 2024
– Develop our new reward framework
– Refocus our equality, diversity and inclusion
strategy
– Focus on the employee experience as part
of our external employer brand
– Continue to develop networks to
support colleagues
Creating a positive working environment
As a healthcare service provider, we recognise and
value the hard work and dedication of all our
colleagues. That’s why investing in our workforce is at
the heart of the group’s strategy, and why when we
say we’re here to make a positive difference to
people’s lives, we include our own people in that.
Given the well-documented shortage of skilled
healthcare staff in the UK and internationally, the
need for wellbeing, inclusion, and a positive,
rewarding working environment has never been
greater. More than that, we recognise that we have a
vital role to play in addressing the shortage of clinical
staff, not just in our own organisation, but also across
the nation’s healthcare system. We aim to develop,
support and protect our colleagues within a
welcoming culture that is characterised by openness,
respect, collaborative working, a focus on clinical
safety, and a spirit of continuous improvement. That’s
how we create value for our colleagues, our business
and the whole health sector.
Bringing recruitment in-house
Our workforce is a critical enabler to deliver our
strategy, but resourcing remains the most significant
barrier to building capacity across our services.
Vacancies are a continuing challenge across the
healthcare sector, notably for specialist clinical roles.
That’s why we brought hospital recruitment in-house
early in the year, and this has led to a tangible
improvement to the filling of vacancies and a reduced
cost per hire – as of September 2023, the average cost
per offer is 41% lower – and the project saved £0.5m
in 2023. We are attracting talented people to join our
teams, while we continue to actively promote people
to new roles from within Spire Healthcare.
Agency costs remain an issue for us and all healthcare
providers, and rates for specialist skills are higher, but
we are controlling them well and costs are down. We
now have a single agency booking system, with a
master agreement in place. This helps us to manage
our agencies and see all costs up front. We are still
in the process of digitising our bank and agency
staff recruitment, but a single platform will bring
future efficiencies.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 28
Our strategy continued
We also continue to develop the way we portray our
employee experience to potential recruits. Building
on work in 2023, we will develop use of social media,
events and advertising to reach new colleagues
in 2024.
Valuing and rewarding colleagues
With the ongoing cost-of-living pressures, high
interest rates, and impact of high inflation, our
colleagues want clarity and certainty about their pay.
That’s why for all eligible colleagues we prioritised a
5.5% salary increase from September 2023. This built
on our 5% increase last year and means that most
colleagues will have seen a rise of over 10% in salary
since September 2022. We have also been developing
a new reward framework with our hospital directors
and senior leaders to provide our colleagues with a
simple structure and clarity on role progression to
support their careers.
Engaging with colleagues
We want our colleagues to have a great work
experience at Spire Healthcare, and if they feel
engaged they can perform at their best. We use a
range of two-way communications channels to
communicate and engage with colleagues. These
channels include our Ryalto colleague
communications tool, which is used to build
employee communities, publish key information and
videos to colleagues from our chief executive officer,
Justin Ash, and members of the executive committee
every month.
In April we held our first-ever colleague survey
champions’ day at our head office, getting people
together from all our hospitals and central functions
to discuss what matters most for our teams. Key
themes from the meeting included the importance of
getting the basics right, particularly around personal
development and growth. The group also reviewed
our activity since last year’s colleague survey: since
the survey, we have launched Justin Ash’s monthly
colleague and consultant update, encouraged and
supported managers to carry out half-year
performance reviews with their teams throughout
July, highlighted the importance of regular 1:1
meetings between managers and colleagues, and
held our first topic-specific colleague call to
get colleagues behind our new multimedia
brand campaign.
We also established a new workforce committee in
July that reports to our executive committee and is
dedicated to strategic workforce matters. We held
further colleague listening sessions with the
executive committee and our non-executive directors
– including a session with Justin Ash on Freedom to
Speak Up.
Colleague survey results
While we encourage regular feedback from our
people formally and informally, our annual colleague
survey is open to all colleagues and provides in-depth
feedback from all parts of the business. We held our
2023 survey in November and achieved an overall
response rate of 86% (77% in 2022), with 81% of
colleagues saying they are proud to work for Spire
Healthcare (+1 percentage point from 2022) and 84%
of colleagues saying that they get personal
satisfaction from the work they do, level with 2022.
86% of colleagues would be happy with the standard
of care if their friends or family needed treatment at
Spire Healthcare (up 3 percentage points from 2022)
and 71% would recommend Spire Healthcare as a
place to work (down from 72% in 2022). Following
these results, teams are developing action plans to
drive improvements such as learning opportunities,
line management and variances between sites.
As part of our analysis of the feedback, we view the
results of the survey by demographic to help us
understand the needs and experiences of different
colleague groups. 75% of respondents in the survey
believe that we treat all people as equals, regardless
of individual differences, up from 70% in 2022.
Equity, diversity and inclusion
We believe that diversity and inclusion are core to
sustaining a successful business, and we aspire to
create an environment where everyone is respected
and cared for, and where difference is celebrated. We
want to ensure that our colleagues feel confident to
bring their whole selves to work, which in turn makes
us stronger as a team and as an organisation. We
were pleased to be listed in the Financial Times
Statista Diversity Leaders index for another year; this
is an index of companies considered to be Europe’s
Diversity Leaders, based on a survey of 100,000
employees across Europe.
Strategy in action
Driving Clinical Excellence in
Practice programme
We were pleased to launch our new Driving Clinical
Excellence in Practice Programme this year. It is a
bespoke educational initiative that covers a
comprehensive framework of necessary
competencies and skills for our registered nurses
and allied health professionals. The programme
encourages participants to engage with their peers
to foster a deeper sense of community and
reinforce pride in the profession. It will also support
nurse revalidation, promote better patient
outcomes, patient experience and promote better
use of resources. The programme was launched at
the beginning of November for our first cohort of
registered nurses. The first education day was held
at Spire Manchester, with 27 registered nurses from
16 hospitals who work across wards, outpatients,
recovery, theatres, eye centres and pre-operative
assessment. The second education day took place at
our head office and was attended by 44 registered
nurses. The first cohort of registered nurses who
complete the programme will be awarded their
Driving Clinical Excellence in Practice badge and
certificate at a graduation event to be held at our
head office, where we will celebrate and
acknowledge all of their hard work and
commitment. This event is scheduled to coincide
with International Nurses Day in May 2024. The
second cohort of the programme is scheduled to
begin in April 2024.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 29
Our strategy continued
Our equity, diversity and inclusion (EDI) strategy is
based on four commitments: (i) we recognise the
value of diversity, (ii) we understand how it will help
us deliver our purpose, (iii) we respect and appreciate
each other for who we are, and (iv) we include diverse
colleagues in our problem-solving to make better,
faster decisions.
Our colleague networks are an important part of
delivering our EDI strategy – we run regular meetings,
lunch-and-learn sessions with external speakers and
other activities to support colleagues and patients.
Networks provide safe spaces for colleagues to
discuss issues of relevance, raise awareness and
competency of those issues, and influence change.
For example, our Let’s Talk LGBTQ+ network extended
the network of trained champions to every hospital in
2023 and has held sessions on transgender
awareness and HIV-positive living, in partnership
with Manchester-based charity, George House Trust.
The network produced three Spire LGBTQ+ podcasts,
made available via our internal channels. These
featured interviews with colleagues on adoption,
career development and living and working as a
transgender person. Vita Health Group runs an
LGBTQIA+ network.
Our menopause colleague network is now in its
second year and has trialled a menopause checklist to
support and enable conversations between line
managers and colleagues when reviewing
adaptations in line with our menopause policy, and
explored a new menopause-friendly uniform in 2023.
Results from a second survey are expected in early
2024. The first survey showed colleague difficulties
with insomnia, anxiety, low confidence and
self-esteem.
Read about our race equality network, and more on
diversity, in the sustainability report on page 45.
Development and apprenticeships
Supporting the development of our colleagues is
crucial if we are to maintain the high standards of
quality and care that we expect for our patients and
pride ourselves on. Professional development is also
an important part of our offer for attracting and
retaining the very best people for our hospitals. We
currently have over 430 apprentices across the
business in a wide range of clinical areas such as
biomedical science, physiotherapy, medical
laboratory technicians, as well as non-clinical
disciplines, representing almost 4% of our
permanent workforce. We welcomed another 12
nurse apprentices at 10 hospitals onto our nurse
apprenticeship programme in late 2023. All 12 passed
a rigorous assessment to join the programme, which
is run with The University of Sunderland. They will
each enjoy remote studying as well as placements in
a range of nursing settings. Some of Spire
Healthcare’s 160 nursing apprentices graduated in
November with high honours, delivering critically-
needed nursing skills directly into the UK healthcare
sector. Spire Healthcare was named Employer
of the Year at the University of Sunderland and
MTC Training Awards.
International colleagues
We continue to recruit overseas nurses, recruiting 115
in 2023. This recruitment not only adds valuable
colleagues and capacity to the group, but also
broadens the opportunities available to the nurses
who join us from other countries, however long they
stay with us and wherever they choose to pursue
their future careers. Each new nurse undertakes
Objective Standard Clinical Examination (OSCE)
training and is individually welcomed, and we provide
them with access to support teams 24/7.
As ethical recruiters, we only recruit actively in ‘green’
countries under the World Health Organization
definition. We help overseas colleagues, including
resident doctors, to connect with others making the
same journey. Since 2021, we have recruited over 670
members of staff from overseas.
Mental health and wellbeing
We have a network of trained volunteer Mental
Health First Aiders who support colleagues at our
sites. Resilience training is available, and attendance is
encouraged to ensure our first aiders have the
support they need and the opportunity to acquire
additional skillsets to prioritise self-care before
helping their colleagues. Group People Director,
Rachel King, attends regular listening calls with our
network of mental health volunteers to enable
colleagues to raise concerns in a safe, supportive and
confidential environment.
Diversity and inclusion are core to
sustaining a successful business, and
we aspire to create an environment
where everyone is respected and cared
for, and where difference is celebrated.
We want colleagues to feel confidence
to bring their whole selves to work,
which makes us stronger as a team.”
We also offer a comprehensive Employee Assistance
Programme providing confidential advice and
support online and via a free helpline, available 24
hours a day, 365 days a year. In late 2023, Spire
Occupational Health started to provide support to
non-clinical Spire Healthcare employees through new
starter assessments, bringing services in-house.
Working with consultants
A crucial part of the care we provide is our consultant
partners, who operate as self-employed practitioners
in our hospitals, drawn from all medical disciplines.
Each hospital’s medical advisory committee meets
quarterly with consultants, and the committee chairs
meet hospital directors and directors of clinical
services regularly to ensure proper, safe, efficient and
ethical medical use of the hospital. In 2023, hospital
leadership teams developed action plans to build on
our existing relationships with consultants. These
aimed to ensure we have the best clinical facilities
available to them, and effective digital systems which
make it easy for them to do business with us. Our
annual consultant survey in 2023 ran using our new
experience measurement platform, Qualtrics, and
saw a seven percentage point rise in the response
rate. Results showed that 83% of consultants now
state that the care provided in hospitals is ‘very good’
or ‘excellent,’ up from 78% in 2022, and driven
exclusively by uplifts in consultants rating care as
‘excellent’. Five hospitals saw rises of 12 percentage
points or higher. Consultants rating the quality of
service provided to them by our hospitals as ‘very
good’ or ‘excellent’ is 69%, up from 64% in 2022 and
the highest level since 2016.
Colleagues proud to work for Spire Healthcare
81%
2022: 80%
Spire Healthcare annual survey 2023 (Spire Healthcare Limited and
The Doctors Clinic Group)
Consultants describe the care provided in hospitals as
‘excellent’ or ‘very good’
83%
2022: 78%
Spire Healthcare consultant survey 2023
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 30
Our strategy continued
NHS sexual safety in healthcare charter
Following reports of sexual assault, harassment and
abuse in the NHS, NHS England launched a new
sexual safety charter this year – urging all NHS trusts,
Integrated Care Boards and others across the
healthcare sector to sign up. We stand in full support
of anyone who has been the victim of this kind of
behaviour and were pleased to sign up to the
organisational charter which commits us to a
zero-tolerance approach to any unwanted,
inappropriate and/or harmful sexual behaviours
towards our workforce. We also commit to actively
working to eradicate sexual harassment and abuse in
the workplace, and to promote a culture that fosters
openness and transparency. These commitments
apply to everyone in our organisation equally.
Creating value for each other
With the pressures of the past few years
compounded by the cost of living, high inflation, and
recession in the economy, supporting our colleagues’
health and wellbeing remains a top priority. Our
Helping Hand initiative uses bespoke notice boards at
all hospitals where our people can ask for or offer
help such as donating or loaning useful items or
offering their skills and time. Our virtual monthly
nightcap club remains in place, giving colleagues a
safe space to share how they are doing. One of the
chief executive’s key messages for 2023 was ‘Be Kind’,
supported by messaging on financial, mental health
and exercise, and a ‘Be Kind’ Christmas campaign.
We introduced new questions in our 2023 colleague
survey about wellbeing to enable us to better
understand how colleagues feel they are being
supported. We offer discount savings via our online
colleague portal, Spire for You, and have promoted
Blue Light cards to colleagues; these provide more
than 15,000 discounts for healthcare workers.
Absence and turnover
Managing absence and turnover helps us understand
our colleagues and ensure they are valued and
rewarded. We use data to flex our workforce and
ensure we have sufficient capacity and resilience.
Our absence rates show a further reduction in 2023,
particularly short-term absence. The overall rate of
absence was 4.7% (5.9% in 2022, 6.3% in 2021). Cost
of sickness absence reduced by over £2 million across
the group in hours lost compared to 2022. Our
monthly turnover rate continued to reduce
significantly, with 23% fewer leavers in 2023,
compared with 2022, suggesting that recent pay
awards and increased development opportunities
have had a positive impact on retention. The highest
recorded reasons for leaving are personal
circumstances and career progression; our focus will
continue to be on career development and flexible
working solutions. The market for talented people
remains competitive, with the demand for nurses
particularly high. We are pleased to see a 40%
increase in the number of offers made to new
colleagues, compared to 2022, following the
successful insourcing of our recruitment team.
Absence rose at Vita Health Group during 2023 with
an overall rate of absence of 3.6% (3.2% in 2022).
Turnover fell slightly from 24% in 2022 to 23.5% in
2023. Absence at The Doctors Clinic Group during
2023 was 1.2% overall, and turnover was 46%.
Overseas nurses recruited
115
2022: 112
Spire Healthcare Limited recruitment data
Colleagues who get satisfaction from their work
84%
2022: 84%
Spire Healthcare annual survey 2023 (Spire Healthcare Limited and
Doctors Clinic Group)
%
6
5
4
3
2
1
0
%
25
20
15
10
5
0
Employee absence, 2023, Spire Healthcare
Total sickness absence in hours as a % of total employed hours
4.7%
overall Spire
Healthcare
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Spire Healthcare Limited
Employee turnover, 2023, Spire Healthcare
12-month rolling turnover rate as a % of total headcount
15.1%
overall Spire
Healthcare
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Spire Healthcare Limited
Read more about diversity networks, allyship and
data in our sustainability report on page 36
Read more about apprentices and learning and
development in our sustainability report on page 36
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 31
Our strategy continued
4. Championing
sustainability
Become recognised as a leader in environmental,
social and governance (ESG) in our industry.
Spire Healthcare’s purpose, strategy and
sustainability ambition are integrally linked to each
other. By managing sustainability successfully, we
aim to create lasting economic and social value.
Our goals
Highlights and priorities
– Leading the independent sector in being
carbon neutral by 2030
– Contributor to Britain’s healthcare
workforce and a diverse employer
– Protect and manage all sensitive data
– Reduction in waste and improved recycling
Highlights of 2023
– 3% ahead of 2023 emissions target (27,017
tCO2e achieved vs target 27,750 tCO2e)
– 35% of overall waste is recycled, up from
30% in 2022
– 47% female representation at board and
executive committee level combined at end
2023
– 18.9% of colleagues classify themselves as
non-white by ethnicity, up from 17.3%
in 2022
Priorities for 2024
– Continue to seek opportunities for carbon
reduction at all Spire Healthcare sites
– Continue to encourage, and train for,
effective recycling and waste management
– Further increase female representation at
executive committee level in pursuit of
40% board and executive committee
combined target by 2025
– Strengthen security measures governing
the storage of and accessibility of
sensitive data
Sustainability is core to Spire Healthcare*
Championing sustainability is core to the group’s
strategy and fundamental to our success and future.
By managing sustainability successfully, we aim to
create lasting social economic value.
Our sustainability strategy, which we launched in
2022, charts a progressive journey in which the group
is evolving from risk management to providing social
value and driving opportunities for sustainable
growth. We actively collaborate with our
stakeholders, including patients, colleagues,
consultants, local communities and partners, to
enrich lives and be a net contributor to society, not
just through the services we provide, but in
everything we do. This includes challenging our
colleagues and the people we work with to factor
sustainability into all aspects of what they do.
Our ambition, through our strategy, is to become
recognised as a leader in sustainability in
our industry:
Ambition
To become recognised as a sustainability
leader within our industry
Strategy
Sustainability framework
Respect the
environment
Operate
responsibly
Engage our
people and
communities
Principles
– Growing a profitable, successful, robust and, ultimately,
sustainable company, and being a net contributor to
society are not mutually exclusive goals
– Need for a clear sense of purpose, consistent values and
a persistent desire to engage with and deliver for a broad
set of stakeholders
* The sustainability strategy covers Spire Healthcare Limited only
at this stage; we anticipate working to bring the rest of the
group under the same plan.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
32
Our strategy continued
Respect the environment
We continually seek ways to reduce the impact our
business has on the environment. We are continually
looking at ways to reduce our carbon emissions,
focusing our efforts on waste and recycling, including
reducing the use of single-use plastics, finding ways
to reuse our single use metal instruments and
reducing the number of disposable gloves we use. We
are doing all of this while working with suppliers to
align goals, to ensure we work together to develop
healthcare in sympathy with a sustainable planet. As
an example, since 2019, we reduced CO2 for Scopes 1
and 2 and improved waste segregation and
reduction, to the equivalent of 28,850 trees planted
or the equivalent of 16 football pitches.
Our journey towards achieving net zero carbon status
by 2030 is going well, with investment in 2023 to
remove piped nitrous oxide systems, further
installations of LED lighting, and carbon reduction
through effective management of our waste and the
optimisation of our building management systems.
We increased the amount of all dry mixed waste we
recycled by 5% since 2022, with 99.7% of our domestic
waste diverted from landfill and used for renewable
energy, reused or recycled in the year. We also set up
all our sites to manage food and glass recycling. Read
more in our sustainability report on page 36.
Engage our people and communities
As set out in the previous section, to deliver our
purpose we need a dedicated and engaged
workforce. We celebrate the large number of
long-standing colleagues who bring many years of
experience and dedication. However, we continue to
invest in our workforce through strong recruitment,
retention and development programmes. We aim to
provide a stimulating, diverse, inclusive and healthy
working environment in which colleagues can thrive
and achieve their career goals and aspirations.
3%
ahead of 2023 target emissions: 27,017 tCO2e achieved,
target 27,750 tCO2e (2022: 9% ahead, 25,854 tCO2e
achieved, target 28,163 tCO2e)
Report on CO2 emissions by Inenco Group Ltd for Spire Healthcare
Our overall median gender pay gap in Spire
Healthcare Limited is 9.2% in 2023 (2022: 6.2%) and
the mean is 17.7% (2022: 17.1%). We are taking a
number of positive steps to invest in and provide
development opportunities for our female colleagues
to progress into senior roles and work towards a
balanced representation to reduce the gender pay
gap. We welcomed two new female board, and two
new female executive committee, members in 2023.
A key way we ensure the sustainability of our
business is through our award-winning learning and
development programmes. We are also embedding
equity, diversity and inclusion across the organisation
with active colleague-led networks for sexuality, race
and mental health. Vita Health Group (VHG) has
additional networks for faith, women and carers.
Closely linked to this is the way we engage with our
local communities. Alongside expanding the
healthcare services we provide, we also fundraise to
support national and local causes in the areas around
our hospitals. In June, we held a company-wide
charity focus week, raising more than £40,000. An
‘around the world’ theme challenged participants to
cover more than 40,000km through local skating,
swimming, dancing and walking challenges, including
a two-day 110km Thames Path walk between our
offices in Reading and London, and cycling across
50km, 100km and 200km distances visiting Spire
Bushey in north London and Spire Harpenden
Hospital. Locally, hospitals contribute informally to
food banks and other charities throughout the year;
we would like to build wider engagement in the
future as our charity committee becomes more
established. Read more on page 49.
To promote services to ‘hard to reach’ patient groups,
our VHG colleagues work closely with voluntary
sector partners to stimulate referrals and bring
services to supermarkets, libraries and community
centres through a network of partnership liaison
officers. In 2023, VHG commissioned a ‘mental health
bus’ which stimulated community awareness of NHS
talking therapies in the east Midlands.
Read more about our diversity and people initiatives
in our sustainability report on page 36 and in the
strategy on workforce on page 27
Strategy in action
Ramping up our recycling culture
As our business grows, we have launched a number
of initiatives to improve further our recycling
culture across Spire Healthcare. All sites are now set
up with facilities to recycle food and glass, and we
are planning an initiative to turn our hard plastics
into benches and planters that we can donate to
schools, parks and other places where they will add
value to our communities.
Previously, items such as disposable curtains and
tray wraps would find their way into general waste,
but we are now set up at most sites to segregate
these and dispose of them properly.
We are also exploring alternative solutions to using
disposable paper tissue roll in many of our
outpatient areas.
Another area planned for 2024 is a ‘gloves off’
campaign, to reduce, within strict safety
parameters, the use of disposable gloves. A
reduction in glove use would reduce carbon
emissions and cost both in procurement and the
cost of waste management.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 33
Our strategy continued
In 2023, we improved waste segregation and
reduction, removing 358.15 tonnes of CO2. This is
the equivalent of planting 1,194 trees, removing
134 cars from the roads or powering 218 houses
for a year.”
Dry mixed recycling rate for hospital sites only
23.5%
2022: 18%
Source: Spire Healthcare waste report 2023.
Female representation at executive committee and board
level combined
47%
2022: 37%
Source: Spire Healthcare data.
Operate responsibly
We believe ethical and responsible behaviour is borne
out of a culture that is based on core values. Spire
Healthcare’s values are:
– Driving clinical excellence
– Doing the right thing
– Caring is our passion
– Keeping it simple
– Delivering on our promises
– Succeeding and celebrating together
We have a relentless focus on delivering healthcare to
the highest standards and prioritise patient safety at
all times. We aim to maintain robust standards of
clinical and corporate governance in line with best
practice while promoting an open and learning
culture for all colleagues. Operating responsibly also
requires strict compliance with the law. We continue
to monitor all aspects of the group’s operations to
ensure we comply with all applicable laws, including
competition law, anti-bribery law, anti-tax evasion
facilitation law, healthcare regulations and data
protection law.
Strengthening information and data security
Security can never be risk free, but at Spire
Healthcare, we have demonstrated our commitment
and support to continual improvement through
investment in our people, processes and technology
to mitigate against cyber risk. This is a particular focus
as we update and invest further in our digital
systems, ensuring that we continue to reduce risk and
strengthen the group’s information governance and
data security position. Read more on page 53.
Read more about sustainability and our goals, progress
and KPIs in our Sustainability report on page 36
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 34
Our strategy continued
5. Expanding our
proposition
Selectively invest to attract patients and meet
more of their healthcare needs.
Expanding our proposition enables us to meet
changing demands for healthcare, reach a wider
target market, and provide a broader service to
patients and the public.
Our goals
Highlights and priorities
– Develop Spire Healthcare as an innovative
integrated healthcare business
Highlights of 2023
– Acquisition of Vita Health Group for
Priorities for 2024
– Begin the integration of Vita Health Group
– Build new revenue and profit streams by
£73.2 million
into Spire Healthcare
building and acquiring new services, as well
as partnering to expand our proposition
– Meet more of Britain’s healthcare needs
with a broader service
– Developed our first diagnostic and
– Expand our national footprint of diagnostic
outpatient clinic in Abergele in north Wales,
opened early 2024
and outpatient clinics
– Grow our occupational health services,
– Integrated The Doctors Clinic Group,
working closely with employers
rebranding as two business units – Spire
Occupational Health and London Doctors
Clinic (LDC)
– 8,000 GP appointments each month across
our Spire GP and LDC businesses
– Expand our network of NHS talking t
herapy services
Becoming an integrated healthcare provider
While running great hospitals remains central to Spire
Healthcare, we are responding to the rapid and
fundamental changes taking place in the UK
healthcare landscape by making selective
investments in new services that are designed to
attract new patients and meet more of their
healthcare needs. We want to take a more proactive
role in our patients’ care before and after a stay in
hospital. More than that, we want to be with people
throughout their whole healthcare journey. That
means offering the services they need, when they
need them – like private GP consultations,
occupational health, musculoskeletal treatment, and
even NHS talking therapies services, bridging the gap
between physical and mental health services.
Becoming an integrated healthcare provider and
meeting more of people’s needs also helps us to
boost Britain’s economy, as we can lift some of the
burden on the NHS by helping to tackle the causes of
ill health and low productivity. More than ever,
employers are looking to improve their employees’
health and wellbeing, and this can often be done
better outside of hospitals before a health issue
becomes a major concern. Prevention is an
increasingly important aspect of healthcare, and we
believe this is an area to which Spire Healthcare can
make a significant contribution.
Occupational health
800+
corporate clients through Spire Occupational Health
and Vita Health Group
Integrated healthcare provider
4%of our revenue is now from new services
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 35
Our strategy continued
Acquisition of Vita Health Group
We made a significant addition to our business with
the acquisition of Vita Health Group (VHG) late in
2023. VHG provides NHS outpatient mental health
talking therapies, musculoskeletal and dermatology
services, with operational hubs in London and four
regional centres in Bristol, Orpington, Oldham and
Leicestershire. Talking therapies are effective and
confidential treatments delivered by trained and
accredited practitioners for conditions like
depression, and anxiety. With a customer base of 16
NHS integrated care boards and more than 200
corporate clients, the company also offers outsourced
physiotherapy and counselling services to the
corporate and occupational health markets.
The acquisition enables us to expand our capabilities
into low-acuity mental health while providing
synergies with the relationships we have already built
with corporate and PMI customers, and occupational
health businesses. VHG is a leading provider of
community-based healthcare solutions, and comes to
the group with outstanding patient feedback, a
proven management team, and a strong track record
in winning new contracts – several of which are likely
to come online in early 2024. And 100% of inspected
VHG locations are rated ‘Good’ by the CQC.
The Doctors Clinic Group – integration
and rebranding
The integration of The Doctors Clinic Group (DCG),
which was acquired in December 2022, is progressing
well. We have spent a lot of time with the DCG team
in 2023, integrating our systems and sharing best
practice, governance and ways of working. We have
also restructured the business into two units – Spire
Occupational Health and London Doctors Clinic, Part
of Spire Healthcare (LDC). Both units have new
branding, with Spire Occupational Health focused on
developing customised health services for employers,
building on more than 600 existing corporate clients,
while LDC offers a range of private GP services
including blood tests, sexual health, men’s and
women’s health, mental health and ECGs, as well as
referrals for diagnostic investigations.
Having reviewed the LDC estate during the year, we
took the difficult decision to close down four clinics in
Manchester and Birmingham to focus the business
on London and the south east. We have since opened
five new clinics in our core target areas of Bank,
Chiswick, Fulham, Hampstead and Islington. We did
not meet our goal of being break even in 2023, owing
to investment in new clinics and a delay to our ability
to offer in-house laboratory services. This is now
rolling out and profitability is expected in 2024.
With the acquisition of VHG, integration will again be
a key workstream as we benefit from synergies
between areas of the business.
Nationwide private GP network
Our Spire GP primary care services continue to grow
in recent years, with patients attracted by a
high-quality service offering efficient access to a GP
near to where they live. Patients also value the longer
appointment times that enable a fuller examination
and discussion of their medical needs with the GP.
Spire GP is now available through almost all of our
hospitals, providing people with a fast and
convenient way to access the diagnoses and
treatments we can offer in our hospitals.
With our Spire GP and LDC businesses, we now have
a large, nationwide private GP network with 18
rapid-access clinics in the capital, delivering around
8,000 GP appointments each month.
Getting people back to work
Following a year of integration, we will now look to
develop and expand our newly rebranded Spire
Occupational Health business. Together with VHG’s
occupational health business, it is poised to make a
positive difference to Britain’s working population in
the year ahead. During 2023, the government
launched two consultations aimed at improving
access to occupational health services, which we
welcomed. At the time of writing, we are awaiting a
final decision from the government on whether to
introduce incentives into the tax system to encourage
employers to provide high-quality occupational
health services to employees. We believe that this
would be a positive step forward, which would result
in greater take up of occupational health, with
positive benefits for employers and employees.
Treatment clinics
Opening new clinics that offer daycase care is a big
part of expanding our footprint, allowing us carry out
minor treatments in many areas. The first of our new
clinics in Abergele, north Wales, opened in early 2024
(see more, right), with work on another in
Harrogate underway.
The clinics offer ambulatory care, enabling us to build
in efficiencies from the start, which is not possible
when running a full hospital. Some of the clinics will
follow an ‘outreach’ model, opening close to existing
hospitals and enabling us to move some of our
outpatient functions and minor treatments away
from our hospitals. Others will be in completely new
parts of the country where we don’t currently have a
presence, enabling us to meet the healthcare needs
of more people, and to build relationships with new
consultants.
Read more on our 17 sustainability
goals on page 36
Private GP consultations in 2023
99,000
2023: 35,798 Spire GP, 63,270 LDC
2022: 32,900 Spire GP
Spire Healthcare data
Patients cared for by Vita Health Group in 2023
since acquisition
46,000+
2023 full year: 225,380, 2022: 168,906
Vita Health Group data
Strategy in action
Broadening our
community
healthcare services
Following several months of building work during
2023 to upgrade the old Spire Abergele
Consulting Rooms at North Wales Business Park,
we were pleased to open the new Spire
Healthcare Abergele Clinic in early 2024.
The clinic provides patients with access to Spire
GPs and will deliver up to 4,000 operations every
year to patients who don’t require an overnight
stay. Spire Healthcare Abergele Clinic represents
an important step in broadening our community
healthcare services, giving local people fast access
to our diagnostic services, as well as treatments
for orthopaedic, ophthalmic, dermatological, and
gynaecological conditions – showing our
determination to deliver outstanding
personalised care in the community. Those
people needing more complex care or treatment
that requires an overnight stay can be referred to
our Yale Hospital in Wrexham.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 36
Sustainability report
We are a progressive, sustainable business
We want to become a recognised as a leader in
We want to become recognised as a leader
sustainability in our industry. Through our
in sustainability in our industry. Through our
sustainability strategy we seek to create value in
sustainability strategy we seek to create
the workplace, our local communities and the
value in the workplace, our local
environment.
communities and the environment.
What sustainability means to Spire Healthcare
Sustainability is a core component of Spire
Healthcare’s strategy and operations. Our ability to
succeed today and plan for tomorrow depends on us
being able to positively contribute towards enhancing
the world for current and future generations. As an
independent healthcare company, we have an
important societal role to play as our delivery of
people’s care contributes to the health of the nation
and benefits society.
As we execute our strategy, we seek to take a
long-term view, whether that is through the
investments we make in our colleagues, hospitals,
clinics and services, or our interactions with the
communities that we serve. We aim to develop a
business that is fit for purpose now and capable of
providing lasting impact in the future.
Over 35 years ago, the United Nations Brundtland
Commission introduced the concept of sustainable
development and described how it could be achieved.
It defined sustainability as ‘meeting the needs of the
present without compromising the ability of future
generations to meet their own needs’. This definition
has stood the test of time and underpins Spire
Healthcare’s approach to sustainability.
We believe that acting conscientiously as a business
and investing responsibly to achieve positive social
and environmental outcomes, are critical to the
long-term success of Spire Healthcare.
* The sustainability strategy covers Spire Healthcare Limited only
at this stage; we anticipate working to bring the rest of the
group under the same plan.
How we make an impact
and add value
We will deliver on our ambition to be a
sustainability leader by focusing on our purpose,
‘making a positive difference to people’s lives
through outstanding personalised care’, which is
implemented through our strategy and
engagement with our stakeholders. The
implementation of our purpose and strategy is
supported by our values. All of this is enabled by
our sustainability strategy. There are three
elements to the strategy:
Respect the environment
We are committed to minimising the
environmental impact of our
operations and maintaining the
group’s resilience to environmental
risks and impacts.
Engage our people and communities
We’re a people business. By hiring
talented people and providing an
environment in which to grow and
develop their careers, our patients and
the communities with whom we
interact, and society at large,
will benefit.
Operate responsibly
We aim to operate to the highest
standards in everything we do,
ensuring honesty, integrity, proper
governance and compliance at all
times. We promote an ethical culture
across the group.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 37
Sustainability report continued
How we support the United Nations Sustainable Development Goals
The United Nations Agenda 2030 is
underpinned by 17 Sustainable
Development Goals (SDGs) that were
ratified by UN Member Countries in
September 2015.
The SDGs together form a roadmap for global
prosperity that can only be achieved with a concerted
global effort led by national governments and
supported by non-governmental organisations, civil
society and business enterprises.
responding to the needs of all our stakeholders and
the world around us. The SDGs have helped us
understand how our objectives and targets align to
broader global issues and have shown us where we
can make a positive impact on society.
As a leading corporation in UK healthcare, Spire
Healthcare is committed to the UN’s SDGs and,
where possible, we map our sustainability activities
to them. Our long-term success depends on
We apply our expertise, skills and ambition to drive
the group’s contribution towards the achievement of
the eight SDGs where we can provide the greatest
impact to society:
Our sustainability goals, timelines and KPIs
This table is a summary of Spire Healthcare’s current and high priority sustainability-related goals, mapped to the SDGs. The following pages provide further detail on
these goals, the actions we are taking to achieve them, together with relevant timelines and KPIs where appropriate.
Respect the environment
Engage our people and communities
Operate responsibly
Providing affordable, reliable,
and sustainable energy for
all. Promoting international
cooperation to provide access to
advanced clean energy technology.
Ensuring sustainable consumption
and production patterns.
Controlling our resource use and
managing waste through policies
and cooperation.
Acting immediately to fight the
climate crisis and adapt to the
impact. Promoting awareness,
policy change and support for
vulnerable countries and states.
Ensuring everyone leads healthy
lives, physically, mentally and
emotionally. Lower mortality rates.
Promoting health and wellbeing.
Providing quality, equal and free
education to all girls and boys.
Making sure adults get access to
further education and training.
Increasing number of quality teachers.
Achieving gender equality for all girls
and women in the world. Ending
discrimination and violence against
women. Promoting women’s
wellness and access to health care.
Achieving sustainable economic
growth and protection for fair,
safe and decent employment.
Preventing slavery and child labour.
Ensuring everyone leads healthy
lives, physically, mentally and
emotionally. Lower mortality rates.
Promoting health and wellbeing.
Achieving gender equality for all girls
and women in the world. Ending
discrimination and violence against
women. Promoting women’s
wellness and access to health care.
Achieving sustainable economic
growth and protection for fair,
safe and decent employment.
Preventing slavery and child labour.
Building peaceful, inclusive societies
with law and accountability at all
levels. Ending violence, trafficking
and corruption.
How we manage sustainability
Responsibility for approving Spire Healthcare’s
sustainability strategy and overseeing its delivery
rests with the board of directors. Regular progress
updates are provided at board meetings. Our chief
financial officer (CFO) oversees delivery of the
sustainability strategy at a business level, while our
executive committee tracks progress towards the
group’s sustainability targets on an ongoing basis
throughout the year.
Having launched our sustainability strategy in
mid-2022, we established a cross-functional internal
sustainability committee in 2023, chaired by our CFO,
and bringing together 15 members from across the
business. Our previous workforce and sustainability
committee joint structure has been split in two to give
proper attention to each area. The sustainability
committee reports to the executive committee, and
acts with delegated authority. It meets every two
months to share progress on delivering actions and
meeting targets and explore initiatives that will
accelerate our progress and identify associated risks
and opportunities.
The main roles and responsibilities of the
sustainability committee are to:
1. Oversee, review and advise the executive
committee on the company’s strategies, objectives
and commitments related to sustainability and
environmental, social and governance (ESG) factors
2. Oversee, review and recommend changes to Spire
Healthcare’s sustainability-related goals, objectives,
commitments and key performance indicators and
monitor the company’s progress against the same
15members of the sustainability committee from across
the business
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 38
Sustainability report continued
Our sustainability goals, timelines and KPIs
This table is a summary of Spire Healthcare’s current and high
priority sustainability-related goals. The following pages provide
further detail and the actions we are taking, together with
relevant timelines and KPIs where appropriate.
Respect the environment
Engage our people and communities
Operate responsibly
Goal
SDG
1 Attain net zero carbon status by the end
of 2030 – includes carbon emissions,
energy use and capital investment
Page
39
Goal
SDG
6 Be a contributor to the UK’s healthcare
workforce through innovative
programmes
2 Manage our waste more efficiently while
minimising detrimental effects to our
planet
3 Undertake a comprehensive review of
climate risk across our operations
4 Identify opportunities to reduce use of
single-use plastics
5 Identify and act on water-saving
opportunities
42
7 Take action to ensure that the ethnic
43
43
44
diversity of Spire Healthcare’s leadership
reflects, or is ahead of, the overall ethnic
diversity of the business as a whole
8 Achieve a gender balance of at least 40%
female representation at board and
executive committee level by 2025
9 Further reduce gender pay gap among
Spire Healthcare colleagues
10 Maintain an overall colleague engagement
score of at least 80%
11 Build strong connections between Spire
Healthcare hospitals and local
communities
Page
44
45
46
47
48
49
Goal
SDG
12 Target ‘Good’ / ‘Outstanding’ or equivalent
scores in England, Scotland and Wales
across all inspected sites
13 Target all Spire Healthcare hospitals to
achieve a rating of at least 80% across:
– Colleague experience
– Patient experience
– Consultant experience
14 Maintain robust standards of clinical and
corporate governance in line with best
practice
15 Promote an open and learning culture
16 Further develop our approach to controls
around modern slavery
17 Maintain and strengthen information
governance and data security
Page
50
50
51
51
52
53
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
39
Sustainability report continued
Respect the environment
Attain net zero carbon
status by the end of 2030
Timeline
End 2030
KPI
tCO2e emissions in line with our decarbonisation
plan – 3% ahead of target in 2023
(2022: 9% ahead)
Net zero target includes full Scope 1 and 2
emissions and Scope 3 emissions from air and
rail travel
Initiatives
– Continuing LED replacements
– Optimisation of Building Management Systems
(BMS)
– Replacement of remaining gas-powered
primary steam boilers at Spire Claremont
– Removal of the remaining piped nitrous oxide
across the estate
– Further PV installations and thermal upgrades
as part of roofing replacements
– Completion of the EV charging point roll-out
across the hospital estate
– Use of electric vehicles in the group’s fleet
1
Progress in 2023
Our 10-year carbon reduction target
Our work continues to reduce the harmful impact of
climate change on our planet through a robust
decarbonisation strategy and delivery programme
that is designed to achieve net zero carbon emissions
(Scope 1 and 2), and elements of Scope 3, by
31 December 20301. We were the first independent
healthcare provider to make such a commitment.
Our dedicated investment to help achieve this aim
by 2030 continues with a £12.2 million commitment
in 2024 to install solar PV panels at every hospital
and upgrade all hospital Building Management
Systems (BMS).
Our underlying strategy continues to prioritise a
targeted approach to reduction from the greatest
carbon emission sources, for example by installing
LED lighting throughout all our buildings, removing
the remaining inefficient gas-powered primary steam
boilers and piped nitrous oxide across the estate, and
optimising the use of our buildings’ fixed plant and
equipment to ensure we maximise both energy and
operational efficiencies.
We continue to engage, empower and support the
Carbon Champions we have at each of our hospitals.
They play a key role in helping us meet our net zero
objective by promoting, coordinating and delivering
carbon management improvement at a local level.
Through the implementation of their audits and
action plans, we realise greater efficiencies across the
group to further support our carbon reduction
targets and strategy, as well as our operational
savings objectives.
Measuring our performance
We use the intensity metric of carbon emissions per £
revenue, which increases in proportion to the growth
of our business.
If revenue grows and intensity figures reduce,
this will demonstrate that we are becoming less
reliant on carbon.
Our carbon reduction roadmap
We have mapped out our carbon reduction plans to
net zero in 2030, using 2019 as our reference base
year. The projected waterfall diagram has been
updated from 2023 to reflect Spire Healthcare’s
current energy procurement strategy and continued
use of brown electricity until at least 2025. The overall
reduction target remains unchanged and we
continue to reduce our carbon emissions in
line with target.
The reduction to date has been achieved through:
– Monitoring and targeting utility benchmarking
reports which are issued monthly to our sites
– Reviewing half-hourly energy consumption data
and heat maps for each of our hospitals to identify
energy efficiency and cost saving opportunities
– Targeted and informed investment in low carbon
infrastructure and heat recovery, including LED
lighting technology across the estate and
end-of-life replacement of fixed engineering and
building services plant and equipment with the
most efficient technology available
Our emissions in 2023 were 27,017 tCO2e, against a
target of 27,750 tCO2e (3% ahead of target).
This excludes Scope 3 emissions included in our 2023
greenhouse gas emissions data shown on page 40
from electricity transmission (1,051 tCO2e), waste 117
tCO2e, and hotels (41 tCO2e).
Spire Healthcare net zero carbon emissions (tCO2e) plan
34,730
34,730
30,422
27,743
28,163
27,750
27,017
24,814
25,854
13,425
10,380
8,797
7,298
5,869
4,498
Mitigation
Offset
1. The trajectory to net zero by 2030 and figures presented here
exclude VHG; we will look to integrate our plans going forward.
Electricity
Natural Gas
Medical Gas
Refrigerants
Transport
Generators
Rail Travel
Air Travel
2019
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 40
Sustainability report continued
Energy monitoring
Business utility and sustainability consultancy Inenco
produces quarterly performance reports that chart
our results against our carbon reduction targets. We
also separately monitor our hospitals on a monthly
basis, and issue energy reports detailing their utilities’
consumption and benchmarking them against
similar-sized hospitals within the group. The reports
include dashboards at site and group-level, detailing
year-on-year performance. Our regional engineering
team audits and monitors our hospitals’ carbon
reduction action plans as part of our annual
compliance auditing programme.
50-60%
new LED light fittings are
50% to 60% more energy efficient
Capital investment in low carbon infrastructure
We continue to invest in our estate and engineering
infrastructure to improve our energy efficiencies. Key
projects in 2023 included:
– Continuing replacement of gas-powered primary
steam boilers within the estate with more efficient
electrically powered heating plant and equipment
at Spire Claremont in Sheffield
– Replacement of a central chiller plant incorporating
and utilising heat recovery into our hot water
systems at Spire Gatwick and Spire Leeds
– Continuing to replace the remaining 10% of older
lighting across the hospital estate with LED fittings
that are 50% to 60% more energy efficient
– Installation of roof and ground mounted photo-
voltaic (PV) solar panels at Spire Murrayfield, Wirral
that will generate up to 12% of the hospital’s
electricity when completed in Q1 2024
– Pipework and ducting insulation upgrades and
replacement of old inefficient single-glazed
windows as requested by Carbon Champions at
Spire Alexandra in Kent, Spire Hull and Spire Little
Aston in the West Midlands
Alongside these investments, our Carbon Champions
continue to receive training and guidance to help
them produce local action plans and identify
opportunities for operational improvements and
efficiencies. Their action plans are reviewed
twice-yearly to monitor and track progress.
Legislation
Since becoming a publicly listed company in 2014,
Spire Healthcare has discharged its responsibilities
under the government’s CRC Energy Efficiency
Scheme, and we will continue to report on our energy
consumption in line with the requirements of the
upcoming Streamlined Energy and Carbon
Reporting legislation.
Spire Healthcare was invited to participate in the CDP
(formerly the Carbon Disclosure Project) again in
2023. We made our ninth annual submission to the
CDP and received a ‘B’ grading for 2023, maintaining
our previous ‘B’ rating, placing Spire Healthcare well
above the market sector average of ‘D’, and
demonstrating our knowledge and understanding of
our impact on climate change issues.
Greenhouse gas emissions in 2023
This section provides the emissions data and
supporting information required by the Companies
Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013 and the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018. Total greenhouse
gas (GHG) emissions for Spire Healthcare for January
to December 2023 were 28,226 tCO2e. The table
below shows this, broken down by emissions source.
We achieved emissions reduction of 3% ahead of our
planned net zero target, but for our wider SECR/GHG
obligations, we experienced a 4% increase year-on-
year. The primary reason for this is the unexpected
market increase in electricity emissions factor,
influenced by global energy supplies and the war in
Ukraine.
Emissions source
Fuel combustion: stationary
Fuel combustion: mobile
Fugitive emissions
Purchased electricity
Air travel
Rail travel
Hotel
Waste
Total emissions (tCO2e)
Revenue £m
Intensity: (tCO2e per £m)
Energy consumption by year (MWh)
Natural gas
Electricity
Transport fuel
Gas oil
Total
2019
12,098
1,209
5,895
15,193
2020
11,590
1,447
5,018
13,330
2021
12,539
1,325
5,139
9,802
34,395
980.8
35.1
31,384
919.9
34.1
28,805
1,106.2
26.0
2022
10,943
1,346
4,703
9,837
40
40
75
106
27,091
1,199
22.6
2023
10,943
1,176
2,646
13,202
41
59
41
117
28,226
1,359
20.76
2019
65,285
54,788
4,883
374
2020
63,032
52,647
5,386
369
125,330 121,434
2021
67,766
54,704
5,363
384
2023
59,337
58,679
4,743
340
128,217 124,984 123,099
2022
59,648
59,717
5,407
212
Share %
39%
4%
9%
47%
<1%
<1%
<1%
<1%
100%
Share %
48%
48%
4%
<1%
100%
YoY %
change
<1%
-13%
-44%
34%
2%
48%
-46%
10%
4%
13%
-8%
YoY %
change
-1%
-2%
-12%
60%
-2%
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
Training and awareness raising for colleagues and
internal champions began in 2024, along with a
webinar from the Centre for Sustainable Healthcare,
and VHG plans to apply for ISO 14001, an
internationally agreed standard that sets out
the requirements for an environmental
management system.
The net zero strategy covers Spire Healthcare Limited
only at this stage; we anticipate working to bring the
rest of the group under the same plan.
Vita Health Group
Vita Health Group (VHG) started its sustainability
journey two years ago and formed a working group to
raise awareness of environmental matters, identify
value impact measures and consider net zero. VHG
does not own its estates which makes getting control
over, and information about, emissions reductions,
energy consumption data and preferred waste
management arrangements more difficult.
However, in 2023, VHG reduced emissions, improved
renewable energy consumption and developed a
sustainable development plan covering key
commitments including reaching net zero emissions
in line with the government target of 2050, modelled
to comply with the 1.5 degree pathway outlined in
the 2015 Paris Agreement. This commitment will be
submitted for Science Based Target Initiatives (SBTi)
verification in 2024. The near-term target is to achieve
a 42% absolute reduction in Scopes 1, 2 and 3
emissions by 2030.
41
Sustainability report continued
Notes to the table:
Please note the figures reported for SECR include
Scope 3 emissions from electricity transmission and
distribution, hotel stays and waste. These emissions
are not currently included in our annual targeted
emissions and net zero roadmap. We aim to progress
our Scope 3 reporting in 2024.
a. Scope 2 / purchased electricity emissions
reporting
The figure for emissions from purchased electricity
from October 2021 to March 2022 reflects our
investment in a zero-carbon electricity tariff across all
our sites and as such a market-based methodology
was applied for this period. The remainder of these
calendar years followed a location-based
methodology. In 2023 we returned to adopting a
location-based methodology across the whole year.
b. Footprint boundary
An operational control approach has been used to
define the GHG emissions boundary, as defined in the
Department for Environment, Food and Rural Affairs’
latest environmental reporting guidelines: “Your
organisation has operational control over an
operation if it, or one of its subsidiaries, has the full
authority to introduce and implement its operating
policies at the operation.” For Spire Healthcare, this
boundary captures emissions associated with the
operation of all our hospitals and other buildings such
as clinics, offices, and our National Distribution
Centre, plus company-owned and leased transport.
Additionally, from 2022 this now also includes air and
rail travel, hotel stays and waste.
c. Emission sources
All material Scope 1 and Scope 2 emissions are
included, plus Scope 3 as required by SECR legislation.
Additional data sets included that are over and above
mandatory compliance include:
– Electricity transmission and distribution losses
– Emissions from air and rail travel
– Emissions from hotel stays and waste
d. Methodology and emissions factors
This information was collected and reported in line
with the methodology set out in the UK government’s
Environmental Reporting Guidelines, 2019.
Emissions factors are taken from the Department for
Business, Energy and Industrial Strategy emissions
factor update published in 2023. There are no notable
omissions from the mandatory Scope 1 and 2
emissions. 0% of emissions are based on estimated
activity data.
e. Fugitive emissions
These are attributable to the use of refrigerants and
medical gases (eg, carbon dioxide, nitrous oxide
and Entonox).
Scope 3 emissions
The Scope 3 emissions stated in this section are in
relation to electricity transmission and distribution,
air and rail travel, hotel stays and waste. We recognise
that this is not the full extent of our Scope 3
emissions, and have carried out a spend-based
method for estimation. Using 2022 spend data it has
been determined that 95% of our emissions are Scope
3 (for more information, including quantification of
these emissions, please see page 80). In 2024 we plan
to take steps to progress our Scope 3 reporting.
Engineering governance and compliance
To support the group’s quality and patient safety
agenda, the estate in which we operate must be
monitored, maintained and developed appropriately
to satisfy our goals and remain fit for purpose. Our
property portfolio, engineering and health and safety
governance sit under a common leadership provided
by the estates and facilities directorate.
The identification, publication and management of
risk associated with our estate and its operation is
managed though annual audit alongside our clinical
team. These audits are used to make this risk
transparent, enabling a prioritised approach to risk
mitigation. The resultant risk profile informs the
business of future capital requirements, gives
confidence that this capital is managed on a true risk
basis and is targeted in the most efficient and
effective way. The central estates team supplement
the formal annual audits with regular routine visits
that ensure our governance system is dynamic, with
continual addition, closure and reassessment of risk.
This, in turn, future-proofs the business.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 42
Sustainability report continued
Respect the environment
Manage our clinical
and non-clinical waste
more efficiently while
minimising detrimental
effects to our planet
KPI
– Overall recycling 30% by end 2023 – 35%
– Hospital sites only dry mixed recycling 30% by
end 2023 – 23.5%
– Offensive waste 40% by end 2023 – 36.5%
Initiatives
– Increased recycling rates through further
segregation of waste and hazardous materials
– Worked to increase the percentage of offensive
waste segregated into this waste stream
– Reduced infectious waste to 3% of total which
lowered carbon emissions and cost, and helped
remove offensive waste from incineration
– Working with current waste carrier to mitigate,
where possible, waste going to landfill sites
– Trained 1,300 colleagues in waste segregation
and training is now mandatory for all colleagues
– Recycling at 47 sites, up from 44 in 2022
– Expansion of reusable sharps containers
2
Progress in 2023
As a business, we generate a considerable amount of
general waste – largely a combination of ‘domestic
waste’, most of which generates renewable energy,
and dry mixed recycling, which can be reused or
repurposed. The group also disposes of clinical,
infectious and offensive healthcare waste that
requires specialist treatment, incineration or disposal
through the renewable energy system. The challenge
of managing and sorting such complex waste
streams is unique to the healthcare sector.
Ensuring that we manage our waste properly, and
recycle what we can, is vital for a healthcare business.
It is all about doing the right thing, contributing to our
carbon reduction programme, protecting the
environment, and reducing costs.
It is important for our teams to understand the
various types of waste and we have been rolling out
in-house waste segregation training. By November
2023, just under 1,300 colleagues had been trained.
The training is becoming mandatory for all colleagues
in 2024 and we hope this will result in improved
waste segregation and recycling outcomes. Although
we incinerate less, prices have increased, so costs
have not reduced in this area.
In 2023, Spire Healthcare’s waste management
initiatives saved over 358 tonnes of CO2. This is
equivalent to:
– 1,194 trees planted each year or
– 134 cars off the road or
– 218 houses powered each year
If we combined our carbon savings for waste with our
Scope 1 and 2 carbon savings, from 2019, this would
equate to 28,852 trees planted, or 16 football pitches.
We are now recycling at 47 sites, up from 44 in 2022.
Dry Mixed Recycling (DMR), (food waste and glass
recycling) has been rolled out across the business
(which includes plastic bottles, Vegiware cups and
food trays, cans, etc) resulting in an improved DMR
recycling figure of 23.5% at hospital sites only.
Most sites are now segregating disposable curtains
and tray wraps, and we are investigating the
feasibility of a ‘gloves off’ campaign to see if this
waste can be removed from our clinical waste. We are
also looking at removing or reducing disposable paper
tissue roll use in many of our outpatient areas.
Spire Healthcare continues to increase its
overall recycling:
We have ‘offensive waste’ segregation at all our sites.
Disposal of offensive waste, as bad as it sounds, costs
more than 60% less, and uses a more environmentally
friendly waste disposal process than clinical or
infectious waste. It is not incinerated; instead, it goes
to a special materials recovery facility, where it
generates renewable energy, without releasing any
harmful substances into the atmosphere. By
encouraging segregation into offensive waste, we
reduce our carbon emissions from having to
incinerate clinical waste which should only include
infectious and chemically contaminated types.
To help reduce our carbon footprint, the Sharps Bio
System, designed by Stericycle, our waste partner, has
been rolled out further across the estate. Stericycle’s
containers are reusable UN-approved puncture-
resistant containers that can be used up to 600 times
after washing and disinfection, as opposed to the
single-use sharps containers that are disposed of
after just one use. The roll-out has taken a little
longer than planned due to a lack of containers
and materials in the UK but is due to be complete
early in 2024.
35%overall waste recycled in 2023, up from 30% in 2022
This includes recycled waste returned to our National
Distribution Centre.
23.5%dry mixed waste recycled, up from 18% in 2022
This excludes National Distribution Centre waste and
is at hospital sites only.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 43
Sustainability report continued
Respect the environment
Undertake a comprehensive
review of climate risk across
our operations
Timeline
End 2026
Initiatives
– Undertake scenario analysis of future climate
warming scenarios in three years’ time
– Consider further mitigation requirements for
our facilities with higher risk from climate
change
Progress in 2023
We engaged an expert advisory firm to conduct a
scenario analysis to assess our climate risk. We set out
the scenario, the analysis they conducted, and the
outcomes that the models predict against our
physical assets in our TCFD reporting on pages 75 to
80. The firm also advised us on the potential risks
we face from an aggressive transition to a low
carbon economy.
We considered the outcomes of their modelling and
analysis at our audit and risk committee in November
2023. We recognise that:
– The scenario analysis undertaken is dependent on
the quality and quantum of data we could provide
to our expert for them to model (for example, we
could give them high-quality data on our physical
assets, but because we have experienced only
minor impacts from adverse weather on our
facilities, the financial impacts we could provide
due to past heatwaves, floods and storm damage
to predict future financial impacts is very limited)
– The scenario analysis is based on the current
predictions of how the climate may evolve. As the
actual impacts of climate change become more
apparent and the models become more accurate,
the predictions from these models will improve in
reliability. We will repeat the scenario analysis in
2026 unless disclosure requirements or other
factors mean we need to do it sooner
As an output from the analysis, we are following up
on risks where the predicted impact at risk was
higher, notably the potential impact of heat stress on
our facilities.
For more information,
see our TCFD section page 75
Respect the environment
Identify opportunities
to reduce use of
single-use plastics
KPI
– Overall recycling 30% by end 2023 – 35%
– Hospital sites only dry mixed recycling 30% by
end 2023 – 23.5%
Initiatives
– Plastic packaging, large cardboard and
polystyrene is returned to Spire Healthcare’s
National Distribution Centre for baling
and recycling
– Dry mixed recycling (DMR) continues to be
rolled out across the business
– Plastic cutlery replaced with reusable or
disposable items in all sites
– Working with waste treatment supplier to
develop recycle initiative for single-use items
Progress in 2023
The use of plastics is a major environmental issue
across the healthcare industry in the UK and globally.
Plastic is a very versatile product for keeping medical
equipment sterile, storage of clinically related
products (eg drugs), and as an infection control
barrier. It will take concerted effort across the global
healthcare industry to develop new products that
can replace the versatility of plastic over the medium
to long term.
We are examining what steps we can take as a
business to reduce our use of single-use plastics. To
improve recycling, a baler was put in place at our
National Distribution Centre to bundle large-scale
plastic packaging such as linen wrapping or surgical
packaging for recycling at a specialist provider.
In 2023, we replaced plastic cutlery with metal
reusable or wooden disposable items and replaced
plastic cups with paper ones. This year, we have been
working with Veolia, a specialist waste treatment
supplier, to enable us to start recycling single-use
oxygen face masks, tubing and hard plastics in 2024.
In 2024 we will explore an initiative to turn our hard
plastic waste into benches and planters that we can
donate to local schools and parks.
Vita Health Group are committed to improving and
aligning their waste management procedures with
plans in the rest of the group.
Read more in goal number two on
managing waste on page 42
3
4
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 44
Sustainability report continued
Respect the environment
Identify and act on
water-saving opportunities
KPI
Target of consumption m3 to be determined
Initiatives
– Making most efficient use of equipment
– Reducing low use outlets
– Leak detection
– Automatic meter reading
Progress in 2023
Water conservation
We continue to develop Spire Healthcare’s strategic
water management plan and in 2023 we achieved a
reduction in both water and energy consumption
without compromise to compliance and safety.
Initiatives include:
– Analysing consumption per site to identify outliers
and equipment efficiencies. After a trial at Spire
Cheshire and Spire Fylde Coast in Blackpool, we
have reduced the self-disinfection cycles of our
endoscopy reverse osmosis systems from seven to
four times a week, offering savings of 27,000 litres
of water per annum
– Identification and safe removal of low-use outlets
within our hospitals – eg a shower or tap that isn’t
regularly flushed through. This will be
supplemented by external audits in 2024
– Automatic meter reading, which together with
BMS optimisation and replacements, will improve
our consumption monitoring capabilities and help
to identify potential leaks or high usage. Our
existing water contract has been rolled forward to
May 2024; on renewal, the roll out of automatic
meter reading can start
Development of the plan will continue in 2024, as we
scope out opportunities in our central functions and
areas of the business that have yet to be explored,
such as catering and housekeeping.
Engage our people and communities
Be a contributor to the
UK’s healthcare workforce
through innovative
programmes
Initiatives
– Learning and development strategy
– Apprenticeship programmes including one of
the largest nurse apprenticeship programmes
in England
– Driving Clinical Excellence in Practice
programme
– Range of leadership training programmes
5
6
Progress in 2023
Investing in our talented people is a major focus for
us, as we seek to train and upskill colleagues,
preparing them for a fulfilling and rewarding career
at Spire Healthcare or elsewhere in the wider health
and care sector.
Our apprenticeships and people development
We offer a range of training opportunities,
supplemented by innovative programmes to help
new and existing colleagues develop professional and
leadership skills to further their careers. This year we
launched our new Driving Clinical Excellence in
Practice programme, which supports the continuing
professional development of our registered nurses
and allied health professionals.
Making almost full use of the UK Government’s
apprenticeship levy, we have over 430 apprentices in
a range of clinical areas such as biomedical science,
physiotherapy, medical laboratory technicians, and
non-clinical disciplines such as marketing, human
resources, engineering and business administration
The most significant is our nurse degree
apprenticeship programme in England, run in
partnership with the University of Sunderland, which
combines study and assessments with on-site
placements to gain practical knowledge. Read more
in our strategy section on people on page 27.
We have delivered training to equip current and
future leaders of our business. The learning and
development team introduced a suite of Mastering
Management modules with almost 1,400 delegates
attending. Our GROW learning framework includes
LEAP, for new managers or those coming into a
leadership role; our Step Up Leadership Programme
for our talented future leaders; our Stretch Leadership
Programme for senior leaders; and our Operations
Directors’ Leadership Programme. The framework is
moving us towards blended learning where
colleagues are supported to take accountability for
their own development and can choose from digital,
class-based or webinar sessions. This approach
ensures a strong succession pipeline.
For more information, see our TCFD section
page 75, and ‘Invest in our workforce’ strategy
section page 27
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 45
Sustainability report continued
Engage our people and communities
Take action to ensure that
the ethnic diversity of Spire
Healthcare’s leadership
reflects, or is ahead of, the
overall ethnic diversity of
the business as a whole
Initiatives
– Consider ethnic diversity balance when
constructing Spire Healthcare’s leadership
programmes
– Broad range of networks including mental
health and wellbeing support, and for sexuality,
racial equality, menopause, women, faith, carers
– Review external benchmarks eg Parker Review
– Working towards better data to improve
reporting and planned action
7
Progress in 2023
During 2023, we have been reviewing this goal in line
with the requirements of the Parker Review:
‘Improving the Ethnic Diversity of Business’, published
in March 2023, to assess how best to support
diversity in the business. Diversity remains vital to our
success, and we were pleased to be listed in the
Financial Times Diversity Leaders index for another
year; this is an index of companies considered to be
Europe’s Diversity Leaders, based on a survey of
100,000 employees across Europe.
The group’s executive committee demographic was
25% ethnically diverse in 2023 (2022: 25%) and the
board is 8% ethnically diverse, unchanged from 2022.
We support the diversity of the business in various
ways; we aspire to create an environment where
everyone is respected and cared for, and where
difference is celebrated.
Race Equality Network
To support our equity, diversity and inclusion strategy,
we have networks supported by a member of the
executive committee to give focus and impetus.
Our Race Equality Network is a highly supportive and
confidential colleague network that provides
individuals from diverse backgrounds with a safe and
open platform to share their personal experiences.
The network has been active with regular meetings
attended by colleagues and senior leaders, and
communications updating colleagues on any actions
taken and celebrating successes. We have introduced
‘Diversity Toolkits’ to encourage hospitals to promote
key events and activities such as Race Equality Week,
South Asian Heritage Month, and Black History
Month, and support them to promote diversity and
inclusivity at work. Regular catering events have also
taken place to encourage colleagues to embrace each
other’s cultures and backgrounds.
Understanding our workforce better
Colleagues are encouraged to share their ethnicity
during the annual colleague survey to help Spire
Healthcare better understand the different
experiences of colleagues. The survey results are
reported and shared nationally and locally, including
the responses to questions on reporting instances of
harassment, bullying, or abuse at work from patients,
managers, and colleagues. The survey also asks
whether colleagues believe that Spire Healthcare
provides equal career progression and promotion
opportunities, regardless of factors such as ethnic
background, gender, religion, sexual orientation,
disability, or age.
Of those colleagues who disclose their ethnicity in
Spire Healthcare Limited, 18.9% report having a
non-white background, up from 17.3% in 2022.
Vita Health Group has a positive action scheme in
place to reduce barriers for people from ethnic
minorities accessing employment; an interview is
guaranteed if an applicant meets the criteria.
Colleagues have been offered training in
understanding micro-aggressions along with a pilot
scheme for anti-racism training.
Headcount by ethnicity Spire Healthcare Limited
Asian
Black
1,578
549
The Race Equality Network has taken positive steps to
engage with senior leaders and executive committee
members during the year. It was also involved in the
production of Spire Healthcare’s annual Workforce
Race Equality Standard (WRES) Action plan.
Chinese
69
Mixed
226
White
Other
23
Not stated
2,070
10,492
18.9%
report having a non-white background, of those colleagues
who disclose their ethnicity, up from 17.3% in 2022
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information Gender balance of board
2
2022
2023
1
2
2023
2023
1
1. Male
2. Female
67%
33%
1. Male
2. Female
55%
45%
46
Sustainability report continued
Engage our people and communities
Achieve a balance
of at least 40% female
representation at
board and executive
committee level by 2025
Timeline
End 2025
KPI
– Proportion of female representation – 40% at
board and executive committee combined
– Board diversity policy – agreed targets of a
minimum 33% female directors on the board by
the 2023 AGM and 40% by 2025
Initiatives
– FTSE Women Leaders Review – first in Health
Care and 7th overall
– FT Diversity Index top 850 company
8
Progress in 2023
Spire Healthcare is committed to diversity and
inclusion, which includes supporting women to
become leaders within the business.
The combined board and executive committee
demographic in 2023 is 47% female up from
37% in 2022.
We have five women on our group board,
representing 45% female board members in 2023
(2022: 33%), and reflecting our commitment to fair
representation across the business. The board
considers its members’ diversity regularly through
data reviews, recruitment decisions and discussions
in board meetings. Diversity is also regularly reviewed
as part of the workforce demographics discussions at
meetings of the remuneration committee and
executive committee.
Our executive committee demographic was 38%
female in 2023 (2022: 38%).
Spire Healthcare is 7th overall for women in senior
leadership positions in the FTSE 250, as recognised by
the FTSE ‘Women Leaders Review’ report for 2023,
and first in the health care sector which covers the
FTSE 350 and the 50 largest private companies. Our
executive committee combined with our senior
managers – their direct reports – was 51% female at
31 October 2023, as reported to the review.
We are one of 68 FTSE 350 companies that have
already met, or exceeded the target for Women in
Leadership, and have done so two years ahead of the
target date of 2025.
For more information, see ‘Invest in our workforce’
strategy section page 27, gender pay gap page 47
and KPIs section page 61
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 47
Sustainability report continued
Engage our people and communities
Further reduce
gender pay gap
among Spire Healthcare
colleagues
Timeline
End 2025
KPI
Gender pay gap: year-on-year reduction – positive
initiatives underway
Initiatives
– Establish workforce committee
– Inclusive approach to training and development
– Monitor and report on gender pay gap
– Support colleague development
9
Progress in 2023
We are required to report gender pay gap figures for
our main employing entity – Spire Healthcare Limited
– covering 96.6% of all reportable employees of Spire
Healthcare Group. Gender pay reflects the structure
of our workforce and is a reflection of the differences
in the balance of male and female workers within the
wider healthcare sector.
Responding to the gender pay gap
We are taking a number of positive steps to invest in
and provide development opportunities for our
female colleagues to progress into senior leadership
roles and work towards a balanced representation
across the organisation to reduce the gender pay gap.
The workforce committee has been established to
provide oversight of the company’s people strategies.
We will continue to invest in colleague development
and training, focusing particularly on management
and leadership capabilities, as well as extending the
induction programme for all senior leaders, and we
have launched the Driving Clinical Excellence in
Practice programme, to enable delivery of high-
quality care. It will include a development pathway
for allied health professionals and nurses, which will
enhance current recruitment and retention.
In the interests of transparency, we have
supplemented the statutory disclosure requirements
with additional data that captures relevant
employees across the Spire Healthcare Group. The
gender pay gap required by the Gender Pay Gap
Regulations represents an average figure. This is
distinct from ‘equal pay’, which considers whether
men and women are paid the same for carrying out
the same work, or work of equal value.
In 2023, the overall median gender pay gap in Spire
Healthcare Limited was 9.2% (2022: 6.2%) and the
mean was 17.7% (2022: 17.1%).
The median in Spire Healthcare Group was 9.1%
(2022: 6.1%) which is below the Office for National
Statistics median of 14.3% in November 2023 and the
mean in Spire Healthcare Group was 17.2%,
(2022: 16.6%).
Our mean gender bonus gap is 82.0%, while the
median gender bonus gap is 50.0% for Spire
Healthcare Limited. In 2023, 30.5% of males received
a bonus across both Spire Healthcare Limited and
Spire Healthcare Group, (down from 82.2% in 2022)
compared to 28.5% of females in Spire Healthcare
Limited and 28.6% of females in Spire Healthcare
Group, (down from 83.7% in 2022). Bonus recipients
have reduced as all colleagues received a thank you
award, classified as a bonus under reporting rules, in
2022 and 2021 gender bonus gap reporting periods.
Gender pay figures are a snapshot from April 2023 and therefore
only apply to Spire Healthcare Limited and Spire Healthcare Group,
and exclude Vita Health Group, which was not acquired until
October 2023. Vita Health Group will report in 2024.
We are undertaking substantial work with hospital
directors and senior leaders to develop a job
framework to provide clarity on roles and progression
to support careers within Spire Healthcare. We have
launched an induction framework for hospital
directors, and completed a comprehensive leadership
development programme for operations directors, a
key role within hospitals which will support newly
appointed colleagues.
The resourcing team was brought in-house in 2023 to
allow better focus on and control of our approach to
candidate pools and recruitment. We continue to
undertake talent and succession planning where we
look to create opportunities and support the
development of female leaders.
Employee table
Entity
Number of employees (includes bank workers)2
Women’s hourly rate is:
Mean
Median
Pay quartiles:
Top quartile
Upper middle quartile
Lower middle quartile
Lower quartile
Women’s bonus pay is:
Mean
Median
Who received a bonus?
Men
Women
Gender breakdown
Employees
Overall employees
Male
2,303
Female
8,955
Spire Healthcare Limited
12,787
Spire Healthcare Group plc1
13,236
17.7% lower
9.2% lower
17.2% lower
9.1% lower
Men
24.7%
18.7%
20.2%
16.9%
Women
75.3%
81.3%
79.8%
83.1%
Men
24.7%
18.8%
20.3%
17.2%
Women
75.3%
81.2%
79.7%
82.8%
82.0%
50%
30.5%
28.5%
81.7%
50%
30.5%
28.6%
1. Including Spire Healthcare Limited, Montefiore House Limited and Claremont.
2. In line with government reporting requirements, the number of employees stated in the table above is the number of colleagues who
received full pay in the pay period April 2023.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 48
Sustainability report continued
Engage our people and communities
Maintain an overall
colleague engagement
score of at least 80%
KPI
Target 80% – 81% proud to work for Spire
Healthcare – up 1 percentage point from 2022
based on 86% response rate
Initiatives
– Bespoke guides, support materials and briefing
sessions for leaders and teams to support
communication of 2022 colleague survey
results and action planning
– Role and involvement of colleague survey
‘champions’ developed
– Engagement sessions with survey ‘champions’,
throughout the 2023 colleague survey to drive
participation, resulting in a response rate
increase of nine percentage points
– National and local communications campaign
to share progress and positive actions taken
since 2022 survey in the lead up to 2023 survey
– Monthly colleague and consultant updates
from Chief Executive Officer, Justin Ash,
launched in January 2023, and colleague
engagement sessions with executive
committee and senior leaders in September
10
Progress in 2023
To help improve engagement, we held an
engagement day in April with more than 80
representatives from every part of the business
where our colleagues discussed priority areas for
driving improvements and shared ideas for
embedding changes locally and at a company level.
Ahead of the 2023 survey, each executive committee
member hosted engagement sessions in our
hospitals, office locations and virtually to give
colleagues a business update and an opportunity to
ask questions, supported by detailed materials.
We held our annual colleague engagement survey in
November 2023. The overall response rate for the full
survey was 86% (up nine percentage points from
2022), with our key engagement measure of
colleagues being proud to work for Spire Healthcare
improving one point to 81%. 84% of colleagues said
they get personal satisfaction from the work they do,
86% say they would be happy with the standard of
care provided by Spire Healthcare if their friends or
family needed treatment (up three percentage points
from 2022) and 71% would recommend Spire
Healthcare as a place to work. After publication,
teams across the business are developing action plans
to drive improvements.
Vita Health Group carried out a colleague survey in
2023; with an 80% response rate, 74% of colleagues
recommended it as a place to work (2022: 69%).
For more information, see ‘Invest in our workforce’
strategy section on page 27 and KPIs section on
page 61
The survey was of Spire Healthcare Limited, LDC and Spire
Occupational Health colleagues.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 49
Sustainability report continued
Engage our people and communities
Build strong connections
between Spire hospitals
and local communities
Initiatives
– Corporate fundraising week
– Long-standing community relationships with
local charities
– Working with voluntary sector partners
– Informal community efforts, including
supporting local foodbanks
– Outreach to bring NHS services to local
communities
11
Progress in 2023
Contributing to our communities
We firmly believe in the power of giving back to our
local communities and making a positive impact on
society. In 2023, Spire Healthcare established a
group-wide charity committee for the first time.
Though various parts of the group contribute to their
local communities through different charitable
initiatives, the executive committee decided to
establish a central committee with the purpose of
coordinating, considering and agreeing the group’s
overall charitable initiatives. The committee is chaired
by a member of the executive committee and
members have been identified to represent a
cross-section of the organisation, with participants
from various central functions and each division of
our hospitals. The charity committee met three times
in 2023 and will seek to meet six times in 2024, with
the intention of supporting and facilitating a broader
contribution to our communities.
During our annual corporate charity week in June, we
fundraised for more than 30 different local and
national causes through a huge variety of activities as
we aimed to cover more than 40,000km – which is
once around the world – between us. For example,
Spire Thames Valley held a danceathon and dog
show, Montefiore colleagues went wild swimming
and for local walks, and central function and hospital
colleagues walked between our Reading and London
offices. A number of colleagues and consultants
cycled between 50 and 200km each and visited Spire
Harpenden and Spire Bushey as part of their route.
Colleagues sought to live out the objectives of being
kind, making a positive difference to worthy causes
and having some fun along the way. Colleagues at
Spire Nottingham worked with their local school,
Tollerton Primary, to raise £750 for its sensory room
and to buy a new aquarium for the library. The week
raised over £40,000 for a range of local and national
good causes.
As well as supporting national charities such as
Macmillan Cancer Support during that week, many of
our hospitals have strengthened their relationships
with local charities and organisations in their
communities throughout the year. These charities are
chosen by our colleagues, closely reflect the
communities they serve, and the support goes
beyond fundraising. The relationships with our
charity partners are often long-standing and
symbiotic, and we offer them valuable resource,
locations for meetings and events, workplace
experience, and publicity where possible.
For example, we have a close link with LOROS, a
Leicestershire charity that provides hospice care.
LOROS is funded by voluntary income and delivers
high-quality, compassionate care and support for
patients, their family and carers. As a provider of
chemotherapy, Spire Leicester has access to the
excellent palliative care physicians at LOROS who
provide expertise and support. This is a service we are
pleased to pay for through a service level agreement
and we support LOROS in their fundraising efforts,
such as marathon walks and the Rocket Round
Leicester campaign. We also link with Leicester Riders,
who are the country’s oldest and most successful
professional basketball team – having won 19 titles in
the top tier of UK basketball. We provide care and
treatment for their players, and many of our
colleagues attend their games at the Morningside
Arena. We were delighted when Mo Walker, Leicester
Riders’ 6’10” tall, high-scoring forward, kindly joined
us to open the recent upgrade to the hospital’s
outpatient facilities.
To promote services to ‘hard to reach’ patient groups,
Vita Health Group colleagues work closely with
voluntary sector partners to stimulate referrals and
bring services to supermarkets, libraries and
community centres through a network of partnership
liaison officers. In 2023, VHG commissioned a ‘mental
health bus’ which stimulated community awareness
of NHS talking therapies in the east Midlands.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 50
Sustainability report continued
Operate responsibly
Target ‘Good’ /
‘Outstanding’ CQC scores
across all our hospitals
(or equivalent)
KPI
Our target is for 100% of our inspected locations
to achieve ‘Good’ or ‘Outstanding’ ratings or the
equivalent from regulators in England, Scotland
and Wales – 98% in 2023 (98%: 2022)
Progress in 2023
Quality underpins everything we do. We have robust
ward-to-board governance and internal audit
procedures, and members of the board and executive
committee regularly visit and meet with hospital
leaders, colleagues, consultants and medical
advisory committees.
We expect the highest possible standards across all
Spire Healthcare sites, delivering care and safety to
the highest standards every day. Currently 98% of our
inspected sites are rated ‘Good’ or ‘Outstanding’ or
the equivalent by health inspectors in England,
Scotland and Wales.
100% of Vita Health Group locations are rated ‘Good’
or have not yet been inspected by the Care Quality
Commission but are registered with no conditions or
concerns.
For more information, see ‘Building on quality’
strategy section on page 24
Progress in 2023
We seek to offer our patients rapid access to
high-quality, compassionate, personalised healthcare,
with expert clinicians, at a price they can afford.
We aim to make Spire Healthcare the first choice for
consultants, and to invest in the best people, facilities
and equipment to achieve this.
For more information, see strategy sections ‘Drive
hospital performance’, ‘Build on quality’ and ‘Invest
in our workforce’ on pages 21 to 30
Operate responsibly
All Spire Healthcare
hospitals to achieve a rating
of at least 80% across
colleague experience,
patient experience and
consultant experience
KPI
80% of employees stating they are proud to work
for Spire Healthcare – 81%
80% of private patients rating their overall
experience as ‘very good’ – 80%
80% of consultants who rate the care given to
their patients by Spire as either ‘excellent’ or ‘very
good’– 83%
In 2023, seven hospitals met all three of these
criteria (2022: 7), 31 hospitals met at least one
(2022: 31) and 16 met at least two (2022: 16).
12
13
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 51
Sustainability report continued
Operate responsibly
Maintain robust standards
of clinical and corporate
governance in line with
best practice
Initiatives
– Implementing PSIRF across the organisation
Progress in 2023
We constantly seek to improve our standards of
clinical and corporate governance, while quality sits
at the heart of Spire Healthcare’s culture. Our Quality
Improvement (QI) strategy is now fully embedded
across the organisation, while our non-executive
directors conduct regular hospital visits, meet with
hospital leaders, and attend local medical advisory
boards and national conferences.
We are also implementing the new NHS England
Patient Safety Incident Response Framework (PSIRF),
which promotes a new, more proportionate approach
to responding to patient safety incidents. It
recommends a system-based approach to learning,
with supportive oversight of consultants focused on
strengthening our response systems and continuous
improvement. The PSIRF strategy advocates the use
of QI methodology to seek lasting solutions for issues,
created by the people involved. This promotes
colleague and patient engagement, ensuring we
respond to the voice of those involved in incidents.
We continue to actively contribute data to relevant
registries including the National Joint Registry (NJR) in
2023. 31 Spire hospitals achieved the Quality Data
Provider certificate, based on 2022/23 NJR Data
Quality Audit with 19 receiving the ‘gold’ award.
The Independent Healthcare Providers Network
(IHPN) published a refreshed Medical Practitioners
Assurance Framework (MPAF) in September 2022;
we conducted a review and provided assurance to
the board. In 2023, we remain fully compliant with
the framework.
For more information, see ‘Build on quality’
strategy section on page 24 and Clinical
governance and safety committee report on
page 101
Operate responsibly
Promote an open
and learning culture
Initiatives
– Freedom To Speak Up Guardians at all our sites
– Launched a Speak Up training module from the
National Guardian’s Office, mandatory for all
colleagues and consultant partners
– Piloted PSIRF in three hospitals
Progress in 2023
We welcome PSIRF, as the framework not only helps
us manage professional standards, but also builds on
our open and learning culture.
We work hard to create a culture that is characterised
by openness, respect, collaborative working, a focus
on clinical safety, and a spirit of continuous
improvement. Attracting, retaining and developing
great people is a high priority for us, and we can only
do this if colleagues feel valued, rewarded, motivated,
and supported by clearly defined career paths.
We continue to encourage our colleagues and
consultant partners to speak up if they see something
that’s wrong, and we will always listen to them and
support them. We have Freedom to Speak Up
Guardians at all our hospital and non-hospital sites,
and available for colleagues who work remotely, to
whom colleagues can turn.
For more information, see ‘Build on quality’
strategy section on page 24 and ‘Investing in our
workforce’ page 27
14
15
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information Progress in 2023
Spire Healthcare Group is committed to acting
ethically and with integrity in all our relationships, in
line with our value of ‘Doing the right thing’. Our
approach to tackling the risk of modern slavery
continues to evolve under the oversight of our
sustainability committee, which reports to our
executive committee to ensure that our directors
have full oversight on all relevant matters.
Our two main areas of focus are, a) to safeguard
patients, colleagues and others who come through
our facilities, and b) in our supply chain. In our
business operations, we believe practitioners and
colleagues are well-placed to identify and deal with
modern slavery concerns through the safeguarding
training and protections we have in place. The
safeguarding system trains those practitioners and
other colleagues (clinical and non-clinical) to
recognise and report signs of abuse. We believe the
rigour of this system mitigates the risk of modern
slavery from either going undetected or being dealt
with inadequately. This risk is further controlled by
the support, training and infrastructure in place for all
colleagues to be able to raise concerns through our
network of Freedom to Speak Up Guardians, or other
available channels. In 2023, we:
– Maintained our modern slavery due diligence
process for new suppliers with an annual spend of
in excess of £1 million. There were no issues
identified through this process
– Updated our procurement policy, which ensures
that our hospitals and clinics are equipped with
guidance and a risk assessment tool for evaluating
modern slavery risks in local contracts
52
Sustainability report continued
Operate responsibly
Further develop our
approach to controls
around modern slavery
Initiatives
– Review the level of performance and risk of our
key suppliers across a range of areas including
the environment, labour and human
rights, fair business practices, ethics and
sustainable procurement
16
– Completed an initial assessment exercise of
third-party management systems which can
risk-assess and monitor the level of performance
and risk of key suppliers across a range of areas
including labour and human rights. It is intended
that our sustainability committee will review this
during 2024
– Continued supplier and product rationalisation
initiatives, focusing our attention on increasing the
proportion of spend with long-standing reputable
suppliers, with whom satisfactory due diligence
has been carried out, where appropriate
In 2024, we plan to continue the activities outlined
above, and further review our approach to enhance
third-party supplier risk monitoring and performance.
Spire Healthcare’s latest Modern Slavery Act statement
investors.spirehealthcare.com/investors/modern-slavery-
act-statement
Vita Health Group’s Modern Slavery Act statement
vitahealthgroup.co.uk/slavery-and-human-trafficking-
statement
The Doctors Clinic Group’s Modern Slavery Act statement
spireoccupationalhealth.com/about-us/accreditations-
policies
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 53
Sustainability report continued
Operate responsibly
Maintain and strengthen
information governance
and data security
KPI
Establish security performance dashboard to
facilitate investment decisions by measuring
investment versus protection – 2024
Establish security programme of work to
implement the NIST recommendations of 2022/3
– ongoing
Onboard new security operations centre – 2024
Define enterprise-wide data strategy and
implement a modern data platform
architecture – 2024
Initiatives
– New data strategy, governance and security
committee
– Investments to strengthen and enhance our
security posture, or overall cyber security
strength
17
Progress in 2023
Spire Healthcare’s cyber security sustainability
strategy covers three key pillars: people, process and
technology. We are investing time, attention and
capital to reduce risk and strengthen the group’s
information governance and data security position.
With ever changing security landscapes, risks and
threats, we take this very seriously, and engage with
security partners to conduct independent reviews
and audits of our systems. We maintain industry-
recognised security certifications such as
ISO27001:2013, Cyber Essentials, Cyber Essentials Plus
and regulatory compliance for contracts such as the
NHS Data Security and Protection toolkit. We also use
the National Institute of Standards and Technology
(NIST) score for continual security assessment for
benchmarking purposes against our peers in the
healthcare industry and more broadly.
In 2023, we established a new data strategy,
governance and security committee, which reports to
the executive committee and has a dotted line to the
audit and risk committee of the board. The
committee draws its members from across the
organisation, including from the clinical, IT,
commercial, operational and legal functions. This
ensures wide visibility and consideration of data and
security matters from around the business, enabling
more effective management of information
and data risk.
We continued to make considerable investments in
2023 to strengthen and enhance our security position
by adopting enterprise level platforms (software
designed for the complex needs of large
organisations) and working with industry-leading
security partners. At the same time, we received
regular intelligence on potential threats from a
number of sources and agencies.
The strategy covers Spire Healthcare Limited only at
this stage; we are working to bring the rest of the
group under the same security governance.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 54
Engagement with stakeholders
Creating value with our stakeholders
Engagement with our stakeholders is critical to our success
and delivering on our purpose, strategy and objectives. Their
input informs our strategic and everyday business-level
decisions, and the board is provided with an overview of
any relevant stakeholder feedback.
Our campaign
We launched a targeted,
multi-channel campaign in
September with the theme, ‘The
sooner you’re better, the better’,
which has seen strong results.
Scan to watch our
TV advert
Our stakeholders
Patients
Colleagues
Consultants
Suppliers
Private Medical Insurers (PMI)
NHS
GPs
Employers and corporates
Regulators
Investors/lenders
Community
p55
p55
p56
p56
p57
p57
p58
p58
p59
p59
p60
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 55
Engagement with stakeholders continued
Patients
Responsible executive owner
Group clinical director
Colleagues
Responsible executive owner
Group people director
Who they are and how we engage
Who they are and how we engage
Who they are
We treat a wide variety of patients who self-pay, use private
medical insurance or are referred to us by the NHS.
Why they are important to us
Providing the highest quality, safe, personalised care is at the
core of everything we do.
What is important to them
Rapid access to high-quality healthcare, both diagnosis and
treatment, at a price they can afford.
How we engage
We engage continuously with patients before, during and
after their treatment and seek to involve them in all key
decisions about their care.
We use a framework of customer and patient surveys,
including questions mandated by regulation (eg Private
Healthcare Information Network) or contracts (eg NHS).
These cover our major touchpoints with patients, whether
they receive admitted care or come to us as outpatients.
We work closely with patients, with the support of the
Patients Association, on a range of projects, to understand
their experience of care with us, and we use their feedback
to further shape and refine our processes. We run hospital
patient forums and conduct regular director and board level
site visits.
Board engagement
While we review the feedback from our patient engagement
locally in our hospitals and as part of our operational
reviews, we also do this through the board’s clinical
governance and safety committee. This helps us develop
and continuously improve the services we provide to
patients, as well as define our annual quality priorities,
which we set out in our annual Quality Account.
Strategy: build on quality, page 24
Chief executive officer’s review, page 10
Who they are
We have 16,8002 colleagues; nurses, theatre teams, allied
health professionals, non-clinical support (such as reception
staff, porters, finance and human resources), central
function teams, musculoskeletal, counselling and
occupational health specialists and GPs.
Why they are important to us
Our colleagues interact with thousands of patients every
day and play a crucial role in delivering the highest quality
care and outcomes. Non-patient facing colleagues are vital in
making the business run smoothly and efficiently.
What is important to them
A fulfilling career with an organisation that offers
opportunities for development, the chance to make a
difference, and appropriate rewards and recognition for
their efforts. Colleagues are supported to learn and develop.
How we engage
We value what our colleagues do, engage closely, and
support them with their personal health and wellbeing, as
well as in their professional lives and career aspirations. We
gain regular feedback from colleagues and new starters, and
those leaving the business. In April, an engagement day took
place with representatives from across the business to
shape actions from the 2023 survey and drive engagement
across hospitals and central function teams, discuss priority
areas and embed change. Our annual survey took place in
November, this time including LDC and Spire Occupational
Health colleagues. Each executive committee member
hosted engagement sessions in multiple locations, and
virtually, ahead of the survey to update and encourage
questions. After the survey, teams developed action plans to
drive further improvements. Vita Health Group carried out a
colleague survey in 2023; with an 80% response rate, 74% of
colleagues recommended it as a place to work (2022: 69%).
Board engagement
The survey feedback we receive is analysed by the full board,
remuneration committee and executive committee, with
action plans put in place to respond to the findings.
1. Spire Omnibus Survey, November 2023
2. Number includes bank colleagues.
Strategy: Invest in our workforce, page 27
Sentiment –96% of patients say their experience of our service was ‘Very Good’ or ‘Good’ –Target audience financially more optimistic1Issues raisedAction/outcomes –Increased demand for patient care, in and out of hospital, due to longer NHS waiting times –Care provided for over 1,070,000 patients (NHS and private) in the year –Expansion of care for private patients seeking to avoid NHS waiting lists –Government elective recovery initiatives, in which Spire Healthcare is participating –Relationships with NHS GPs to enable patient choice –Expansion of Spire GP and other new propositions to meet demand –Increased need for care provided by employers owing to ill health of employees –New provision of services through Spire Occupational Health, London Doctors Clinic and Vita Health Group –Need to provide safe and efficient patient pathways –Increasing use of digital technology, offering in-person and virtual consultations and assessments, online brochures and appointment bookingSentiment –81% of colleagues proud to work for Spire Healthcare –84% of colleagues get personal satisfaction from their work –86% of colleagues happy with standard of care if friends or family treated –71% recommend Spire Healthcare as a place to work to friends or familyIssues raisedAction/outcomes –Continued focus on colleagues’ health and wellbeing –Increased investment in wellbeing support, including mental health support –Ran sessions with expert speakers –Occupational health provided to all colleagues –Support available to colleagues promoted internally and externally –National shortage of healthcare professionals across the UK, increasing pressure on existing workforce –Nursing and other apprenticeship programmes, addressing future as well as current requirements –Recruiting, integrating and training overseas nurses –Reward packages in 2023 to retain colleagues –Insourcing of recruitment to improve outcomes and reduce costs. Savings in 2023 were £0.5 million. –Continued focus on issues from feedback such as vacancies, volume of work –Strong recruitment, retention, and development programmes –Surveys during the year, eg online pulse surveys, new joiner surveys, exit interviews, full annual survey –Forums with chief executive officer and executive committee members when they visit sites –Regular all-hands calls and online sessions, ‘askJustin’ email address –Consultation with selected colleagues on key initiatives –Listening sessions with board members and hospital teams –Fortnightly listening calls with chief operating officer for hospital directors –Listening sessions with new group people director in 2023 to develop new programmesSpire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 56
Engagement with stakeholders continued
Consultants
Responsible executive owner
Group medical director
Suppliers
Responsible executive owner
Chief operating officer
Who they are and how we engage
Who they are and how we engage
Who they are
We work with 8,650 consultants, who operate as
self-employed practitioners in our business. They are experts
in their fields, drawn from all medical disciplines, who are
granted privileges to practise in our hospitals, in line with
our stringent medical governance procedures.
Why they are important to us
Our consultants are integral to providing high levels of
medical care to our patients.
What is important to them
High-quality facilities, continuity of trained, committed
employees providing support to help them establish and
develop an efficient practice at our sites, and the quality of
care that we provide to patients.
How we engage
We meet with consultants to plan individual procedures,
understand their future needs and horizon scan for
developing clinical innovation. They are invited to complete
an annual feedback survey; in 2023 this had our highest ever
response rate, up 7 percentage points on 2022. In addition,
each hospital has its own medical advisory committee
(MAC) to advise the hospital director, the director of clinical
services on any matter relating to the proper, safe, efficient
and ethical medical and dental use of the hospital; they
meet quarterly. Each medical specialty is represented. Topics
including clinical quality, learning from concerns, incidents
and complaints are discussed, plus feedback from members
about matters concerning consultants. MACs are governed
by standard terms of reference, and all discuss the same key
items using a standard agenda. The medical director and
associate medical directors attend MACs at hospitals, with
the aim of attending all MACs at least annually. In addition,
hospitals hold an AGM for their whole medical society, to
which all consultants are invited. MAC chairs run
performance appraisals for each consultant.
Board engagement
Feedback from our annual survey is reviewed by the board’s
clinical governance and safety committee and we use this to
enhance the offer we provide to consultants. Board and
executive committee members visit regularly to listen,
learn and guide and there are biannual reviews with
hospital directors.
Who they are
We work with a diverse range of organisations who supply
the group with everything from medicines, equipment,
services and food to people.
Why they are important to us
A reliable and effective supply chain is vital to us being able
to carry out medical treatment and run the business. In an
increasingly volatile environment, resulting from rising
inflation and international conflicts, the existence of a
reliable and effective supply chain has been particularly
important during 2023.
What is important to them
Clear policies, contracts and a strong relationship to ensure
long-term and mutually beneficial commercial
arrangements.
How we engage
We hold performance evaluation sessions with our existing
suppliers, with the frequency determined by the nature of
purchase and the risk profile of the goods or services
supplied. Spire Healthcare’s procurement team undertake
detailed supplier assessments as part of tender evaluation
processes to ensure a supplier’s capabilities are aligned to
the group’s business requirements. We require suppliers to
be contractually compliant on key issues, including modern
slavery.
Board engagement
The audit and risk committee reviews all relevant risks in our
supply chain as part of its annual risk assessments.
Sentiment –83% of consultants say care provided in hospitals is ‘very good’ or ‘excellent’, up from 78% in 2022 –Improved relationship and closer involvement between MAC chairs, consultants and Spire Healthcare leadership –Consultants experience improved accountability for clinical and medical governanceIssues raisedAction/outcomes –Desire for improved digital solutions including one patient record –Desire for improved administrative processes –Structured digitalisation plan which will enhance working practices for consultants –Investment in equipment and marketing support, which create an improved patient experience and make it easier for consultants to do business with Spire Healthcare –Such investment results in improved feedback from consultants on the high-quality service we provide –Ongoing need for open and regular dialogue with our consultants –Fortnightly ‘Two Minute Times’ connects consultants with each other and with Spire Healthcare with a mix of national and local news –MAC chairs meet regularly with board members and executive committee –Continued close working with our MAC Chairs, led by group medical director –Continued rigorous oversight of all aspects of consultant clinical practiceSentiment –Our strategic suppliers value our collaborative engagement –Suppliers recognise our integrity and professionalism –Key suppliers have recognised how their values are aligned to oursIssues raisedAction/outcomes –Continuity in our supply chaina) Inflationb) Temporary cessation of supply of renewably-sourced electricity –Work with supply chain to mitigate detrimental impacts from global product recalls, supply issues and supply chain frictiona) Work with suppliers and internal stakeholders to minimise impact of inflation through effective use of demand and supply leversb) Rephasing of trajectory to reflect impact until end of 2024 and commitment to acceleration of other measures, eg solar and Building Management Systems (BMS) controls to reduce emissions impact Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 57
Engagement with stakeholders continued
Private medical
insurers (PMI)
Responsible executive owner
Chief commercial officer
Who they are and how we engage
Who they are
Private Medical Insurers (PMI) provide medical insurance
cover for both employees and individual members.
Why they are important to us
PMIs are a core part of our referral network, as in a normal
year, approximately 40-50% of our revenue comes
from PMIs.
What is important to them
The need to provide their members with prompt access
to leading consultants, facilities and clinical teams
with a strong track record on safety, quality and
patient satisfaction.
How we engage
Regular commercial and clinical review meetings are held
with insurers, covering strategic initiatives, contract
performance, clinical and financial governance, member
satisfaction and operational and clinical KPIs. We also work
to agree and action strategic joint projects. This is a key part
of the relationship management of our payors and therefore
is conducted quarterly.
We have opened a number of cancer specialist centres
(breast and prostate) accredited by, and in partnership with,
Bupa. We have a rolling plan to launch in more locations and
to work on further cancer pathways together such as skin
and bowel cancer care.
All our hospitals are, for example, providing fast access to
imaging and pathology services to AXA Health, one of our
key partners to support their primary care virtual GP service
and onward hospital referrals.
Board engagement
The board supports management as needed in their
relationships with leading PMIs.
NHS and government
Responsible executive owner
Chief executive officer
Who they are and how we engage
Who they are
Within central government, we work closely with the
Department of Health and Social Care (DHSC). We liaise
closely with the NHS; we work with NHS England, Integrated
Care Boards, local NHS trusts (and the equivalent in Scotland
and Wales), and central NHS teams.
Why they are important to us
The government sets the political and regulatory
environment in which we operate and overall NHS policy
towards the independent sector. The NHS is a large
customer, as we provide care for NHS patients, either
through referrals, commissioning or contracts.
What is important to them
Our ability to provide high-quality, planned care for NHS
patients, helping them to address waiting times and
relieving pressure on NHS services.
How we engage
Our local leadership teams maintain their well-established
relationships with NHS counterparts. As well as holding
regular meetings, local NHS leaders visit our hospitals, to
ensure they understand the capability we have and the
services we offer. Our national leadership team holds
relationships with NHS central teams in England, Scotland
and Wales. We have relationships with various DHSC and
NHS England officials covering a range of portfolios and fed
views into the government’s Elective Recovery Taskforce.
Through our Vita Health Group brand, we bid for NHS
talking therapy and MSK contracts in England through
central tendering processes. VHG has regular engagement
with commissioners and the local health system where
contracts are held.
Board engagement
Our executive committee liaise with their NHS counterparts
to agree the contractual support we provide to them in
meeting Britain’s demand for healthcare.
Sentiment –Spire Healthcare is viewed as a valued partner with a clear patient focus, always accessible, responsive and supportive –Viewed as getting good outcomes for members and aligned in views on value based healthcareIssues raisedAction/outcomes –Insurers want good engagement –Regular proactive and real-time, open communications with the insurers: –Daily reporting at an individual hospital and service level of available care for private patients –Regular meetings with the PMI medical governance and operational leads –PMIs kept abreast of key strategic initiatives and plans to ensure rapid access to the best quality clinical care, and develop our propositions in partnership –Insurers looking for clear commitments on carbon and ESG –Shared detailed action plan with clear commitments to net zero Our market, page 16Sentiment –The NHS values our sustained commitment to providing high-quality care across England, Scotland and Wales –Government expressed a desire to make more use of the independent sector through the Elective TaskforceIssues raisedAction/outcomes –Elective Recovery Taskforce recommended an expansion in patient choice for NHS patients –Local requests for assistance to address elective care backlog –Patients are able to opt to receive care in a hospital of their choice, including one run by an independent provider. Spire Healthcare is listed as a provider to NHS patients when making a choice with their GP and NHS GPs are increasingly open to speaking to patients about using independent healthcare –Recontracted with local commissioners for all Spire Healthcare sites and increased volumes in eReferrals Chief executive’s review, page 10Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 58
Engagement with stakeholders continued
GPs
Responsible executive owner
Group medical director
Chief commercial officer
Who they are and how we engage
Who they are
GPs treat all common medical conditions and refer patients
to hospitals and other medical services for urgent and
specialist treatment.
Why they are important to us
GPs are a critical part of our referral network, as most
patients are referred to us by their NHS GP. For that reason,
we seek to liaise closely with them. We are also seeing more
patients self-refer. We have invested in a network of primary
healthcare relationship managers available to all hospitals;
these provide the key link with GPs and deliver training,
education and information.
We also offer our own private GP services, Spire GP and
London Doctors Clinic (LDC). They are a network of over 137
GPs, who are granted privileges to operate in our hospitals,
in the same way as consultants or are directly employed by
or contract with LDC.
What is important to them
An understanding of our business and services, to make it
easier for them to refer patients to us. They value a
high-quality environment, suitable for consulting
with patients.
How we engage
Our hospitals offer regular educational events which
support the continuing professional development of NHS
GPs which have been extended to include the LDC GPs.
Hospital colleagues also provide educational events on site
at NHS GP practices. We use the feedback that we
receive to organise future events that are tailored to
their ongoing needs.
For the first time in 2023, LDC GPs participated in the Spire
Healthcare annual colleague engagement survey.
Board engagement
Some of our board members are experienced medical
practitioners and liaise with NHS GPs through medical
forums and conferences.
Employers and
corporates
Responsible executive owner
Chief commercial officer
Who they are and how we engage
Who they are
Employers are the customers for our occupational health
and employee assistance programmes, along with
musculoskeletal and mental health services. Meanwhile,
more employers are providing PMI for their employees, who
subsequently come to us to receive care.
Why they are important to us
We deliver care to employees, but the care is purchased by
the employer as a package to support occupational health
and wellbeing, to prevent ill-health, stress reduction, health
intervention, education and self-help.
What is important to them
The need to provide their employees with access to leading
clinicians, facilities, locations and virtual services with a
strong track record on safety, quality, patient satisfaction
and good quality clinical advice and outcomes, to enable
people to be healthy and productive and to stay or get back
to work.
How we engage
Account managers regularly engage with employers who
hold occupational health or employee assistance
programme contracts, or both, to discuss current and future
requirements and where bespoke services may be
developed. Employers hold contracts with us for mental and
physical health on an annual or ad-hoc basis. We work with
business leaders and their human resources, health and
safety colleagues, wellbeing champions, preventative
service teams and training departments to engage
on the best mix of support for varied workforces and
types of employer.
Board engagement
The board supports management as needed in their
relationships with business customers.
Sentiment –For our private GP network, they value the ability to achieve a portfolio career across the independent and NHS sectors –89% of respondents to the colleague engagement survey (LDC GPs colleagues) get personal satisfaction from their work –NHS GPs value the relationship between their practice staff and our consultants –NHS GPs are increasingly open to asking patients if they are insuredIssues raisedAction/outcomes –Minor local issues with increasing referral levels affecting capacity at Spire Hospital locations –Close relationships with NHS GPs and electronic referral system (eRS) as a major form of referrals –Capacity at all sites is constantly reviewed and new consultants engaged to increase capacity to meet demand Business model, page 14Sentiment –Clients appreciate transparent, responsive and consistent communication, being made aware of market trends and business updates –Contract holders feel prepared for upcoming changes and pleased with the support provided, both bespoke and included in contracts –Growing need for mental and physical support owing to rising population ill-health makes employers amenable to purchase our servicesIssues raisedAction/outcomes –Poor employer understanding of what occupational health can achieve and how to access services –Line managers not aware how to use occupational health and employee assistance programmes contracts in place –Need for specialist services to address trauma, stress, substance abuse, neurodiversity and mental health first aid –Request for support on new legislation on sexual harassment in the workplace –Support for high levels of sickness absence in employers –Employers requesting support on the menopause for employees –Marketing approaches to address customer understanding –Service promotion and training to help managers identify when employees would benefit from support –Development of bespoke services, webinars, training and information to meet employers’ needs –Mental health first aid training (MHFA) delivered to line managersSpire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 59
Engagement with stakeholders continued
Regulators
Responsible executive owner
Group clinical director
Who they are and how we engage
Who they are
We are required to engage with a range of financial, clinical,
health and safety, and competition and market regulators.
The principal healthcare regulators we engage with are the
Care Quality Commission (CQC), the Healthcare Inspectorate
Wales (HIW) and Healthcare Improvement Scotland (HIS).
Safe Effective Quality Occupational Health Service (SEQOHS)
accredits occupational health services.
Why they are important to us
Each of our hospitals is required to be registered with the
relevant national healthcare regulator in order to be
authorised to offer services to patients.
What is important to them
Compliance with the law and all relevant regulations.
How we engage
We have regular dialogue with the healthcare regulators,
with local relationships at hospital level and a national
relationship with the group clinical director. Our hospitals
have focused contact with inspection teams pre, during and
post formal inspections. Individual hospitals draw up and
implement improvement plans on the basis of feedback
from regulators.
Centrally, we also have regular calls with CQC, HIW and HIS,
to understand the changing face of regulation, and to
provide assurance to the regulators of action being taken
to maintain and improve safety and quality and share
good practice.
For other regulators, such as the Competition and Markets
Authority, we have a dedicated legal team who, with
external counsel, monitor and advise the group on legal and
regulatory developments.
Board engagement
The board supports management with assurance of
effective ward-to-board governance processes and reviews
collated feedback from regulators to identify trends and
drive responses.
Investors/lenders
Responsible executive owner
Chief executive officer
Chief financial officer
Who they are and how we engage
Who they are
Shareholders, potential shareholders, analysts and lenders.
Our largest investor is Mediclinic, which holds a 29% stake in
Spire Healthcare and has a seat on the board.
Why they are important to us
Our investors and lenders help to ensure we have access to
the resources, support and finances we need to develop and
grow the business.
Our aim is to reduce covenant leverage over time through
robust cash management and conservation.
What is important to them
Investors and lenders are looking for sustainable returns
from any capital outlaid and are keen to understand our
work with the NHS, how we are building our private
business, expansion into new areas of healthcare and how
we work sustainably and support the community.
How we engage
Our director of investor relations engages with shareholders
and analysts. We also maintain regular contact with lenders
and keep them informed on all major issues affecting the
business. Our full year and half year results were presented
as hybrid events; both were well attended. We regularly
gather feedback after each results roadshow and use this to
guide our future investor relations strategy.
The chief executive officer and chief financial officer
regularly meet with investors.
Board engagement
Our chairman, senior independent director and executive
directors meet with institutional investors at individual
meetings and analyst presentations, as well as at
results roadshows.
Sentiment –98% of our inspected locations are currently rated ‘Good’ or ‘Outstanding’ or the equivalent by regulators in England, Scotland and Wales –Inspected Vita locations are currently rated 100% ‘Good’ by CQC.Issues raisedAction/outcomes –CQC began to change its assessment model during 2023, rollout will continue in 2024 –We have worked with CQC to understand the proposed changes and their impact on our business –Extensive training for colleagues on the changes –Spire Occupational Health rebranding –Safe Effective Quality Occupational Health Service (SEQOHS) awarded Spire Occupational Health full accreditation, the industry standard for occupational health, in late 2023 Strategy: ‘Build on quality’, page 24Sentiment –Investor feedback received is generally good, with support for the group’s strategy and management team –Lack of share liquidity is sometimes a barrier for investment for institutional investorsIssues raisedAction/outcomes –Recovery of our private self-pay business has a critical impact on Return on Capital Employed and other measures –Presentations to investors and analysts –Environmental, social and governance (ESG) impacts –Net carbon zero target by 2030 –Sustainability committee with nominated owners for each section of the sustainability strategy and a scorecard developed for each area –Effect on the business of operating in a high inflationary environment –Capital allocation – use of surplus cash generated, capex, margins and return on investment –Through our efficiency programmes, we have delivered more than £30 million of cost savings in 2022 and 2023. –Further self-help actions taken include implementing price rises where appropriate, managing our mix of services and being more selective in the choice of products we use –We balance use of surplus cash between a number of areas including reduction of leverage, payment of dividends to our shareholders and M&A opportunities –We continue to invest strongly in the business to improve margins and return on investment Risk management, page 64Financial review, page 82 Our strategy, page 20Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 60
Engagement with stakeholders continued
Community
Responsible executive owner
Chief executive officer
Who they are and how we engage
Who they are
Our business plays an important part in the communities in
which we operate.
Why they are important to us
We want to be involved in the local communities of our
patients, existing and future colleagues. As a responsible
business, we have a duty to give back to these areas and
contribute to their greater wellbeing. We also have a duty of
care to the environment and have plans aimed at becoming
net zero carbon by 2030.
What is important to them
A strategy that focuses on the ethical, social, environmental,
cultural, and economic dimensions of doing business.
How we engage
Local hospitals forge relationships with community
organisations in their locality and liaise with local authorities
and other local groups when investment projects are
planned which may cause disruption to residents. Many
hospitals also undertake fundraising initiatives for local
charities. Nationally Spire Healthcare undertakes
company-wide charity activities and other community
initiatives. We are engaged in environmental projects to
reduce our greenhouse gas emissions and manage our
waste effectively. Engagement with Integrated Care
Systems, including local authorities and community services,
can provide closer links with local health and social care
communities around our hospitals and clinics.
Board engagement
The board reviews our sustainability and environmental
ambitions on a regular basis.
Sentiment –Charities receiving donations express gratitude and explain what can be provided for recipients through monies raised –Longer-term relationships with local sites are valued and bring communities closer Issues raisedAction/outcomes –The cost-of-living crisis has affected people in the communities we serve –Our 2023 company-wide charity focus week raised £40,000 for more than 30 causes around Britain selected by local hospitals through cycling, baking and walking challenges to name a few –As a business we support several major fundraising and awareness events such as Macmillan’s coffee morning and Breast Cancer Now’s wear it pink’ –Vita Health Group (VHG) introduced one day’s paid leave for colleagues to volunteer each year in 2023 –Growth in need for talking therapies and musculoskeletal support in local NHS communities –VHG works with voluntary sector partners to stimulate referrals and bring services to local communities –VHG commissioned a ‘mental health bus’ to build local awareness Chief executive’s review, page 10 and Sustainability report, page 36Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 61
Our key performance indicators
We use a range of financial and non-financial metrics to
measure group performance in line with our strategy
and to deliver strong financial performance.
Non-financial KPIs
Colleague engagement index >80%
100% CQC/HIS/HIW
Good or Outstanding
>75 net promoter score among
admitted patients
Apprentices constitute
5% of our workforce
81%2022: 80%
98%2022: 98%
802022: 81
4%2022: 5%
Why is this a KPI?
We are a people business. Having engaged
colleagues is not only important for their
own wellbeing, but also helps them in their
daily efforts to provide high-quality care
to our patients.
Why is this a KPI?
Providing personalised quality care is our daily
responsibility and a key business driver. We seek to
reach 100% Good or Outstanding ratings from
regulators in England, Scotland and Wales.
Why is this a KPI?
Our net promoter score (NPS) metric measures
admitted patients’ likelihood to recommend Spire
Healthcare to friends or family in need of similar
treatment. This is a key indicator of customer
satisfaction and the quality we are delivering
to our patients.
Why is this a KPI?
There is a shortage of clinicians in the UK and
worldwide. We are committed to building up the
talent pipeline for our business and for the UK
healthcare sector more widely.
Performance
We are achieving high levels of colleague
engagement – 81% of colleagues said they felt
proud to work for Spire Healthcare, one
percentage point up on 2022, based on an 86%
response rate.
The 2023 colleague survey applies to Spire
Healthcare Limited and The Doctors Clinic Group.
Performance
98% of inspected locations are rated ‘Good’ or
‘Outstanding’ or the equivalent. 100% of
inspected Vita Health Group and London Doctors
Clinic locations are rated ‘Good’.
Performance
We continue to achieve high levels of private
patient recommendation. NPS among admitted
patients was 80.2%, down slightly from 80.6% in
2022.
At Vita Health Group, the NPS is 84 overall for
corporate clients (with employee assistance plan
corporate customers scoring 97). NPS for NHS
customers is 95.
We continue to monitor all patient feedback to
drive continuous improvement.
Performance
We now have over 430 clinical and non-clinical
apprentices in Spire Healthcare and Vita Health
Group, which is almost 4% of our total permanent
workforce. We will continue to make
apprenticeships an attractive option for new and
existing colleagues and ensure both learning and
supervising colleagues are fully supported.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 62
Our key performance indicators continued
Non-financial KPIs continued
Net zero carbon emissions
(tCO2e) by 2030
Year-on-year reductions in gender
pay gap
40% female membership of board
and executive committee by 2025
3%ahead of 2023 target emissions (27,017 tCO2e achieved,
target 27,750 tCO2e) (2022: 9% ahead, 25,854 tCO2e
achieved, target 28,163 tCO2e)
9.2%2022: 6.2%
47%2022: 37%
Why is this a KPI?
We continually seek ways to reduce our impact on
the environment. We are reducing our carbon
emissions, focusing our efforts on waste and
recycling, while working with our suppliers to align
goals to develop healthcare in sympathy with a
sustainable planet. This is the responsible
approach of any healthcare business.
Why is this a KPI?
Our purpose is to make a positive difference to
people’s lives and that includes all our colleagues.
Gender pay reflects the structure of our workforce
and is a reflection of the differences in the balance
of male and female workers within the wider
healthcare sector.
Why is this a KPI?
Spire Healthcare wants to support women to
become leaders within the business. More diverse
boards are more effective; diversity drives
innovation and better decision-making and is
reflective of the group and its employees.
Performance
Spire Healthcare Limited is in line to hit our
planned 2030 target, delivering 3% ahead of
emissions target. Our emissions in 2023 were
27,017 tCO2e, against a target of 27,750 tCO2e.
We achieved an emissions reduction of 3% ahead
of our planned net zero target, but for our wider
SECR/GHG obligations, we experienced a 4%
increase YoY, owing to increased brown electricity,
influenced by global energy supplies and the war
in Ukraine. The net zero strategy covers Spire
Healthcare Limited only at this stage; we
anticipate working to bring the rest of the group
under the same plan.
Performance
In 2023, the overall median gender pay gap in
Spire Healthcare Limited was 9.2% (2022: 6.2%).
We are taking a number of positive steps to invest
in and provide development opportunities for our
female colleagues to progress into senior
leadership roles and work towards a balanced
representation across the organisation to reduce
the gender pay gap. Read more developments and
detail in our Sustainability report on p47.
Performance
The combined executive committee and board
demographic in 2023 is 47% female. Our executive
committee demographic is 38% female. Spire
Healthcare is supporting women to become
leaders within the business, and we now have five
women on our board, moving the board’s gender
balance to 45% women. We are recognised as the
first company in healthcare in the ‘FTSE 250
Women Leaders Review’, in which our executive
committee and their direct reports combined is
listed as 51% female at 31 October 2023.
Please see the Sustainability
report for more information
on page 36
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 63
Our key performance indicators continued
All three financial KPIs described below align with Spire
Healthcare’s strategy and the long-term financial objectives
outlined at the group’s Capital Markets Day event in June 2022.
Financial KPIs
Revenue CAGR c5% by 2025
Adjusted EBITDA* margin
>21% by 2025
ROCE* >10% by 2025
2023
2022
2021
2020
2019
1,359.0m
1,198.5m
1,106.2m
919.9m
980.8m
2023
2022
2021
2020
2019
17.6%
17.0%
16.1%
17.5%
19.3%
2023
2022
2021
2020
2019
7.5%
6.2%
4.0%
4.9%
5.1%
Why is this a KPI?
Monitoring revenue provides a measure of Spire
Healthcare’s growth.
Why is this a KPI?
The margin we achieve reflects the group’s
efficiency in generating shareholder returns from
the hospital business, which excludes new
services. An increasing margin makes the profit
more resilient to adverse effects and
demonstrates the group’s strategy for managing
cost and targeting private payors is the right one.
Why is this a KPI?
ROCE is an important metric and measures how
well the group’s capital is being deployed to
generate returns. Adopting ROCE as a KPI
influences future investment strategy by the
business to ensure that available capital is directed
towards generating improving shareholder return.
Performance
Overall revenue was £1,359.0 million, up 13.4%
compared to 2022 including £31.4 million from
acquisitions in 2023.
Performance
Adjusted EBITDA for the group was £234.0 million
in 2023, up 15.0% on 2022.
Hospital adjusted EBITDA was £233.8 million, up
14.9% on 2022. Hospital revenue was £1,327.6
million, up 10.8% on 2022. Hospital adjusted
EBITDA margin was 17.6%, up from 17.0% in 2022.
Performance
Spire Healthcare seeks financial discipline with a
clear capital allocation policy and targeted
investment. We have improved operational
effectiveness with our efficiency programmes
which delivered more than £15 million savings in
the year. We have also implemented price rises
where appropriate, managed our mix of services
and been more selective in the choice of products
we use. The strong operational performance in
the period resulted in Adjusted EBIT climbing by
23.5% to £130.4 million, leading to a material
improvement in ROCE, up by 1.3 percentage
points to 7.5%.
Risks – for more information
see page 64
Read more in our
Financial review page 82
* Refer to page 85 for a reconciliation of non-GAAP
financial measures.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 64
Risk management and internal control
Responsibility for risk management and
internal control systems lies with the
board of directors”
The board has a consolidated view of key risks from across Spire Healthcare. Our risk management and internal
control processes are managed through the audit and risk committee (ARC) in association with the clinical
governance and safety committee (CGSC).
Risk management
The risk management framework (shown diagramatically on page 67) is designed to identify, evaluate and
mitigate the risks that we face at all levels. All significant risks are recorded on our risk management system.
We have reviewed a range of potential emerging risks and their possible impact on Spire Healthcare, using
internal and external sources of emerging risk information, for example:
– The University of Cambridge Judge Business School Centre for Risk Studies’ taxonomy of business risk
– The UK government’s national risk register
– The World Economic Forum’s annual risk assessment
We use the risk register to manage all significant risks facing Spire Healthcare by assessing risk in terms of
consequence and likelihood. Our risk management methodology captures the assessment of risk on a ‘current’
or ‘net’ basis, after existing controls are considered. The detailed registers also include management actions to
further reduce risk exposures when considered necessary. In the case of the principal risks, sources of assurance
over mitigation of the risks are also reported to the ARC. Reporting of risk within our management information
(eg, to the executive committee and ARC), is on a current basis, and the importance of each risk as presented in
this report is on the current basis. The relative exposures from the principal risks to Spire Healthcare are shown
on page 65.
All risks have an identified risk lead in charge of monitoring and mitigating the risk. Management reviews risk
registers in line with the risk management policy at intervals of one, three or six months or when there is
imminent change in the risk environment such as legislation.
Current risk environment
As with 2022, 2023 remained a volatile year in terms of international geopolitics, domestic inflation, rapid
interest rate rises in early 2023 and industrial unrest impacting wage settlements. We expect 2024 to be no
less volatile, with a higher probability of greater volatility than 2023 given key elections in many democracies
including the USA and the UK, increasing international conflict and continuing impacts from climate change.
As in 2022, we had to respond to several changing risks and threats to our operations on our supply side,
although that position improved during 2023, and we believe the risk of major supply chain disruption declined
over the course of the year. The acquisition of Vita Health Group has opened new commercial opportunities for
us, but importantly, also improved our mitigation of the risk from diversification and disintermediation.
Through high levels of demand for our services, we have been able to offset much of the inflationary risk we
faced. We continue to review our risk profile and challenge ourselves on whether we are taking all reasonable
steps to mitigate our principal risks.
Risk appetite
Whilst we make every effort to ensure that all risks are as low as reasonably achievable, it is not possible to
reduce all risks to zero. Decisions must therefore be made as to whether the benefits and best use of resources
outweigh the risks.
We define our risk appetite as the amount of risk we are prepared to accept, tolerate, or be exposed to at any
time. We are committed to doing everything reasonably possible to reduce risk for all patients and to deliver
high-quality, efficient, and effective care. We are uncompromising on patient safety relating to our clinical
service delivery. The lowest risk appetite applies to all safety and compliance objectives, including preventable
patient harm, public and employee health and safety. We have a higher risk appetite for the pursuit of
innovation and our strategic and operational objectives. This means meeting legal and other regulatory
obligations will take priority over other business objectives.
We apply the following definitions to our risk appetite for the strategic principal risks:
VL Very low: A high level of risk mitigation or risk avoidance representing the safest strategic route available
L
B
Low: Seeking to integrate sufficient control and mitigation methods to accommodate a low level of risk
Balanced: An approach that brings a high chance for success, considering the risks, along with
reasonable rewards, economic and otherwise
H High: Willing to consider bolder opportunities with higher levels of risk in exchange for increased
business payoffs
VH Very high: Pursuing high-risk, unproven options that carry with them the potential for high-level rewards
The risk appetite for each principal risk is shown on pages 68 to 74 in the detailed risk descriptions.
Principal risks outside of risk appetite
One principal risk falls outside of our risk appetite.
Workforce – (reported as outside of appetite in 2022) because there is a long-term structural shortage of
clinical and medical staff in the UK, which has been the case since before the COVID-19 pandemic. We are
working to recruit and retain colleagues in a highly competitive domestic and global market for healthcare
workers. Given the scale and range of external factors that cause the risk, and especially the dominant role that
the NHS plays in attracting, recruiting, and training clinical and medical staff in the UK, the mitigations
available to us are unlikely to mitigate the risk fully in the near to medium term.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 65
Risk management and internal control continued
Principal risks
The diagram shows the principal risks of the group. Further detail on the individual risks is provided
on pages 68 to 74.
i
h Movement
g
H
since 2022
1
2
6
3
7
8
9
13
12
10
11
4
5
Low
Consequence
Medium
14
High
i
m
u
d
e
M
d
o
o
h
i
l
e
k
i
L
w
o
L
The principal risks fall under
the following categories:
Ranked by likelihood
Category
1 Workforce
People
2
Inflation and
wage inflation
Financial
3 Climate change
Environment
4
5
Information
governance and
security
Digitalisation,
automation and
efficiency
Technology
Technology
6 Brand reputation
Social
7
8
9
Government and
NHS policy
Geopolitical
Self-pay market
dynamics
Financial
Major
infrastructure
failure
Technology
10 Patient safety and
clinical quality
Clinical and
patient safety
11 Expanding our
proposition
Governance
12 PMI market
dynamics
13 Supply chain
disruption
Financial
Geopolitical
14 Antimicrobial
resistance
Social
Material change to our risk profile from 2022
In reviewing our principal risks, we decided to reclassify the following risks:
– A further outbreak of COVID-19 is no longer considered a principal risk as we have incorporated managing
COVID-19 into our operations
– Risk of a pandemic from a new pathogen to an emerging risk, ie, a risk we will continue to monitor, but we
will not undertake any further specific mitigations for at this stage. We have developed our pandemic
response plans incorporating the learning from the COVID-19 pandemic and therefore believe this is now the
appropriate categorisation for this risk
– Reduced the risk from competitor challenge as no longer a principal risk. Competitor activity is a potential
causal factor for PMI market dynamics, and a new risk, on self-pay market dynamics (see below)
We have elevated two risks onto the principal risk register:
– The risk from our ability to adopt digital technologies into patient experience and back-office processes at
the required speed to achieve our objectives (see risk 5 digitalisation, automation and efficiency)
– The risk from the self-pay market dynamics given the materiality to our revenue and profitability this market
segment represents (see risk 8 self-pay market dynamics)
We have renamed our principal risk ‘diversification and disintermediation’ to ‘expanding our proposition’.
Inter-relationships of principal risks
We recognise the strong inter-relationships between the principal risks. The risks that would have the most
material impact on other principal risks are:
– Antimicrobial resistance
– Information governance and security
– Government and NHS policy
Emerging risks
The board considers emerging risks to be those with the following characteristics:
– Any manifestation of the risk is most likely outside of the normal strategic planning horizon of five years
– Are risks for which we have little or no prior experience because of their novelty or highly uncertain nature
– There are no practical control measures that can be taken now but a longer-term strategic response
may be appropriate
The emerging risk process is as follows:
– The executive committee prepares an annual analysis of long-term global trends that may lead to emerging
risks and opportunities
– It then recommends specific long-term risks to be added to an emerging risk register for monitoring and
consideration in our strategic planning process
– The board, via the audit and risk committee, reviews and approves the potential emerging risks and
opportunities that the executive committee is monitoring
Through the emerging risk process in 2023, we have added several new emerging risks to our register, largely
focused on emerging threats from geopolitical tensions. Our assessment of climate change risk in the short
term is described below; further details of our assessment of climate change risk are provided in our TCFD
disclosures on pages 75 to 80.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 66
Risk management and internal control continued
Internal controls
1) Standard policies and procedures
We have documented policies and standard procedures in place covering all significant activities and areas of
risk, which are subject to regular review and update by the policy approval committee (PAC) comprising a cross
functional membership of subject matter experts. The PAC reports into the safety, quality and risk committee.
The PAC meets eleven times a year and publishes updates to policies on our intranet. All policies are required to
follow a standard process for creation and review. There is a standard structure for procedures and guidelines
to provide our colleagues and consultants with further operational detail for policies where required. The
default review period once a policy is approved is three years but can be shorter if required. There are certain
policies that the board reserves the right to approve, for example treasury management, raising concerns and
risk management policies.
2) Assurance over clinical delivery and clinical regulatory compliance risks
As a provider of clinical services to patients, we face a specific set of non-financial risks associated with such
provision. We have strong control structures as described below.
– The group medical director oversees the governance of the medical professional standards of 8,760
consultants through the medical professional standards committee, the management of patient
reviews and recalls, the processes for the management of practising privileges and setting medical
governance policy
– The Integrated quality governance team support a suite of clinical audits which assess compliance with key
areas of patient safety
– The central clinical team oversaw a national programme of clinical reviews including testing according to the
approach taken at regulatory inspections
– The central clinical team also oversees the drafting, communication and training of a comprehensive set of
clinical policies and procedures for Spire Healthcare. These form part of the overall framework for clinical
safety governance and quality, to ensure that clinical risk and clinical regulatory compliance is managed
effectively across all registered sites. The governance activities are monitored by the integrated quality
governance team and are reported regularly to the safety, quality and risk committee, the executive
committee and the CGSC
– Each hospital has a risk register through which clinical and medical risks are managed, mitigated
and escalated
– Comprehensive, non-financial management information on quality including safety, clinical effectiveness
and patient experience is produced and reviewed monthly against pre-agreed standards by the corporate
integrated quality governance and clinical teams and reported to the SQ&R sub-committee and reported to
the CGSC quarterly. Specific KPI measures drawn from this management information are given on page 61
– We are subject to substantial levels of external inspection and review, both by the range of national
healthcare regulators (CQC/HIW/HIS) and through invited assurance inspections such as the rolling
programme of health and safety inspections carried out by third-party specialists. The executive committee
and the CGSC review the outcomes of these activities. In 2023, we had a total of 7 CQC and HIW/HIS
inspections, all producing ‘Good’, ‘Outstanding, or equivalent performance assessments
– We have maintained throughout 2023 the structures and processes to provide the level of evidence
and assurance required to monitor clinical regulatory compliance
3) Financial and operational controls
Our design of our finance function splits resources across on-site finance directors at each hospital, supported
by a central finance function based in Reading.
We received regular fraud updates from the NHS Counter Fraud Authority during the year and, where relevant,
disseminated the fraud alerts to relevant colleagues. We are subject to daily direct and indirect cyber-attacks
during the year. We have prepared response plans to cyber-attacks utilising both in-house and third-party
experts. After any incident, we undertake a full incident review and reflected learnings into our
cyber-security environment.
The fundamental financial controls as reported in 2022 remained in place during 2023, namely:
– The annual process of preparing business plans and budgets, followed up by close monitoring of operational
performance by the executive committee and the board
– Weekly forecasting to drive corrective action
– Monthly monitoring of actual results, compared to budgets, forecasts and the previous year
– All material capital projects are subject to an investment evaluation and authorisation procedure including
board approval when the forecast capital expenditure exceeds the level of delegated authority
– Common accounting policies and procedures
– Our treasury position and forecast liquidity are kept under review to ensure that borrowings are aligned with
our growth and follow banking covenants
Other non-financial operational risks are managed by means of the application of best practice, as defined by
group policies and standard procedures, in areas such as project management, human resources management
and IT security and delivery, supported by detailed performance monitoring of outputs and issues.
In October 2023, HM Government withdrew the proposed Regulation requiring certain companies to publish a
resilience statement and disclosures relating to distributable profits and distributions, a material fraud
statement and an audit and assurance policy part way through the legal ratification process. The Financial
Reporting Council have published an updated Corporate Governance Code in early 2024 requiring new
disclosures over our risk management and internal control environment for our fiscal year starting 1 January
2026. We continue to prepare for these new requirements by documenting and strengthening our internal
financial controls where appropriate.
4) Internal Audit
An in-house director of internal audit is supported by a dedicated team from KPMG who provide co-source
internal audit resource. The activities of internal audit are reported in the audit and risk committee report on
pages 104 to 109.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 67
Risk management and internal control continued
Continuous learning
Our process of continuous improvement through events, knowledge and awareness will help us to make
progress. We recognise this unequivocally and its importance in driving outstanding quality. No matter how
robust and reliable, internal control systems and risk management cannot guarantee to remove all error or loss.
We take all instances of incidents (including near misses), complaints, control failures, regulatory non-
compliance, or other risk events seriously. As such, we have a detailed process in place to understand the cause
and identify learning to minimise the chances of reoccurrence.
We actively promote an open culture to positively encourage the reporting of all risk events and other issues
arising. Hospital management, the executive committee, the ARC, and the CGSC closely monitor the number
and nature of events arising, and the operation of incident management processes.
We offer various channels through which colleagues can report any issues or concerns. The main channel for
raising concerns is the Freedom to Speak Up Guardians (FTSUGs) that were introduced into every Spire
Healthcare hospital and corporate team in 2018. Other channels include a central raising concerns team,
members of the executive team and board, and an independent whistleblowing helpline to facilitate
anonymous reporting of issues or concerns that they are unwilling to raise via any other channel. We have an
independent national corporate guardian who oversees and supports the FTSUGs (see Engagement with
stakeholders section for further details on page 54).
y
t
i
l
a
i
r
e
t
a
M
Our risk management framework
Governed by our board-approved enterprise risk management policy
Emerging risk register
Board and executive committee
Prinicipal risk register
Board and executive committee
Corporate risk registers
Executive sub-committees
Hospital risk registers
Hospital leadership teams
Risk assessment libraries
Heads of departments
d
r
a
o
B
o
t
d
r
a
W
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 68
Risk management and internal control continued
1. Workforce
Executive owner(s): Group people director
Risk description
There is both a UK and global shortage of nursing and
healthcare practitioners. We compete for talent in the UK and
from international demand, and increasingly for non-clinical
roles in a candidate driven marketplace.
Our ability to attract and retain clinical and non-clinical
colleagues has been affected by the following:
– The cost-of-living increase impacting all our employees. Those
on the lower salary levels are more sensitive to inflationary
pressures and may move to marginally higher payers, both
within or outside of healthcare
– Increasingly, permanent colleagues are looking for more
flexibility in their work environment and work life balance
– The candidate driven market which impacts salary
expectations for key roles, and attraction of agency rates
– Growth of demand for healthcare services since the pandemic
Risk impact
In the short term, the impact is on operating costs, either
through increased pay awards or the use of bank and agency
colleagues to fill resourcing gaps.
Link to strategy
Link to strategy
Risk mitigation
We seek to retain colleagues through:
– A common purpose and a positive workplace culture (our
employee engagement score as reported on page 29 provides
evidence that this mitigation is effective)
– Competitive pay and reward benefits. In 2023, we announced
a competitive pay award that provided a 5.5% increase for
most eligible colleagues. We will continue to review pay
competitiveness in all the sectors in which we operate
– Offering greater flexibility in employee’s roles
– Employee development programmes, eg a nurse training
programme and other apprentice schemes
– Continuous investment in our equipment, facilities and
services to retain high-quality clinicians
In 2023, our risk mitigations have helped to produce a
downward trend in colleague churn rates as shown on page 30.
We seek to recruit colleagues through:
– A centralised recruitment process which we brought
in-house 2023
2. Inflation and wage inflation
Executive owner(s): Chief commercial officer
Risk description
Inflation continues to fall in the UK (now at 4% vs a peak of
+11%), but still higher than the Bank of England target of 2%.
Base lending rate is 5.25%. It had been forecast to increase
further but with the fall in inflation in Q4 2024, our expectations
are that base rates remain c5% for much of 2024 with falls
possibly in Q3-Q4 2024 to c4.25% (source: National Westminster
Bank). There is still risk of further energy price shocks and food
price shocks from increased geopolitical tensions in Ukraine and
the Middle East. Wage inflation (excluding bonuses) is 6.6%
(September-November 2023).
Despite these inflationary headwinds the expectation is that the
primary growth drivers for healthcare will remain medium term,
namely record NHS waiting lists, stable/growing PMI
lives covered and a self-pay market which is larger
than pre-pandemic.
Risk impact
– Higher staff churn because of more competitive pay in other
sectors/other healthcare providers or higher staff costs to
maintain competitive pay and benefits
– Reduction of self-pay patients as inflationary pressures reduce
– Offering apprenticeship programmes to support the
affordability reducing volumes
Risk mitigation
In response to macro inflationary pressure, we will continue to
benefit from a range of inflation mechanisms built into the PMI
contracts and will benefit from our ability to change self-pay
pricing quickly via our pricing engine subject to prevailing market
conditions. Our conversion rate from Out-patient appointment
to In-patient procedure remains stable. Our procurement team
maintains a constant review of pricing and seeks opportunities
to mitigate inflationary increases.
We continue to respond to changing economic circumstances by
optimising our private and NHS-funded work, ensuring we are
not over-reliant on one income source, and supported by an
efficient cost base.
We responded to wage inflation by announcing to our staff early
in 2023 that the 2023 general pay increase will be 5.5% for most
eligible colleagues, and more for those near minimum wage.
Over the long-term wage inflation and resource scarcity could
result in a decline in our expected revenue growth.
development of clinical and non-clinical teams across the
business
– Building of local bank colleague pools and using digital
solutions to improve access to available shifts
– On contract renewals, PMI providers take more aggressive
stance on pricing to mitigate from recent inflationary
increases reducing margin
– NHS tariff increases are below the level of inflation thus
– An overseas recruitment capability to secure skilled healthcare
reducing margin
workers from outside the EU (in line with World Health
Organization protocols to actively recruit in only ‘green’
countries, see page 29).
The group manages immediate colleague shortages using
agency and bank workers.
Risk appetite B
Risk movement: 2022
2023
Risk appetite B
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
69
Risk management and internal control continued
3. Climate change
Executive owner(s): Chief financial officer
Risk description
Climate-related risks have been identified through the
enterprise risk management process. In 2023, we have
undertaken scenario analysis to identify our short-, medium-
and long-term risks from climate change.
Following the structure of the Taskforce on Climate-related
Financial Disclosures (TCFD), we face risks and opportunities
from the transition to a low carbon economy and physical risks
from a warming climate. This principal risk is an overarching
description of those individual risks that are described in greater
detail in our TCFD reporting on pages 75 to 80.
We may, in the medium to long term, be indirectly at risk from
societal risks related to climate change, eg, food security.
Risk impact
Severe storm weather has the potential to cause major damage
and disruption to our sites. Storm events raise the risk of floods
at our buildings due to rising external water levels, such as from
rivers run off and the sea. Our hospitals would be badly affected
by flooding should it occur, as water ingress would affect
medical equipment and risk the hygiene of our premises and
safety of our patients.
Extreme weather events will also disrupt our patients, staff, and
consultants’ ability to attend our facilities.
Prolonged spells of extreme ambient temperatures could lead to
an inability of existing critical Heating, Ventilation & Air
Conditioning (HVAC) systems to cope with required cooling and
potentially cause cancellation of procedures and operations.
Providing healthcare services is a relatively energy intensive
business. We are vulnerable to fluctuations in energy prices
driven by rising carbon costs imposed on power generators as
well as through increasing taxation at the point of consumption.
Link to strategy
Link to strategy
Risk mitigation
Flood risk mitigation includes a continued periodic review of our
estate in relation to existing and predicted flood risk zones and
investment in improved roofing and drainage where
vulnerabilities have been identified. None of our current sites are
situated in predicted high risk flood zones or in coastal areas
predicted to be at risk from rising sea levels.
Extreme ambient temperature risk mitigation includes an
informed investment plan for upgrade of failing and vulnerable
plant. Design of the replacement and upgrade would account
for the predicted increase in ambient temperature profiles
expected within the lifespan of the plant eg, 15 years. Further
mitigation measures include extreme weather warning protocol
and Business Continuity Plans to provide emergency loan
HVAC plant.
Energy price risk mitigation includes energy efficiency measures
to reduce consumption and our energy hedging strategy which
has seen all our current energy requirements secured until
December 2024.
4. Information governance and security
Executive owner(s): Chief operating officer
Risk description
As a healthcare organisation, we must manage and maintain a
range of physical and digital data assets including patient
records, commercial information and staff data. Our intelligence
indicates that healthcare data remains highly valuable to
criminal and hostile state operators. There is a risk that:
– We will not manage personal data in compliance with the
principles set out in the Data Protection Act 2018 and the
General Data Protection Regulations (GDPR)
– We will be subject to hostile and sophisticated cyber activity
against our IT systems and applications
Risk impact
Our business could be disrupted if its information systems fail,
are breached, destroyed or damaged.
Colleague and patient data could be stolen or compromised.
We could also be subject to litigation by third parties and
enforcement action from regulators.
A successful cyber-attack and a breach of data security could
result in:
– Material costs to recover operations
– Material financial penalties for breaches of Data Protection
law
– Compensation for patients or staff if personal data is
compromised
– Reputational damage
Risk mitigation
The data strategy, governance and security committee monitors
the risk and mitigations for data governance and cyber security.
The committee reports into the executive committee with a
separate reporting line to the audit and risk committee (see
page 109). To support this governance structure, we have a
range of policies and practices, and mandatory staff training
covering data governance (eg, central monitoring of compliance
with data subject access requests, data processing impact
assessments and notifications to or from the Information
Commissioners Office) and cyber security.
Our IT team have a cyber-security strategy for continuous
improvement based on industry standards. It covers the
processes from identifying specific risks, to protecting physical
and digital data assets through to recovery in the event of a
successful cyber-attack.
We work with several industry-leading technical partners to
provide:
– Multiple layers of business protection using advanced
detection and protection systems
– Regular third-party penetration testing on new and existing IT
systems
– Red-Teaming Exercises to attempt to access our systems using
a variety of real-world techniques
– Managed Security Operations Centre (SOC) to monitor,
analyse and respond to security threats 24x7
Risk appetite B
Risk movement: 2022
2023
Risk appetite B
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 70
Risk management and internal control continued
Link to strategy
Link to strategy
5. Digitalisation, automation and efficiency
Executive owner(s): Chief operating officer
Risk description
We have authorised substantial investment to digitalise our
patient experience as well as back-office processes. However,
despite our digitalisation programme there is a risk that:
– The digital environment evolves requiring us to readjust or
increase our investment to further retain or improve our
position in the market
– We do not deploy new technologies with the support and
training of our colleagues, thus undermining the potential for
efficiency gains
– Loss of IT and other team members because of the
competitive market for scarce talent which would hinder our
progress and/or increase costs of implementation
Risk impact
We lose market share and fail to achieve operational excellence
which will ultimately impact our profit margin.
Risk mitigation
The digital strategy focuses on an 18-24 month planning horizon
to improve the predictability of investment and outcomes. This
will enable us to adjust the priorities and speed of
implementation in response to changes in the macro climate
and competitive landscape.
We will utilise best practice programme governance, supported
by third party experts, to deliver change programmes into
the business.
We will use technology to enable early benefits realisation, for
example utilising process automation to release immediate
efficiencies and improvements to boost productivity and
further fund future investments for digitalisation.
The digital strategy has built-in focus on innovation and external
horizon scanning to ensure we are not behind the curve
compared to competitors (current or future).
Risk appetite B
Risk movement: 2022 N/A 2023
6. Brand reputation
Executive owner(s): Chief commercial officer
Risk description
Following the COVID-19 pandemic and rising NHS waiting lists
there has been a substantial amount of positive media coverage
for independent healthcare and Spire Healthcare specifically,
boosted by our television advertising campaign.
Our brand reputation is interconnected with several other
principal risks, eg, clinical quality and patient safety, information
governance and security.
Our future growth depends upon our ability to maintain, and
continue to enhance, our reputation amongst patients, clinicians
and other stakeholders.
As our brand presence grows, the risk increases that adverse
events such as:
– Patient notifications, recalls, inquests and associated press
coverage
– Mishandling of patient data
– A breach of law or regulation
will have a more material impact on us.
Risk impact
If we fail to protect or grow the brand it may harm our ability to:
– Maintain or grow income
– Attract and retain the best colleagues and consultant partners
– Win new contracts
– Raise capital at competitive rates
Risk mitigation
Our primary mitigations against damage to our brand
reputation is through the good management of our principal
risks, in particular:
– Patient safety and clinical quality
– Cyber security and data protection
– Workforce
In addition, we continue to invest in the awareness and health of
the brand through national advertising, public relations and
centrally coordinated social media. We also continue to build our
reputation amongst analysts and public commentators.
Risk appetite B
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
71
Risk management and internal control continued
7. Government and NHS policy
Executive owner(s): Chief commercial officer
Risk description
Historically, the levels of NHS referrals have been subject to
sudden and unpredictable changes dependent on national
political priorities, or local NHS financial constraints.
There is a general risk that the government’s economic, public
spending and employment policies could have an impact on
our sector.
In the near-term, should the government’s elective recovery
strategies and promotion of patient choice be successful in
reducing waiting lists significantly, this could reduce demand
for self-pay or private medical insurance.
With a general election set to take place before January 2025,
we continually assess possible outcomes, monitor the policy
announcements of the major political parties and their
potential impact on the business and seek to engage with
key spokespeople.
Risk impact
Changes to NHS commissioning models, if adverse, could lead to
reduced access to patients, reduced tariffs, or reduced prices
adversely affecting revenues and/or margins.
A reduction in patient volumes could lead to a reduction in the
operational efficiency of our existing hospital network.
Changes in government fiscal policy or spending policy towards
corporate organisations, or the healthcare sector, could
materially affect our profitability.
At present, both the Conservatives and Labour are committed to
using the independent sector to help address waiting lists, but
until the manifestos are launched in the immediate run-up to
the general election, it is difficult to quantify the magnitude of
the risk posed by any future government.
Link to strategy
Link to strategy
Risk mitigation
Historically, we derived 70% of our revenues from PMI and
self-pay patients that provided a natural ‘hedge’ against
exposure to government and NHS policy. Post-pandemic, we are
seeing strong private revenues that are expected to continue
medium term.
During the COVID-19 pandemic, we strengthened our
relationships with the Department of Health and Social Care
and NHS England. Meanwhile hospitals have also strengthened
their relationships with the local NHS commissioners. The
Integrated Care Systems (ICSs) are all established and starting to
commission referrals effectively. The impact on NHS referrals
has been minimal.
From a contract perspective we have now signed effective
contracts with all ICSs.
Vita Health Group’s acquisition gives us a new opportunity
to participate in the NHS tender market.
We also inputted into the government’s Elective Recovery
Taskforce, whose work concluded in summer 2023.
8. Self-pay market dynamics
Executive owner(s): Chief commercial officer
Risk description
There is a risk that the self-pay market softens because of:
– A material lowering of NHS waiting lists for key self-pay
procedures within the Spire Healthcare footprint,
reducing demand
– Affordability amongst our core target market decreases as
inflation or higher tax take reduces disposable income
– Growth in the self-pay market is constrained by low growth in
the UK economy
– New competitors price to secure market share
Risk impact
In 2023, self-pay patients contributed 26% of group turnover. A
material reduction in the self-pay market could have a material
impact on our profitability and margin.
Risk mitigation
We invest in high-quality patient care which we believe
promotes an attractive service to self-pay patients and
promotes our brand through word-of-mouth recommendations.
Since 2022, we have deployed national multi-channel marketing
campaigns highlighting the key benefits of private healthcare to
increase our brand awareness.
We are expanding the range of services we offer to capture a
greater share of services that have healthy demand growth (as
illustrated by our acquisition of Vita Health Group).
We are strengthening our operational capability with further
enhancements to the website (content and functionality) and
call centre resilience and training.
We have adopted sophisticated pricing capability.
We are promoting patient financing as a payment option.
Risk appetite B
Risk movement: 2022
2023
Risk appetite B
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 72
Risk management and internal control continued
9. Major infrastructure failure
Executive owner(s): Chief operating officer
Risk description
There is a risk that there is a failure of national infrastructure, eg:
– The national electricity grid
– Import channels for our UK-based suppliers
– Fuel distribution
– Access to NHS
The above risks are from a variety of causes including lack of
resilience in national infrastructure, strike action, terrorist
activity, international geopolitical tensions, and action by state
governments wishing to harm the UK.
As international events in 2022 and 2023 have demonstrated,
this risk can materialise unexpectedly and rapidly.
Risk impact
Our hospitals are reliant on the provision of electricity from the
national grid. Main power outages result in the immediate
cancellation of procedures under general anaesthetic.
Failure of logistic channels is covered in supply chain failure risk.
In very rare cases, patients need to be transferred to the NHS for
further treatment and service level agreements (SLAs) are in
place with NHS bodies to facilitate this. If local NHS trust
hospitals are overburdened, or suffering strike action, there
could be delays in transferring patients.
Risk appetite B
Risk movement: 2022
2023
Risk mitigation
All our hospitals have a backup power source provided from
diesel powered generators that operates major circuits of a
hospital, but some key equipment is not covered, eg, MRI
scanners. Battery powered uninterrupted power is provided into
specific equipment in theatres to ensure patients remain safe in
the event of a generator failure. These backup power sources are
designed to keep patients in the hospital safe but are not a
complete substitute for mains power.
Our national distribution fleet refuel daily at the end of their
shifts to ensure resilient operational capability.
NHS hospitals are obliged to provide emergency care to
everyone but their pressures on ambulance services can and do
lead to delays to emergency transfers on rare occasions.
Mitigation plans are in place and rehearsed at hospitals.
The chief operating officer chairs a regular multi-disciplinary
winter planning meeting to co-ordinate response activities to
any infrastructure failures.
Link to strategy
Link to strategy
10. Patient safety and clinical quality
Executive owner(s): Group clinical director | Group medical director
Risk description
There is a risk to the provision of high-quality patient care
because of:
Risk mitigation
We maintain the following controls to mitigate against a failure of
patient safety and clinical quality:
– Clinical and non-clinical colleagues and consultants failing
to follow guidelines, standards and policies resulting in
avoidable patient harm
– Failing to learn from incidents, complaints, mortality
reviews, patient feedback and Patient Notification Exercises
in a timely manner which may result in further patient harm
– Failure to act on findings from audits, clinical outcome
measures (including registry data), peer reviews and
external inspections
Risk impact
Reputational and financial loss could occur if we fail to
address adequately issues identified by incidents, audits,
complaints, Patient Reported Outcomes Measures (PROMs),
National Registries, Raising Concerns, workforce feedback,
our internal Patient Safety Quality Reviews and the
Care Quality Commission.
– A reporting culture of openness and shared learning from ward
to board, with a FTSUG at each site
– Timely incident reporting via a database with central oversight
and development of actions to ensure learning. We are migrating
to the new Patient Safety Incidence Response Framework (PSIRF)
in 2024 in line with the NHS
– Continually monitoring clinical standards, reporting progress via
the board’s clinical governance and safety committee (CGSC)
– Quality and safety reporting based on a Quality Assurance
Framework with a standard set of KPIs
– A schedule of robust and regular hospital audits including the
Patient Safety and Quality Reviews, with an action plan for
improvement that is monitored
– Standard Operating Procedure for patient notification exercises
that includes learning and continuous improvement
methodologies
– Colleague induction, clinical competencies requirements and
mandated training
– Consistent reporting of clinical outcome and effectiveness
measures within the hospital and central meeting governance
structures (including medical advisory committee meetings) to
ensure that insights and learning are actioned and shared
– Continuous monitoring of patient experience via regular surveys
and policies and procedures in place to ensure learning
from patient experience feedback (including detractors
and complaints)
Risk appetite VL
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
73
Risk management and internal control continued
11. Expanding our proposition
Executive owner(s): Chief commercial officer
Risk description
There is a risk that:
Risk mitigation
We have:
– We will not be able to launch and scale new propositions or
services at sufficient pace to diversify and mitigate the risk
of disintermediation
– New digital healthcare services deliver lower margins and
therefore contribution to existing services
– In making new acquisitions, we may fail to derive the expected
value from our acquisitions that will improve our return on
capital employed as well as diversify our service offering
Risk impact
We fail to grow the revenues, generate cash and provide a return
on investment to investors of the group in line with our five-year
strategic plan. We become disintermediated by new/specialist
service providers.
– An innovation board bringing together the CEO and executive
committee members of the medical, clinical, commercial and
finance functions to identify healthcare trends and
opportunities to develop new services
– A dedicated director of innovation and proposition
development sourcing specific opportunities to support the
group strategy, leading on development, supported with
dedicated IT and project resource
– A dedicated director sourcing suitable target acquisitions
supported by an expert external financial and tax adviser
– A property lead to handle the assessment and acquisition
of new physical assets with the support of retained
property advisers
– Acquisition due-diligence processes using appropriate
third-party expertise
– Board review and approval of acquisitions
– Post-acquisition project management and integration
processes incorporating learnings from previous acquisitions
The acquisition of Vita Health Group has opened new
commercial opportunities for us, but importantly also improved
our mitigation of this risk.
Risk appetite H
Risk movement: 2022
2023
Link to strategy
Link to strategy
12. PMI market dynamics
Executive owner(s): Chief commercial officer
Risk description
The PMI market remains concentrated, with the top four
companies (Bupa, AXA, Aviva and VitalityHealth) having a
market share estimated at over 90%.
Risk mitigation
We work hard to maintain good relationships and a joint
product/patient health offering with the PMI companies, which,
in the opinion of the directors, assists the healthcare sector in
delivering high-quality patient care.
We have individual contractual relationships for the provision of
our services with all the major PMI providers. These contracts
come up for renewal on a recurring basis. There is a risk that
renewal of contract terms cannot be secured on historical terms.
We invest in high quality patient care as we believe this
provides confidence to our PMI partners to refer their insured
customers to us.
Service line tenders and the introduction of triage services are
expected to continue medium term as PMIs look to reduce costs.
We also expect an increase in directional networks.
We ensure we have long-term contracts in place with
our PMI partners that avoids co-termination of
contractual arrangements.
In the current economic environment, there is a risk that the
pressures on competitors results in irrational market behaviour
manifesting itself in low pricing on tenders.
We believe that continuing to invest in our well-placed portfolio
of hospitals provides a natural fit to the local requirements of all
the PMI providers long term.
Risk impact
Loss of, or renewal at lower tariffs, of an existing contractual
relationship with any of the key insurers could significantly
reduce our revenue and profit.
We continue to invest in efficiency programmes to ensure that
we can offer the best combination of high-quality patient care
at competitive prices.
Risk appetite L
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 74
Risk management and internal control continued
13. Supply chain disruption
Executive owner(s): Chief financial officer
Risk description
Disruption in the global and UK supply chains because of a
variety of factors, could lead to shortages of critical components
or products within:
– Medicines
– Consumables
– Prostheses
– Food
– Green energy supply
– Medical gases
– Oil and gas
– Electronic components for medical equipment
Risk impact
Our hospitals are reliant on a wide range of products to be able
to conduct operations and procedures. Shortfalls in fulfilment of
fresh food orders for example, could result in hospitals having to
cancel inpatient operations and procedures.
We are heavily reliant on medical consumables, that in turn are
heavily reliant on the availability of plastics, to carry out even the
most basic procedures (eg, taking blood samples). Shortages in
raw materials or disruption in the supply chain from the
manufacturer could result in hospitals having to cancel
operations and procedures.
Link to strategy
Link to strategy
Risk mitigation
We run a centralised supply chain with a national distribution
centre (NDC) and its own vehicle and driver fleet. Medical
consumables are held at the NDC with an average of six weeks’
supply, medicines and prostheses are being held at
hospital sites.
We must respond to product shortages and global recalls
consistently, and we have seen some minor shortfalls in order
fulfilment. In all cases, our centralised procurement function
has been able, with the support of a permanent presence from
the Clinical team, to find alternative supplies to maintain
hospitals’ activities.
Fresh food is supplied through a national food distributor who
has its own delivery fleet and directly employs its HGV drivers.
Order fulfilment has remained in the high ninety percentile. We
have contingency menu plans in case of fresh food shortages.
Any national shortages in critical medicines and medical gases
are managed by NHS Supply Chain. We receive allocations based
on our activity.
We will continue to monitor supply chain risks considering the
continuing geopolitical volatility.
14. Antimicrobial resistance
Executive owner(s): Group medical director
Risk description
Antimicrobial resistance (AMR) is a global health and
development threat.
The World Health Organization has declared that AMR is one of
the top 10 global public health threats facing humanity.
Risk mitigation
Our mitigations are:
– Executive level awareness of the government’s five-year
AMR strategy
– Participation in, and collaboration with, government’s
monitoring of AMR outbreaks
Misuse and overuse of antimicrobials are the main drivers in the
development of drug-resistant pathogens.
– Requirement on clinicians to follow guidance in line with
government guidelines on the prescribing of antibiotics
– Access to up-to-date antimicrobial prescribing via online
systems and access to microbiologists at all sites
– Appropriate investigations of post-surgery infections including
review of antibiotics
The cost of AMR to the economy is significant. In addition to
death and disability, prolonged illness results in longer hospital
stays, the need for more expensive medicines and financial
challenges for those impacted.
Without effective antimicrobials, the success of modern
medicine in treating infections, including during major surgery
and cancer chemotherapy, would be at increased risk.
Source: World Health Organization
Risk impact
If AMR becomes prevalent in the UK, the ability for consultants
to carry out routine elective surgery could become too
dangerous. This would mean the current business model of Spire
Healthcare will become unviable.
New antibiotic costs may increase substantially.
Risk appetite L
Risk movement: 2022
2023
Risk appetite L
Risk movement: 2022
2023
Strategy key
Drive hospital
performance
Build on
quality
Invest in our
workforce
Champion
sustainability
Expand our
proposition
Deliver strong
financial performance
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 75
Task force on climate-related financial disclosures (TCFD) report
The board makes its statement of compliance with TCFD disclosures as required by Listing Rule (LR 9.8.6 R(8)) below. By this we mean the four TCFD recommendations and eleven recommended disclosures set out in
the table below and in Figure 4 of Section C of the report entitled “Recommendations of the Task Force on Climate-related Financial Disclosures” published in June 2017 by the TCFD and updated in the 2021 TCFD
Implementing Guidance (annex). The approach to building scenarios described on pages 76 to 77 for our scenario analysis follows the updated guidelines produced by the TCFD within their Guidance on Scenario Analysis
for Non-Financial Companies. Our TCFD report does not include the Vita Health Group as the acquisition occurred in October 2023.
Governance
Strategy
Risk management
Metrics and targets
Disclose the organisation’s governance around climate-related
risks and opportunities.
Disclose the actual and potential impacts of climate-related
risks and opportunities on the organisation’s businesses,
strategy, and financial planning where such information is
material.
Disclose how the organisation identifies, assesses and
manages climate-related risks.
Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities where such
information is material.
Recommended disclosures
Status
Recommended disclosures
Status
Recommended disclosures
Status
Recommended disclosures
Status
a) Describe the board’s
oversight of climate-related
risks and opportunities.
– see page 76
b) Describe management’s
role in assessing and
managing climate-related
risks and opportunities.
– see page 76
Compliant
Partial compliance
Non-compliant
a) Describe the climate-
related risks and opportunities
the organisation has
identified over the short,
medium, and long term.
– see page 76
b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial
planning.
c) Describe the resilience of
the organisation’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C or
lower scenario.
– see page 78
– see page 79
a) Describe the organisation’s
processes for identifying and
assessing climate-related
risks.
– see page 79
b) Describe the organisation’s
processes for managing
climate-related risks.
– see page 79
c) Describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
– see page 80
a) Disclose the metrics used
by the organisation to assess
climate-related risks and
opportunities in line with its
strategy and risk
management process.
b) Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the related
risks.
– see page 80
– see page 80
c) Describe the targets used
by the organisation to manage
climate-related risks and
opportunities and
performance against targets.
– see page 80
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 76
Task force on climate-related financial disclosures (TCFD) report continued
Governance
a) The board’s oversight of climate-related risks and opportunities
Our board has ultimate oversight of climate-related risks and opportunities facing us. It exercises that
oversight through:
– An annual review of our corporate strategy, that includes championing sustainability as one of its five pillars
as described on pages 31 to 33
– Review of major strategic climate and environmental-related initiatives as put to the board by the executive
committee in line with the corporate strategy eg, the environmental, social and governance strategy
explained on pages 36 to 53 and the net zero strategy as explained on pages 39 to 41
– Quarterly key performance indicator report on the corporate strategic objectives, including progress against
the sustainability development goals and the net zero strategy. The major strategic initiatives have
milestones and targets. The management information presented to the board shows progress against
those targets
– Receiving reports from board sub-committees following their meetings, eg, the audit and risk committee
(ARC) that reviews the principal risks on behalf of the board and oversees our risk management processes,
that includes climate-related risks, as explained on pages 64 to 65
– Annual review of emerging risks with the executive management team through the ARC
As the board also retains the authority to approve all capital projects over £5 million under its delegated levels
of authority, in doing so, it reviews all major capital expenditure projects that affect sustainability.
b) Management’s role in assessing and managing climate-related risks and opportunities
The executive committee retains overall responsibility for assessing climate-related risks and opportunities.
The committee is chaired by Justin Ash, our chief executive officer, and comprises his direct reports.
The committee receives a quarterly report from the director of audit, risk and compliance on the principal risks
and the overall risk profile of the group prior to reporting to the ARC. The principal risk report analyses the
principal risks in several ways, from individual assessment of their probability and impact, their inter-
relationships, and detail on the individual current and planned risk mitigations and sources of assurance. It is
through that assessment, in conjunction with other management information, that the executive committee
understands and acts on its assessment of climate-related risks. The committee also reviews global trends for
emerging risks on an annual basis and submits a report to the ARC on emerging risks it sees from those global
trends.
The executive committee receives data and information from various functional management teams to help it
collate its overall view of the climate-related risks and opportunities facing the group.
In 2023, we undertook a detailed scenario analysis exercise based on future global warming scenarios. The
outcomes provided us with a detailed view of our potential physical and transitional risks from climate change.
The outcomes are described in more detail on page 77 to 78.
The executive committee communicates with the board through two main reports from the chief executive
officer and chief financial officer, and additional reports from the chief operating officer. The executive
committee also presents reports to the board through specific topics that are on the agenda for the board, eg,
the executive committee’s proposed sustainability strategy that the board approved in 2022.
In 2023, we decided that we needed to have focused committees on workforce and sustainability, so we split
the previous workforce and sustainability committee into two sub-committees of the executive committee.
The sustainability committee, chaired by the chief financial officer, was formed to focus on our sustainability
risks and strategy.
The sustainability committee’s remit is to:
– Oversee our sustainability strategy
– Provide management support and oversight to other committees
– Approve and oversee the implementation of relevant policies and procedures
– Review and approve reporting, public disclosures, and external communications in relation to sustainability
– Monitor sustainability and ESG related developments
– Oversee stakeholder engagement on sustainability
– Oversee the design and delivery of sustainability related training
The committee is composed of a diverse membership from members of the executive committee, senior
managers, and members of our community of carbon champions.
Strategy
a) Climate-related risks and opportunities the organisation has identified over the short, medium
and long term
Time frames
The board recognises that climate-related risks and opportunities would emerge over very long time frames,
and well outside the normal five-year strategic planning horizon. Its review of going concern and viability are
conducted over 12 months, and three years respectively, from the date of the balance sheet. The board
conducts these reviews before publication of the interim and annual financial statements, and while they
model the impact of a near-term climate event in line with the principal risks, do not capture longer-term
impacts from climate change.
In 2023, we engaged WTW (formerly Willis Towers Watson) to consider:
a) transitional risks we may face in the scenario that by 2050, humanity has transitioned to a low carbon
economy such that the increase in global average temperatures is restricted to 1.5˚C above pre-industrial
times and;
b) the physical impacts of climate change up to 2100 because the effects of climate change will be more
material over the longer time horizon.
WTW modelled the impacts to physical risks from climate change over the following time horizons:
– Short term – to 2030
– Medium term 2030-2050
– Long term 2050-2100
To quantify the impacts of the risks modelled in the physical and transitional risk scenarios, WTW used our risk
impact assessment criteria contained within our enterprise risk management policy to maintain consistency
with other risk categories as described in our principal risk section on pages 64 to 65. The outcomes of the
scenario analysis are described below. The scenario analysis covered all physical assets of our operations in our
ownership as at 1 January 2023, and therefore does not include the physical or transition risks of Vita Health
Group that we acquired in October 2023. We will rerun the scenario analysis within three years on our asset
base at the time.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 77
Task force on climate-related financial disclosures (TCFD) report continued
Relative importance of physical risks and transitional risks to the business
Current climate/low emissions scenario RCP2.6 (1.5˚C) by 2030
Physical risks
From a climate change perspective, we consider our operations as one business unit because all of our
operations are within the UK, and similar in nature. The scenario analysis to assess the physical risks covered
the following chronic and acute climate risks:
Risk title
Potential impact(s)
Heat stress
Impact: Negligible
Some of our hospitals are vulnerable to overheating and air conditioning (AC) failure, especially in the
south. This happened during the 2022 heatwaves in the UK with some of our facilities having short (one
day) temporary closures of their operating theatres.
Chronic climate risks assessed
Acute climate risks assessed
– Chronic heat-stress
– Chronic drought-stress
– Sea level rise
– Chronic precipitation-stress
– Fire weather
– Windstorm
– Tornado
– River flood
– Flash flood
– Coastal flood
– Hailstorm
– Lightning
– Wildfire
We provide commentary on the four most material physical risks associated with climate change below. The
modelled outcomes of all the other risks above, but not described below, were immaterial. WTW’s
methodology input:
– the specific geographical locations of all our sites
– data concerning the building (eg number of storeys, building materials)
– insurance valuation
– revenue derived from each specific physical location, where that information was available
– historical business interruptions
This data was modelled against WTW’s climate diagnostic model (see page 79), to forecast climatic changes in
the specific locations out to 2100. We report the outcomes of the scenario analysis by the forecast impact for:
– Low emissions (RCP2.6 + 1.5°C) over the short term (to 2030) because there are no material differences in
that time frame between the scenarios, and
– High emissions (RCP8.5 +4°C) over the medium term (to 2050) to illustrate the worst-case outcomes
We acknowledge that these risk modelled continued to have an increasing impact over the long term
(2050-2100) in the high emissions scenario (RCP8.5), but have not reported them here given the increased
uncertainty as to what will be the most likely scenario and risk impacts for these very long-term time frames.
Currently all of our facilities are exposed to very low heat stress, seeing less than five heatwave days
each year with temperatures more than 30˚C.
If cooling systems remain the same, by 2030 we could see a slight increase in incidents across our
hospitals. As we have a rolling programme to upgrade end-of-life AC systems within our capital
expenditure plans, there is no material impact on our business model.
Drought
Impact: Negligible
Our facilities depend on a stable supply of water from the mains water network to maintain safe
patient care.
Overall, there is very low or low exposure across our facilities, with less than three months of drought
duration per year, even in the south. No drought or water stress related issues have been reported to
date. Consequently, drought is not considered a material risk under climate conditions modelled to
2030.
Flooding
(all types)
Impact: Negligible
Flooding of our facility would necessitate partial or complete closure of the site until any cleanup and
repairs are completed to enable safe patient care to resume. Most of our assets (96%) between 2023
and 2030, are at very low risk for river flooding, however there are three facilities with moderate risk (2%
likelihood of river flooding in a decade), and one London Doctors Clinic location with high risk (10%
likelihood in each decade).
Our property portfolio has low exposure to heavy rainfall and potential flash floods in this time period.
The average annual modelled losses from river flood are negligible. In severe years it could be more
significant but even then, still negligible. Most of the financial impact is associated with property
damage rather than loss of revenue.
Windstorm
Impact: Negligible
All our facilities in the UK are in stormy regions, with 1% annual chance of having severe wind gusts of
over 121km/h between 2023 and 2030, with seven locations at risk of higher winds of 161-200km/h due
to extratropical cyclone. Property damage from windstorm could result in partial or full closure of a site
until repairs are completed to allow for safe operation of the site.
Most of the financial impact is associated with property damage rather than loss of revenue.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 78
Task force on climate-related financial disclosures (TCFD) report continued
High emissions scenario RCP8.5 (+4˚C) by 2050
Risk title
Potential impact(s)
Heat stress
Impact: negligible
to minor
Drought
Impact: minor to
moderate
Flooding
(all types)
Impact: negligible
By 2050, heat stress develops to low risk for 55 facilities, with 5-20 heatwave days in a year, and 39
assets are likely to have a very low risk exposure.
This trend could mean an increase in the cost of cooling of hospitals and clinics, and more disruptions
to operations.
The number of material incidents could increase up to five times compared with the 2022 heatwave
including AC failure, overheating including operating theatres, drug storage issues, patient and
colleague illness and more potential closures. This could impact our long-term business model (beyond
2030) with a need to invest in additional methods for cooling patient and colleague areas within our
facilities, especially in the south, not currently covered by existing AC systems.
There will likely be an increase in our exposure under this scenario by 2050.
46 facilities could become exposed to moderate stress (3-4 months of drought per year), whilst 34
facilities could be exposed to low risk and 14 facilities exposed to very low risk of drought stress.
The potential adverse consequences to our business include reduced water availability and other
utilities and operations relying on water. This may require additional investment between 2030-2050 in
back-up water supplies for some specific sites in the south if the national water network does not
become more resilient to drought.
The number of exposed locations will not change substantially by 2050 but changes in the frequency of
flood events is likely. Three facilities could be very highly exposed and one facility moderately exposed.
By 2050 what is considered today to be a severe 200-year event could happen more frequently (ie, one in
100 years). In a severe one in 100 future event, losses could be five times that of our current risk, but the
risk still remains within the negligible impact range. To maintain current operations, additional flood
protections may be required for those specific locations most at risk between 2030-2050 under this
emissions scenario.
Windstorm
Impact: negligible
The frequency and/or severity of windstorms (extratropical cyclones) are likely to be similar to current
climate conditions for our locations of assets under this scenario and time frame.
Therefore, the average annual modelled damages for both property damage and business interruption
stay in the same impact range. The modelled outcome from windstorm suggests there is no impact on
our current business model.
Transitional risks
In the transition to a low carbon economy by 2050, the assessment of transition risks assume nation states
adopt highly ambitious goals to dramatically reduce the impact of climate change. In line with our enterprise
risk management methodology, we identified and quantified 12 transition risks in the categories
recommended by the TCFD (being policies and legal risks, technology risks, market risks and opportunities, and
reputational risks and opportunities). In our quantification of those risks only one risk concerning price
fluctuations for the purchase of green energy is an immediate risk. We have taken the decision to purchase
‘brown’ energy and delay the reduction in our carbon emissions until the ‘green’ energy market stabilises. We
believe the other transitional risks and opportunities identified are currently immaterial. We will continue to
monitor the remaining transitional risks at least annually as they may, between now and 2050, increase in
materiality, especially if new laws and regulations come into effect (eg, regarding carbon taxation policy or
building code regulations) or potential risks over finite resources begin to emerge in our supply chain (which
would be covered by our principal risks on supply chain disruption or major infrastructure failure, depending on
the impact).
Impact on climate-related risk and opportunities on the financial statements
We have not identified any climate-related risks or opportunities that would have a material impact on the
carrying values of the assets or liabilities of the group, and therefore we have not adjusted financial balances
for climate-related risks or opportunities in our balance sheet as of 31 December 2023.
Opportunities
We have an opportunity to turn some of the risks to opportunities, especially by communicating our
environmental credentials more prominently, including our carbon reduction strategy, as a differentiator in the
independent healthcare sector.
There are predictions that climate change disruptions will result in increased respiratory and cardiovascular
disease, injuries and illness related to extreme weather events, changes in the prevalence and geographical
distribution of food and water-borne illnesses and other infectious diseases, and threats to mental health. As a
business, we recognise this and are committed to reducing our impact on climate change, but we are also able
to support the UK to prepare for the health impacts of climate change. We continue to adapt and deliver
quality healthcare services that meet changing needs in the market.
b) Impact of climate-related risks and opportunities on our businesses, strategy, and financial planning
Financial impact of climate change risks and opportunities
We have focused on the near-term financial impacts for the purposes of the going concern and viability
modelling. The outcomes of that modelling are reported in the statement on viability on page 81. We have
previously announced that the net zero strategy represents a cash investment of £16 million up to 2030.
We approved a further £12.2m of additional capital spend for 2024 to fund installations of solar panels and
building management systems across our estate. Capital expenditure for routine upgrades of hospital
infrastructure, where we build in the latest design tolerances for future climate change, has been within
our normal capital expenditure programme, the total quantum of which was £84.4 million in 2023
(£90.1 million in 2022).
Following the outcome of our scenario analysis as discussed above, in our five-year strategic plan, other than
the allocation of capital to the net zero strategy, and except for energy costs or potential losses from major
disruption from an adverse weather event as modelled in our viability testing, we do not consider that other
climate-related risks and opportunities will have a material impact on our revenues, operating costs,
acquisitions, divestments and access to capital over that time horizon. In relation to energy costs, we have
energy price hedging in place until December 2024. Thereafter, we are exposed to future energy prices. We
are already reviewing future hedging strategies to reduce our level of exposure from price volatility post
December 2024.
We have highlighted in the risk analysis above where over the medium term (2030-2050) and in the high
emissions scenario, our business model may need to respond to changing climatic conditions.
Other impacts on our business, strategy and financial planning
Our net zero strategy does not rely on unproven technology. Details of the net zero strategy are in the
sustainability section on pages 39 to 41. We are aware that technological developments are occurring at pace,
for example looking at the electrification of HGVs. They may have an impact on our strategy before 2030 if
they become commercially viable.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 79
Task force on climate-related financial disclosures (TCFD) report continued
There has been no significant change in 2023 to our approach of identifying climate-related risks and
opportunities, or our mitigation strategies against the risks we have identified. The process of risk
management described on pages 64 to 67 utilises well established methodologies to prioritise risks by
assessing their impact and probability. We used the same risk assessment criteria described in our enterprise
risk management policy for assessing the outcomes from the scenario analysis. We will continue to review our
mitigations through:
– Our normal risk management process
– Taking advantage of opportunities as we identify them and they arise
c) Resilience of our strategy, including a 2°C or lower scenario
We conducted a scenario analysis in 2023, covering the scope of the physical and transitional risks and the
timescales as described above. The primary objective was to assess the physical climate risks for our portfolio
of hospitals based on current climate conditions as well as projections of climate change impact in the long
term and to identify our potential transitional risks in the scenario of a transition to a low carbon economy by
2050. The assessment considered a range of different climate scenarios in line with the recommendations of
the TCFD.
The physical risk assessment relied on the use of WTW’s climate diagnostic model, which uses underlying
climate data provided by Munich Re’s climate change hazard layers. The layers utilise data from the European
Centre for Medium-Range Weather Forecasts (ECMWF), UKCP18, JBA Global Flood Model and the Met Office.
The flood model provides a view of the risk based on an underlying digital terrain model, which provides a
robust view of buildings and physical assets being exposed.
We modelled climate scenarios and corresponding average global warming based on the Inter-Governmental
Panel for Climate Change’s scenarios:
– RCP2.6 (1.5°C)
– RCP4.5 (2-3°C)
– RCP8.5 (4°C+)
As described above, against the specific modelled risks, the outcomes indicate that our physical asset base,
being largely low-rise buildings and away from flood plains around England, Scotland, and Wales, is relatively
well protected from projected adverse climate scenarios. We consider heat stress to be the most significant
near-term risk with drought becoming an increased risk in the RCP8.5 (4°C+) scenario.
We assessed our exposure to transitional risks which, except for energy prices, we assess as negligible now.
However, changes in the regulatory or legal environment, may materially change that assessment at short
notice. Our business strategy to mitigate energy price fluctuations is to a) continue to invest in energy
reduction measures, b) buy forward and fix prices for at least the full financial year ahead of the current
financial year. Our overall business strategy, we believe, is resilient to the identified transitional risks because of
their limited impact as we assess them now.
Risk management
a) Our processes for identifying and assessing climate-related risks
On pages 64 to 67 we describe our risk management process and its governance. We use the same process to
identify and assess climate-related risks augmented by specific deeper dive risk assessments where
appropriate. The relative importance of climate-related risks is established through the same method of
estimating the range of potential impacts and the likelihood. As risk management is looking to the future, there
is always a degree of uncertainty over probability and impact measures, especially with climate change, given
the climate is dynamic and the changes are complex to model. Page 65 shows the relative importance we judge
climate change risk to have compared to other principal risks. We have set out on page 77 and 78 what we
believe are the climate-related risks that are specific to our circumstances.
b) Our processes for managing climate-related risks
On page 76, we describe the governance of climate-related risks and opportunities including the role the
sustainability committee will have going forward. Our governance structure results in four levels of
management of our climate-related risks and opportunities depending on the materiality of the activity as
shown in the figure below.
Board
Strategic direction, including approval of large-scale investment programmes
reserved as a matter for the board
Executive committee (with specific delegated responsibilities to the sustainability committee)
Determination of strategic direction and large-scale investment, approval of tactical investments
Functional leadership
Group-wide tactical management
Site level leadership
Local strategies and tactical implementation
The structure shown above reflects the type of actions we have taken to manage our climate-related risks,
for example:
– Major strategic initiatives sponsored by the board, eg, the net zero strategy
– The pragmatic management of risk assessed and prioritised activities such as the replacement of ageing
heating, ventilation, air conditioning (HVAC) systems, the installation of energy saving technologies from
new building management software, solar panels and energy efficient lighting led by functional leadership
reporting into the executive committee
– As described on page 40, local carbon champions working with their local leadership teams have developed
site specific action plans that have been fundamental in making site level changes that are saving energy,
reducing CO2 emissions and improving waste disposal on a daily basis
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 80
Task force on climate-related financial disclosures (TCFD) report continued
c) How processes for identifying, assessing, and managing climate-related risks are integrated into our
overall risk management
As the responsibility for identifying and managing risks, including climate-related risks, as set out on pages 64
to 67 is with the board, the executive committee (via the sustainability committee) and then through
functional and local leadership, management of climate-related risks is entirely integrated into our normal
management processes. We have not built a separate management process to manage climate change related
risks and opportunities.
While various committees look at specific aspects of climate-related risks as described on page 76, reporting on
the sustainability pillar of the corporate strategy is embedded in KPI reporting with all other strategic KPIs.
From there, the identification, assessment and management of more detailed climate-related risk
management activity is embedded within our established management systems, whether that be the
recording of specific risk assessments within our risk management system, or the review and decision-making
by established committees and local management teams.
Metrics and targets
a) Our metrics used to assess climate-related risks and opportunities
In our risk management process, we assess all risks against a range of impacts including financial, reputational,
and patient safety amongst others.
In relation to climate change, the main strategic risk and opportunity for which we have developed is the
decarbonisation of our operations in line with our net zero strategy. We use the following metrics to track
progress towards achieving our net zero targets:
– Gas and electricity consumption against targets plus associated scope 1 and 2 carbon emissions
quarterly, twice yearly
– Carbon intensity against revenue annually
– Electricity generated by solar PV annually
– Waste to landfill/energy-from-waste/recycling
– Water consumption
– Financial losses due to climate-related incidents
We report Scope 1 and 2 emissions in full, and some of the Scope 3 emissions being grey fleet, air and rail travel,
hotel and waste. The method of quantification requires we anticipate carbon pricing to impact our net zero
strategy until 2030 when the residual unmitigated emissions will be offset.
We have separate metrics to measure our performance of waste management. Our metrics are described
on page 42.
Against the risks that have been identified through our physical and transitional scenario analysis, we will
develop further metrics in 2024 to monitor the likelihood and impact of the most material emerging risks (ie
heat stress, drought, flooding and windstorm damage) and energy pricing.
We do not consider the use of internal carbon pricing is of any practical use as all our operations are in the UK,
of a uniform nature and individual sites are charged for their actual energy consumption as the energy
usage is metered.
b) Our Scope 1, Scope 2 and, Scope 3 greenhouse gas (GHG) emissions, and their related risks
We disclose our GHG emissions, methodology and footprint boundary on page 39 to 41 in accordance with the
methodology set out in the UK government’s Environmental Reporting Guidelines 2019. There has been no
change to the methodology applied to calculate our emissions in 2023. As we use an independent third party
to calculate our emissions and only 0% of our emissions data is based on estimated activity data, we believe
the risk of material error in our data is low.
We express our energy intensity ratio as a tCO2e per £m revenue. This ratio provides a consistent year-on-year
basis to measure the energy required to deliver our operational activities. We track and disclose the change in
intensity ratio over the last five years as disclosed on page 40. Our intensity ratio has fallen by 41% between
2019 and 2023.
We assess Scope 3 emissions to be material to our operations. Those we have been able to measure to date
(grey fleet, air and rail travel, hotel and waste), we include in our emissions data on page 40. We have
quantified our Scope 3 emissions from our supply chain for the first time in 2023. We used the ‘spend
methodology’ on our 2022 supply chain expenditure as the best methodology currently available and therefore
it is 100% based on estimated data. That estimation indicates our supply chain makes up c95% of our total
carbon emissions with total scope 3 emissions of 462,710 tCO2e, made up of:
– Purchased goods and services 451,770 tCO2e
– Capital goods 10,678 tCO2e
– Waste generation 106 tCO2e
– Business travel 156 tCO2e
In 2024, we will develop our plans to refine our reporting of scope 3 emissions.
c) Our targets to manage climate-related risks and opportunities and performance against targets
The net zero target is measured as net zero CO2e (carbon dioxide equivalent) emissions, ie, that CO2e emissions,
taking 2019 as our baseline, will be fully mitigated or offset. Our plan anticipates that we will mitigate over 85%
of our 2019 CO2e levels by the end of calendar year 2030, with the remainder offset.
We have a target as set out in our net zero strategy and waste management strategy to reduce our GHG
emissions until 2030. Our net zero target includes elements of scope 3 emissions (energy transmission, hotels,
and waste) but it does not include scope 3 emissions from our supply chain. We report our progress and the
initiatives to deliver against those targets on page 39. Our targets for net zero and waste management are
actively pursued and included in our business plans. In 2024, we plan to develop our targets to reduce our scope
3 emissions over the medium to long-term, and to consider if we adopt the science-based target initiative.
The Remuneration Committee have debated the inclusion of ‘Environmental’ related metrics in incentive plans
and whilst this is not included explicitly, these are inherent in our strategy and also help drive the quality
metrics which are part of the incentive plans.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 81
Compliance statements
Viability
Assessment of prospects
In accordance with the 2018 UK Corporate Governance Code, the directors assessed the viability of the
group and have maintained a period of three years for their assessment. Although longer periods are used
when making significant strategic decisions, three years has been used as it is considered the longest period
of time over which suitable certainty for key assumptions in the current climate can be made. The assessment
conducted considered the group’s current financial position and forecasted revenue, EBITDA, cash flows, risk
management controls and loan covenants over the three-year period (which is consistent with the approach
for prior years).
Assessment of viability
Further detail on both macroeconomic-related risk is provided in the risk management and internal control
section on pages 64 and 74.
Other specific scenarios covered by our testing were as follows:
– The group is subject to temporary suspension of trade, with a temporary adverse impact on revenue,
for example, as a result of a successful cyber-attack on key business systems
– The downside modelling of a number of risks which result in a decline in earnings, including the loss of a
contractual relationship with a key insurer
– Significant change in government policy resulting in consultants going on payroll
– Short-term disruption to trade at a sub-set of hospitals owing to an extreme weather event
Management’s approach also included testing for a specific combination of these risks. This testing entailed
modelling for the potential impact if, although considered highly remote, the three risks which individually
give rise to the largest adverse financial impact were to take place in combination.
This review included the following key assumptions:
– No change in capital structure given the group has refinanced its existing senior finance facility and
revolving credit facility in February 2022, and exercised the option to extend the senior finance facility for a
further year, and
– The government will not make significant change to its existing policy towards utilising private provision
of healthcare services to supplement the NHS
Based on the results of this analysis, the directors confirm that they have a reasonable expectation that the
group will be able to continue in operation and meet its liabilities as they fall due over the next three years.
Going concern
The group has undertaken extensive activity to identify plausible risks which may arise and mitigating actions.
Further information on these is provided in the section on viability above. Based on the current assessment of
the likelihood of these risks arising by 31 March 2024, together with their assessment of the planned mitigating
actions being successful, the directors have concluded that it is appropriate to prepare the accounts on a going
concern basis. See note 2 – Basis of Preparation in the Financial Statements for more detail.
Non-financial and sustainability information statement
The Companies Act 2006 requires the company to disclose certain non-financial and sustainability reporting
information within the annual report and accounts. Accordingly, the disclosures required in the company’s
non-financial information and sustainability statement can be found on the following pages in the strategic
report (or are incorporated into the strategic report by reference for these purposes from the pages noted):
– Information on our employees (page 27-30)
– Information on diversity (pages 28-29 and 45)
– Information on our anti-bribery and corruption policy (page 33)
– Information on our approach to raising concerns (whistleblowing) and Freedom to Speak Up
(pages 8, 26, 51, 52, 67, 72, 96, 102, 103)
– Information on our approach to human rights (page 52 and 96)
– Information on social matters (pages 44 to 53)
– Information on our environment policy (pages 39 to 44)
– Information on our climate-related financial disclosures in line with The Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022 (pages 75 to 80)
Section 172 (1) statement
The directors are required to act in a way they consider, in good faith, would most likely promote the success of
the company for the benefit of its members as a whole, taking into account the factors as listed in section 172
of the Companies Act 2006.
Details of how the directors have had regard to their Section 172 duty can be found throughout the strategic
and governance reports. We set out on pages 36 to 41 details of who we consider to be our main stakeholders,
how we have engaged with them during the year and the outcomes of the process. Further details on how the
directors’ duties are discharged and the oversight of these duties are included in the governance section on
pages 85 to 94. The principal decisions of the board during the year are shown on page 85.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 82
Chief financial officer’s review
Flexible business model
and strong balance sheet
In 2023 the business delivered
a strong financial performance,
in line with our expectations,
in a tough inflationary and an
uncertain macroeconomic
environment, demonstrating
that our strategy is working.”
Jitesh Sodha
Chief Financial Officer
Dear shareholder,
In 2023 we delivered an excellent financial
performance in an inflationary and challenging
economic environment. All headline metrics rose
with increases in volume and revenue. Adjusted
EBITDA was the highest since we listed in 2014 and I
was particularly pleased with the flow through to
EBIT, PBT and PAT. The business continues to be cash
generative with cash conversion from EBITDA at 98%
and an increase in free cash flow. Vita Health Group
(VHG) is an excellent addition to the business. Going
forwards, the group will present numbers separately
for its hospitals business and new services. The new
services have lower EBITDA margins but because they
have lower capex requirements, they will have good
flowthrough to PBT.
Revenue was £1,359.0 million, up 13.4% on 2022,
driven by steady demand for private healthcare.
Private revenue rose by 9.5% to £959.7 million during
2023 and ARPC rose by 6.3% to £3,381.0, driven by our
progress to a more complex treatment mix and active
control over pricing.
Further good progress was made in 2023 to expand
the group’s business. In October 2023, we acquired
VHG, a provider of mental health, musculoskeletal
and dermatology services, and corporate and
occupational health services, for a net cash
consideration of £73.2 million. Integration of The
Doctors Clinic Group (DCG), acquired in late 2022,
continued during 2023, together with work on the
group’s new clinics.
Adjusted EBITDA rose YOY by 15% to £234.0 million
while adjusted EBIT increased 23.5% to £130.4 million.
Adjusted EBITDA margin for the group’s hospitals
business was 17.6%, up 0.6% compared to 2022.
Adjusted EBIT margin for the hospitals business was
9.9% for the period, up from 8.8% in 2022. We have
now laid the platform for further margin
development to achieve our medium-term adjusted
EBITDA target of at least 21% and adjusted EBIT
target of more than 13% for our hospitals business.
There was steady progress in the delivery of our
efficiency programme, resulting in cost savings of
£15 million in 2023. Key initiatives included
improving best-practice models for hospital
operations, such as standard operating procedures
and minimum staffing levels, the ongoing
reorganisation of hospitals into hubs and
procurement savings.
We continue to manage the ongoing shortage of
skilled healthcare workers. It is pleasing to note that
our turnover fell and colleague engagement scores
increased YOY.
The group’s leverage remained flat at 2.2x for 2023
and 2022 even though net bank debt has increased
to £315.7 million in 2023 with the acquisition of
VHG which was funded through cash and debt.
£10.0 million of this debt was subsequently repaid
by the year end. We also extended our senior
finance facility by another year to February 2027.
We invested in our estate and improved capabilities
with capital investment in 2023 of £84.4 million.
Our strong operational performance and increase
in adjusted EBIT led to an improvement in ROCE,
up by 1.3 percentage points to 7.5%. The directors
have recommended the payment of a final
dividend of 2.1 pence per share for the year ending
31 December 2023.
Demand for independent healthcare will likely
remain strong in 2024 and beyond. Our flexible
business model enables us to manage market
impacts. Our balance sheet remains strong and
enables investment and expansion of our offering,
managing these opportunities in a disciplined way.
We expect to make further good progress and
continued delivery of the group’s strategy in 2024.
Having spent five years at Spire Healthcare as the
chief financial officer, I will be stepping down from
the board at the annual general meeting on 9 May
2024 and I am pleased to be able to support
Harbant Samra in transitioning to his new role as
my successor.
Jitesh Sodha
Chief Financial Officer
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 83
Chief financial officer’s review continued
Selected financial information
(£m)
Revenue
Cost of sales
Gross profit
Other operating costs
Other income
Operating profit (EBIT)
Finance income
Net finance costs
Profit before taxation
Taxation
Profit for the period
Profit/(loss) for the year attributable
to owners of the Parent
Profit for the year attributable
to non-controlling interest
Adjusted EBITDA(1)
Basic earnings per share, pence
Adjusted FCF(2)
Net cash from operating activities
Net bank debt(3)
Year ended 31 December 2023
Year ended 31 December 2022
Total before
Adjusting
items
1,359.0
(734.8)
624.2
(497.4)
3.6
130.4
1.4
(93.0)
38.8
(6.4)
32.4
Adjusting
items
(note 9)
–
–
–
(6.7)
2.5
(4.2)
–
–
(4.2)
(0.3)
(4.5)
Total before
Adjusting
items
1,198.5
(660.1)
538.4
(435.8)
3.0
105.6
–
(91.5)
14.1
2.5
16.6
Adjusting
items
(note 9)
–
–
–
(10.2)
–
(10.2)
–
–
(10.2)
1.8
(8.4)
Total
1,359.0
(734.8)
624.2
(504.1)
6.1
126.2
1.4
(93.0)
34.6
(6.7)
27.9
Total
1,198.5
(660.1)
538.4
(446.0)
3.0
95.4
–
(91.5)
3.9
4.3
8.2
31.8
(4.5)
27.3
17.0
(8.4)
8.6
0.6
–
0.6
(0.4)
–
(0.4)
234.0
6.8
48.0
215.5
315.7
203.5
2.1
28.0
180.1
250.1
Revenue
Group revenues increased 13.4% to £1,359.0 million (2022: £1,198.5 million). The increase is driven by demand
for private healthcare which remained strong throughout the year. The group’s self-pay business remained
robust with revenue up year-on-year delivered through a strong focus on mix, where it targeted more complex,
higher margin treatments in orthopaedics, while scaling back in high volume but low value areas such as
ophthalmology and cosmetics.
Included in other revenue is £31.4 million related to new services of which £18.3 million of revenue relates to
our recent acquisition of VHG and £13.1 million (2022: £0.1 million) relates to The Doctors Clinic Group
acquired in the prior year. Revenue from new services were not material in FY23. From FY24, new services will
be presented separately.
Revenue by location and payor
(£m)
Total revenue
Of which:
Inpatient
Daycase
Outpatient
Other
Total revenue
Of which:
PMI
Self-pay
Total private
Total NHS
Other
Total revenue
2023
1,359.0
535.5
399.9
365.4
58.2
1,359.0
615.7
344.0
959.7
341.1
58.2
1,359.0
2022
1,198.5
487.5
348.0
333.1
29.9
1,198.5
538.7
338.0
876.7
295.4
26.4
1,198.5
Variance %
(2023-2022)
13.4%
9.8%
14.9%
9.7%
94.5%
13.4%
14.3%
1.8%
9.5%
15.5%
120.5%
13.4%
1. Adjusted EBITDA is calculated as Operating Profit, adjusted to add back depreciation, and adjusting items, referred to hereafter
as ‘Adjusted EBITDA’. For EBITDA for covenant purposes, refer to note 22.
2. Adjusted FCF (Free Cash Flow) is calculated as Adjusted EBITDA, less rent, capital expenditure cash flows and changes in working capital
after adjusting for one-off items which are not related to the normal trading activity of the business. Rent cash flows are defined as
interest on, and payment of, lease liabilities. Capital expenditure cash flows are defined as the purchase of plant, property
and equipment.
3. Net bank debt is defined as bank borrowings less cash and cash equivalents.
Cost of sales and gross profit
Gross margin for the year is 45.9% compared to 2022 of 44.9%. Cost of sales increased in the period by £74.7
million or 11.3% to £734.8 million (2022: £660.1 million) on revenues that increased by 13.4% (2022: 8.3%).
Increased costs are due to inflationary pressures, increased agency costs and continued wage rate expansion.
The margin was higher in 2023 due to increased private volumes, and careful management of pricing, mix
and cost savings.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 84
Chief financial officer’s review continued
Cost of sales is broken down, and presented as a percentage of relevant revenue, as follows:
Adjusting items
Year ended 31 December 2023
Year ended 31 December 2022
Year ended 31 December
Clinical staff
Direct costs
Medical fees
Cost of sales
Gross profit
£m
304.1
312.4
118.3
734.8
624.2
% of revenue
22.4%
23.0%
8.7%
54.1%
45.9%
£m
275.3
280.3
104.5
660.1
538.4
% of revenue
23.0%
23.4%
8.7%
55.1%
44.9%
Other operating costs
Other operating costs, excluding adjusting items have increased by £61.6 million, or 14.1% to £497.4 million
(2022: £435.8 million). The main driver is increased staff costs due to continued wage rate expansion and other
inflationary pressures. Depreciation for the year was £103.6 million (2022: £97.9 million). The increase is in line
with expectations and is largely due to additional leases relating to medical equipment and RPI increases on
properties. As disclosed in 2022, the prior year benefits from a reduction in charge of £6.6 million (2022: £2.9
million) as a consequence of a revision of the useful life and residual value policy in respect of freehold
properties so that it more closely aligned with external benchmark information. The useful life was extended
from a maximum of 50 years to a maximum of 60 years, and the group has set the residual value equal to 20%
of cost (previously nil).
Adjusting items included in operating costs are explained below. Other operating costs including Adjusting
items for the year ended 31 December 2023 increased by £58.1 million or 13.0% to £504.1 million (2022: £446.0
million).
Operating margin for the year ended 31 December 2023 is 9.3% (2022: 8.0%). Operating margin, excluding
adjusting items is 9.6%, up from 8.8% at 2022.
Adjusted EBITDA
Adjusted EBITDA for the group has increased by 15.0% in the period from £203.5 million to £234.0 million for
2023. The increase is due to continued growth in private revenue and good cost management.
Share-based payments
During the period, grants were made to executive directors and other employees under the company’s Long
Term Incentive Plan. For the year ended 31 December 2023, the charge to the income statement is £3.7 million
(2022: £2.3 million), or £4.1 million inclusive of National Insurance (2022: £2.6 million). Further details are
contained in note 27 of the annual report and accounts.
(£m)
Business reorganisation and corporate restructuring costs
Asset acquisitions, disposals, impairment and aborted project costs
Remediation of regulatory compliance or malpractice costs
Hospitals set up and closure costs
Total pre-tax adjusting items
Income tax charge/(credit) on adjusting items
Total post-tax adjusting items
2023
2.0
3.1
(0.9)
–
4.2
0.3
4.5
2022
4.5
4.3
1.1
0.3
10.2
(1.8)
8.4
Adjusting items comprise those matters where the directors believe the financial effect should be adjusted for,
due to their nature, size or incidence, in order to provide a more accurate comparison of the group’s
underlying performance.
Asset acquisitions, disposals, impairment and aborted project costs of £3.1 million mainly relate to asset
acquisitions. In October 2023, the group acquired 100% of the share capital in Vita Health Group Limited for
£83.0 million as part of its strategic investment in its broader healthcare offering. The costs of acquisition of
£2.5 million have been incurred in the period. Costs for integration are expected to continue into FY24. £0.4
million of integration related costs have been incurred following the acquisition of The Doctors Clinic Group Ltd
in December 2022.
In the prior year, the costs mainly related to Claremont Hospital and the purchase of the remaining non-
controlling interest, and an impairment of £0.5 million was recognised on the St Saviours property which was
sold in H2 2022.
During H2 21, the group announced a strategic, group-wide initiative that impacts the operating model of the
group to allow a more efficient governance and reporting structure, as well as a drive on digital functionality.
This initiative will be implemented over several phases. In the period, £2.0 million (2022: £4.5 million) has been
incurred. The initial phase of the initiative was completed in 2022, with the majority of the project completed
in 2023. It is expected that some costs will be incurred in 2024 as the project enters into the next
strategic phase.
The group has recognised a credit of £0.9 million during the year in respect of Remediation of Regulatory
Compliance or Malpractice Costs relating to Paterson. This comprises £2.5 million funds received from its
insurer and £0.9 million reduction in provision which had been held to resolve the matter. This is offset by an
increased separate provision in respect of Paterson by £2.5 million (2022: £0.9 million), which relates to a
detailed patient review initiative which commenced in 2021, supporting patients of Paterson. During 2023 the
group has re-evaluated the expected cost of completing this complex project, and its associated settlement
of patient claims.
Hospital set-up and closure costs mainly relate to the maintenance costs of non-operational sites.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 85
Chief financial officer’s review continued
Net finance costs
Net finance costs remain flat at £91.6 million (2022: £91.5 million). This is due to the effectiveness of the
interest rate swaps, interest income on fixed deposits offset by increased interest on the draw down of the
revolving credit facility and a one-off charge of £3.1 million in the prior year in respect of unamortised fees
which were recognised in full following the refinancing of the senior loan facility.
Taxation
The effective tax rate assessed for the year, all of which arises in the UK, differs from the standard weighted
rate of corporation tax in the UK. The reconciliation of the actual tax charge to that at the domestic
corporation tax rate is as follows:
(£m)
Profit before taxation
Tax at the standard rate
Effects of:
Expenses and income not deductible or taxable
Tax adjustment for the super-deduction allowance
Impairment charge in respect of held for sale assets (not tax deductible)
One-off impact of revision to useful economic life and residual value of freehold
property portfolio
Adjustments to prior year
Difference in tax rates
Deferred tax not previously recognised
Total tax charge/(credit)
Year ended 31 December
2023
34.6
8.1
3.2
(0.8)
–
–
(4.2)
(0.2)
(1.2)
6.7
2022
3.9
0.7
8.2
(2.6)
0.1
(9.0)
(1.8)
0.1
–
(4.3)
Corporation tax is calculated at 23.5% (2022: 19.0%) of the estimated taxable profit or loss for the year. The
effective tax rate on profit before taxation for the year is 19.4%, although not truly reflective of the current
year position as a result of adjustments to the prior years (2022: not meaningful as a result of adjustments in
respect of prior years and movements on deferred tax which are not directly linked to profit). Excluding the
adjustments to prior years in 2023, the effective tax rate is 31.5%. The adjustments to prior years includes the
recognition of a deferred tax asset in respect of Corporate Interest restrictions which has recognised a credit of
£3.3m through adjustments to prior years for deferred tax purposes, as well as the recognition of deferred tax
on acquired losses of £1.9m in respect of an acquisition. In the prior year, the group reassessed the useful life
and residual value of its freehold property portfolio. This resulted in a one-off deferred tax credit of £9.0m.
Deferred tax is detailed in note 23.
Profit after taxation
The profit after taxation for the year ended 31 December 2023 was £27.9 million (2022: £8.2 million).
Adjusted financial information
This statement was prepared for illustrative purposes only and did not represent the group’s actual earnings.
The information was prepared as described in the notes set out below.
Alternative performance (non-GAAP) financial measures
We have provided alternative financial information that has not been prepared in accordance with IFRS. We
use these alternative financial measures internally in analysing our financial results and believe they are useful
to investors, as a supplement to IFRS measures, in evaluating our ongoing operational performance. We believe
that the use of these alternative financial measures provides an additional tool for investors to use in
evaluating ongoing operating results and trends in comparing our financial results with other companies in the
industry, many of which present similar alternative financial measures to investors.
Alternative financial measures should not be considered in isolation from, or as a substitute for, financial
information prepared in accordance with IFRS. Investors are encouraged to review the reconciliation of these
alternative financial measures to their most directly comparable IFRS financial measures provided in the
financial statements table.
Adjusted EBITDA, Adjusted EBIT and Hospital Business Adjusted EBITDA margin
(£m)
Operating profit
Remove effects of:
Adjusting items before interest and tax
Adjusted EBIT
Depreciation
Amortisation
Adjusted EBITDA
For the Hospital Business
Revenue
Adjusted EBITDA
Adjusted EBITDA margin
Year ended 31 December
2023
126.2
4.2
130.4
103.0
0.6
234.0
2022
95.4
10.2
105.6
97.9
–
203.5
1,327.6
233.8
17.6%
1,198.5
203.5
17.0%
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 86
Chief financial officer’s review continued
Adjusted profit after tax and adjusted earnings per share
Adjustments have been made to remove the impact of non-recurring items.
(£m)
Profit before tax
Adjustments for:
Adjusting Items – operating costs
Adjusted profit before tax
Taxation(1)
Adjusted profit after tax
Profit for the year attributable to owners of the parent
Profit/(loss) for the year attributable to non-controlling interests
Weighted average number of ordinary shares in issue (No.)
Adjusted earnings per share (pence) attributable to the parent
1. Reported tax charge for the period adjusted for the tax effect of adjusting Items.
Year ended 31 December
2023
34.6
2022
3.9
4.2
38.8
(6.4)
32.4
31.8
0.6
403,648,886
7.9
10.2
14.1
2.5
16.6
17.0
(0.4)
402,679,296
4.2
Adjusted free cash flow
Adjusted FCF (Free Cash Flow) is calculated as adjusted EBITDA, less rent, capital expenditure cash flows
and changes in working capital after adjusting for one-off items which are not related to the normal trading
activity of the business. Rent cash flows are defined as interest on, and payment of, lease liabilities. Capital
expenditure cash flows are defined as the purchase of plant, property and equipment. The calculation of
readjusted free cash flow is shown below:
Year ended 31 December
(£m)
Adjusted EBITDA
Less: Rental payments
Less: Cash flow for the purchase of property, plant and equipment
Less: Working capital movement
Less: Adjustments for non-recurring items
Adjusted free cash flow
2023
234.0
(100.2)
(84.4)
(15.5)
14.1
48.0
2022
203.5
(93.7)
(87.7)
(15.0)
20.9
28.0
Return on capital employed
Return on capital employed (ROCE) is the ratio of the group’s Adjusted EBIT to total assets less cash, capital
investments made in the last 12 months and current liabilities. In the current year the calculation annualises
the EBIT of the VHG acquisition as it was not part of the group for the full year. The calculation of return on
capital employed is shown below:
Year ended 31 December
(£m)
Adjusted EBIT
Adjusted: for full year pro-forma effect of VHG acquisition
Adjusted EBIT pre VHG
Total assets
Less: Cash and cash equivalents
Less: Capital investments
Less: Current Liabilities
Capital employed
Return on capital employed %
2023
130.4
6.8
137.2
2,281.6
(49.6)
(84.4)
(316.1)
1,831.5
7.5%
2022
105.6
–
105.6
2,159.8
(74.2)
(90.1)
(283.4)
1,712.1
6.2%
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Chief financial officer’s review continued
Cash flow analysis for the period
Year ended 31 December
Borrowings
At 31 December 2023, the group has bank borrowings (inclusive of IFRS 9 adjustments) of £365.3 million
(2022: £324.3 million), drawn under facilities which mature in February 2027.
(£m)
Cash
Bank borrowings
Bank borrowings less cash and cash equivalents
Year ended 31 December
2023
49.6
365.3
315.7
2022
74.2
324.3
250.1
During the year, the Group exercised its option to extend the senior loan facility by a further year. The financial
covenants and agreement terms relating to this agreement are unchanged, with leverage to be below 4.0x and
interest cover to be in excess of 4.0x. As at 31 December 2023 the leverage measure stood at 2.2x (2022:2.2x)
and interest cover of 8.2x (2022: 8.5x).
As at 31 December 2023 lease liabilities were £891.7 million (2022: £866.5 million).
Dividend
The directors of Spire Healthcare have recommended the payment of a final dividend of 2.1 pence per share for
the year ending 31 December 2023. Subject to shareholder approval at the forthcoming Annual General
Meeting on 9 May 2024.
Related party transactions
There were no significant related party transactions during the period under review.
(£m)
Opening cash balance
Operating cash flows before adjusting Items and income tax paid
Net cash flow from adjusting Items (included in operating cash flows)
Income tax paid
Operating cash flows after operating adjusting Items and income tax
Net cash flow from adjusting Items (included in investing cash flows)
Net cash in investing activities
Cash outflow for acquisition of subsidiary
Investing cash flows after investing adjusting Items
Net cash flow from adjusting Items (included in financing cash flows)
Net cash in financing activities
Financing cash flows after financing adjusting Items
Closing cash balance
2023
74.2
218.3
(2.7)
(0.1)
215.5
–
(84.0)
(73.2)
(157.2)
–
(82.9)
(82.9)
49.6
2022
202.6
186.5
(6.4)
(0.1)
180.0
3.2
(87.2)
(11.4)
(95.4)
(2.7)
(210.3)
(213.0)
74.2
Closing cash balance
The group’s year end cash balance stood at £49.6 million, which reflects a reduction of £24.6 million against the
prior year balance of £74.2 million. This movement contains two significant one-off items being the acquisition
of VHG for a net cash consideration of £73.2 million and a cash inflow of £40 million from the draw down of
the revolving credit facility. Further detailed information on the cash flow during the period is set out in the
following sections.
Operating cash flows before adjusting items
The cash inflow from operating activities before tax, Adjusting items and VHG was £228.2 million (2022:
£186.5 million), which constitutes a cash conversion rate from £232.2 million Adjusted EBITDA pre VHG of 98%
(2022: 92% conversion of £203.5 million Adjusted EBITDA). The net cash outflow from movements in working
capital in the period was £15.5 million (2022: £15.0 million outflow).
Investing and financing cash flows
Net cash outflow in investing activities for the period was £157.2 million (2022: £95.4 million). The cash
outflow relates to the net cash consideration paid for the acquisition of VHG of £73.2 million and the purchase
of plant, property and equipment in the period totalled £84.4 million (2022: £87.7 million). Capital investment
in the year includes the new outpatients and diagnostic centre at Yale, investment into cardiac theatres at
Manchester and Nottingham, ophthalmic services at Cambridge and continued major hospital refurbishment
programmes.
Net cash used in financing activities for the period was £82.9 million (2022: £213.0 million) Cash outflows
include interest paid and other financing costs of £90.0 million (2022: £94.6 million), and £27.2 million (2022:
£18.5 million) of lease liability payments and £3.1 million for the buyback of shares to settle share awards. This
is offset by an inflow of £40 million from the draw down of the revolving credit facility.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 88
Chairman’s governance letter
Our strategy is delivering value
for all our stakeholders
The group delivered a
strong financial performance,
with sustained growth in
revenue, earnings and margin,
creating value for a range of
stakeholders. We continued
to invest in colleagues, facilities
and new services in 2023, and
we were particularly pleased
to acquire Vita Health Group,
delivering new physical and
mental health services,
in line with our strategy.”
Sir Ian Cheshire
Chairman
Dear shareholder,
I am pleased to introduce this governance report in a
year that the group has delivered a strong financial
performance, with sustained growth in revenue,
earnings and EBIT margin. At the same time, I am
delighted that we have created significant value for a
range of stakeholders. We are helping to create a
healthier and more productive Britain, which is why
we have been building on our hospital business to
become a more integrated healthcare provider.
We are investing in our business to grow organically,
enhancing our infrastructure and opening new clinics,
while also adding new services through strategic
acquisitions. Following the acquisition of The Doctors
Clinic Group last year, the board was pleased to see
how the business was integrated into the group and
successfully restructured into Spire Occupational
Health and London Doctors Clinic. We also welcomed
the acquisition of Vita Health Group in 2023, bringing
new physical and mental health services to Spire
Healthcare, while further adding to our occupational
health capabilities and portfolio in line with our
strategy to expand our proposition. All this enables us
to assist more self-funded and insurance-backed
patients with their healthcare needs, and to build
relationships with more companies looking to
support their employees’ wellbeing. At the same time,
we continue to work closely with the NHS in their
efforts to reduce waiting lists.
Of course, quality and patient safety remain our
number one priority. The board was delighted to see
that we maintained our quality scores this year, with
98% of our inspected locations rated as ‘Good’ or
‘Outstanding’, or the equivalent, by regulators in
England, Scotland and Wales. We are particularly
proud of the culture we have embedded in which
colleagues at all levels are encouraged to speak up if
they see something that concerns them.
We are adding value to the UK economy by investing
in skills through initiatives such as our nurse
apprenticeship programme, one of the largest in our
sector, and boosting the nation’s productivity by
helping people get back to work. We are also making
progress towards achieving net zero carbon status by
2030 through a range of investments designed to
reduce our energy use, manage our waste better
and optimise our building management systems.
Put together, this is how we are delivering
sustainable shareholder value. In recognition of our
business performance in 2023, the board is
proposing a final dividend this year of 2.1p.
I was delighted to welcome new directors Debbie
White and Natalie Ceeney to the board during 2023.
Their expertise and experience have already proved
valuable to the group, as we support our
management team to build on the solid platform
we have created to drive revenue growth, while
maintaining our grip on cost control to ensure a
strong level of liquidity in the business. In late 2023,
the board completed its annual performance
evaluation, led by Debbie White and supported by
the company secretary and an external specialist,
BoardClic, who together created a comprehensive
set of questionnaires based on best practice and
regulatory guidelines for the board and each board
committee. An action plan for 2024 is being worked
up to responses received.
Looking ahead, the board is confident we can
continue to deliver on the group’s strategy, and that
we are well positioned to meet demand. Our brand
campaign, ‘The sooner you’re better, the better’ is
apt, not just for the part we can play in the health of
individuals, but also for the nation’s health. It is to
the credit of our excellent management team and
colleagues across the organisation that we can
aspire to do both.
Jitesh Sodha will be stepping down from the board
at the annual general meeting on 9 May 2024. I
would like to take this opportunity to thank Jitesh
for his immense contribution to the group during
his tenure. Jitesh will be succeeded as chief financial
officer by Harbant Samra. Harbant has been with
the group since 2018 and I am delighted to see him
now join the board.
Sir Ian Cheshire
Chairman
28 February 2024
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 89
Corporate governance report
Compliance with the UK Corporate Governance Code in 2023
The 2018 UK Corporate Governance Code (the ‘Code’) provides the
standard for corporate governance in the UK. The Financial Conduct
Authority requires listed companies to disclose whether they have
complied with the provisions of the Code throughout the financial
year under review.
The company has complied with the principles and provisions of the
Code, throughout the year except as shown in the following table.
Code
provision
10
How has the Company
not complied with the
provisions of the UK Code? The Board’s response
Dame Janet Husband has
served for more than nine
years from the date of
their first appointment
A thorough review was undertaken in
February 2023 and again in February 2024,
with regard to Dame Janet Husband
remaining on the board for longer than nine
years. The assessment concluded that Dame
Janet continues to make a valuable
contribution to the board, and leads the
clinical governance and safety committee
effectively. There was considered no
impairment to her independence resulting
from her tenure. It was further considered to
be in the best interests of the company that
Dame Janet Husband continue in her role and
the nomination committee recommended
to the board that she remain a director.
Director independence
Independence is determined by ensuring that, apart from receiving
their fees for acting as directors or owning shares, non-executive
directors do not have any other material relationship or additional
remuneration from, or transactions with, the group, its promoters, its
management or its subsidiaries, which in the judgement of the board
may affect, or could appear to affect, their independence of
judgement.
The company does not consider Dr. Ronnie van der Merwe, who has
been nominated to act as a non-executive director by Mediclinic Group
Limited, the company’s principal shareholder, to be independent.
Mediclinic Group Limited’s subsidiary, Mediclinic Jersey Limited
(formerly Remgro Jersey Limited), entered into a relationship
agreement with the company in June 2015 (the ‘Relationship
Agreement’). Under the terms of the Relationship Agreement, when
Mediclinic International PLC controls 15% or more of the votes, it will be
entitled to appoint one non-executive director to the board. It controls
29.9% of votes as at 28 February 2024. The directors believe that the
terms of the Relationship Agreement will enable the group to carry on
its business independently of Mediclinic Group Limited.
The board considers that, excluding the chairman, over half of the
board is independent of management and free from any business or
other relationship that could affect the exercise of their
independent judgement.
Workforce engagement
The board has appointed the remuneration committee to monitor
workforce engagement and report to the board on the progress of
Spire Healthcare’s workforce initiatives, together with the challenges,
concerns and priorities of colleagues. This provides directors with an
understanding into how culture is embedded across hospitals and
central functions, and any issues to be addressed.
Conflicts of interest
Save as set out below, there are no actual or potential conflicts of interest
between any duties owed by the directors or senior management to the
company and their private interests or other duties. The board will
continue to monitor and review potential conflicts of interest on a
regular basis.
Director
Dr. Ronnie van der Merwe
Conflict
Chief executive officer of Mediclinic Group Limited, which controls 29.9%
of the voting rights in the company as at 28 February 2023.
Changes to your board during 2023
Individual
Debbie White
Natalie Ceeney
Event
Appointed an
independent
non-executive director
(became the
company’s Senior
Independent Director
on 12 May 2023)
Date
1 February 2023
Appointed an
independent
non-executive director 1 May 2023
Adele Anderson,
Tony Bourne and
Simon Rowlands
Independent
non-executive
directors
All stepped down from the board on
the conclusion of the company’s annual
general meeting on 11 May 2023
Principal decisions of the board during 2023
Throughout this annual report, we provide examples of how the
company takes into account the likely consequences of long-term
decisions; builds relationships with stakeholders; understands the
importance of engaging with our colleagues; understands the impact
of our operations on the communities in our region and the
environment we depend upon; and attributes importance to behaving
as a responsible business. The directors recognise the importance of
effective stakeholder engagement and that stakeholders’ views should
be considered in its decision-making.
Decision of
the board
Acquisition of
Vita Health
Group
Stakeholders
– Patients
– NHS
Link to Spire Healthcare’s
strategy
Expand our proposition
Deliver strong financial
performance
Return to paying
a dividend
– Investors
Deliver strong
financial performance
Further details
can be found
See page 35
Digitalisation
plan
– Patients
– Colleagues
– Consultants
Drive hospital
performance
Build on
quality
See pages
21 to 23
The board has a formal schedule of matters reserved to it and
delegates certain matters to committees. Specific matters reserved for
the board considered during the year to 31 December 2023 included
reviewing the group’s performance (monthly and year to date),
approving capital expenditure, setting and approving the group’s
strategy and annual budget.
Key roles and responsibilities
The company has set out in writing a division of responsibilities
between the chairman, senior independent director and the chief
executive officer.
Non-executive chairman
Sir Ian Cheshire
The non-executive chairman leads the board and is responsible for:
– The leadership and overall effectiveness of the board
– A clear structure for the operation of the board and its committees
– Setting the board agenda in conjunction with the chief executive
officer an company secretary
– Ensuring that the board receives accurate, relevant and timely
information about the group’s affairs
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 90
Corporate governance report continued
Chief executive officer
Justin Ash
The chief executive officer manages the group and is responsible for:
– Developing the group’s strategic direction for consideration and
approval by the board
– Day-to-day management of the group’s operations
– The application of the group’s policies
– The implementation of the agreed strategy and purpose
– Being accountable to, and reporting to, the board on the
performance of the business
Senior Independent Director
Debbie White
The board nominates one of the independent non-executive directors
to act as senior independent director and is responsible for:
– Being an alternative contact for shareholders at board level other
than the chairman;
– Acting as a sounding board for the chairman
– Leading the annual performance evaluation process for the board
– If required, being an intermediary for non-executive directors’
concerns
– Undertaking the annual chairman’s performance evaluation
Company Secretary
Philip Davies
The company secretary supports the chairman on board corporate
governance matters and is responsible for:
– Making appropriate information available to the board in a
timely manner
– Ensuring an appropriate level of communication between the board
and its committees
– Ensuring an appropriate level of communication between senior
management and the non-executive directors
– Keeping the board apprised of developments in relevant legislative,
regulatory and governance matters
– Facilitating a new director’s induction and assisting with
professional development, as required
Board and committee structure
Ultimate responsibility for the management of the group rests with the
board of directors. The board focuses primarily upon strategic and policy
issues and is responsible for:
– Leadership of the group
– Implementing and monitoring effective controls to assess and
manage risk
– Supporting the senior leadership team to formulate and execute
the group’s strategy
– Monitoring the performance of the group
– Setting the group’s values and standards
There is a specific schedule of matters reserved for the board.
The non-executive directors
The non-executive directors bring a wide range of skills and experience
to the board. The independent non-executive directors represent a
strong, independent element on the board and are well placed to
constructively challenge and support management. They help to shape
the group’s strategy, scrutinise the performance of management in
meeting the group’s objectives and monitor the reporting of performance.
Their role is also to satisfy themselves with regard to the integrity of
the group’s financial information and to ensure that the group’s internal
controls and risk management systems are robust and defensible.
The independent non-executive directors oversee the adequacy of the
risk management and internal control systems (from their membership
of the audit and risk committee and clinical governance and safety
committee), as well as the remuneration for the executive directors
(from their membership of the remuneration committee).
As members of the nomination committee, the non-executive directors
also play a pivotal role in board succession planning and the
appointment of new executive directors.
Your board in 2023
The principal decisions of the board during the year can be found
on page 89.
Board meetings were held in person during the year and director
attendance at scheduled meetings is shown on page 95.
The agenda at scheduled meetings in 2023 covered standing agenda
items, including: a review of the group’s performance from the chief
executive officer, the current month’s and year to date financial
statistics from the chief financial officer and a review of clinical
performance and medical governance by both the group clinical
director and group medical director. In addition, the board received a
verbal report from committee chairs, where their committee met
immediately in advance of the scheduled board meeting, and the
board regularly received reports on legal and statutory matters.
The board’s plan for 2024
It is currently planned that the board will convene for seven scheduled
meetings in 2024, as well as holding any necessary ad hoc board and
committee meetings to consider non-routine business.
The chairman and the other non-executive directors will meet on their
own without the executive directors present. In addition, the senior
independent director and other non-executive directors will meet
without the chairman present to discuss matters such as the
chairman’s performance.
The board will maintain its focus on the group’s pursuit of its 2024
targets during the year. Its activities will include:
– Reviewing and approving the 2023 annual report
– Reviewing the revised five-year strategic plan and approving the
2024 annual operating plan
– Completing deep dives into key areas of the business
– Embedding the risk management framework
– Reviewing the makeup of the board
– Following a rolling agenda, ensuring proper time for strategic debate
Furthermore, the board will maintain its commitment to continuous
improvement of clinical quality and the use of Quality Improvement
methodology. It will maintain overall responsibility for the group’s
system of internal control and risk management processes via the
relevant board committees.
Disclosure committee
The board has established a disclosure committee to ensure, under
delegated authority, that the company complies with its disclosure
obligations, specifically under the Market Abuse Regulation and related
legislation. The disclosure committee also manages the company’s
share dealing code, ensuring colleague compliance and provides
training where required. The members of the disclosure committee
are shown on page 93.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 91
Corporate governance report continued
Share schemes committee
In addition, the board delegates certain responsibilities in relation to
the administration of the company’s share schemes on an ad hoc basis
to the share schemes committee. This committee operates in
accordance with the delegation of authority agreed by the board.
Executive committee
The executive committee meets twice a month, splitting its time
between project work and strategic matters. The executive committee
delegates certain matters to the safety, quality and risk committee
who have specific focus on safety, quality and risk matters respectively
(see the governance framework on page 93).
National medical professional standards committee
The national medical professional standards committee meets
monthly and is chaired by the group medical director, with
membership including the group clinical director, chief operating
officer (deputy chair), associate medical directors, deputy general
counsel (regulatory) and director of integrated quality governance.
The purpose of the national medical professional standards committee
is to:
– Have oversight of performance and monitoring of safety standards
of consultants and GPs with practising privileges or employed by
Spire Healthcare
– Have oversight over the investigations relating to the practice of
doctors with practising privileges at Spire Healthcare’s facilities in
order to provide assurance to the executive committee and board
in relation to compliance with medical policies relating to
professional standards
– Provide oversight of consultant related Patient Notification Exercises
in order to promote and maintain good medical practice, and inform
the continuous quality improvement programme across
Spire Healthcare
– Ensure that local and organisational learning is determined
and actioned in relation to medical professional standards
and performance
Board meetings
The attendance of the directors who served during the year ended
31 December 2023, at meetings of the board during 2023, is shown on
page 95. To the extent that directors are unable to attend scheduled
meetings, or additional meetings called on short notice, they will
receive the papers in advance and relay their comments to the
chairman for communication at the meeting. The chairman will follow
up after the meeting in relation to both the discussions held and
decisions taken.
Effectiveness
Board composition
The board seeks to ensure that both it and its committees have the
appropriate range of skills, experience, independence and knowledge
of the group to enable them to discharge their respective duties and
responsibilities effectively; for example, the 2023 board calendar
included sessions on clinical data analysis and statutory regulations.
The board considers its size and composition to be appropriate for the
current requirements of the business but will continue to keep this
under review.
Committee composition is set out in the relevant committee reports
and listed on page 93. No one other than committee chairs and
members of the committees is entitled to participate in meetings
of the audit and risk, CGSC, disclosure, nomination and remuneration
committees, unless by invitation of the respective committee chair.
Debbie White is the Senior Independent Director. Biographical details of
the directors are set out on pages 96 to 97.
Appointments to the board
Recommendations for appointments to the board are made by
the nomination committee. As part of the recruitment process the
nomination committee follows a formal, rigorous and transparent
procedure. Further information is set out in the nomination committee
report on page 99.
Time commitment of the non-executive directors
The non-executive directors each have a letter of appointment which
sets out the terms and conditions of their directorship. An indication
of the anticipated time commitment is provided in any recruitment role
specification, and each director’s letter of appointment provides details
of the meetings that they are expected to attend.
Non-executive directors are required to set aside sufficient time to
prepare for meetings, and to regularly refresh and update their skills
and knowledge. In signing their letters of appointment, all directors
have agreed to commit sufficient time for the proper performance of
their responsibilities, acknowledging that this will vary from year to year,
depending on the group’s activities.
Directors are expected to attend all board and committee meetings,
and any additional meetings, as required. Each director’s other
significant commitments were disclosed to the board at the time of their
appointment and they are required to notify the board of any subsequent
changes. The group has reviewed the availability of the non-executive
directors and considers that each of them is able to, and in practice does,
devote the necessary amount of time to the group’s business.
Induction and training
Generally, reference materials are provided, including information
about the board, its committees, directors’ duties, procedures for
dealing in the group’s shares and other regulatory and governance
matters, and directors are advised of their legal and other duties,
and obligations as directors of a listed company.
On joining the board, it is the responsibility of the chairman and
company secretary to ensure that all newly appointed directors receive
a full and formal induction which is tailored to their individual needs.
The induction programme includes a comprehensive overview of the
group, dedicated time with other directors and senior management, as
well as guidance on the duties, responsibilities and liabilities as
a director of a listed and regulated company. These activities
formed part of the induction programmes for Natalie Ceeney and
Debbie White.
The company secretary ensures that any additional request for
information is promptly supplied. The chairman, through the company
secretary, ensures that there is an ongoing process to review any
internal or external training and development needs.
As already noted, in the event of a general training need, in-house
training will be provided to the entire board. Necessary and relevant
regulatory updates are provided by the group general counsel,
company secretary or by external advisers as required.
Information and support
The board ensures that it receives, in a timely manner, information of
an appropriate quality to enable it to adequately discharge its
responsibilities. This is aided by the use of an online portal. Papers are
provided to the directors in advance of the relevant board or
committee meeting to enable them to make further enquiries about
any matters prior to the meeting, should they so wish. This also allows
directors who are unable to attend to submit views in advance
of the meeting.
Outside the board papers process, the executive directors provide
written updates to the non-executive directors on important business
issues, including financial and commercial information. In addition,
relevant updates on shareholder matters (including analysts’ reports)
are also provided to the board.
All directors have access to the advice and services of the company
secretary. There is also an agreed procedure in place for directors, in the
furtherance of their duties, to take independent legal advice, if
necessary, at the group’s expense.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 92
Corporate governance report continued
Election of directors
All the directors appointed at the time offered themselves for election
at the ninth annual general meeting in May 2023. Directors are
elected or re-elected in accordance with the requirements
of the Code.
The board has established formal procedures to authorise situations
where a director has an interest that conflicts, or may possibly conflict,
with the interests of the company – Situational Conflicts. Directors
declare Situational Conflicts, so that they can be considered for
authorisation by the non-conflicted directors.
The audit and risk committee and the clinical governance and safety
committee, whose reports are set out on pages 104 to 109 and pages
101 to 103 respectively, assist the board in reviewing the effectiveness
of the group’s risk management system and internal controls, including
financial, clinical, operational and compliance controls.
All of the company’s directors, with the exception of Jitesh Sodha who
will step down from the board, will stand for re-election at the annual
general meeting in May 2024. A thorough review was undertaken in
February 2024, with regard to Dame Janet Husband remaining on the
board for longer than nine years, which is a circumstance the Code
deems could impair the independence of a non-executive director. The
assessment concluded that Dame Janet continues to make a valuable
contribution to the board, and leads the clinical governance and safety
committee effectively. There was considered no impairment to her
independence resulting from her tenure. It was further considered to
be in the best interests of the company that Dame Janet Husband
continue in her role and the nomination committee recommended to
the board that she remain on as a director.
The biographical details of each director standing for re-election is
included in the 2024 notice of annual general meeting. The board
believes that each of the directors standing for re-election is effective
and demonstrates commitment to their respective roles. Accordingly,
the board recommends that shareholders approve the resolutions to
be proposed at the 2024 annual general meeting relating to the
re-election of the directors.
The biographical details of all directors are set out on pages 96 to 97.
Directors’ indemnities
The directors of the company have the benefit of a third-party
indemnity provision, as defined by section 236 of the Companies Act
2006, in the group’s articles of association. In addition, directors
and officers of the group are covered by directors’ and officers’
liability insurance.
Directors’ conflicts of interest
The Companies Act 2006 provides that directors must avoid a situation
where they have, or can have, a direct or indirect interest that conflicts,
or possibly may conflict, with a company’s interests. Directors of public
companies may authorise conflicts and potential conflicts, where
appropriate, if a company’s articles of association permit.
In considering a Situational Conflict, these directors act in the way
they consider would be most likely to promote the success of the group,
and may impose limits, or conditions, when giving authorisation or,
subsequently, if they think this is appropriate.
The company secretary records the consideration of any conflict and
any authorisations granted. The board believes that the system it has in
place for reporting Situational Conflicts continues to operate effectively.
Non-executive director engagement with hospitals
Non-executive directors, particularly the members of the clinical
governance and safety committee are regular attendees at a wide range
of hospital briefings, meetings and specialist conferences. These events
have included local and national meetings, and the national medical
professional standards committee. Directors have also attended the
national theatre managers conference and the national pharmacy
managers conference, as well as conferences for directors of clinical
services and critical care, and cardiology specialists.
Accountability
The audit and risk committee
The audit and risk committee report is set out on pages 104 to 109
and identifies its members, whose biographies are set out on
pages 96 and 97.
The report describes the audit and risk committee’s work in discharging
its responsibilities during the year ended 31 December 2023, and its
terms of reference can be found on the group’s website at
www.investors.spirehealthcare.com.
Risk management and internal control
The board has overall responsibility for establishing and maintaining a
sound system of risk management and internal control, and for reviewing
its effectiveness. This system is designed to manage, rather than eliminate,
the risks facing the group and safeguard its assets. No system of internal
control can provide absolute assurance against material misstatement
or loss. The group’s system is designed to provide the directors with
reasonable assurance that issues are identified on a timely basis and are
dealt with appropriately.
Executive compensation and risk
Only independent non-executive directors are allowed to serve on the
audit and risk committee and remuneration committee. The non-
executive directors are therefore able to bring their experience and
knowledge of the activities of each committee to bear when
considering the critical judgements of the other.
This means that the directors are in a position to consider carefully
the impact of incentive arrangements on the group’s risk profile and
to ensure the group’s remuneration policy and programme are
structured, so as to accord with the long-term objectives and risk
appetite of the group.
Financial and non-financial risk
The clinical governance and safety committee, with the audit and risk
committee, collectively ensure that the control and monitoring of both
financial and non-financial risks is satisfactory.
In addition, both committees seek to ensure, as far as practicable, there
are no elements omitted or unnecessarily duplicated, and that all
critical judgements receive the correct level of challenge.
Relations with shareholders
The board is committed to communicating with shareholders and
stakeholders in a clear and open manner, and seeks to ensure effective
engagement through the group’s regular communications, the annual
general meeting and other investor relations activities.
The group undertakes an ongoing programme of meetings with
investors, which during 2023 was led by the chief executive officer,
chief financial officer and the director of investor relations.
The non-executive chairman, senior independent director and
committee chairs remain available for discussion with shareholders on
matters under their areas of responsibility, either through contacting
the company secretary or directly at the annual general meeting.
The company reports its financial results to shareholders twice a year,
with the publication of its annual and half yearly financial reports.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 93
Corporate governance report continued
Governance framework in 2023
Non-Executive Chairman
Sir Ian Cheshire
Senior Independent Director
Debbie White
Key objectives:
– Ensure effectiveness of the board
– Promote high standards of
corporate governance
– Ensure clear structure for the
operation of the board and its
committees
– Encourage open communication
between all directors
The board of Spire Healthcare Group plc
The board comprises eleven directors
– the non-executive chairman, two
executive directors and eight
non-executive directors, seven of whom
are deemed to be independent for the
purposes of the 2018 UK Corporate
Governance Code. Philip Davies serves
the board as company secretary.
Key objectives:
– Leads the group
– Oversees the group’s system of risk
management and internal controls
– Supports the executive committee to
formulate and execute the group’s
strategy
– Monitors the performance of the
group
– Sets the group’s values and standards
Executive committee
The group also operates an executive
committee (convened and chaired by
the chief executive officer). The
executive committee meets fortnightly.
Key objectives:
– Assists the chief executive officer
in discharging his responsibilities
– Ensures a direct line of authority from
any member of staff to the chief
executive officer
– Assists in making executive decisions
affecting the company
Safety, quality and risk committee
A committee of the executive
committee (jointly chaired by the group
clinical director and group medical
director) that focuses on safety, quality
and risk matters across the group’s
operations. The safety, quality and risk
committee met monthly during 2023.
Key objectives:
– Reviews the group’s clinical
performance
– Reviews evidence of compliance with
statutory notification requirements
– Scrutinises all unexpected deaths
occurring at hospitals
Audit and risk committee
Martin Angle (chair), Natalie Ceeney,
Dame Janet Husband, Debbie White
Key objectives:
– Monitors the integrity of financial
reporting
Clinical governance and safety
committee
Dame Janet Husband (chair), Justin Ash,
Martin Angle, Jenny Kay, Professor Cliff
Shearman
Disclosure committee
Sir Ian Cheshire (chair), Martin Angle,
Justin Ash, Jitesh Sodha, Debbie White
– Assists the board in its review of the
effectiveness of the group’s internal
control and risk management systems
Key objectives:
– Promotes, on behalf of the board,
a culture of high-quality and safe
patient care; and monitors specific
non-financial risks and their associated
processes, policies and controls:
(i) clinical and regulatory risks
(ii) health and safety
(iii) facilities and plant
Key objectives:
– Ensures that the company complies
with its disclosure obligations,
specifically under the Market Abuse
Regulation and related legislation
– Oversees the company’s Share Dealing
Code including colleague training
Nomination committee
Sir Ian Cheshire (chair), Martin Angle,
Natalie Ceeney, Dame Janet Husband,
Dr. Ronnie van der Merwe, Debbie White
Key objectives:
– Advises the board on appointments,
retirements and resignations from
the board and its committees
Remuneration committee
Natalie Ceeney (chair), Martin Angle,
Jenny Kay
(Paula Bobbett was appointed a
member of the remuneration
committee on 26 February 2024)
– Reviews succession planning for
the board
Key objectives:
– Determines the appropriate
framework and level for remuneration
of the chairman, executive directors,
company secretary and other
members of the executive committee
– Reviews workforce remuneration and
related policies
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 94
Corporate governance report continued
In conjunction with these announcements, presentations or
teleconference calls are held with institutional investors and
analysts, and copies of any presentation materials issued
are made available through the company’s website at
www.investors.spirehealthcare.com.
All directors are expected to attend the company’s annual general
meeting, providing shareholders with the opportunity to question
them about issues relating to the group, either during the meeting or
informally afterwards.
Modern slavery
Spire Healthcare Group is committed to acting ethically and with
integrity in all our relationships, in line with our value of ‘Doing the
right thing’. Our approach to tackling the risk of modern slavery
continues to evolve under the oversight of our sustainability
committee, which reports to our executive committee to ensure that
our directors have full oversight on all relevant matters.
Our two main areas of focus are, a) to safeguard patients, colleagues
and others who come through our facilities, and b) in our supply chain.
In our business operations, we believe practitioners and colleagues are
well-placed to identify and deal with modern slavery concerns through
the safeguarding training and protections we have in place. The
safeguarding system trains those practitioners and other colleagues
(clinical and non-clinical) to recognise and report signs of abuse. We
believe the rigour of this system mitigates the risk of modern slavery
from either going undetected or being dealt with inadequately. This
risk is further controlled by the support, training and infrastructure in
place for all colleagues to be able to raise concerns through our
network of Freedom to Speak Up Guardians, or other available
channels. In 2023, we:
– Maintained our modern slavery due diligence process for new
suppliers with an annual spend of in excess of £1 million. There were
no issues identified through this process
– Updated our procurement policy, which ensures that our hospitals
and clinics are equipped with guidance and a risk assessment tool for
evaluating modern slavery risks in local contracts
– Completed an initial assessment exercise of third-party management
systems which can risk-assess and monitor the level of performance
and risk of key suppliers across a range of areas including labour and
human rights. It is intended that our sustainability committee will
review this during 2024
– Continued supplier and product rationalisation initiatives, focusing
our attention on increasing the proportion of spend with long-
standing reputable suppliers, with whom satisfactory due diligence
has been carried out, where appropriate
In 2024, we plan to continue the activities outlined above, and further
review our approach to enhance third-party supplier risk monitoring
and performance.
The corporate governance report has been approved by the board and
signed on its behalf by:
Philip Davies
Company Secretary
28 February 2024
Spire Healthcare’s latest Modern Slavery Act statement
investors.spirehealthcare.com/investors/modern-
slaveryact-statement
Vita Health Group’s Modern Slavery Act statement
vitahealthgroup.co.uk/slavery-and-human-traffickingstatement
The Doctors Clinic Group’s Modern Slavery Act statement
spireoccupationalhealth.com/about-us/accreditationspolicies
Annual general meeting
Shareholders are encouraged to participate at the company’s annual
general meeting, ensuring that there is a high level of accountability
and identification with the group’s strategy and goals. A summary of
the proxy voting at the 2023 annual general meeting was made available
via the London Stock Exchange and on the company’s website as soon
as reasonably practicable on the same day as the meeting and is
shown below:
1
2
3
4 to
14
15
16
17
18
19
20
21
22
Summary of resolution
2022 Annual report and accounts
2022 Directors’ remuneration report
Final dividend
Election or re-election of directors
Reappointment of auditors
Auditors’ remuneration
Political expenditure
Authority to allot shares
Disapplication of statutory
pre-emption rights*
Disapplication of statutory
pre-emption rights for an acquisition*
Authority to purchase own shares*
General meetings to be held on 14
clear days’ notice*
* Special resolution.
Total votes
for %
99.83%
96.15%
99.99%
Between
99.98% and
96.27%
99.76%
99.94%
99.91%
98.06%
98.66%
Total votes
against %
0.17%
3.85%
0.01%
Between
0.02% and
3.73%
0.24%
0.06%
0.09%
1.94%
1.34%
Number
of votes
withheld
174,433
32,281
24,193
Maximum
35,088
24,483
25,773
26,781
24,073
30,135
96.56%
3.44%
30,135
99.74%
99.20%
0.26%
0.80%
40,367
24,481
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 95
Board of directors
Tenure
4
3
Ethnicity
2
1
2
1
1. 0-3 years 33%
2. 4-6 years 42%
3. 6-9 years 17%
4. 9+ years 8%
1. White 92%
2. Asian Indian 8%
Position
Gender
4
3
1
2
2
1
1. Independent NED 64%
2. Non-independent NED 9%
1. Male 55%
2. Female 45%
3. Executive 18%
4. Chairman 9%
Board meeting attendance during 2023
Chairman and executive directors
Non-Executive Chairman
Sir Ian Cheshire
Senior Independent Director
Debbie White1
Executive directors
Justin Ash
Jitesh Sodha
Non-executive directors
Martin Angle
Paula Bobbett
Natalie Ceeney2
Dame Janet Husband
Jenny Kay
Professor Cliff Shearman
Dr Ronnie van der Merwe
Board meetings
7/7
7/7
7/7
7/7
Board meetings
7/7
7/7
5/5
7/7
7/7
7/7
6/7
1. Initially appointed as an independent non-executive director on 1 February 2023 before
becoming senior independent director on 12 May 2023.
2. Appointed an independent non-executive director on 1 May 2023.
Board skills, experience and background
Healthcare
Accounting and finance
Sustainability and ESG
UK plc experience
Multi-site operating
M&A
Remuneration
Digital and technology
The Financial Conduct Authority (FCA) has introduced a requirement
for listed companies to report on new board diversity targets and
provide data on the gender and ethnic diversity of the board and in its
executive management. Following the FCA’s definition, executive
management for these purposes, means the members of our executive
committee. However, we have included board members who are also
in executive management only in the board members column, and not
in the executive management column, in the below tables. We are
committed to improving diversity across all protected characteristics
and will continue to make progress in line with the new requirements
from the FCA.
Number
of senior
positions
on the
board
(CEO, CFO,
SID and Chair)
Number
of board
members*
Percentage
of the board
Number
in executive
management
Percentage
of executive
management
FCA gender diversity reporting as at 31 December 2023
Men
Women
Not specified/
prefer not to say
6
5
–
55%
45%
–
3
1
–
FCA ethnic diversity reporting as at 31 December 2023
White British or
other White
(including
minority-white
groups)
91%
10
3
Mixed/Multiple
ethnic groups
Asian/Asian British
Black/African/
Caribbean/Black
British
Other ethnic group,
including Arab
Not specified/
prefer not to say
–
1
–
–
–
–
9%
–
–
–
–
1
–
–
–
3
3
–
6
–
–
–
–
–
50%
50%
–
100%
–
–
–
–
–
* The number of board members includes those who are members of both the board
and the executive management.
Further details on levels of gender and ethnic diversity across all of
Spire Healthcare can be found on pages 45 to 47.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 96
Board of directors continued
Key to board and
executive committees
A Audit and risk committee
C Clinical governance and
safety committee
D Disclosure committee
N Nomination committee
R Remuneration committee
E Executive committee
S Safety, quality and risk committee
Committee chair
ND
SEDC
SED
NA
RNDA
Sir Ian Cheshire
Non-Executive Chairman
Sir Ian Cheshire joined Spire Healthcare
as chairman-designate in early March
2021 and became non-executive
chairman at the conclusion of its
annual general meeting in May 2021.
Current external appointments
– Chairman of Land Securities Group plc
– Chairman of Channel 4
– Non-executive director of Menhaden
Resource Efficiency plc
– Trustee of the Institute for Government
– Chair of We Mean Business Coalition
Skills and previous experience
Sir Ian brings to Spire Healthcare
considerable FTSE experience, deep
understanding of the government-
business interface and broad ESG
credentials, which are important to the
company’s strategy and long-term
sustainable success.
Sir Ian was chairman of Barclays Bank UK
PLC until December 2020 and a
non-executive director of both Barclays
PLC and BT Group plc until May 2021 and
July 2023 respectively. He was also
previously senior independent director and
remuneration committee chair of
Whitbread plc until September 2017. Sir Ian
held a variety of posts whilst at Kingfisher
plc including chief executive of B&Q from
2005 to 2008 and group chief executive
from 2008 to 2014. He is involved with
many charitable organisations, such as The
Prince of Wales’s Charitable Fund which he
also chairs, and has also worked with
various government departments.
Justin Ash
Chief Executive Officer
Justin Ash was appointed chief
executive officer and an executive
director in October 2017.
Jitesh Sodha
Chief Financial Officer
Jitesh Sodha was appointed chief
financial officer and an executive
director in October 2018.
Debbie White
Senior Independent Director
Debbie White was appointed an
independent non-executive director in
February 2023 and became senior
independent director in May 2023.
Current external appointments
– Member of the strategic council of
Independent Healthcare Providers
Network
– Chair of the trustees of Tropical Health
and Education Trust (THET)
Skills and previous experience
Justin was previously chief executive of
Oasis Dental Care between 2008 and 2017
before leading its sale to Bupa. Prior to this,
he was managing director of Lloyds
Pharmacy and has held several other
senior retail positions including general
manager of KFC in the UK/Ireland, and
commercial director of Allied Domecq
Spirits and Wines (Europe). Justin was
previously a senior consultant with Bain
and Company in London and Paris, and a
non-executive board member and chair of
the audit and risk committee of Al Nadhi
Medical Company. He was chair of
Independent Healthcare Providers
Network until December 2020 and is a
trustee of Fraxinus Trust and chair of the
Freemasons Fund for Surgical Research.
Current external appointments
– Non-executive director of PZ Cussons Plc
Current external appointments
– Non-executive director and chair
Skills and previous experience
Jitesh is a CIMA qualified accountant.
He has worked in a range of businesses
with an international footprint, most
recently as chief financial officer of De La
Rue plc. He was previously chief financial
officer of Greenergy International,
Mobilestreams Plc, where he led the IPO,
and T-Mobile International UK. Jitesh
graduated from New College, Oxford with
a degree in Philosophy, Politics and
Economics.
Jitesh chairs the company’s sustainability
committee and leads on ESG matters for
the board.
designate of The Co-operative Group
– Director of PAVmed Inc (listed on the
NASDAQ)
– Director of Lucid Diagnostics Inc (listed
on the NASDAQ)
– Trustee and honorary treasurer for the
charity Wellbeing of Women
Skills and previous experience
Debbie is an experienced CEO and
independent director. Her last full time
executive role was as chief executive
officer of Interserve Group which was
preceded by a number of senior executive
roles at Sodexo SA including global chief
executive officer of Sodexo Healthcare and
Sodexo Government, chief financial officer
of the North American and UK&I
businesses and chief executive officer of
Sodexo UK&I. She was interim group HR
director for BT Group plc during 2022,
supporting the executive on the
transformation of the group. Debbie was a
non-executive director of Howden Joinery
Group plc until December 2023.
Debbie started her career with Arthur
Andersen and is a chartered accountant
and chartered tax practitioner. She joined
AstraZeneca where she held a variety of
financial roles, before joining Sodexo.
Debbie was a director of PWC consulting
where she advised principally in the
pharmaceutical sector.
Martin Angle
Deputy Chairman and Independent
Non-Executive Director
Martin Angle was appointed as deputy
chairman and senior independent
director in May 2019, having initially
joined the board as an independent
non-executive director in March 2019.
Current external appointments
– Chairman of Gulf Keystone Petroleum plc
– Non-executive director of Ocean
Biomedical, Inc. (listed on the NASDAQ)
Martin kindly agreed to step aside as senior
independent director during May 2023 to
allow the company to meet the Listing Rule’s
requirement that at least one senior board
position is held by a woman. Martin Angle
remains as deputy chairman following
this change.
Skills and previous experience
Martin has held a number of non-executive
positions including with Pennon Group plc
and its subsidiary South West Water, Savills
Plc (senior independent director), National
Exhibition Group (chairman), Dubai
International Capital, and Shuaa Capital,
then the only listed Gulf investment bank. In
his earlier career, he held a number of senior
positions in investment banking with S.G.
Warburg & Co, Morgan Stanley, where he
headed UK M&A, and Kleinwort Benson,
before becoming group finance director of TI
Group, then a FTSE 100 company with
worldwide engineering activities.
Martin joined Terra Firma Capital Partners as
an operating managing director where he
held a number of senior roles in its portfolio
companies including Le Meridien Hotel
Group (executive deputy chairman and
acting chairman) and the Waste Recycling
Group (executive chairman), then a leading
UK waste management business. He is a
chartered accountant and a graduate in
physics from the University of Warwick.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 97
Board of directors continued
NCA
R
NA
R
RC
C
N
Professor Dame Janet Husband
Vice Chair
Dame Janet Husband was appointed
an independent non-executive director
in June 2014. Dame Janet was
appointed vice chair on 1 March 2023.
Paula Bobbett
Independent Non-Executive Director
Paula Bobbett was appointed an
independent non-executive director in
November 2022.
Natalie Ceeney CBE
Independent Non-Executive Director
Natalie Ceeney was appointed an
independent non-executive director in
May 2023.
Current external appointments
– Emeritus Professor of Radiology at the
Current external appointments
– Chief digital officer of Boots UK
Institute of Cancer Research
Skills and previous experience
Paula specialises in business strategy and
critical analysis, particularly in digital. She
is highly experienced in online trading,
commercial strategy and analytics as well
as in delivering digital transformation
across commercial operations. Paula joined
Boots in December 2020 and has driven
the end-to-end development of boots.com
leading to growth in online performance
and positioning boots.com as the UK’s
number one health and beauty website.
Prior to joining Boots UK, Paula was head
of online performance at Dixons Carphone.
She has held senior analytics and customer
insight roles at a variety of companies,
including strategy and analytics manager
at Avon, commercial insight manager at
Debenhams, as well as roles at British
Airways and Vanguard Strategy.
Skills and previous experience
Having trained in medicine at Guy’s
Hospital Medical School, Dame Janet’s
extensive career in healthcare allows her
to bring invaluable insight and knowledge
of the industry.
Dame Janet has previously served as a
non-executive director and special adviser
to the Royal Marsden NHS Foundation
Trust, as a specially appointed
commissioner to the Royal Hospital
Chelsea and as chair of the National Cancer
Research Institute. She was elected
president of the Royal College of
Radiologists in 2004 and also served as
vice chair of the Academy of Medical
Royal Colleges.
These appointments followed a long
career as professor of radiology at the
Institute of Cancer Research and Royal
Marsden Hospital during which Dame
Janet gained global recognition for her
pioneering research in cancer imaging.
Prior to retirement from clinical practice
she was appointed medical director of the
Royal Marsden NHS Foundation Trust
where she worked closely with senior
management to develop a programme
of robust clinical governance and
continuous improvement in the quality
of patient services.
Current external appointments
– Non-executive director of Anglian Water
Services Limited
– Chair of Cash Access UK Limited
– Non-executive director Openreach
Limited
– Non-executive director of Liverpool
Financial Services Ltd (LV=)
Skills and previous experience
Natalie spent more than 20 years leading
organisational and digital transformation,
firstly as a McKinsey & Company
consultant and then as an executive. She
has worked across a range of sectors, both
public and private, and has experience as a
regulator as well as a CEO. Natalie has a
focus on and deep interest in meeting the
needs of customers, inclusion, and the
transformational nature of technology.
Natalie’s executive career included chief
executive roles at HM Courts & Tribunals
Service, the Financial Ombudsman Service,
the National Archives and as a member of
HSBC’s UK executive team. She was a
non-executive director of Ford Credit
Europe until October 2023. Natalie is a
graduate of the University of Cambridge.
Jenny Kay
Independent Non-Executive Director
Jenny Kay was appointed an
independent non-executive director in
June 2019. She has been designated
Spire Healthcare’s non-executive
director lead for safeguarding and the
board’s Freedom to Speak Up Guardian.
Skills and previous experience
Jenny has extensive experience as a
front-line registered nurse and subsequent
experience in senior management and
board roles across the NHS including as
director of nursing at Dartford and
Gravesham NHS Trust in Kent. She was a
senior independent director at East London
NHS Foundation Trust until the end of
December 2020. Jenny also worked at the
Department of Health in the chief nursing
officer’s team, leading on communications.
Additionally, Jenny has experience as
director of quality in a clinical
commissioning group.
Jenny’s clinical background is in children’s
nursing – she was a ward sister at King’s
College Hospital for many years,
specialising in care for children with liver
disease and children requiring intensive
care. Jenny trained at St Thomas’ (RGN) and
Guy’s Hospitals (RSCN).
Before commencing her nursing career,
Jenny studied languages at Durham
University and she also has an MBA from
the Bristol Business School.
Professor Cliff Shearman
Independent Non-Executive Director
Professor Cliff Shearman was
appointed an independent
non-executive director in
October 2020.
Current external appointments
– Emeritus professor of vascular surgery,
University of Southampton
– Deputy chair of University Hospitals
Dorset NHS Foundation Trust
Skills and previous experience
Cliff was a consultant vascular surgeon for
26 years, initially in Birmingham and then
in Southampton, and professor of vascular
surgery at the University of Southampton.
His research interests focus on factors that
lead to diabetic vascular disease and how
to improve the clinical outcomes for people
with diabetes.
Cliff was a clinical service director and
associate medical director in the University
Hospital Southampton. At a national level
he was president of the Vascular Society of
Great Britain and Ireland and was one of
the team that separated vascular surgery
from general surgery leading to a new
speciality, centralisation of services and a
new training programme for vascular
surgeons. These changes have been
associated with dramatic improvements in
outcomes for patients. Cliff was a member
of the council and a trustee of the Royal
College of Surgeons of England, serving as
vice president from 2018 until July 2021.
He was awarded an OBE in 2021 for
services to vascular surgery.
Dr Ronnie van der Merwe
Non-Executive Director
Dr Ronnie van der Merwe was
appointed as a non-executive director
in May 2018. The company does not
consider Ronnie to be independent as
he has been appointed to the board by
the company’s principal shareholder,
Mediclinic Group Limited, under the
terms of the relationship agreement
with them.
Current external appointments
– Group chief executive officer of Mediclinic
Group Limited
Skills and previous experience
Ronnie has a strong track record of
leadership and management within the
healthcare industry, including strategy,
organisational development, clinical
performance, adoption of technology, and
quality and data management.
As a specialist anaesthesiologist in private
practice, Ronnie gained extensive
experience in trauma and elective
anaesthesia, intensive care management,
and the management of acute and chronic
pain. He subsequently expanded his
expertise at medical insurance company
Sanlam Health before joining Mediclinic in
1999. As chief clinical officer, he took
responsibility for various aspects of the
business, contributed greatly to the growth
and strategic positioning of the group, and
served as chair of the board of trustees of
the in-house medical aid scheme, Remedi.
He also served on the board of the premier
private emergency medical care provider in
South Africa, ER24, and as executive director
of Mediclinic International Limited from
2010 up to the combination of the
businesses of Mediclinic (then Al Noor
Hospitals Group plc) and Mediclinic
International Limited. He was appointed as
group chief executive officer in 2018.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 98
Executive committee
E
S
E
S
E
S
E
S
E
S
E
S
John Forrest
Chief Operating Officer
Dr Cathy Cale
Group Medical Director
Peter Corfield
Chief Commercial Officer
Rachel King
Group People Director
Professor Lisa Grant
Group Clinical Director and Chief Nurse
John Forrest joined Spire Healthcare in
October 2018, after spending most of his
career as a leading operator in the retail
and hospitality industries.
Dr Cathy Cale joined Spire Healthcare in
October 2020, following a successful
30-year career in the NHS, which spanned
clinical, research and leadership roles.
John started his career at Marks & Spencer,
before moving to the Body Shop and then
the Co-operative Group. In 2007, John
joined Whitbread as the head of new
openings and led the roll out of Premier
Inn, before being promoted to chief
operating officer at Premier Inn in 2011. In
2015, John moved to Greene King as chief
operating officer for their retail division to
lead the operational integration of the
recently acquired Spirit Pub Company. He
became managing director for Greene King
Pub Partners Business before leaving to
join Spire Healthcare.
Cathy trained in paediatric immunology
and immunopathology. She has extensive
experience as a medical director, with roles
at three NHS trusts, including Great
Ormond Street Hospital for Children NHS
Foundation Trust.
In 2017, she became a clinical ambassador
for Getting it Right First Time (GIRFT), a
national programme designed to improve
medical care by tackling variations in the
way services are delivered across the NHS,
and by sharing best practice between
trusts. At this time, she was also deputy
medical director for NHS Improvement
London region, combining this with
ongoing clinical work. Cathy most recently
worked as medical director at The
Hillingdon Hospitals NHS
Foundation Trust.
Cathy jointly chairs the Safety, Quality and
Risk Committee with Professor Lisa Grant.
Peter Corfield joined Spire Healthcare in
October 2015 as group commercial
Director and has responsibility for
delivering revenue growth through our
payor groups and identifying new business
opportunities. He was appointed chief
commercial officer in January 2018 with
additional responsibility for business
development across the hospital portfolio.
Prior to joining Spire Healthcare, he held a
number of senior executive and board
roles within the financial services industry
in the UK, most recently as managing
director of Ageas Retail Direct.
Prior to this, Peter worked for both Zurich
Financial Services Group and Royal Bank of
Scotland in various roles that covered
Europe, the Middle East and Japan.
Rachel King joined Spire Healthcare in
January 2023 as group people director,
with responsibility for leading our people
strategy across the group.
Prior to joining Spire Healthcare, Rachel
was the group people director at Camelot,
the regulated former operator of The
National Lottery where she sat on the
executive committee, leading the
transformation of the people strategy and
culture. Prior to her six years at Camelot,
she held a number of senior executive roles
in a wide range of organisations spanning
media, broadcasting, technology and retail
sectors. In addition, Rachel was a member
of the board of Network Homes, a
London-based housing association, until
October 2023.
Professor Lisa Grant joined Spire
Healthcare in March 2023, following a
successful 25-year career in the NHS
holding a number of leadership and
management roles. Lisa is an experienced
nurse and has held three executive chief
nurse posts over the last 13 years and also
held the role of chief operating officer in
large acute NHS trusts. Lisa established the
Royal Liverpool Nursing Programme and
developed the Excellence in Practice
Programme at Leeds Teaching Hospitals
NHS Trust that focuses on the
development and recognition of the
workforce teams. Lisa held a variety of
management and leadership roles in the
north of England and was awarded a
visiting chair in health professions
leadership from the University of
Leeds in 2022.
Lisa jointly chairs the Safety, Quality and
Risk Committee with Dr Cathy Cale.
Mantraraj Budhdev
Group General Counsel and Corporate
Concerns Director
Mantraraj Budhdev joined Spire Healthcare
in September 2022 as group general
counsel, with 15 years’ global experience
from a range of industries in both private
practice and in-house roles.
A large proportion of his experience was
gained at two global law firms – Linklaters
and Hogan Lovells – where he worked on
compliance, regulatory and risk matters,
while advising leading blue-chip and listed
corporate clients, and completed
secondments at investment banks
including Goldman Sachs. Most recently,
Mantraraj was responsible for leading a
wide range of transactional, governance
and regulatory matters as the group head
of compliance and head of legal for Europe
and the Americas region with a global port
and logistics provider.
Mantraraj is responsible for leading a legal
team of corporate, commercial, healthcare
and litigation lawyers, Spire Healthcare’s
data protection and company secretarial
teams, and he is also the group corporate
concerns director.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 99
Nomination committee report
The introduction of three new
board members at our annual
general meeting this year has
strengthened the team, ensuring
we have the appropriate mix of
knowledge, skills and experience
the business needs to support the
execution of our strategy in the
years ahead.”
Sir Ian Cheshire
Chair, Nomination Committee
At a glance
The majority of nomination committee members were independent
non-executive directors at all times during the year in line with the
provisions of the UK Corporate Governance Code 2018. The board
appoints the chair of the committee, who must be either the chairman
of the board or an independent non-executive director. If members are
unable to attend a meeting they have the opportunity beforehand to
discuss any agenda items with the chair of the committee.
The company secretary, or their appointed nominee, acts as secretary to
the committee.
Role and responsibilities
The nomination committee’s foremost priorities are to ensure that the
group has the best possible leadership and to plan for both executive
and non-executive director succession. Its prime focus is therefore on
the composition of the board, for which appointments will be made on
merit against objective criteria. The nomination committee advises the
board on these appointments, oversees the recruitment processes, and
also considers retirements and resignations from the board and its
other committees. The nomination committee regularly examines
succession planning based on the board’s balance of experience, overall
diversity and the leadership skills required to deliver the company’s
strategy.
Committee meetings
Process for board appointments
While making new appointments to the board on merit, the board
will actively seek to secure candidates with a diverse background.
Appointments will take account of the specific skills and experience,
resilience, independence and knowledge needed to ensure a rounded
board and the diverse benefits each candidate can bring to its overall
composition. Care is taken to ensure that proposed appointees have
sufficient time to devote to the role and have no conflicts of interest.
The nomination committee uses the services of an executive search
firm to identify appropriate candidates, ensuring that the search
firm appointed does not have any other conflicts with the group.
In addition, the nomination committee will only use those firms
that have adopted the Voluntary Code of Conduct addressing gender
diversity and best practice in search assignments. A long list of
potential appointees is reviewed, followed by the shortlisting of
candidates for interview based upon the objective criteria identified
in the specification. Committee members interview the shortlisted
candidates together with other directors as appropriate, and identify
a preferred candidate. Following these meetings, and subject to
satisfactory references, the nomination committee makes a formal
recommendation to the board on the appointment.
2
Committee membership and attendance at meetings
The nomination committee members at the end of 2023 and the
number of meetings they each attended during the year were as follows
(the maximum number of meetings that the member was eligible to
attend is also shown):
Member
Sir Ian Cheshire
(Committee Chair)
Martin Angle
Committee
member since
May 2021
May 2020
Position in Company
Non-executive
chairman
Deputy chairman
Natalie Ceeney
May 2024
Dame Janet Husband
Dr Ronnie van der Merwe
July 2014
May 2020
Debbie White
May 2024
Independent
non-executive
director
Vice chair
Non-executive
director
Senior
independent
director
Committee
meetings
attended/
held in 2023
2 (2)
2 (2)
1 (1)
2 (2)
1 (1)
Nomination committee members’ biographies are shown on pages x to x.
Adèle Anderson stepped down from the board at the company’s annual general meeting in
May 2023 and left the nomination committee. Debbie White and Natalie Ceeney were
appointed to the nomination committee on 1 May 2023.
The Nomination Committee’s terms of reference can be found at www.investors.
spirehealthcare.com
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 100
Nomination committee report continued
Dear shareholder,
I am pleased to present the nomination committee’s report for the
year ended 31 December 2023.
While there have been no new appointments to the board this year, we
were pleased to welcome Natalie Ceeney and Debbie White as
independent non-executive directors. These appointments were in
addition to the appointment of Paula Bobbett who joined us shortly
before the start of the year. Our three new directors joined us after a
thorough and wide ranging search, facilitated by executive search firm
Odgers Berndtson. Each has completed a successful onboarding
process during the year which has included a number of hospital visits.
I was very pleased to see Debbie take on the role of senior independent
director, and Natalie became chair of the remuneration committee
during the year. On the recommendation of the committee, both
Debbie and Natalie became members of the nomination committee.
The company’s deputy chairman, Martin Angle, brought his
considerable experience to the role of audit and risk committee chair,
as well as becoming a member of the clinical governance and
safety committee.
I am pleased to confirm that the company complies with the Listing
Rule changes brought about by the FCA’s policy statement on diversity
and inclusion on boards that at least 40% of the board should be
women; at least one of the senior board positions (chair, chief
executive officer, chief financial officer or senior independent director)
should be a woman; and at least one member of the board should be
from an ethnic minority background, excluding white ethnic groups.
Succession planning and appointments to the board
All changes to the board and its committees are overseen by the
nomination committee. Strong succession planning remains a key
focus to help ensure that we continue to have an appropriate mix of
skills, experience and backgrounds on the company’s board and in its
senior leadership team.
We recognise the requirements of the UK Corporate Governance Code
2018 (the ‘Code’) in our decision-making, while assessing the cultural
and strategic capabilities that will help the group deliver its strategic
aims. We remain committed to making appointments on merit, based
on objective criteria, but we set that against a clear strategy to
promote diversity across the business.
We also consider the tenure of board members and potential future
board retirements, and the impact of these on membership of the
board and its committees.
The committee’s remit includes an ongoing review of the structure, size
and composition of the board and its committees to ensure we maintain
the appropriate mix of knowledge, skills, experience, and diversity.
Independence and time commitments
Based on our assessment during 2023, the committee is satisfied that,
throughout the year, all non-executive directors remained independent
in character and judgement.
A thorough review was undertaken by the committee in February 2024,
with regard to Dame Janet Husband remaining on the board for longer
than nine years, which is a circumstance the Code deems could impair
the independence of a non-executive director. The assessment
concluded that Dame Janet continues to make a valuable contribution to
the board, and leads the clinical governance and safety committee
effectively. There was considered no impairment to her independence
resulting from her tenure. It was further considered to be in the best
interests of the company that Dame Janet continue in her role and the
nomination committee recommended to the board that she remain on
as a director.
In recommending directors for election and re-election at the annual
general meeting, the committee reviews the performance of each
non-executive director and their ability to continue meeting the time
commitments required, taking into consideration individual capabilities,
skills and experiences and any potential conflicts of interest that have
been disclosed. While some of our directors have other significant
commitments outside of Spire Healthcare, these are considered to be
appropriate and not to conflict with their responsibilities to the group.
Diversity and inclusion
Our board diversity policy and our wider equity, diversity and inclusion
(EDI) strategy puts four commitments at the heart of our approach
to EDI:
1. We recognise the value of diversity.
2. We understand how it will help us deliver our purpose.
3. We respect and appreciate each other for who we are.
4. We include diverse colleagues in our problem-solving to make better,
faster decisions.
Diversity and inclusion is a major focus of activity across Spire
Healthcare, and will continue to be in the years ahead. The board
promotes diversity and inclusivity within the organisation, including
supporting women to become leaders within the business and
improving the diversity of the company’s workforce. We believe that a
diverse board includes and makes good use of differences in skills,
experience, background, ethnicity, gender and other characteristics.
Our aim was to achieve a minimum 33% female representation on the
board by our annual general meeting in May 2023 and 40% by 2025.
We were delighted to have already achieved our 2025 target in 2023,
with a gender split on our board of 55% male and 45% female.
Spire Healthcare continues to employ a large majority of female
colleagues and the company’s gender pay gap compares favourably to
other organisations. However, we recognise we can do more to achieve
better gender representation at senior leadership levels. Details of the
company’s staff diversity and gender pay gap, in line with reporting
requirements, can be found on pages 45-47. The chart on page 97 also
illustrates the diversity of the board in terms of gender.
Performance evaluation
In late 2023, the committee completed its annual performance
evaluation, which was led by Debbie White (as the senior independent
director) supported by the company secretary and an external
specialist, BoardClic, who together created a comprehensive set of
questionnaires based on best practice and regulatory guidelines for the
board and each board committee. In reviewing the matters identified
in BoardClic’s report on the outcome of the review, the committee
chair discussed and agreed to prepare an action plan for 2024 that took
into consideration elements of the report on future board composition.
Re-election of directors
The committee met in early 2024 to review succession arrangements
for directors, and the continuation in office and potential
reappointment of other members of the board as described earlier.
Following this review, the committee recommended to the board that
all directors standing be reappointed or have their appointments
confirmed, and hence these directors will seek election or re-election at
the annual general meeting in May.
Sir Ian Cheshire
Chair, Nomination Committee
28 February 2024
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Clinical governance and safety committee report
Our work to improve the patient
experience before, during and
after people come into our care
has been an important part of
the committee’s focus this year.
This has been reflected across the
business, as we constantly seek to
enhance our patient care and the
range of services we offer.”
Professor Dame Janet Husband
Chair, Clinical Governance and Safety Committee
Role and responsibilities
The CGSC sits above the group’s clinical governance systems and is
charged by the board with ensuring effective systems and processes
are in place to review clinical performance, including the management
of complaints, safeguarding concerns, whistleblowing and freedom to
speak up issues.
The responsibilities of the CGSC include:
– Promoting a culture of high-quality and safe patient care
and experience
– Reviewing the group medical director’s report
– Reviewing the group clinical director’s clinical governance and
safety reports
– Monitoring patient health and safety matters
– Reviewing governance matters that impact patient safety
– Reviewing the clinical matters on the whistleblowing register
– Promoting continuous clinical improvements
– Holding the executive committee accountable for following
up actions
At a glance
The clinical governance and safety committee (CGSC) must have at least
two members, one of whom must be an independent non-executive
director. The board appoints the chair of the CGSC who must be an
independent non-executive director. If members are unable to attend a
meeting, they have the opportunity beforehand to discuss any agenda
items with the chair of the committee.
The company secretary, or their appointed nominee, acts as secretary to
the CGSC.
Committee meetings
4
Committee membership and attendance at meetings
The CGSC members at the end of 2023 and the number of meetings
they each attended during the year were as follows (the maximum
number of meetings they could have attended is also shown):
Member
Dame Janet Husband
(Committee Chair)
Justin Ash
Committee
member since
July 2014
Position in Company
Vice chair
October 2017 Chief executive
Martin Angle
Jenny Kay
May 2023
June 2019
officer
Deputy chairman
Independent
non-executive
director
Professor Cliff Shearman
January 2021 Independent
non-executive
director
Committee
meetings
attended/
held in 2023
4 (4)
4 (4)
3 (3)
4 (4)
4 (4)
CGSC members’ biographies are shown on pages 96-97.
Adele Anderson stepped down from the board at the conclusion of the company’s annual
general meeting held on 11 May 2023 and ceased to be a member of the CGSC. Martin
Angle was appointed a member of the CGSC on 1 May 2023.
The CGSC’s terms of reference can be found at www.investors.spirehealthcare.com
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 102
Clinical governance and safety committee report continued
Dear shareholder,
In our first year without COVID-19 restrictions, I am delighted that
members of the clinical governance and safety committee (the
‘committee’ or the ‘CGSC’) have been able to get out in the business
and visit many of our hospitals. This has been a wonderful way to
engage with our senior leadership teams and colleagues in many
different roles and also to talk to patients in hospitals directly. We have
seen for ourselves the results of the significant investments which
have been made in the group’s equipment and facilities and learned
about other exciting new developments in the provision of the highest
quality care to our patients. We have also gained a better
understanding of the major challenges which each hospital faces and
of the practical problems they deal with on a daily basis.
The committee believes that these hospital visits are hugely beneficial,
bringing the work of the committee to life and enabling us to better
support our hospital leaders as they strive to continually improve
patient care.
Our integrated governance reports have matured over the last two
years, and the CGSC now has access to detailed information which
allows us to identify key themes, examine trends, and to seek
clarification and assurance when issues arise. This strategic overview of
governance ensures we can fulfil the committee’s role and gives the
board strong assurance and a high level of confidence that our patient
services are well led, effective, responsive and safe.
The wellbeing of patients has been a strong focus through the year,
and I am pleased to see that patient forums are now standard across
the group. We are committed to learning from every experience,
whether good or wanting in some way. That’s why we look at patient
complaints very closely, and where needs are not met for whatever
reason, we seek to put things right swiftly. We are determined that
every interaction with Spire Healthcare should be a good one, and that
people know that whatever their needs, whether personal or medical,
we are here to help.
Committee meetings in 2023
Our four regular CGSC meetings enabled the committee to meet its
broad remit again this year, covering the oversight of Spire Healthcare’s
clinical governance, as well as medical professional standards, clinical risk
and the clinical aspects of health and safety. Alongside these meetings,
once again we held two informal seminars, allowing us to review specific
topics in more detail with the help of expert guest speakers. We use
these seminars not only to look at our internal processes, but also to help
us look externally and learn from other healthcare organisations,
including the NHS.
At our formal meeting in February, we received a presentation on clinical
staffing models, and learned how the new safe staffing tool had been
embedded in our hospitals and ensures there are safe staffing levels on a
daily basis. The tool will also support a more reliable temporary
workforce model and inform future workforce planning. Dr Cathy Cale,
group medical director, presented the key highlights from the medical
professional standards report December 2022, as well as the annual
review (2022) of consultant concerns report. We also received the
patient experience report for quarter four 2022, noting that interactive
sessions were being conducted to ensure that key patient needs were at
the forefront of actions and improvements.
At our first seminar in April we welcomed Professor Tim Briggs, National
Director for Clinical Improvement and Elective Recovery for NHS England,
and Chair of GIRFT (Getting It Right First Time), the national programme
dedicated to improving the quality of care within the NHS. He talked to
us about surgical hubs and the national effort to deliver the most
ambitious elective catch-up plan in NHS history. It was good to have this
opportunity to engage with the NHS and to discuss Spire Healthcare’s
own programme of support for the NHS with Professor Briggs.
At the CGSC meeting in September, the committee acknowledged the
horrific crimes of Lucy Letby, a neonatal nurse who had worked at an
NHS hospital, and the outcome of her trial. There was recognition of
the impact of this case on Spire Healthcare colleagues, particularly
those in clinical roles and those in a position of leadership, who were
deeply shocked and upset. We discussed our support of colleagues and
our culture, which is now well embedded across our hospitals and
other parts of the business. The aim is to ensure that colleagues speak
up at the very first opportunity should patient safety be of concern.
The committee noted that our Freedom to Speak Up Framework is now
well-embedded across our hospitals and that the National Guardian’s
Office’s Speak Up training is mandatory for all colleagues.
For our second seminar in September, we were joined by Dr Henrietta
Hughes OBE, the National Patient Safety Commissioner, whose role is
to promote patient safety in relation to medicines and medical devices
and to promote the patient’s voice. With her visit coming soon after
the verdict in the Lucy Letby case, we had a very useful and informative
discussion that focused on the needs of patients, while considering
wider governance issues and best practice in patient safety with
respect to boards and board committees.
At our December meeting, we received a presentation on integrated
governance with respect to our new services, delivered through the
newly rebranded London Doctors Clinic (LDC) and Spire Occupational
Health, as well as Vita Health Group (VHG). While this governance
framework is still in development, the committee is very much looking
forward to working with VHG and learning more about their work in
the area of mental health support. We also reviewed half-yearly reports
with deep dives into critical care and cancer care. Our work in cancer
this year has shown a continued increase in activity levels.
At our June meeting, we heard a patient story from Spire Cheshire
Hospital, where a solution had been implemented to secure a patient’s
personal belongings while the patient was in the operating theatre. This
simple but highly effective solution has now been implemented across
the group. Dr Cale also presented the key points from the annual
learning from deaths report (2022). Areas for improvement were
noted, particularly the need for greater clarity on anticoagulant
management, which has been addressed through our Quality
Improvement programme.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 103
Clinical governance and safety committee report continued
Maintaining our high-quality standards
Quality is a key pillar of our business strategy, and our Quality
Improvement (QI) strategy continues to deliver quality improvements.
Each hospital has its own QI programme, and our standard QI
methodology is an important part of Spire Healthcare’s quality
improvement culture.
Healthcare regulators in England, Scotland and Wales continued their
inspections at our hospitals this year, and we have maintained our
score of 98% of inspected locations rated ‘Good’ or ‘Outstanding’ or
the equivalent. I was also pleased to see that all inspected VHG and
LDC locations are rated ‘Good’. Our one remaining site with a ‘Requires
improvement’ rating, Spire Alexandra, has not been inspected since
2016, so we look forward to demonstrating improvements.
The Care Quality Commission in England has changed its assessment
model and we are looking forward to working with them on their new
approach. More than ever, our focus is on always being inspection
ready – something that our new Group Clinical Director and Chief
Nurse, Professor Lisa Grant, is working hard to achieve.
Lisa joined us following a successful 25-year career in the NHS. She has
been developing a new nursing strategy that we aim to implement
across Spire Healthcare next year, with the full support of the
committee. This year, under Lisa’s leadership, we were also excited to
see the launch of the Driving Clinical Excellence in Practice programme
for our nursing colleagues – supporting nurse revalidation, better
patient outcomes, and an improved patient experience.
I would like to thank Lisa for her unwavering support of the committee
during her first year in office and for sharing with us her vision and her
strategy for the future to ensure that we provide the best nursing care
at all times and to every single patient.
Quality governance
We are presented with a detailed set of key performance indicators
(KPIs) which report trends and flag any statistical alerts to ensure we
remain focused on the most pertinent areas of clinical governance for
the business. These are scrutinised in-depth by experienced clinical
members of the board, and we examine themes and trends.
The subjects include, but are not limited to, incidents of VTE, infection
control, patient safety initiatives and mortality. Thankfully, deaths at
Spire Healthcare are rare, but each is examined, and the findings are
reviewed by the committee with an independent perspective provided
by our independent mortality adviser.
We conduct thematic reviews to take a deep dive into specific topics of
concern. Topics in 2023 included prevention of never events,
improvements to care for patients after discharge, critical care,
pathology and cancer services.
We also keep oversight on patient notification exercises and particularly
the review of those patients who were the victims of Paterson.
Preparing for PSIRF
The committee is delighted with the progress we are making at our
hospitals in implementing the new NHS England Patient Safety Incident
Response Framework (PSIRF). PSIRF promotes a new, more proportionate
approach to responding to patient safety incidents within a wider
system of improvement, with compassionate engagement and
involvement of those affected by patient safety incidents. Building on
Spire Healthcare’s open and learning culture, we have already trained all
the people in our hospitals who need to be ready for the full PSIRF
implementation in 2024.
Hospital engagement
As I mentioned in my introduction, members of the committee have
finally been able to make regular visits to our hospital sites again this
year – between the clinical non-executive directors (Jenny Kay, Professor
Cliff Shearman, and myself) we have made 21 hospital visits. I’ve also led
visits with other non-executive directors, including our senior
independent director, Debbie White, and our deputy chairman, Martin
Angle. These visits together add value and have proved very helpful in
further aligning Spire Healthcare’s business and commercial views with
its clinical interests.
We are pleased to support local hospital management teams and always
take time to listen to them and our people, all of whom give us valuable
insights. The national shortages in healthcare professionals are still a
concern across the group, but there has been a lot of work done this year
to help us fill gaps, from bringing key recruitment resources in-house to
our nursing apprenticeship scheme, which remains one of the largest in
our sector, developing talent in the healthcare sector.
Other activities
Members of the committee continue to attend and observe briefings,
committee meetings and specialist conferences. These events include
medical advisory committee chair conferences held twice yearly and
other national meetings including the directors of clinical services
meeting, the Freedom to Speak Up Guardians conference and Patient
Safety Incident Response Framework training sessions.
We have also attended other committees as observers within the
business – such as the medical professional standards committee, and
the safety, quality and risk committee.
Looking ahead
The committee continues to function well and, in the coming year, we
look forward to learning more about our new business areas and
understanding their key governance and patient safety metrics better.
In so doing we will get closer to what they do on a daily basis – for
example, the NHS talking therapies offered by VHG. So we will aim to
meet with some of the people delivering these services, to hear from
them first-hand about their roles and experiences. We also have a new
daycase clinic which opened in early 2024, with another scheduled
to open later in 2024, so we also plan to hear about the progress
they are making in the delivery of rapid access diagnostics and
daycase treatments.
With some newer non-executive directors on the board, we will
continue to introduce them to the clinical aspects of Spire Healthcare,
and to the workings of the committee. Indeed, all board members
have standing invites to join us at our CGSC seminars and
committee meetings.
We are keen to see the new nursing strategy put into practice and will
maintain oversight as it is developed next year. We also look forward to
celebrating excellence and enhancing professional pride through the
Delivering Clinical Excellence in Practice programme. I am confident
this will help us build on our standards of outstanding care, add value
to our developing workforce, and help us all make a positive difference
to people’s lives through outstanding personalised care.
We will continue to work closely with our Group Medical Director, Dr
Cathy Cale, as she leads clinical governance across Spire Healthcare’s
growing clinical business. On a personal note I would like to thank
Cathy for her unstinting support of the committee and for ensuring
that the information presented to the committee is robust, allows
appropriate scrutiny and, importantly, provides strong and consistent
board assurance.
Professor Dame Janet Husband DBE FMedSci, FRCP, FRCR
Chair, Clinical Governance and Safety Committee
28 February 2024
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Audit and risk committee report
In 2023, the committee focused
on the risks from continued
geopolitical tensions, including
cyber, as well as areas of
fundamental financial control.”
Martin Angle
Chair, Audit and Risk Committee
Role and responsibilities
The audit and risk committee has responsibility for overseeing the
financial reporting and internal financial controls of the group, for
reviewing the group’s internal control and risk management systems,
and for maintaining an appropriate relationship with the external
auditor of the group, and for reporting its findings and
recommendations to the board.
These include:
– Receiving and reviewing the annual report and accounts of the
group and half yearly financial statements, and any public financial
announcements as required, and advising the board on whether the
annual report and accounts is fair, balanced and understandable
– Receiving and reviewing reports from the external auditor,
monitoring its effectiveness and independence, and approving its
appointment and terms of engagement
– Agreeing the annual internal audit programme, including the use of
external consultants to support the internal resource
– Monitoring the effectiveness of the risk management system
– Reviewing the effectiveness of the group’s system of internal
controls and assessing and advising the board on the internal
financial, operational and compliance controls
– Overseeing the group’s procedures for detecting fraud
and whistleblowing
Martin Angle took over from Adèle Anderson as chair of the company’s
audit and risk committee from 1 May 2023. Debbie White and Natalie
Ceeney CBE joined the audit and risk committee from 1 May 2023.
At a glance
The audit and risk committee must have at least three members, all of
whom must be independent non-executive directors. If members are
unable to attend a meeting, they have the opportunity beforehand to
discuss any agenda items with the chair of the committee.
The audit and risk committee invites the external auditor, the chief
executive officer, chief financial officer, general counsel and the director
of audit, risk, and compliance to attend each meeting, with other
members of the management team attending as and when invited. The
group’s external auditors have regular private sessions with the audit
and risk committee and with the chair prior to each meeting.
The company secretary, or their appointed nominee, acts as secretary to
the committee.
Committee meetings
6
Committee membership and attendance at meetings
The Audit and Risk Committee members at the end of 2023 and the
number of meetings they each attended during the year were as follows
(the maximum number of meetings that the member was eligible to
attend is also shown):
Member
Martin Angle
(Committee chair)
Debbie White
Committee
member since
September
2019
May 2023
Natalie Ceeney
May 2023
Dame Janet Husband
July 2014
Position in Company
Deputy chairman
Senior
independent
director
Independent
non-executive
director
Vice chair
Committee
meetings
attended/
held in 2023
6 (6)
3 (4)
4 (4)
6 (6)
Audit and risk committee members’ biographies are shown on pages 96 and 97.
The audit and risk committee’s terms of reference can be found at www.investors.
spirehealthcare.com.
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Audit and risk committee report continued
Dear shareholder,
As chair of the audit and risk committee (the ‘committee’), I am pleased
to present our report for the year ended 31 December 2023.
Risk management and internal controls
Internal audit and risk management continue to be areas of particular
focus and scrutiny for the committee at each meeting, with papers
presented and discussed in detail to understand key issues raised and
identify emerging and significant risks to the business. We paid
particular regard to the risk impact of the increasing global geopolitical
tensions, particularly on cyber, procurement and energy.
Internal audit function
From 1 April 2023, we extended KPMG’s contract to provide co-sourced
internal audit resource to support the internal audit function for
another two years.
The committee receives an update report from the director of audit,
risk and compliance on internal audit activity four times a year, with
two of the committee meetings reserved for deep dives into specific
risk or internal control matters. In each update, the committee receives
the executive summary of recently published internal audit reports,
and the chair receives the full internal audit report. The committee also
receives a status update of any remedial actions agreed with
management. If there are significant findings, the committee asks the
appropriate senior management to attend to discuss the findings.
The director of audit, risk, and compliance, under International internal
audit standards, has to declare to the committee any potential
compromises on his independence. This may include other ‘control’
functions for which he has line management responsibility. The
committee has to approve any activity that falls outside of internal
audit. As in prior years, in 2023, the director of audit, risk and
compliance had the risk management function reporting into him,
with the approval by the committee. On an annual basis the
Committee reviews the internal audit charter that is based on the
Institute of Internal Audit’s template charter. The Committee also
reviewed the compliance by the director of internal audit, risk, and
compliance with the internal audit code of conduct.
The committee requires KPMG, as the co-source provider of internal
audit services, to maintain independence. In 2023, in the best interests
of the company, and after full consideration by the committee of any
impact on the independence of internal audit services, the committee
approved that KPMG provided some additional services to the group,
relating to support with the design of its digital strategy.
The 2024 internal audit plan was approved at the November 2023
committee meeting. The plan is prepared on a risk-focused basis with
input from the senior leadership team and non-executive directors. For
2024, the plan will focus on some of our larger hospitals, digital
technology implementation and core areas of financial control.
New financial and internal control reporting requirements
In 2020, the committee received a briefing from the external auditors
on the broad range of matters the UK government is consulting in
relation to corporate governance following the publication of the
independent review of the Financial Reporting Council in 2018 and the
Brydon Report in 2020. In 2021, management set up a project team to
prepare for the most likely aspects of new legislation from the UK
government in this area. In October 2023, the government withdrew
the proposed Companies’ regulations part way through legal
ratification and no mention was made of regulatory changes to
corporate reporting and governance in the King’s speech in
November 2023.
Risk management function
The risk management and internal control report details the changes to
the risk environment the group has faced in 2023 (see pages 64 to 74).
To provide visibility of risks from ‘ward to board’, the risk management
team provides quarterly reports to:
– the executive committee and the audit and risk committee on
principal risks;
– the safety, quality and risk committee and clinical governance and
safety committee on clinical quality risks.
On a monthly basis, the operations committee reviews hospital
level risks.
The committee reviews the risk appetite the executive report against
the principal risks providing challenge where appropriate on the level
of risk the executive wish to tolerate.
Emerging risks
As in 2022, along with the executive management team, the committee
has focused more time on the risks, and potential mitigations, that have
emerged from the rapidly changing geopolitical and economic
environment. The principal risks and emerging risks are discussed in
more detail in the risk management and internal control report on
pages 64 to 74.
The FRC published the revised Corporate Governance Code (2024 Code)
in January 2024. The committee will continue to monitor
developments in the regulatory environment and receive reports from
management on their readiness to comply with new requirements.
The committee has received briefings on the two sustainability
financial reporting standards issued by the International Sustainability
Standards Board (ISSB) in 2023. It is the committee’s planning
assumption that these standards will become mandatory in the United
Kingdom in due course with substantially the same requirements. Our
sustainability committee has commenced initial work to prepare our
capabilities so we can comply with those standards when they come
into force in the UK. From the beginning of 2024, the committee will
receive a regular report from the chair of the sustainability committee.
Task Force on Climate-related Financial Disclosures (TCFD)
In February 2024, the committee reviewed the TCFD disclosures on
pages 75 to 80 and reviewed the process for the preparation of the
disclosures in compliance with Listing Rule (LR 9.8.6 R(8)).
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Audit and risk committee report continued
Viability
The committee reviewed the process undertaken by management to
support and allow the directors to make the group’s viability
statement. The committee considered and provided input into the
determination of which of the group’s principal risks and combinations
thereof might have an impact on the group’s liquidity and solvency.
The committee reviewed the results of management’s scenario
modelling and the stress testing of these models. The group’s viability
statement can be found on page 81.
External audit
Annual auditor appointment
The committee has primary responsibility for the relationship with, and
performance of, our external auditor. This includes making the
recommendation on the appointment, reappointment, and removal of
the external auditor, assessing their independence on an ongoing basis
and for negotiating the audit fee in conjunction with the chief
financial officer.
The shareholders re-appointed Ernst & Young LLP as the company’s
external auditor during 2023. Ernst & Young LLP has served the
business since 2008. Whilst recognising that the 10-year period of its
appointment technically began with the company’s admission in 2014,
the committee agreed that a full audit tender should be linked to the
end of the previous lead audit partner’s term of office and took place in
2020. Our current audit partner from Ernst & Young LLP is Stephney
Dallmann who took on the role in 2020.
The committee ensures that the external auditor adheres to The
Auditing Practices Board’s Ethical Standard 3, which requires the
rotation of the audit partner for listed companies every five years. As a
result the committee noted that this is the fourth fiscal year for
Stephney Dallmann to serve as the audit partner.
External auditor independence and effectiveness
The committee reviewed the independence and effectiveness of the
external auditor. We did this by:
– Reviewing its proposed plan for the 2023 audit
– Discussing the results of its audit, including its views about material
accounting issues and key judgements and estimates, and its
audit report
– Reviewing the quality of the people and service provided by Ernst &
Young LLP
– Evaluating all of the relationships between the external auditor and
the group, to determine whether these impair, or appear to impair,
the auditor’s independence
Significant issues and material judgements
The audit and risk committee assesses whether suitable accounting
policies have been adopted and whether management has made
appropriate estimates and judgements.
The committee reviewed the nature of all items classified as ‘adjusting
items’ in the year and management’s justification thereof against
relevant accounting guidance. Where costs spanned a reporting period,
the committee considered the significance of the total expected costs to
be incurred across reporting periods (based on management’s
estimates), when determining the appropriateness of the
accounting treatment.
Other activities in 2023
Prior to the release of the company’s 2023 interim results, the committee
completed a thorough review of:
– Viability and going concern
– Assessment of goodwill for impairment
– Assessment of property carrying values for impairment
– Assessment of provisions for future liabilities
The committee also reviewed the company’s banking
covenant compliance.
In addition to providing oversight of the group’s financial reporting,
internal controls and risk framework, the committee has had reports on
information governance from management and external advisors,
preparations and planning undertaken in response to the UK Corporate
Governance Code update on risk management and internal controls, and
counter fraud initiatives.
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Audit and risk committee report continued
The table below summarises the matters where the most material judgements have been made in relation to reporting in 2023:
Matters
Improper revenue
Goodwill carrying value
Property carrying values
Judgement and estimation required
Pressure to achieve results could lead management to manipulate the
financial reporting of revenue. This could include the:
– Manipulation of prices charged, in particular in relation to PMI
– Miscoding of procedures by hospitals impacting revenue recorded
– Misreporting of other income in the year
– Overstatement of accrued revenue at the year end
Goodwill is tested for impairment annually or when there is an indicator of
impairment. This is achieved by comparing the value-in-use of the cash
generating unit with its carrying value in the accounts. The value-in-use
calculations require the group to estimate future cash flows, considering
market conditions, and the present value of these cash flows is determined
using an appropriate discount rate. The current value of goodwill is
underpinned by these forecasts.
Freehold and leasehold property is held at depreciated cost and its carrying
value is required to be assessed for indicators of impairment by
management on an annual basis.
For those properties with an indicator, an impairment test is performed by
calculating a value-in-use, by means of a discounted cash flow model.
As this process involves some degree of estimation there is a risk that
properties are held in the financial statements at inappropriate
carrying values.
How the committee gained comfort on the matter
Central management carry out a detailed review of monthly hospital performance compared
to forecast, focusing on the cut-off of revenue reported at the balance sheet date. The group
maintains effective segregation of duties to safeguard the integrity of pricing Master file data
on which billing is dependent. Management routinely reconciles revenues and cash collections
as part of monthly cash flow management procedures. This includes accrued revenue, which is
substantiated with reference to subsequent billings and cash collection.
The committee has reviewed in detail the analysis produced by management to assess the
carrying value of goodwill. Its review included assessing for reasonableness the key underlying
assumptions used by management in their analysis. These included the discount factor rate,
future anticipated growth rates and forecasted levels of capital maintenance investment
(excluding expenditure on new or enhancement of assets). The committee noted that the
discount factor was within EY’s comparative range.
The committee has reviewed management’s latest assessments in August and November 2023
and in February 2024. This regular recurring review process has allowed for earlier visibility of
the key assumptions and any potential issues.
The committee reviewed the analysis prepared by management to assess the carrying value of
those properties with an indicator of potential impairment, including the appropriateness of
the key underlying assumptions. These included future anticipated growth rates, the discount
factor rate, and levels of ongoing capital maintenance investment (excluding expenditure on
new or enhancement of assets).
This work was conducted in two phases. An initial review was performed in November 2023.
This initial review was performed to provide early visibility of any potential issues and to allow
for a preliminary assessment of the reasonableness of the key judgements applied by
management. These judgements included:
– The terminal growth rate
– The discount factor rate
– Appropriateness of the determination of a Cash Generating Unit
– Forecasts in ongoing capital maintenance
– Growth rates applied at an individual hospital level over the next five years
Management’s review was updated at the year-end using the latest available forecasts. A
shortlist of hospitals was identified from this activity and reviewed in detail by the committee
to ensure that management’s conclusions were appropriate. This included, where appropriate,
establishing the level of confidence management has in its ability to deliver the plan
underlying the forecast. The committee noted that the work carried out by the external
auditors, Ernst & Young LLP, supported its own findings in this area.
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Audit and risk committee report continued
Matters
Provision for Paterson Public Inquiry costs
Adjustments to EBITDA (Adjusting Items)
Accounting for acquisitions
Judgement and estimation required
Following the publication of the Public Inquiry report on Ian Paterson on 4
February 2020, the group continues to assess the potential impact of the
remedial actions recommended in the report. Since 2020, the group
recognised a charge of £24.1 million to ensure the recommended actions
are fully adhered to. It is possible that, as further information becomes
available, an adjustment to the provision held for claims may be required.
How the committee gained comfort on the matter
Through the year, the committee has reviewed the information prepared by management,
including the key assumptions and judgements underpinning their assessment. The committee
continues to challenge management on the appropriateness of the Paterson provision and to
gain an understanding of any adjustments proposed. The committee also notes that, whilst it
is possible that new information may necessitate a revision to this charge in the future, the
position taken by management at 31 December 2023 is appropriate at this time.
The committee:
– Reviewed in detail each item which was proposed by management to be classified as an
adjusting Item
– Assessed whether the proposed approach was consistent with prior periods
The committee has reviewed the reports produced by management to assess the fair value of
intangible assets. Its review included assessing for reasonableness the key underlying
assumptions used by management in their analysis.
It is the group’s policy to disclose EBITDA after adjusting for certain items,
due to their nature, amount or incidence, in order to provide a meaningful
comparison of the group’s underlying performance. Group underlying
performance is considered the comparable year-on-year business, and
therefore excludes items of a one-off or irregular nature. Pressure to
achieve targets could lead management to manipulate the outcome by
overstating the level of adjusting Items.
The cost of an acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the date of
exchange. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, irrespective of the extent of any
noncontrolling interest. Costs related to acquisitions are expensed as
incurred and reported in adjusting items.
The excess of the cost of acquisition over the fair value of the group’s share
of the identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the group’s share of the net assets
of the subsidiary acquired, the difference is recognized directly in the
income statement.
Judgement is required in determining the fair value of assets and liabilities
acquired and additionally the value of acquired intangible assets. In
determining the value fair value of intangible assets, being customer
contracts, management have obtained an external valuation and made the
following judgements:
– Nature of the contracts
– Future expected cash flows related current contracts
– Rate of customer contract renewal
– Estimated useful life of the contract
– Discount rate
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Audit and risk committee report continued
UK Competition and Markets Authority (CMA) Order
During the year, the company has complied with the CMA Order in
relation to Statutory Audit Services for Large Companies.
Audit risk
The committee received from Ernst & Young LLP a detailed plan
identifying the scope of their audit for the year, planning materiality
and their assessment of key risks. The audit risk identification process is
considered a key factor in the overall effectiveness of the external
audit process. Ahead of the full-year audit, the committee reviewed the
key risks that Ernst & Young LLP identified to ensure their areas of audit
focus remain appropriate.
Working relationship with the external auditor
During the year, the committee met with the external auditor without
management present to provide additional opportunity for open
dialogue and feedback between both parties. Matters typically
discussed include the external auditor’s assessment of business risks,
the transparency and openness of interactions with management,
confirmation that there has been no restriction in scope placed on
them by management, the independence of their audit and how they
have exercised professional scepticism. I also meet with the external
lead audit partner ahead of each committee meeting. Additionally, the
director of audit, risk and compliance liaises with, and meets, the
external auditors on a regular basis, and the external auditors receive a
copy of each internal audit report.
Non-audit services and independence
Ernst & Young LLP provided non-audit services to the group during the
year ended 31 December 2023. These services related only to the
interim review. Total non-audit service fees amounted to £0.1 million
(2022: £0.1 million), less than 50% of the audit fees. All non-audit fees
are approved by the committee.
Ernst & Young LLP confirmed to the committee their independence,
taking into account any threats to independence including their fees
from non-audit services.
Clinical governance and safety committee (CGSC)
To ensure that the committee and the CGSC complement each other’s
work, Dame Janet Husband and I have followed protocols developed
under Adele Anderson’s tenure as committee chair:
– We both sit on each other’s committees
– At each meeting this committee receives a report from Dame Janet
Husband focused on risk and control matters discussed at the CGSC
– We split the focus of risk management with the CGSC focusing on the
clinical risk management at corporate and hospital level and this
committee on the principal risks, and non-clinical operational risks,
of the group
Data strategy, governance and security committee (DSGS)
In 2023, the executive committee set up the new DSGS committee to
improve the governance and oversight of data management in a rapidly
evolving environment of new technologies and cyber-security risks. The
chair of the committee, the general counsel, has a reporting line into this
committee and provides a report at each meeting.
Our priorities for 2024
The committee’s focus in 2024 will remain largely consistent with
2023 i.e.:
– Geopolitical risks including cyber security
– Implementation of digital change programmes
– Monitoring the organisation’s preparations for expected new
corporate reporting requirements (including certification of internal
controls related to financial reporting and the development of an
audit and assurance policy over non-financial information)
– Adequacy of mitigations to areas of emerging and the principal risks
In addition, the committee will increase its focus on the developments in
managing sustainability risks and sustainability reporting.
Annual evaluation of the committee’s performance
The latest evaluation of the committee’s performance was carried out
in late 2023 and confirmed that it continued to perform effectively.
In taking over the role as committee chair in May 2023, I wish to
express my gratitude to my predecessor, Adele Anderson, who stepped
down from the board in May 2023.
Martin Angle
Chair, Audit and Risk Committee
28 February 2024
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Remuneration committee report
It is evident that Spire Healthcare’s
ambitious, empowering patient
and people focused culture is
what attracts and retains our
colleagues. Spire Healthcare has
continued to recognise the
contribution of its colleagues with
an exceptional salary review of
5.5% for the majority of
permanent colleagues in 2023.”
Natalie Ceeney
Chair, Remuneration Committee
Role and responsibilities
The remuneration committee has authority from the board to
determine the framework and total remuneration arrangements of the
executive directors and, in consultation with the chief executive officer,
senior management. It also oversees the group’s share-based incentive
arrangements. In practice, the committee agrees:
– Policy for cash remuneration, executive share plans, service
contracts and termination arrangements
– Reward packages of the chairman, executive directors and the
executive committee, including arrangements on appointment
– Termination arrangements for executive directors and the executive
committee members
– Recommendations to the board concerning any new executive share
plans or changes to existing schemes which require shareholders’
approval
– Basis on which awards are granted and their amount to executive
directors and senior management under the LTIP
The committee also ensures consistency of remuneration
arrangements across all levels within Spire Healthcare. It also has
responsibility for matters identified by the UK Corporate Governance
Code relating to workforce engagement.
At a glance
The remuneration committee must have at least three members, all of
whom must be independent non-executive directors, and the board
appoints the remuneration committee’s chair. If a member is unable to
attend a meeting, they have the opportunity beforehand to discuss any
agenda items with the chair of the committee.
The company secretary, or their appointed nominee, acts as secretary to
the remuneration committee.
Committee meetings
7
Committee membership and attendance at meetings
The remuneration committee members at the end of 2023 and the
number of meetings they each attended during the year were as follows
(the maximum number of meetings that the member was eligible to
attend is also shown):
Member
Natalie Ceeney
(Committee chair)
Martin Angle
Jenny Kay
Committee
member since
May 2023
Position in Company
Independent
non-executive
director
March 2019 Deputy chairman
June 2020
Independent
non-executive
director
Committee
meetings
attended/
held in 2023
5 (5)
6 (7)
7 (7)
Remuneration committee members’ biographies are shown on pages 97 and 98.
Tony Bourne and Simon Rowlands stepped down from the board at the company’s annual
general meeting in May 2023 and ceased to be members of the remuneration committee at
that time.
Natalie Ceeney became a member of the remuneration committee on her appointment as
an independent non-executive director on 1 May 2023 and chair of the committee from 12
May 2023. Paula Bobbett was appointed a member of the committee on 26 February 2024.
The remuneration committee’s terms of reference can be found at www.investors.
spirehealthcare.com
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Remuneration committee report continued
Dear shareholder,
supporting the remuneration resolution at the 2023 AGM.
I am pleased to present to you the Directors’ Remuneration Report for
the year ended 31 December 2023. This is my first report since
assuming the role of chair of the remuneration committee (the
committee) and I would like to thank my predecessor, Tony Bourne, for
his leadership of the committee since IPO in 2014.
As part of my onboarding I have met many of our colleagues and senior
leaders over the past year. I was impressed by the drive and energy
with which our colleagues live the Spire Healthcare purpose. Each and
every one of the colleagues I spoke to was proud to work at Spire
Healthcare and it is evident that Spire Healthcare’s ambitious,
empowering patient and people focused culture is what attracts and
retains our colleagues.
Key areas of focus for the year
This year the committee has been focused on three key areas to
support the business to deliver our strategy and support our
colleagues.
1. Supporting our colleagues – The committee is acutely aware of the
impact of economic challenges on our colleagues and during the
year the committee has spent time considering how best we
support our colleagues and support the interventions that
management has been able to make.
2. Ensuring that our remuneration strategy is working optimally to
Under the normal three-year renewal cycle, we will be submitting an
updated policy for approval at the 2024 AGM. The committee has
reviewed the remuneration policy taking into account the group’s
strategy and purpose, shareholder views and market practice.
Following this review, the committee has concluded to maintain the
overall structure of our current remuneration model, with only minor
refinements proposed to how the policy is operated in future years.
In summary:
– Structure – no change proposed – maintain current fixed pay plus
bonus and LTIP pay model
– Incentive levels – no change proposed – maintain maximum award
levels under the variable incentive plans
– Bonus deferral – for the chief executive officer, the proportion of the
bonus deferred will reduce to one-third (from 50%) once the
shareholding guidelines have been met. There will be significant
shareholder alignment through the shareholding guidelines being
met, one-third of the bonus being deferred, and through the LTIP
which is delivered in shares. This will also align the deferral percentage
with other executive directors who will remain at one-third deferral
– Other best practice features maintained – including aligning executive
director retirement benefits to broader employees, LTIP holding
period, and shareholding guidelines (including post-cessation)
recruit and retain talent in critical roles – While the external focus on
remuneration is usually on our executive directors, it is just as
important to us that we can attract and retain the right talent at all
levels. During the year the committee has undertaken a review of
our remuneration approach for its senior management.
While the current performance measures referenced in the incentive
plans continue to align to the strategy and purpose of the group, in
direct response to investor feedback, we have included a new target
relating to EBITDA margin for 2024 LTIP awards. Further detail is set out
later in this letter.
3. Directors’ Remuneration Policy review – We are required to review
our Directors’ Remuneration Policy every three years. As noted
below, the committee concluded that the broad framework
remained appropriate and fit-for-purpose and therefore, only minor
changes are proposed.
This letter provides further detail of the work of the committee and
decisions taken in respect of 2023, and our updated remuneration
policy which is due for renewal at the 2024 AGM.
Directors’ remuneration policy review
The overall remuneration structure has been in place since 2014 and
remains aligned with mainstream FTSE market and best practice. The
policy was last approved by shareholders in 2021 and received over
99% support. The implementation of the remuneration policy has also
been well supported by shareholders, with over 96% of shareholders
We engaged with our major investors regarding the proposals set out
above, and the feedback received was generally supportive. As well as
the remuneration policy, the company will also be seeking shareholder
approval to renew the Deferred Share Bonus Plan and Long-term
Incentive Plan at the 2024 AGM. While both plans will reach the end of
their ten-year life in 2024, they remain broadly fit-for-purpose. Therefore,
both plans are being renewed with only minor amendments to reflect
evolving market and best practice.
Performance in 2023
Spire Healthcare delivered a strong financial performance during 2023
with revenue growth of 13.4%. There was continued high demand for
private healthcare from people seeking fast access to high-quality care,
against the backdrop of pressures on the NHS.
Revenue growth, efficiency programmes and a focus on the
treatments most appropriate for the Spire Healthcare hospital
environment have enhanced margin and resulted in adjusted EBITDA
growth of 15%.
Maintaining strong quality and safety credentials remain core to our
activities and our focus on continuous improvement has resulted in
98% of our inspected locations rated ‘Good’, ‘Outstanding’ or the
equivalent by health inspectors in England, Scotland and Wales.
We also continued to increase utilisation including deploying
innovation and technology to improve flow, and reconfiguring space
within our hospitals.
Our new services continue to perform well. Demand for our Spire GP
service is very strong and the integration of The Doctors Clinic Group,
which we acquired at the end of 2022, is progressing well. Work
continues on opening new clinics and we opened the first of the
company’s clinics at Abergele, north Wales, earlier this month.
With the acquisition of Vita Health Group (provider of mental and
physical health services in England) in October 2023, Spire Healthcare
has expanded its offerings into complementary, adjacent markets that
will help attract patients and meet more of their healthcare needs.
Wider workforce pay
The committee has continued to monitor the impact of economic
pressures on colleagues and fully supported the management proposal
to make a substantial investment in salary increases for all eligible
permanent colleagues this year following extensive feedback from
many of our colleagues. The majority of our permanent colleagues
received a 5.5% salary increase with investment made to provide
competitive minimum rates of pay. The 5.5% salary increase builds on
our increase of 5% last year and means that most of our colleagues
have seen a rise of over 10% since September 2022.
No salary increases were provided to the executive directors in 2023.
Significant engagement has been undertaken this year with executive
committee members and senior leaders hosting colleague
engagement sessions at each hospital and site. The sessions have been
well received and provided a business update and plans for future
improvement of our digital capability and our patient offerings.
We remain committed to developing a new reward framework with
our hospital directors and senior leaders to provide our colleagues
with a simple structure and clarity on role progression to support
their careers.
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Remuneration committee report continued
Senior management remuneration
Although the external focus of remuneration tends to be on our
executive directors, it is just as critical to Spire Healthcare’s success that
we can attract and retain talent at all levels. With a network of 39
hospitals, and a growing portfolio of healthcare services, we rely on
strong and capable leadership at all levels.
The committee undertook a review of our remuneration approach for
our senior managers which included 1:1 interviews with a number of
Spire Healthcare’s senior leaders. The committee found that, positively,
most leaders had been attracted to Spire Healthcare because of its
quality focus and culture, and that the reality aligned strongly with the
promise. The review determined that our remuneration approach was
broadly ‘right’ for the leaders we had and for future leaders we aimed
to recruit, but identified a small number of changes we could make in
the detail of our remuneration implementation which would enhance
its effectiveness.
We will continue to keep this under review to ensure that our approach
supports execution of our strategic goals.
2023 incentive outcomes
The bonus is linked to adjusted EBITDA, free cash flow and individual
strategic objectives. The financial and operating performance in the
year resulted in bonuses being earned in respect of 2023. The
committee evaluated the performance of the chief executive officer
and chief financial officer against a number of individual strategic
objectives. The overall bonus outcomes for the chief executive officer
and the chief financial officer is 75.4% of maximum opportunity. The
committee concluded that these outcomes are fully warranted and
proportionate relative to the scale of performance delivered.
A portion of the bonuses earned by the executive directors will be
deferred into shares for three years to ensure continued alignment
with our shareholders (50% for chief executive officer and one-third for
chief financial officer for the 2023 award). Further detail on the
performance criteria for this award is set out on page 121.
The 2021 LTIP awards were based on TSR, financial and operational
excellence performance measured to 31 December 2023. During the
performance period, the company delivered growth in shareholder value
which was significantly higher than the upper quartile of the FTSE 250
(excluding investment trusts) comparator group over the equivalent
period. Therefore the relative TSR element for the 2021 award will vest in
full. Return on capital employed exceeded target with outcome of this
element at 56%. For operational excellence, regulatory rating objective
was met in full with 98% of our inspected locations rated as ‘Good’,
‘Outstanding’ or the equivalent by health inspectors in England, Wales
and Scotland, and there was an improved colleague engagement score
of 81%. The overall vesting outcome for this award is 82.19% of
maximum. Vested awards for executive directors will be subject to a
further two-year holding period. The committee is satisfied that the
outcomes from this award are supported by both underlying
performance and the experience of our shareholders.
Remuneration for 2024
Salary increases normally take effect from September. Any increase to
salaries for executive directors will take into account of the average
increase awarded to the wider workforce.
Incentives are based on a rounded assessment of performance taking
into account financial, operational and strategic elements. The
operational excellence objectives in the LTIP include consideration of our
broader ESG performance. The maximum bonus opportunity for
executive directors remains unchanged at 150% of salary. For both
executive directors, performance measures will remain heavily weighted
towards the achievement of adjusted EBITDA targets (60%) and the
remainder assessed based on free cash flow (20%) and individual
strategic objectives (20%).
For LTIP grants to executive directors, it is expected that awards
equivalent to 200% of salary will be granted, consistent with the limits in
the remuneration policy. From 2024, EBITDA margin will be introduced as
a performance measure with 15% weighting. EBITDA margin is a key
measure of group efficiency and long-term improvement in EBITDA
margin has been an area of focus for a number of our largest investors.
The weighting for relative TSR has been reduced to 20% to facilitate the
inclusion of EBITDA margin. While the committee and management are
focused on generating value for our shareholders, it is recognised that
the lack of listed peers means relative TSR against the general market is
not necessarily a perfect measure of success for Spire Healthcare. There
is no change in the operational excellence measures as these continue to
be an important focus. The committee remains comfortable that the
objectives are challenging, taking into account wider industry norms and
the continued enhancements in the expectations of our regulators.
Executive director changes
Jitesh Sodha will step down from the board and his role as chief
financial officer upon conclusion of the annual general meeting on 9
May 2024, to be succeeded by Harbant Samra. After stepping down
from the board, Jitesh will initially support his successor with transition
before focussing on a number of strategic initiatives for the remainder
of his notice period. Given his contribution to the group since
appointment in 2018, Jitesh will be treated as a ‘good leaver’ for the
purposes of outstanding incentive awards. Further detail is provided
on page 128.
The board is pleased to announce Harbant Samra as the new chief
financial officer. Harbant will receive a salary of £380,000 with all other
elements of his future remuneration package in line with the
remuneration policy. Harbant’s base salary has been set below his
predecessor. It is the committee’s intention to keep his salary under
review in future years to ensure it continues to reflect his experience
and development in role. Where appropriate the committee would
consider making phased increases over time to position remuneration
at a more competitive level against the market.
If you have any questions about this year’s directors’ remuneration
report, please contact me via companysecretary@spirehealthcare.com.
Natalie Ceeney
Chair, Remuneration Committee
28 February 2024
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Remuneration committee report continued
Remuneration principles – how our approach to pay reflects the principles of the UK Corporate Governance
Code
Element
LTIP measures
Clarity
Simplicity
Risk
Incentive arrangements are intended to be closely aligned to our strategy to effectively
engage with participants. The remuneration committee regularly engages with wider
stakeholders including shareholders and seeks to provide clear disclosure and explanation of
our pay arrangements.
Our remuneration policies are straightforward and easy to understand.
Our variable incentive schemes contain an appropriate balance of financial and non-financial
measures so that risk is effectively managed and mitigated. Discretion, malus and clawback
help to prevent payments for failure.
Potential values from remuneration arrangements are clearly communicated.
Predictability
Proportionality Incentives incorporate performance measures that are linked to the strategic goals of the
business. Variable pay is intended to reward for successful execution of the strategy over the
short and longer term. The remuneration committee is also mindful of the outcomes of
variable incentives for the wider workforce.
Targets for variable incentives are intended to be based on a balance of measures to provide a
rounded assessment of performance. We are conscious of our impact on wider stakeholders
and how that ultimately impacts the value we create for shareholders.
Alignment to
culture
At a glance: implementation of the new remuneration policy for 2024
The table below summarises how key elements of the remuneration policy will be implemented in 2024 and
key decisions taken by the committee for the year ended 31 December 2023.
Element
Base salary as at
31 December 2023
Pension
Annual bonus policy
maximum
Annual bonus measures
Justin Ash (CEO) £642,952
Jitesh Sodha (CFO) £432,600
8% (in line with opportunity available to the majority of employees)
Maximum: 150%
– For 2024, performance measures will be adjusted EBITDA (60%) and free cash
flow (20%) and strategic individual objectives (20%)
– Full disclosure of performance measures and weightings will be made
Annual bonus deferral
policy
LTIP policy level
retrospectively
– Deferral in line with remuneration policy
Maximum: 200%
– 2024 LTIP awards will be based on the following measures ROCE (35%), EBITDA
margin (hospital) (15%), relative TSR (20%), employee engagement (15%) and
regulatory ratings (15%)
– Performance will be measured over a three-year period from 1 January 2024 to
31 December 2026
Relative TSR (20%)
ROCE (35%)2
EBITDA margin (hospital) (15%)3
Regulatory ratings (15%)4,5
Employee engagement (15%)5
25% vests
Median
8.6%
84%
Achieve ‘Good’
or above
76%
50% vests
10%
20.5%
88%
Achieve ‘Good’
or above
80%
100% vests
Upper quartile
11%
21%
94%
Achieve ‘Good’
or above
82% (or better)
– As noted in the chair’s letter, an EBITDA margin (hospital) target has been
included as a new measure for 2024 LTIP awards. This is in direct response to
shareholder feedback and reflects the strategic importance of delivering a
step-change improvement in efficiency of the hospital business. The target
range is for performance substantially ahead of the result in 2023 (17.6%).
Rather than incorporating a lower threshold hurdle for vesting of 25% for
EBITDA margin (hospital), the committee has concluded that there will be
no vesting under this element where performance is less than 20.5%. The
ROCE targets have also been increased against targets for the prior year.
Although the regulatory rating performance in 2023 was exceptionally
strong, there is a recognition that the expectations of regulators continue to
evolve which may impact ratings in future years. The proposed range is also
stretching when considered against wider sector norms. The target ranges
for the relative TSR and employee engagement are consistent with 2023
LTIP awards.
– LTIP awards are subject to a two-year holding period
– 200% of salary in-employment shareholding guideline
– Post-cessation shareholding requirements apply at the same level as the
in-employment guideline (or actual shareholding upon departure, if lower) for
two years following cessation of employment
LTIP holding requirement
Shareholding guideline
Malus and clawback
– Malus and/or clawback provisions apply to annual bonus awards and LTIP
awards as set out in the remuneration policy later in this report
1. Straight-line vesting between points shown.
2. Return on Capital Employed is calculated as ‘Adjusted EBIT/Capital Employed’. Capital Employed is calculated as ‘Total Assets less Cash
less Current Liabilities less Capital expenditure in the previous 12 months’. Capital expenditure in the last 12 months reflects additions
of fixed assets (excluding leased assets). Return on Capital Employed will be measured as at 31 December 2026.
3. EBITDA Margin is calculated as EBITDA as a percentage of Revenue as at 31 December 2026. The EBITDA Margin is for Spire’s core
hospital group.
4. Vesting for the regulatory rating element can be scaled back (including to nil) if any site is rated ‘inadequate’. The remuneration
committee is satisfied that outcomes at the upper-end of the scale would represent exceptional and market leading results.
5. The portfolio of Spire Group hospitals shall be that as at 1 January 2024 including The Doctors Clinic Group but excluding new clinics that
open during the Performance Period and Vita Health Group.
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Remuneration policy report
The following section sets out our Directors’ Remuneration Policy that will be put to a binding shareholder
vote at the annual general meeting on 9 May 2024. If approved, it will be effective from that date.
The current policy was approved by shareholders in 2021, and therefore a new policy is being presented to
shareholders under the standard three-year renewal cycle. The key features of the current policy have been
retained and remain unchanged under the new policy and there are no proposed changes to incentive
structure or opportunities. There are some proposed changes to the implementation of the policy (such as to
the LTIP measures for 2024), further information of which is set out in the policy tables below. The current
policy received strong shareholder support and the remuneration committee is of the view that the overall
structure continues to be aligned with prevailing market and best practice. As part of the renewal process the
remuneration committee has taken the opportunity to make a small change to the deferral requirements for
the chief executive officer and other minor changes to aid the operation.
In developing the updated remuneration policy, the focus has been on how our approach to pay can support
the strategic priorities of the group over the medium and long term. The remuneration committee followed a
robust process when undertaking the review, which included discussion on key design features over a series
of meetings, consideration of market and best practice developments, and pay arrangements in the wider
organisation. The remuneration committee also consulted with major shareholders regarding the proposed
approach. The remuneration committee also considered input from management and our independent
advisers, while ensuring that conflicts of interest were suitably mitigated. In line with best practice, directors
do not participate in discussions regarding their own remuneration.
Remuneration policy table
Fixed remuneration
Salary
Purpose and
link to strategy
Operation
To provide fixed remuneration that is appropriate for the role and to secure and retain the
talent required by the group.
The remuneration committee typically takes into account a number of factors when setting
salaries, including but not limited to:
– Scope and responsibility of the role
– The skills and experience of the individual
– Salary levels for similar roles within appropriate comparators
– Overall structure of the remuneration package
– Pay and conditions elsewhere in the group
Maximum
opportunity
Salaries are normally reviewed annually.
While there is no defined maximum opportunity, salary increases normally take into account
increases for full-time employees across the group.
The remuneration committee retains discretion to make higher increases in certain
circumstances, for example, following an increase in the scope and/or responsibility of the
role, or a significant change in market practice or development of the individual in the role.
Current salary levels are disclosed in the annual report on remuneration.
None.
Performance
measures
Benefits
Purpose and
link to strategy
Operation
Fixed element of remuneration providing market competitive benefits to both support
retention and recruit people of the necessary calibre.
A range of role-appropriate benefits may be provided to executive directors, including such
items as private medical cover (for the executive director and their family), participation in an
income protection scheme, life assurance, an annual health assessment (for the executive
director and their spouse) and a car allowance. This also includes reimbursement of all costs
associated with reasonable expenses incurred for the proper performance of the role
including tax thereon.
Additional benefits may also be provided where the remuneration committee considers this
appropriate (eg, on relocation).
Executive directors are also eligible to participate in any all-employee share plans operated by
the company from time-to-time on the same basis as other eligible colleagues.
Maximum
opportunity
The remuneration committee keeps the benefits package offered to existing and new
executive directors under review.
While no maximum limit exists, individual benefit arrangements take into account a
number of factors, including market practice for comparable roles within appropriate
pay comparators.
Participation in any HMRC-approved all-employee share plan is subject to the maximum
permitted by the relevant tax legislation.
None.
Performance
measures
Retirement benefits
Purpose and
link to strategy
Operation
Maximum
opportunity
Performance
measures
Fixed element of remuneration to assist with retirement planning.
Retirement benefits are provided to both support retention and recruit people of the
necessary calibre.
Executive directors can opt to join the company’s defined contribution scheme, receive a
contribution into a personal pension scheme, take a cash supplement or any combination of
the three.
The employer defined contribution level, the contribution into a personal pension scheme
and/or cash supplement are kept under review by the remuneration committee. The
retirement benefits are not included in calculating bonus and long-term incentive quantum.
For executive directors, the nature and value of any retirement benefits provided will be set
by reference to the rate offered to wider employees. The maximum benefit receivable by the
majority of employees is currently 8% of base salary.
None.
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Remuneration policy report continued
Remuneration policy table continued
Variable remuneration
Annual bonus
Purpose and
link to strategy
Operation
To incentivise and reward the achievement of annual objectives that are key to the delivery of
the group’s strategy.
Objectives are normally set annually to ensure that they remain targeted and focused on the
delivery of strategic goals. The remuneration committee sets targets that require appropriate
levels of performance, taking into account internal and external expectations of performance.
The remuneration committee typically meets as soon as practicable after the year end to
review performance against objectives and determines payout levels. The committee
may adjust payments to ensure they are reflective of overall performance and wider
stakeholder experience.
A portion of any bonus (as determined by the committee) is normally deferred into an award
of shares under the Deferred Share Bonus Plan (DSBP). For the chief executive officer, the
proportion of the bonus deferred will normally be one-half of any bonus paid until the
in-employment shareholding guideline has been met, at which point it will reduce to
one-third. For other executive directors, normally one-third of any bonus is deferred. The
deferral period is currently three years for all executive directors.
DSBP awards may be in the form of conditional share awards or nil-cost options, or any other
form allowed by the Plan rules. This deferred bonus element is not normally subject to any
further performance conditions, although it is subject to continued employment.
Further details of the malus and clawback provisions applicable are set out on page 116.
Maximum award opportunity for executive directors is 150% of base salary for each financial
year.
Awards may be based on a combination of financial, operational and/or individual goals.
Maximum
opportunity
Performance
measures
Maximum
opportunity
Performance
measures
At least 50% of the award will be assessed against the group’s financial metrics. The
remainder (if any) of the award will normally be based on performance against strategic
objectives and/or individual objectives.
Long Term Incentive Plan (LTIP)
Purpose and
link to strategy
To incentivise and reward the delivery of long-term strategic objectives.
To align the interests of the executive directors with those of shareholders and
other stakeholders.
Operation
To assist recruitment and retention of executive directors.
Awards granted under the LTIP vest subject to achievement of performance conditions
normally measured over a period of at least three years, unless the remuneration committee
determines otherwise.
Following the end of the performance period, the remuneration committee reviews
performance against the targets set to determine the level of vesting. The remuneration
committee may adjust vesting outcomes to ensure that they are reflective of overall
performance and wider stakeholder experience.
Awards may be in the form of conditional share awards or nil-cost options or any other form
allowed by the LTIP rules.
Further details of the malus and clawback provisions applicable are set out on page 116.
Awards will normally be subject to a two-year holding period.
The maximum award opportunity (at grant) for executive directors in respect of a financial
year is 200% of base salary.
Vesting of awards may be dependent on a range of financial, operational or share price
measures, as set by the remuneration committee, which are aligned with the long-term
strategic objectives of the group and shareholder value creation.
Normally, at least 50% of an award will be based on financial measures or measures linked to
the share price. The remainder (if any) will be based on operational or strategic measures.
A sliding scale between 0% and 100% of the maximum award pays out for achievement
between the minimum and maximum performance thresholds. The pay-out schedule for
each metric may be tailored to reflect the stretch of the targets set.
At the threshold performance, no more than 25% of the award will vest, rising to 100% for
maximum performance. The pay-out schedule for each metric may be tailored to reflect the
stretch of the targets set.
For 2024, performance measures will be adjusted EBITDA (60%), free cash flow (20%) and
strategic individual objectives (20%).
For awards to be granted in 2024, vesting will be based on ROCE (35%), EBITDA margin (15%),
relative TSR (20%) and operational excellence (30%).
The details of measures, targets and weightings may be varied by the remuneration
committee year-on-year based on the group’s strategic priorities.
The details of measures, targets and weightings may be varied by the remuneration
committee prior to grant based on the group’s strategic objectives.
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Notes to the policy table performance measures and targets
Annual bonus
The annual bonus performance measures are designed to provide an appropriate balance between
incentivising executive directors to meet financial targets for the year and to deliver specific strategic,
operational and/or individual objectives. This balance allows the remuneration committee to review the
group’s performance in the round against the key elements of our strategy, and appropriately incentivise
and reward the executive directors.
Bonus targets are set by the remuneration committee each year to ensure that executive directors are
focused on the key financial and strategic objectives for the financial year. In doing so, the remuneration
committee usually takes into account a number of internal and external reference points, including the
group’s business plan.
Long Term Incentive Plan (LTIP)
The remuneration committee believes it is important that the performance conditions applying to LTIP
awards support the long-term ambitions of the group and the creation of shareholder value. As part of its
review of the remuneration policy, the remuneration committee reviewed the metrics for 2024 awards
reflecting on the group’s strategic priorities and feedback from major shareholders. For 2024 awards, it was
determined that ROCE remains a key measure of long-term success, EBITDA margin (hospital) will be
introduced as a performance measure as it’s a key measure of group efficiency, relative total shareholder
return will be retained at a reduced weighting to facilitate the inclusion of EBITDA margin, and operational
excellence measures will also be retained which continue to be strategically important given the highly
regulated and quality sensitive nature of the healthcare sector.
The remuneration committee will keep the measures and weightings under review to ensure they continue
to support the long-term success of the group.
Shareholding guidelines
Executive directors are expected to build up and maintain, a shareholding equivalent to twice their respective
base salary.
In addition, executive directors will also be expected to maintain a shareholding for two years after stepping
down from the board. Further details on the guideline are set out in the annual report on remuneration.
The committee may disapply or reduce the shareholding guidelines in extenuating circumstances, for
example in compassionate circumstances.
Recovery provisions (malus and clawback)
Prior to vesting, the remuneration committee may cancel or reduce the number of shares subject to, or
impose additional conditions on, LTIP and DSBP awards in circumstances where the remuneration committee
considers it to be appropriate (malus). Such circumstances may include: a serious misstatement of the group’s
audited financial results; a serious miscalculation of any relevant performance measure; a serious failure of
risk management or regulatory compliance by a relevant entity; serious reputational damage to the group or
a relevant business unit; the participant’s material misconduct, a material corporate failure, or any other
circumstances that the committee considers to be similar in their nature of effect.
In addition, the remuneration committee may also apply malus and/or clawback in certain extreme
circumstances (including those listed above) for up to two years after the vesting date for LTIP awards and
payment of cash bonus, and up to three years after the grant date for the DSBP award.
Prior to applying malus or clawback, the remuneration committee will take into account all relevant factors
(including, where a serious failure of risk management or regulatory compliance or serious reputational
damage has occurred, the degree of involvement of the employee in that failure or damage in question and
the employee’s level of responsibility) in deciding whether, and to what extent, it is reasonable to operate
malus and/or clawback. The remuneration committee is satisfied that the above provisions provide robust
safeguards against inappropriate payment of incentive awards.
Recruitment policy
In determining remuneration for new executive directors, the remuneration committee will consider all
relevant factors, including the calibre of the individual and the external market, while aiming not to pay more
than is necessary to secure the required talent. The remuneration committee would seek to act in what it
considers to be the best interests of the group and its shareholders. Normally, the remuneration committee
will seek to align the new executive director’s remuneration package to the remuneration policy, as set
out above.
Salary and benefits (including any retirement benefits) will be determined in accordance with the policy table
above. In certain instances, the committee may decide to appoint an executive director to the board on a
lower-than-typical salary, with the intention of gradually increasing the salary to move closer to the market
level as they build experience in the role. Normally, benefits will be limited to those outlined in the policy
table above, however there may be relocation benefits and other costs in relation to the appointment (eg
legal fees) in certain circumstances, which may include a cash payment to cover reasonable expenses.
Reimbursed expenses may include a gross-up to reflect any tax due in respect of the reimbursement.
The maximum level of variable pay (excluding any buyouts) that may be awarded to a new executive director
will be limited to 350% of base salary in respect of any financial year, which is consistent with the policy table
above. Incentives will normally be granted under the existing plans; however, where appropriate, the
remuneration committee may tailor the award (eg time frame, form, performance criteria) based on the
commercial circumstances.
The remuneration committee may ‘buy out’ remuneration terms a new hire has had to forfeit on joining the
group. Buyout awards are intended to be of comparable commercial value and capped accordingly. The
remuneration committee will take into account all relevant factors when determining the quantum and
form/structure of any buyout, including any performance conditions attached to any forfeited awards, the
likelihood of those conditions being met, and the proportion of the vesting/performance period remaining.
Other elements may be included in the following circumstances: (i) an interim appointment being made to
fill an executive director role on a short-term basis; and (ii) if exceptional circumstances require that the chair
or a non-executive director takes on an executive function on a short-term basis.
The service contracts for new appointments will be consistent with the policy described later in this report.
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Remuneration policy report continued
Where an executive director is appointed from within the organisation, the policy of the group is that any
legacy arrangements would be honoured in line with the original terms and conditions. Similarly, if an
executive is appointed following an acquisition of, or merger with, another company, legacy terms and
conditions would be honoured.
Fixed pay
Assumed performance
All performance scenarios
Illustration of the remuneration policy
The remuneration arrangements have been designed to ensure that a significant proportion of pay is
dependent on the delivery of stretching short-term and long-term performance targets aligned with the
group’s objectives, and on delivering shareholder value. The remuneration committee considers the level of
remuneration that may be received under different performance outcomes to ensure that this is appropriate
in the context of the performance delivered and the value added for shareholders.
Variable pay
Minimum performance
Mid-point
Assumptions
– Consists of total fixed pay, including base salary,
benefits and retirement benefits
– Base salary – salary effective as at 1 January 2024
– Benefits – based on 2023 values
– Retirement benefits – 8% of 2024 salary
– No pay-out under the annual bonus
– No vesting under the LTIP
– 50% of the maximum payout under the annual
bonus. This represents 75% of base salary. A portion
of the bonus is deferred into shares under the DSBP
– 50% vesting under the LTIP. This represents 100% of
base salary
Maximum performance
– 100% of the maximum payout under the annual
bonus. This represents 150% of base salary for both
executive directors. A portion of the bonus is deferred
into shares under the DSBP
– 100% vesting under the LTIP. This represents 200% of
base salary
Maximum performance with share
price appreciation
– Performance outcomes as detailed under the
‘maximum performance’ description above, assuming
share price growth of 50% in respect of the LTIP award
The chart below provides illustrative values of the annual remuneration package for the chief executive
officer and chief financial officer under four assumed performance scenarios. This chart is for illustrative
purposes only and actual outcomes may differ from those shown. In accordance with the disclosure
regulations, share awards have been shown at face value, with no dividend accrual or discount rate
assumptions and share price growth modelled in the final scenarios only.
Chief Executive Officer – Justin Ash
Chief Financial Officer – Jitesh Sodha
£000
4,000
3,000
2,000
1,000
713
100%
0
Minimum
performance
3,606
18%
2,963
43%
36%
11%
22%
9%
18%
£000
2,500
2,000
1,500
1,000
500
484
2,431
18%
1,998
43%
36%
11%
22%
9%
18%
1,241
35%
9%
17%
24%
20%
100%
39%
24%
20%
1,838
35%
9%
17%
39%
Mid-point
Maximum
Maximum
performance
with
share price
appreciation
0
Minimum
performance
Mid-point
Maximum
Maximum
performance
with
share price
appreciation
Salary/benefits
Cash Bonus
Deferred shares
LTIP
Share price appreciation
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 118
Remuneration policy report continued
Executive director service contracts and payments for loss of office
The key employment terms and other conditions of the current executive directors are set out below:
Notice period
Benefits
Up to 12 months’ notice by either the group or the executive director. This is also the policy
for new recruits.
The group may agree that certain benefits will be specified within the executive directors’
service contracts.
The current executive directors are contractually entitled to private medical cover (for the
executive director and their family), income protection, life assurance, an annual health
assessment (for the executive director and their spouse) and a car allowance.
The group may terminate employment by making a payment in lieu of notice (PILON)
equivalent to (i) up to 12 months’ base salary, and (ii) the cost of specific benefits (including
retirement benefits).
Termination
payment
Upon termination by the group, the group can determine whether a PILON is made as a single
lump sum or paid in instalments, subject to mitigation. Where the sum is paid in instalments,
the executive director has a duty to use reasonable endeavours to secure alternative
employment as soon as reasonably practicable. In the event the executive director
commences alternative employment with a salary above a de minimis level, there will be a
pro rata reduction in the PILON payments.
The service contract of an executive director may also be terminated immediately and with
no liability to make payment in certain circumstances, such as the executive director
bringing the group into disrepute or committing a fundamental breach of their e
mployment obligations.
Executive directors may accept one position as a non-executive director of another publicly
listed company that is not a competitor of the group, subject to prior approval of the board.
External appointments to any other company (and treatment of any fees) are also subject to
the prior approval of the board.
Immediate
termination
External
appointments
In the event that the employment of an executive director is terminated, any compensation payable will be
determined in accordance with the terms of the service contract between the group and the employee, as
well as the rules of any incentive plans in which they participate. Where appropriate, the company may also
provide other benefits in connection with the departure, which may include making a payment in respect of
outplacement costs, legal fees and the cost of settling any potential claims.
Where an executive director’s employment with the group ceases prior to the payment of the annual bonus
in respect of a financial year, the committee in its absolute discretion will determine whether any bonus
should be paid (which will normally only be in ‘good leaver’ scenarios) and the extent to which deferral into
shares should be applied. Any awards would normally be prorated. Malus and clawback provisions will also
apply. For the avoidance of doubt, in the event the executive director is dismissed for misconduct, no bonus
will be payable.
The treatment of share awards made by the company is governed by the relevant share plan rules. The
following table summarises the leaver provisions of share plans under which executive directors may
currently hold awards.
Plan
Deferred Share
Bonus Plan
(DSBP) and LTIP
Leaver reasons where awards
may continue to vest
Injury, ill health or disability.
The transfer of the individual’s
employing company or business out
of the group.
Any other scenario in which the
committee determines good leaver
treatment is justified.
Death.
Any other reason.
Vesting arrangements
LTIP awards will vest to the extent determined by the
remuneration committee, which, unless the
remuneration committee determines otherwise, will be
calculated on the basis of the achievement of any
performance conditions at the relevant vesting date
and, unless the remuneration committee determines
otherwise, will be pro-rated for time.
The vesting date for such awards will normally be the
original vesting date, although the remuneration
committee has the flexibility to determine that awards
can vest upon cessation of employment or any other
date no later than the original vesting date. Unless the
remuneration committee determines otherwise, LTIP
awards will normally continue to be subject to any
holding period which applies to an award.
DSBP awards will normally vest in full on the original
vesting date, although the remuneration committee has
the flexibility to determine that awards can vest earlier.
DSBP and LTIP awards will continue to be subject to
malus and clawback provisions.
The LTIP awards will normally vest to the extent
determined by the remuneration committee as soon as
reasonably practicable following the date of death and
the awards shall vest on that date, or any other date no
later than the original vesting date.
DSBP awards will normally vest in full as soon as
reasonably practicable following the date of death.
Awards lapse in full to the extent that they have
not vested.
Where executive directors participate in any HMRC-approved all-employee share plans, the leaver treatment
will be consistent with the relevant legislation and on the same terms as all other employees.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 119
Remuneration policy report continued
Non-executive chairman and non-executive directors
The group seeks to appoint non-executive directors who have relevant professional knowledge and/or
specific technical skills to support the current expertise of the board and to match the healthcare sector
within which the group operates.
In the event of the appointment of a new non-executive chairman and/or non-executive director,
remuneration arrangements will normally be in line with those detailed in the relevant table below.
Remuneration of non-executive directors, with the exception of the chairman, is determined by the chairman
and the executive directors. The remuneration of the chairman is determined by the remuneration
committee. Directors are not involved in any decisions in relation to their own remuneration.
The table below sets out the remuneration policy with respect to non-executive directors. Fees to non-
executive directors will not include share options or other performance-related elements. Non-executive
directors do not participate in the group’s bonus arrangements, share incentive schemes or retirement
benefit plans.
Approach to setting remuneration
for non-executive directors
Fees are set at appropriate levels to ensure
non-executive directors are paid to reflect the
individual responsibility taken, as well as the skills
and experience of the individual. Fees are
reviewed periodically.
When setting fee levels, consideration is given to a
number of factors, including responsibilities and
market positioning.
Where appropriate, benefits to the role may be
provided. Travel and other reasonable expenses
(including fees incurred in obtaining professional
advice in the furtherance of their duties and any
associated taxes) incurred in the course of
performing their duties may be paid by the group
or reimbursed to non-executive directors.
Opportunity
The total fees paid to non-executive directors will remain
within the limit stated in the Articles of Association of the
company.
Individual fees reflect responsibility and time
commitment, as well as the skills and experience of the
individual. Additional fees may be paid for further
responsibilities, such as chairmanship of committees.
Any benefits provided will be reasonable in the market
context and take account of the individual circumstances
and benefits provided to comparable roles. Expenses
reasonably incurred in the performance of the role may be
reimbursed or paid for directly by the group, as
appropriate, including any tax due on the benefits.
Non-executive directors will also be covered by the
group’s indemnity insurance.
The current fee arrangements are set out in the Annual
Report on Remuneration.
Non-executive chairman and non-executive directors’ letters of appointment
The non-executive chairman and non-executive directors have letters of appointment that set out their
duties and responsibilities. They do not have service contracts with either the group or any of its subsidiaries.
The key terms of the appointments are set out in the table below. This is the policy for current and any new
non-executive directors.
Provision
Period
Policy
In line with the UK Corporate Governance Code, the chair and all independent non-executive
directors are subject to annual re-election by shareholders at each annual general meeting.
Termination
After the initial three-year term, the chair and the non-executive directors are typically
expected to serve a further three-year term.
The appointment of the chair is terminable by either the group or the director by giving up to
12 months’ notice.
The appointment of the deputy chairman is terminable by either the group or the director by
giving three months’ notice.
The appointment of any independent non-executive director is terminable by either the
group or the director by giving two months’ notice.
The non-executive director nominated by Mediclinic International PLC or any other
shareholder representative is pursuant to the terms of any relationship agreement and is
currently terminable without notice.
Further detailed provisions
The DSBP and LTIP will be operated in accordance with the relevant plan rules. The remuneration committee
may adjust or amend awards only in accordance with the provisions of the relevant plan rules. This includes
making adjustments to awards to reflect one-off corporate events, such as a change in the group’s capital
structure. In accordance with the plan rules, awards may be settled in cash rather than shares, where the
remuneration committee considers this appropriate.
The performance conditions applicable to incentive awards may be amended on an appropriate basis
determined by the remuneration committee, if an event occurs or circumstances arise that cause the
remuneration committee to consider the performance condition is no longer a fair measure of performance.
In addition, the remuneration committee has the discretion to adjust the formulaic outturns of incentive
awards where it considers that the outcome of the award is not a fair reflection of the underlying
performance of the company or participant over the relevant performance period. When making such
judgement the remuneration committee may take into account any such factors that are deemed relevant.
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Remuneration policy report continued
Under the DSBP and LTIP, participants may receive an additional amount, in cash or shares, to take account of
the value of dividends the participant would have received on the shares that vest. This amount may assume
the reinvestment of dividends and may include or exclude special dividends.
In the event of a change of control of the company, LTIP awards may vest to the extent that the remuneration
committee determines, taking into account the extent to which any performance conditions have been
satisfied, and such other factors as the remuneration committee considers relevant in the circumstances,
provided that, unless the remuneration committee determines otherwise, awards will be pro-rated for time;
DSBP awards will normally vest in full. Alternatively, awards may be exchanged for equivalent awards in the
acquiring company.
The remuneration committee may make any remuneration payments (including vesting of incentives) and
payments for loss of office, notwithstanding that they are not in line with the policy set out above, where the
terms of that payment were either agreed: (i) during the term of, and were consistent with, any previous
policy approved by shareholders; or (ii) at a time when the relevant individual was not a director of the
company and, in the opinion of the remuneration committee, the payment was not in consideration for the
individual becoming a director of the company.
The DSBP and LTIP rules incorporate dilution limits. These limits are 10% in any rolling 10-year period for all
plans and 5% in any rolling 10-year period for discretionary share plans.
The remuneration committee may make minor amendments to the policy set out above for regulatory,
exchange control, tax or administrative purposes or to take account of a change in legislation without
obtaining shareholder approval for that amendment.
Remuneration arrangements throughout the company
The policy for our executive directors is designed in line with the remuneration philosophy and principles that
underpin remuneration across the group. When making decisions in respect of the executive directors’
remuneration arrangements, the committee takes into consideration the pay and conditions for employees
throughout the group. As set out on page 111, the committee chair also met with a number of Spire
Healthcare’s senior leaders as part of the remuneration policy review.
As stated in the policy table, salary increases are, in practice, normally determined taking into account the
salary increases received by the general employee population. Consideration is also given to how incentive
design and outcomes cascade through the organisation.
Details of how the company engages with its colleagues are described on page 55.
The remuneration of the wider employee population is based on the same reward philosophy, while the
components of remuneration vary with seniority. All employees, including executive directors, receive a
salary and role-appropriate benefits. Role-specific annual bonus arrangements are operated across the group.
Only senior individuals who can have significant influence on the performance of the group as a whole are
invited to participate in the long-term incentive plans. This provides those individuals with an incentive to
help achieve the group’s medium and long-term objectives and create shareholder value, while ensuring their
remuneration varies to the extent these goals are achieved. As noted above, retirement benefits for executive
director are set by reference to arrangements in place for wider employees.
Consideration of shareholder views
Since admission, the remuneration committee has regularly engaged with shareholders regarding its
approach to remuneration and remains mindful of shareholders’ views and emerging market and best
practice when evaluating and setting future remuneration strategy. During the year the remuneration
committee consulted with major shareholders regarding the key terms of the new policy and the feedback
received was generally supportive.
This remuneration policy will be presented to shareholders for approval at the 2024 AGM.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 121
Annual report on remuneration
Single total figure of remuneration – executive directors (audited)
The following table sets out the total remuneration for the executive directors for the year ended
31 December 2023. This comprises the total remuneration in respect of the full year from 1 January 2023
to 31 December 2023.
Annual bonus
For the 2023 financial year, the maximum bonus opportunity for Justin Ash and Jitesh Sodha was 150% of
base salary. Awards were measured 60% on adjusted EBITDA, 20% on free cash flow and 20% against
individual strategic objectives.
All bonuses in the group, including those payable to executive directors, were subject to a minimum EBITDA
trigger of £190m and a minimum quality trigger. Both hurdles were achieved for 2023, and therefore
executive directors were considered for bonuses. A portion of bonuses for executive directors are deferred
into shares for three years.
Financial measure targets and outcomes for 2023 were as follows:
Adjusted EBITDA
60%
Free cash flow
20%
0% of element
50% of element
65% of element 100% of element
Outcome
Outcome (% of
element)
£190m
£220.7m
£231.0m
£236.5m
£231.5m
68.2%
£15m
£35m
£41m
£55m
£48m
82.5%
EBITDA for the purpose of bonus was adjusted to reflect certain items including the impact of Vita Health
Group. 25% of the EBITDA measure would have vested for achievement of £203.5m.
(£000)
Salary
Benefits
Retirement benefits
Total fixed pay
Annual bonus1
Long-term incentives2,3
Total variable pay
Total
Justin Ash
Jitesh Sodha
2023
643.0
18.5
51.4
712.9
727.3
1,217.2
1,944.5
2,657.4
2022
630.5
10.3
113.5
754.3
496.2
1,609.5
2,105.7
2,860.0
2023
432.6
17.0
34.6
484.2
489.3
819.0
1,308.3
1,792.5
2022
424.2
20.3
76.4
520.9
329.5
1,033.7
1,363.2
1,884.1
1. Half of the annual bonus paid to Justin Ash and one-third of the annual bonus paid to Jitesh Sodha will be deferred into shares for
three years.
2. Both executive directors were participants of the 2021 LTIP awards, which are due to vest in 2024. For the purposes of this table, the
value of awards is based on the average share price during the final quarter of 2023 (£2.22). The share price used to determine the
number of shares under the 2021 LTIP Awards was £1.641 being the average of the mid-market closing share price over the five trading
days ending on 17 March 2021. Based on the average share price of last quarter of 2023 of £2.22, there has been a 35% share price
growth during the three-year performance period. Therefore, 26% of the value shown is attributable to share price appreciation.
3. The 2020 LTIP awards have been restated to reflect the actual share price on vesting of £2.135.
Additional notes to the table
Salary
Taking into account the impact of the wider macroeconomic trends on colleagues, salary increases of 5.5%
were awarded to the majority of permanent colleagues. There was no salary increase for the executive
directors. The salaries for the executive directors remain unchanged from 1 September 2022.
– Justin Ash’s salary is £642,952
– Jitesh Sodha’s salary is £432,600
Benefits
The benefits consist of private medical cover (for the executive directors and their families), life assurance,
health assessment, car allowance and income protection cover.
Retirement benefits
The amount set out in the table represents the group contribution to the executive directors’ retirement
planning at a rate of 8% of base salary which is aligned with the wider workforce.
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122
Annual report on remuneration continued
For 2023, the strategic element comprised 20% of the overall bonus and was centred around the achievement
of the areas of focus noted in the table below. The outcome for the executive directors fairly reflects
the outstanding contribution made during the year, including progress towards a number of key
strategic initiatives.
Progress and achievements during the year
Outcome
Area of focus
Chief executive officer
1. Deliver second year plan of the five-year
strategy presented at Capital Markets Day
2. Deliver next phase of transformation
programme savings
3. Develop and implement phase one of
reward framework
Strong strategic progress largely resulting from successful
acquisition of Vita Health Group
Spire Healthcare’s efficiency programmes have delivered
the target savings of £15m in 2023
The reward framework has been well developed however,
implementation has been delayed as Spire Healthcare
prioritised the annual salary review of 5.5% for majority
of permanent colleagues given the cost of living and
inflationary pressures
PSIRF has been very well introduced at Spire Healthcare
and extensive training undertaken to prepare for CQC’s
new assessment framework
Strong strategic progress largely resulting from successful
acquisition of Vita Health Group
Spire Healthcare’s efficiency programmes have delivered
the target savings of £15m in 2023
Successful execution of the plan to improve free cash
flow (cash conversion now at 98%). Process improvement
systems due to be implemented in 2024
Successful improvement in ROCE group-wide and
particularly in low ROCE sites
5/5
5/5
3/5
5/5
18%
5/5
5/5
3/5
5/5
18%
4. Successful implementation of PSIRF and
preparations for new CQC assessment
framework
Total bonus achieved against individual strategic targets
Chief financial officer
1. Deliver second year plan of the five-year
strategy presented at Capital Markets Day
2. Deliver next phase of transformation
programme savings
3. Finance process improvement
4. ROCE improvement
Total bonus achieved against individual strategic targets
Based on the assessment above, the overall outcome is 75.4% of the maximum bonus for the chief executive
officer and the chief financial officer.
Taking into account overall performance during the year and strategic progress made, the remuneration
committee is satisfied that the outcomes are appropriate and no discretion has been applied.
For Justin Ash, 50% of the 2023 bonus will be deferred into shares for three years, with deferral of one-third of
the award for Jitesh Sodha.
Long Term Incentive Plan (LTIP)
The performance period for awards granted in 2021 ended on 31 December 2023. Awards were made to
executive directors at 175% of salary against 200% of salary as per the remuneration policy. The share price at
which the awards were granted was materially higher than the prior year. This award was based on targets
linked to ROCE, relative TSR and operational excellence measures. Justin Ash and Jitesh Sodha both
participated in this award.
The performance targets for this award were disclosed in the 2021 directors’ remuneration report and the
result at the conclusion of the three-year performance period was as follows:
TSR v FTSE 250 (excluding
investment trusts) (35%)
Return on capital
employed (35%)
Regulatory rating (15%)
Employee engagement
(15%)
25%
vests
Median1
50% vests
6.0%1
7.2%
100% vests
Upper
quartile
9.6%
Outcome
Above upper
quartile
7.5%
82% achieve
‘Good’ or
above1
76%1
86% achieve
‘Good’ or
above
79%
90% achieve
‘Good’ or
above
82%
98% achieve
‘Good’ or
above
81%
Percentage
outcome
35%
19.69%
15%
12.5%
82.19%
1. There is no vesting for performance below these levels.
2. There is straight-line vesting between the points shown.
Overall the committee is satisfied that the outcomes from this award are supported by improvements in
underlying performance over the period and the experience of our shareholders as reflected in the TSR
performance. Therefore, the committee is satisfied that the vesting outcomes are fully warranted. Vested
shares are subject to a two-year holding period.
Awards under the LTIP were granted to Justin Ash and Jitesh Sodha on 15 March 2023. These awards were
granted in the form of nil-cost options over Spire Healthcare Group plc shares, with the number of shares that
may vest conditional on performance over the three-year period to 31 December 2025. The maximum award
granted to executive directors was equivalent to 200% of base salary.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 123
Annual report on remuneration continued
The full details of the performance conditions applying to the 2023 awards are set out below.
Relative TSR (35%)
Return on capital employed (35%)2
Regulatory ratings (15%)4
Employee engagement (15%)
25% vests
Median1
7.3%1
84% achieve
‘Good’ or above1
76%1
50% vests
–
8.6%
88% achieve
‘Good’ or above
80%
100% vests
Upper quartile
10.0%
94% achieve
‘Good’ or above
82%
1. There is no vesting for performance below this level.
2. Return on Capital Employed is calculated as ‘Adjusted EBIT/ Capital Employed’. Capital Employed is calculated as ‘Total Assets less Cash
less Current Liabilities less Capital expenditure in the previous 12 months’. Capital expenditure in the last 12 months reflects additions
of fixed assets (excluding leased assets). Return on Capital Employed will be measured at a point in time on 31 December 2025.
3. The remuneration committee may adjust targets in certain circumstances (eg major acquisition or disposal; change to accounting
standards).
4. Vesting for the regulatory rating element can be scaled back (including to nil) if any site is rated as ‘inadequate’.
5. Straight-line vesting between points shown.
Outstanding share awards
The following table provides details of all outstanding awards, as at 31 December 2023, made to executive
directors under the LTIP that remain within their three-year performance period:
Justin Ash
Type of award
Conditional Share
Award (in the form
of nil-cost options)
Date of grant
18 March 2021 665,606
14 March 2022 543,750
15 March 2023 541,661
Number of shares Share price Face value at grant1 End of performance period
£1,092,394
£1,248,450
£1,285,904
31 December 2023
31 December 2024
31 December 2025
£1.641
£2.296
£2.374
Jitesh Sodha Conditional Share
Award (in the form
of nil-cost options)
18 March 2021 447,843
14 March 2022 365,853
15 March 2023 364,448
£1.641
£2.296
£2.374
£735,000
£840,000
£865,200
31 December 2023
31 December 2024
31 December 2025
1. The face value of awards made in 2023 was equivalent to 200% of base salary. The share price used to determine the number of shares
under the 2023 award was based on the average of the mid-market quotation at close of business over the 30 trading days ending on
14 March 2023 (£2.374). The face value of awards made in 2021 and 2022 were equivalent to 175% and 200% of base salary
respectively.
2. The 2021, 2022 and 2023 awards are subject to relative TSR, ROCE and Operational Excellence conditions. Further detail on specific
targets is set out in the 2021 and 2022 Directors’ Remuneration Reports.
The following table provides details of all outstanding awards, as at 31 December 2023, that have completed
their three-year performance period and have vested to executive directors under the LTIP but remain within
the two-year holding period:
Justin Ash
Type of award
Conditional Share
Award (in the form
of nil-cost options)
Jitesh Sodha Conditional Share
Award (in the form
of nil-cost options)
Number of shares
originally awarded
Date of grant
25 March 2019 694,444
6 April 2020
1,028,046
Number of
shares lapsed
321,181
274,180
Number of shares
in two-year
holding period
373,263
753,866
25 March 2019 446,025
660,289
6 April 2020
206,287
176,100
239,738
484,189
End of two-year
holding period
25 March 2024
6 April 2025
25 March 2024
6 April 2025
The following table provides details of awards granted to the executive directors during 2023 under the
Deferred Share Bonus Plan, which relate to bonuses payable in respect of 2022 and disclosed in last year’s
remuneration report. Awards will normally vest three years after the grant date.
Justin Ash
Type of award
Conditional Share
Award (in the form
of nil-cost options)
Jitesh Sodha Conditional Share
Award (in the form
of nil-cost options)
Date of grant
15 March 2023 116,473
Number of shares
Share price
£2.13
Face value at grant
£248,089
15 March 2023 51,569
£2.13
£109,842
These awards will be released in 2026 and remain subject to malus terms during this period.
Sharesave
The company encourages share ownership and operates an HMRC-approved Savings-Related Share Option
Plan (Sharesave). Participation in Sharesave is conditional on three months’ service and executive directors
may participate in the same way as all other colleagues. Sharesave is an all-employee share plan and there are
no performance conditions.
Date of grant
Justin Ash
26 April 2022
Jitesh Sodha 26 April 2022
Number of shares
1,818
1,818
Option price
£1.98
£1.98
Awards are exercisable between
1 June 2025 and 30 November 2025
1 June 2025 and 30 November 2025
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 124
Annual report on remuneration continued
Single total figure of remuneration – non-executive directors (audited)
The following table sets out the total remuneration for the non-executive directors for the year ended
31 December 2023.
(£000)
Sir Ian Cheshire
Adèle Anderson2
Martin Angle
Paula Bobbett3
Tony Bourne2
Natalie Ceeney4
Professor Dame Janet Husband
Jenny Kay
Simon Rowlands2
Professor Cliff Shearman
Dr Ronnie van der Merwe5
Debbie White6
Total
2023
Fees
230.0
24.2
150.0
56.7
24.2
44.2
95.6
56.7
20.6
56.7
50.0
63.7
872.6
2023
Benefits1
2.0
0.7
18.4
–
0.4
0.4
15.7
0.9
–
2.0
–
2.1
42.6
2023
Total
232.0
24.9
168.4
56.7
24.6
44.6
111.3
57.6
20.6
58.7
50.0
65.8
915.2
2022
Fees
230.0
65.6
150.0
9.4
65.6
–
71.2
55.6
54.7
55.6
50.0
–
807.7
2022
Benefits1
0.9
4.5
10.5
–
–
–
6.9
–
–
1.3
–
–
24.1
2022
Totals
230.9
70.1
160.5
9.4
65.6
–
78.1
55.6
54.7
56.9
50.0
–
831.8
1. Reasonable expenses incurred by any non-executive director will be reimbursed by the company but they have no other contractual
entitlement to benefits. For non-executive directors certain expenses relating to the performance of a non-executive director’s duties
in carrying out activities, such as travel to and from company meetings, are classified as taxable benefits by HMRC. In line with current
regulations these taxable benefits have been disclosed and are shown in the taxable benefits column in the directors’ remuneration
table above. The figures shown include the cost of the expenses grossed up for tax and national insurance.
2. Adele Anderson, Tony Bourne and Simon Rowlands did not seek re-election at the company’s annual general meeting held on 11 May
2023 and stepped down from the board from this date.
3. Paula Bobbett was appointed an independent non-executive director on 1 November 2022.
4. Natalie Ceeney was appointed an independent non-executive director on 1 May 2023.
5. Pursuant to the relationship agreement dated 22 June 2015 between the company and Mediclinic Jersey Limited, under which
Mediclinic Jersey Limited is entitled to nominate for appointment to the board one non-executive director and Dr Ronnie van der
Merwe was appointed to the board on 24 May 2018. As a non-executive director nominated by the principal shareholder, the fees for
Dr Ronnie van der Merwe are paid to a subsidiary company within the Mediclinic Group Limited group.
6. Debbie White was appointed an independent non-executive director on 1 February 2023. She became the company’s senior
independent director on 12 May 2023.
Non-executive directors
There was no increase to the independent non-executive directors’ basic fees during 2023. With effect from 1
January 2024, the non-executive chairman and independent non-executive directors’ fees were increased by
3%. Fee levels are as follows.
– Non-executive chairman: £236,900
– Deputy chairman: £154,500
– Senior independent director: £77,250
– Vice chair: £103,000
– Basic fee for independent non-executive directors: £58,350
– Basic fee for non-independent non-executive directors: £50,000
– Chairs of audit and risk committee and remuneration committee: £10,300
Martin Angle, Deputy Chairman, does not receive a fee to chair the audit and risk committee.
Statement of directors’ shareholding and share interests (audited)
The table below sets out the directors’ shareholdings in the company. As noted above, executive directors are
expected to build up and maintain a holding equivalent to twice their base salary. In addition, executive
directors are required to retain this level of shareholding (or actual relevant holding on departure, if lower), for
two years after stepping down from the board. There is no requirement for non-executive directors to hold
shares in the company.
Non-executive chairman
Sir Ian Cheshire
Executive directors
Justin Ash
Jitesh Sodha
Non-executive directors
Martin Angle
Paula Bobbett
Natalie Ceeney2
Professor Dame Janet Husband
Jenny Kay
Professor Cliff Shearman
Dr Ronnie van der Merwe
Debbie White2
Shareholding
As at
31 December 2023
As at
31 December 2022
Guidelines
Proportion of
shareholding
guideline achieved1
8,846
8,846
578,268
134,058
418,962
53,802
235.9%
155.0%
–
–
–
10,231
4,911
–
–
–
–
–
10,231
4,911
–
–
1. Calculated based upon the closing share price on 31 December 2023 of £2.265. Unvested DSBP shares and vested LTIP awards subject
to a holding period are only are taken into account on a net of tax basis for the purpose of the guidelines. As noted above during 2024,
shares relating to the 2021 LTIP will vest for both executive directors.
2. Debbie White and Natalie Ceeney were appointed independent non-executive director on 1 February 2023 and 1 May 2023
respectively. Neither held any shares in the company on appointment.
There have been no changes to directors’ shareholdings between 31 December 2023 and the date this report
is signed off.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 125
Annual report on remuneration continued
The table below sets out the directors’ interests in shares of the company which remain unvested or have
vested but are unexercised as at 31 December 2023. Unvested awards are structured as nil-cost options.
Options
Unvested and not
subject to
performance
conditions1
Shares
Unvested and
subject to
performance
conditions2
Unvested and not
subject to
performance
conditions3
Vested and not
subject to
performance
conditions4
Non-executive chairman
Sir Ian Cheshire
Executive directors
Justin Ash
Jitesh Sodha
Non-executive directors
Martin Angle
Paula Bobbett
Natalie Ceeney5
Dame Janet Husband
Jenny Kay
Professor Cliff Shearman
Dr Ronnie van der Merwe
Debbie White5
–
1,818
1,818
–
–
–
–
–
–
–
–
–
–
1,751,017
1,178,144
308,731
140,626
1,127,129
723,927
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1. Consists of awards granted under Sharesave.
2. Consists of grants under the LTIP that have been awarded but remain subject to performance conditions.
3. Consists of grants under the DSBP that have been awarded but remain unvested.
4. Consists of grants under the LTIP that have vested and currently subject to a two-year holding period.
5. Debbie White and Natalie Ceeney were appointed independent non-executive directors on 1 February 2023 and
1 May 2023 respectively.
Letters of appointment
Non-executive director
Martin Angle
Paula Bobbett
Natalie Ceeney1
Sir Ian Cheshire
Dame Janet Husband
Jenny Kay
Professor Cliff Shearman
Dr Ronnie van der Merwe2
Debbie White1
Date of appointment
14 March 2019
1 November 2022
1 May 2023
4 March 2021
24 June 2014
1 June 2019
1 October 2020
24 May 2018
1 February 2023
Notice period
3 months
2 months
2 months
12 months
2 months
2 months
2 months
n/a
3 months
Date of expiry
No later than 30 June 2024
No later than 30 June 2025
No later than 30 June 2025
No later than 30 June 2026
No later than 30 June 2026
No later than 30 June 2025
No later than 30 June 2026
No later than 30 June 2024
No later than 30 June 2025
–
–
–
–
–
–
–
1. Debbie White and Natalie Ceeney were appointed independent non-executive directors on 1 February 2023 and
1 May 2023 respectively.
2. Pursuant to the relationship agreement dated 22 June 2015 between the company and Mediclinic Jersey Limited, under which
Mediclinic Jersey Limited is entitled to nominate for appointment to the board one non-executive director, Dr Ronnie van der Merwe
was appointed to the board on 24 May 2018. Dr Ronnie van der Merwe is considered to be a non-independent non-executive director.
Service contracts
After appointment, executive directors will put themselves up for re-election at each annual general meeting.
Executive directors are employed under ongoing service contracts with the group. These contracts do not
have a fixed term of appointment. Copies of their service contracts are available to shareholders for
inspection at the company’s registered office.
Performance graph
The graph below illustrates Spire Healthcare Group plc’s TSR performance against the FTSE 250 (excluding
investment trusts) since admission on 23 July 2014. Given that the company is a constituent of the FTSE 250
index, the remuneration committee considers this an appropriate peer group.
200
150
100
50
0
23 Jul 14
31 Dec 14
31 Dec 15
31 Dec 16
31 Dec 17
31 Dec 18 31 Dec 19 31 Dec 20
31 Dec 21 31 Dec 22
31 Dec 23
Spire Healthcare Group plc
FTSE 250 (excluding investment trusts)
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 126
Annual report on remuneration continued
The table below shows the total remuneration paid in respect of the chief executive officer role.
Chief executive’s single figure remuneration (£000s)1,2
Annual bonus payout (% of maximum)
LTIP vesting (% of maximum)3
2014
6,223.1
34%
n/a
2015
1,095.8
0%
n/a
2016
320.5
0%
n/a
2017
128.2
0%
n/a
2018
732.4
0%
n/a
2019
1,010.1
30%
n/a
2020
1,251.7
35%
18.9%
2021
2,129.3
48.4%
53.75%
2022
2,860.0
53.0%
73.33%
2023
2,657.4
75.4%
82.19%
1. 2017: Justin Ash was appointed chief executive officer on 30 October 2017. The value shown for 2017 therefore represents a part-year figure for his time in role. During 2017: (i) Garry Watts fulfilled the role of chief executive officer from 14 March 2016 to 12 June 2017 for which
he was paid £714,600; and (ii) Simon Gordon undertook the role of Interim chief executive officer between 13 June 2017 and 29 October 2017 for which he was paid c.£243,000.
2. 2016: Rob Roger stepped down from the board on 30 June 2016. The value shown for 2016 therefore represents a part-year figure for his time in the role. Garry Watts fulfilled the role of chief executive officer from 14 March 2016 to 12 June 2017.
3. Rob Roger and Garry Watts did not have any LTIP awards vesting in respect of 2016; for other participants the LTIP based on performance to 31 December 2016 vested at 50% of maximum. Similarly, Justin Ash and Garry Watts did not have any LTIP awards vesting in respect of
2017, 2018 or 2019; for other participants (including Simon Gordon) the LTIP based on performance to 31 December 2017 and 31 December 2018 lapsed in full while the LTIP based on performance to 31 December 2019 vested at 3.75% of maximum.
Annual change in remuneration
In line with the requirements in The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, the table below shows the annual percentage change in remuneration (based on
salary or fees, benefits and annual bonus). Given the small number of people employed by the Spire Healthcare Group plc entity, data for all employees of the group has been included.
2023
2022
2021
2020
Salary/fee FY23
vs FY22
Benefits FY23 vs
FY22
Annual Bonus
FY23 vs FY22
Salary/fee FY22
vs FY21
Benefits FY22 vs
FY21
Annual Bonus
FY22 vs FY21
Salary/fee FY21
vs FY20
Benefits FY21 vs
FY20
Annual Bonus
FY21 vs FY20
Salary/fee FY20
vs FY19
Benefits FY20 vs
FY19
Annual Bonus
FY20 vs FY19
Chairman
Sir Ian Cheshire1
Garry Watts2
Executive directors
Justin Ash
Jitesh Sodha
Non-executive directors
Adèle Anderson4
Martin Angle
Paula Bobbett3
Tony Bourne4
Natalie Ceeney
Dame Janet Husband
Jenny Kay
Simon Rowlands4
Professor Cliff Shearman
Dr Ronnie van der Merwe
Debbie White
Average employee
0%
–
2.0%
2.0%
0%
0%
0%
0%
0%
34.3%
1.98%
0%
2.0%
0%
0%
4.7%
122.2%
–
79.6%
(16.3%)
(84.4)%
72.2%
–
100.0%
–
127.5%
100.0%
–
53.85%
–
–
5.1%
–
–
46.6%
48.5%
–
–
–
–
–
–
–
–
–
–
–
60.0%
0%
–
1.0%
1.0%
0.9%
0%
0%
0%
–
1.7%
1.1%
9.4%
1.1%
0%
–
4.4%
100%
–
45.1%
20.1%
–
400.0%
–
–
–
137.9%
–
–
100.0%
–
–
11.8%
–
–
9.5%
(3.6)%
–
–
–
–
–
–
–
–
–
–
–
(1.4)%
–
–
1.0%
5.8%
0%
0%
–
–
–
0%
0%
0%
–
0%
–
2.3%
–
–
2.9%
0%
–
(64.4)%
–
–
–
(60.3)%
–
–
–
–
–
11.2%
–
–
40.4%
65.2%
–
–
–
–
–
–
–
–
–
–
4.4%
–
(4.5)%
(4.5)%
(4.5)%
0%
0%
–
–
–
0%
0%
0%
–
0%
–
5.3%
–
(61.7)%
(0.1)%
0%
(100.0)%
(59.0)%
–
–
–
(67.6)%
(100)%
–
–
–
–
2.7%
–
–
16.7%
16.7%
–
–
–
–
–
–
–
–
–
–
–
75.7%
1. Sir Ian Cheshire was appointed chairman-designate on 4 March 2021. To provide a meaningful comparison of percentage increase his fee received as chairman for 2022 has been considered on a full-time equivalent basis.
2. Garry Watts stepped down from the board on 13 May 2021.
3. Paula Bobbett, Natalie Ceeny and Debbie were appointed independent non-executive director on 1 November 2022, 1 May 2023 and 1 February 2023 respectively. To provide a meaningful comparison of percentage increase Paula’s fee for 2022 and Natalie and Debbie’s fees for
2023 have been considered on a full-time equivalent basis.
4. Adèle Anderson,Tony Bourne and Simon Rowands stepped down from the Board on 11 May 2023. To provide a meaningful comparison of percentage increase their fees for 2023 have been considered on a full-time equivalent basis.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 127
Annual report on remuneration continued
Relative importance of spend on pay
£(m)
Total remuneration
Distributions to shareholders
2023
477.2m
2.0m
2022
418.4m
0
% change
14.1%
100%
CEO pay ratio for 2023
The table below shows the ratio of the total remuneration of the chief executive officer to that of the lower
quartile, median and upper quartile employees and bank workers in 2023, consistent with the Regulations.
Year
2019
2020
2021
2022
2023
Method
A
A
A
A
A
Pay Ratio
Pay Ratio
Pay Ratio
Pay Ratio
Pay Ratio
P25 (LQ)
50:1
61:1
92:1
122:1
107:1
P50 (Median)
35:1
45:1
66:1
89:1
81:1
P75 (UQ)
25:1
31:1
42:1
62:1
55:1
Spire Healthcare has compared the total remuneration of the chief executive officer to UK employees for the
12 months ending 31 December 2023 on a full-time equivalent basis. The company has determined the P25,
P50 and P75 individuals with reference to a ranking of total remuneration.
The company’s principles for pay setting and progression in our wider workforce are the same as for our
executives which form a total reward proposition which is competitive to attract and retain the highest
quality of talent in a difficult market, while providing opportunities for development and career progression.
The median pay ratio reported is consistent with the wider policies in place at Spire Healthcare. All employees
are eligible for pay increases, recognition awards, participation in Sharesave, and career and development
opportunities.
The pay for the chief executive officer is by design intended to have a larger proportion linked to
performance-based variable pay, and therefore the pay ratio would be expected to vary year-on-year and be
higher in years when the business performs well. The CEO pay ratio is lower in 2023 as the 2022 pay ratio was
more materially impacted by share price appreciation. There is no discernible trend between the period from
2019 to 2023. Removing the impact of share price growth on the 2021 LTIP would reduce the median CEO to
employee ratio to 71:1. For colleagues, the year-on-year change in remuneration reflects the exceptional
annual salary review of 5.5% for majority of permanent colleagues (in comparison to no increase for
executive directors).
Notes to the calculation
– The 2023 total remuneration for the colleagues identified at P25, P50 and P75 are as follows: £24,911,
£32,876, £48,233
– The 2023 base salary for the colleagues identified at P25, P50 and P75 are as follows: £22,454, £30,877,
£47,230
– Under option A, the ratios are based on the full-time equivalent total remuneration which includes base
salary, incentive payments, taxable benefits and pension benefits for the financial year 1 January to
31 December 2023
– Option A is selected as it is considered to provide the most transparent approach to calculation
– Vita Health Group is excluded from the 2023 calculation as they were not part of Spire Healthcare for
all of the year
– The reference colleagues at the 25th, 50th and 75th percentile have been determined by reference to the
last day of the financial year, 31 December 2023
– In accordance with the regulations, employees and bank workers have been included, while non-executive
directors, contractors and medical consultants we contract with in our hospitals and clinics have not
been included
– A total of 13,747 employees and bank workers were included in the calculation of the CEO Pay ratio.
Colleagues on reduced pay due to long-term sickness absence, maternity leave or with zero pay in 2023
were excluded from the calculation
– Pay for each colleague is calculated in accordance with the single figure of remuneration. All components
of remuneration are presented on a full-time equivalent basis by dividing sums by the number of hours for
the portion of the year worked and subsequently multiplying by the relevant annual full-time hours
– Bank workers do not participate in the annual bonus plan, long-term incentive plan and do not have any
taxable benefits
– A significant portion of the chief executive officer’s pay is variable. The pay ratio is, therefore, significantly
impacted by the outcomes of variable pay plans
– The full amount of the annual bonus for the chief executive officer for 2023 is included in the total
remuneration figure including the portion deferred into shares
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information This report on directors’ remuneration will be put to an advisory vote at the annual general meeting on 9 May
2024. The directors confirm that this report has been prepared in accordance with the Companies Act 2006
and reflects the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013. It also includes updates to legislation from The Companies (Miscellaneous
Reporting) Regulations 2018 (SI 2018/860) and The Companies (Directors’ Remuneration Policy and Directors’
Remuneration Report) Regulations 2019. The report was approved at a meeting of the directors held on
28 February 2024.
Details of all resolutions passed at the annual general meeting held on 11 May 2023 can be found on page 94.
Natalie Ceeney
Chair, Remuneration Committee
28 February 2024
128
Annual report on remuneration continued
Departure terms for Jitesh Sodha
As set out on page 112, Jitesh Sodha will step down from the board and his role as chief financial officer upon
conclusion of the 2024 annual general meeting. After stepping down from the board, Jitesh will initially
support his successor with transition before focusing on a number of strategic initiatives for the remainder of
his 12 month notice period.
While Jitesh remains an employee, he will continue to receive his base salary and benefits. Healthcare
benefits will cease 12 months after the end of his notice period. As Jitesh will continue to work his notice
period, he will not receive any payment in lieu of notice or any other termination payment. He will also be
provided with professional fees in relation to legal and career transition support of up to £55,000.
In light of Jitesh’s performance and contribution during his tenure, he has been treated as a ‘good leaver’ for
incentive plan purposes. Outstanding deferred bonus awards and LTIP awards subject to a holding period will
be released at the normal time. LTIP awards that are unvested at cessation of employment will be pro-rated
for time and will remain subject to performance assessed at the end of the relevant performance period.
Jitesh will not be granted a further LTIP award in respect of 2024. In line with our normal practices, to the
extent that Jitesh works his notice period, he will remain eligible for a bonus. Any bonus earned in respect
of 2024 will be paid in Spring 2025 in line with other bonus participants.
The post-employment shareholding requirement as set out in the annual report on remuneration will apply
for a period of two years from the date he steps down from the board.
Advice provided to the remuneration committee
During the course of the year, Deloitte LLP provided external advice to the remuneration committee and its
total fees were £84,800 (2022: £65,750). During 2023, Deloitte LLP also provided other consulting services to
the group. Deloitte LLP has voluntarily signed up to the remuneration consultants’ code of conduct in relation
to executive remuneration consulting during the year. The remuneration committee is comfortable that
the Deloitte LLP engagement partner and team that provides remuneration advice to the remuneration
committee do not have connections with the company or any of its directors that may impair
their independence.
The non-executive chairman, chief executive officer, chief financial officer, group people director and
company secretary attended committee meetings by invitation in order to provide the remuneration
committee with additional context. No individual participates in decisions regarding their own remuneration.
Statement of voting at 2023 annual general meeting
The following table sets out the voting in respect of the resolutions to approve the company’s directors’
remuneration policy (voted on by shareholders in 2022) and 2022 directors’ remuneration report put to
shareholders at the company’s annual general meeting held on 11 May 2023:
Resolution at 2023 AGM
Approve the 2022 Directors’
Remuneration Report
Resolution at 2021 AGM
Approve the Directors’
Remuneration Policy
Votes for
% of vote
Votes against
% of vote
Votes withheld
330,080,521
96.15%
13,232,242
3.85
32,281
Votes for
% of vote
Votes against
% of vote
Votes withheld
334,256,201
99.68%
1,076,261
0.32
4,562
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 129
Directors’ report
The directors submit their annual report together with the audited
financial statements of Spire Healthcare Group plc (the ‘company’)
together with its subsidiaries (the ‘group’) for the year ended
31 December 2023.
Certain disclosure requirements for inclusion in this directors’ report
have been incorporated by cross reference to the strategic report on
pages 1 to 63 and the directors’ remuneration report on pages 111 to
128, and should be read in conjunction with this report. The following,
included in the strategic report, also form part of this report:
– Greenhouse gas emissions, which can be found in the sustainability
report on page 36, engagement with stakeholders on page 60 and
TCFD reporting on page 75
Dividends
The directors recommend the payment of a final dividend in respect of
the year ended 31 December 2023 of 2.1 pence per ordinary share.
Subject to shareholders approving the recommendation at the annual
general meeting, the final dividend will be paid on 21 June 2024 to
shareholders on the register as at 24 May 2024.
Board of directors
The following changes were made to the board of directors between
1 January 2023 and signing of this report:
– Debbie White was appointed an independent non-executive director
on 1 February 2023. Debbie became Spire Healthcare’s senior
independent director on 12 May 2023
– Employees, which can be found in our strategy on page 27,
– Natalie Ceeney was appointed an independent non-executive director
sustainability report from page 44 and engaging with stakeholders
on page 55
– The corporate governance report on pages 89 to 94
– Our strategy on pages 20 to 35
A description of the group’s exposure and management of risks is
provided in the risks section on pages 64 to 74.
Information regarding the company’s gender pay gap reporting and
charitable donations can be found in the sustainability report from
page 36 and in engaging with stakeholders on page 60.
Registered office
The company’s registered office and principal place of business is
3 Dorset Rise, London EC4Y 8EN.
Annual general meeting
The annual general meeting of Spire Healthcare Group plc will be held
at 11.00am on 9 May 2024. Full details of shareholder attendance at
the meeting will be provided in the 2024 notice of annual general
meeting and at www.spirehealthcare.com/AGM.
At the meeting, resolutions will be proposed to receive the 2023 annual
report and financial statements, approve a final dividend, approve the
directors’ remuneration report and the directors’ remuneration policy,
re-elect directors and to reappoint Ernst & Young LLP as auditor.
Shareholders will also be asked to authorise the directors to hold
general meetings at 14 clear days’ notice (where this flexibility is
merited by the business of the meeting and is thought to be in the
interests of shareholders as a whole) and approve amended rules for
its executive share plans. Further items of business to be proposed
at the annual general meeting are described throughout this
directors’ report.
on 1 May 2023
– Adèle Anderson, Tony Bourne and Simon Rowlands stepped down
from the Board and ceased to be independent non-executive directors
at the conclusion of the Company’s annual general meeting held on
11 May 2023
A list of the current directors of Spire Healthcare Goup plc can be found
on pages 96 and 97.
The UK Corporate Governance Code provides for all directors of FTSE
companies to stand for re-election by shareholders every year.
Accordingly, all members of the board, with the exception of Jitesh
Sodha who will step down as a director, will retire and seek re-election at
this year’s annual general meeting. Full biographical details of all of the
directors can be found on pages 96 and 97.
Further information on the contractual arrangements of the executive
directors is given on pages 125. The non-executive directors do not have
service agreements.
Powers of the directors
The business of the company is managed by the directors who may
exercise all the powers of the company, subject to any relevant
legislation, any directions given by the company by passing a special
resolution and to the company’s articles of association. The articles, for
example, contain specific provisions concerning the company’s power
to borrow money and issue shares.
Appointment and removal of directors
Rules relating to the appointment and removal of the directors
are contained within the company’s articles of association.
Director’s indemnities
See page 92 in the corporate governance section.
Amendment of articles of association
The company may only make amendments to the articles of
association of the company by way of special resolution of the
shareholders, in accordance with the Companies Act 2006.
Employees
The group is an equal opportunities employer and is committed to
creating an environment which will attract, retain and motivate its
people, by creating a working environment in which individuals are
able to make best use of their skills, free from discrimination or
harassment, and in which all decisions are based on merit. Spire
Healthcare employs people who consider themselves to have a
disability (a physical or mental impairment which has a substantial
and long-term adverse effect on their ability to carry out normal
day-to-day activities).
Employees who consider themselves to have a disability are under no
obligation to inform their employer of this, however, we are fully aware
of, and comply with, our obligations in accordance with the relevant
provisions of the Equality Act 2010.
We remain committed to colleague involvement throughout the
business. Colleagues are kept well informed of the clinical and financial
performance of the facility that they work in as well as the group more
widely. Examples of colleague involvement and engagement are
highlighted throughout this annual report. When appropriate,
consultations with employee and union representatives take place. The
group gives full and fair consideration to applications for employment
from disabled persons. Should an employee become disabled during
their employment with Spire Healthcare, every effort is made to enable
them to continue their service with the group.
Further information on our colleagues can be found under our strategy
from page 27 and engagement with stakeholders on page 55.
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Directors’ report continued
Statement regarding fostering relationships with suppliers,
customers and others
Explanation of how the directors have fostered the company’s business
relationships with suppliers, customers, employees and others, and
taken each group into account when making principal decisions can be
found under engagement with stakeholders on pages 54 to 60.
Political donations and expenditure
The group made no political donations during the year. Although the
company does not make, and does not intend to make, donations to
political parties, within the normal meaning of that expression, the
definition of political donations under the Companies Act 2006 is very
broad and includes expenses legitimately incurred as part of the
process of talking to members of parliament and opinion formers to
ensure that the issues and concerns of the group are considered and
addressed. These activities are not intended to support any political
party and the group’s policy is not to make any donations for political
purposes in the normally accepted sense.
A resolution will therefore be proposed at the annual general meeting
seeking shareholder approval for the directors to be given authority to
make donations and incur expenditure which might otherwise be
caught by the terms of the Companies Act 2006. The authority sought
will be limited to a maximum amount of £100,000.
Share capital
As at the date of this report, Spire Healthcare Group plc had an issued
share capital of 404,130,113 ordinary shares of 1 pence each, being the
total number of shares with voting rights.
Equiniti Trust (Jersey) Limited, as trustee of the company’s Employee
Benefit Trust, holds 312,160 ordinary shares of 1 pence each (2022:
26,704). Further details can be found in note 21 on page 161.
Directors’ interests in shares
The beneficial interests of the directors’ and their families in the shares
of the company are detailed on page 124.
During the year, no director had any material interest in any contract of
significance to the group’s business.
Employee share scheme participation
The company’s operates an all-employee Sharesave scheme which has
been well received by colleagues. This is an important part of our total
reward package and encourages and supports employee share
ownership.
Material interests in shares
As of 28 February 2024, the company has been notified by the
following investors of their interests in 3% or more of the company’s
issued share capital. These interests were notified to the company
pursuant to Disclosure and Transparency Rule 5:
Shareholder
Mediclinic International PLC
Toscafund Asset Management
FIL Limited
Bridgemere Securities
Melquart Opportunities Master Fund Limited
% disclosed
29.9
18.1
5.9
4.1
3.8
The rights attaching to the shares are set out in the articles of
association. There are no restrictions on the transfer of ordinary shares in
the capital of the company other than those which may be imposed by
law from time-to-time. There are no special control rights in relation to
the company’s shares and the company is not aware of any agreements
between holders of securities that may result in restrictions on the
transfer of securities or on voting rights. In accordance with the
Disclosure Guidance and Transparency Rules, certain employees are
required to seek approval prior to dealing in the company’s shares. The
company’s entire issued ordinary share capital is listed on the premium
segment of the Official List of the Financial Conduct Authority and to
unconditional trading on the London Stock Exchange plc’s main market
for listed securities.
Further information relating to the company’s issued share capital can
be found in note 21 to the company’s financial statements on page 160.
The company has made no purchases of its own shares during the year
and no shares were acquired by forfeiture or surrender or made subject
to a lien or charge. Details of the shares purchased by the company’s
Employee Benefit Trust are shown in note 21 on page 161.
Allot shares and pre-emption rights
Shareholders will be asked to renew both the general authority of the
directors to issue shares and to authorise the directors to issue shares
without applying the statutory pre-emption rights. In this regard, the
company will continue to adhere to the provisions in the pre-emption
group’s Statement of Principles.
Further details on these matters can be found in the 2024 notice of
annual general meeting.
Voting rights
In a general meeting of the company, on a show of hands, every member
who is present in person or by proxy and entitled to vote shall have one
vote. On a poll, every member who is present in person or by proxy shall
have one vote for every share of which they are the holder.
Restrictions on voting
Unless the directors otherwise determine, a shareholder shall not be
entitled to vote either personally or by proxy:
– If any call or other sum presently payable to the company in respect of
that share remains unpaid or
– Having been duly served with a notice to provide the company with
information under Section 793 of the Companies Act 2006, and has
failed to do so within 14 days, for so long as the default continues
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Directors’ report continued
Significant agreements
The following agreements are considered to be significant in terms of
their potential impact on the business of the group as a whole and
could alter or terminate on a change of control of the group:
– The group’s bank facility agreement contains provisions entitling the
counterparties to exercise termination or other rights in the event of
a change of control
– There are a number of contracts which allow the counterparties to
alter or terminate those arrangements in the event of a change of
control of the company. These arrangements are commercially
sensitive and confidential and their disclosure could be seriously
prejudicial to the group
– The company’s share incentive plans contain provisions relating to a
change of control and full details of these plans are provided in the
directors’ remuneration report on pages 111 to 128. Outstanding
options and awards would normally vest and become exercisable on
a change of control, subject to the satisfaction of performance
conditions, if applicable, at that time
The relationship agreement entered into with Mediclinic Jersey Limited
(formerly called Remgro Jersey Limited), a subsidiary of Mediclinic
International PLC, in June 2015 is deemed a material agreement
between the company and its principal shareholder. The agreement
does not include a change of control provision but does terminate
upon the earlier of the company’s ordinary shares ceasing to be listed
and traded on the London Stock Exchange’s main market for listed
securities and the principal shareholder ceasing to be entitled, in
aggregate, to exercise or to control the exercise of 15% or more of the
votes to be cast on all or substantially all matters of a general meeting
of the company.
Compensation for loss of office
There are no agreements between the group and its directors or
employees providing for compensation for loss of office or
employment that occurs as a result of a change of control.
Disclosures required under listing rule 9.8.4R
The table below is included to meet the requirements of Listing Rule
section 9.8.4R. The information required to be disclosed by that section,
where applicable to the company, can be located in the annual report
2023 at the references set out above.
Information required
Long-term incentive schemes
Equity securities allotted for cash
Parent and subsidiary undertakings
Subsisting significant agreements
Controlling shareholder relationships
Location in Annual Report 2023
Directors’ Remuneration
Report pages 122 to 123
Note 21 on page 160
Note 16 on page 157-158
Page 130
Page 130
Financial risk
The group’s disclosure regarding financial risk is disclosed in note 31 of
the financial statements.
Events after the reporting period
There have been no events to disclose after the reporting date.
Going concern
The group assessed going concern risk for the period through to 30 June
2025. As at 31 December 2023 the group had cash of £49.6m, a Senior
Loan Facility of £325m and an undrawn Revolving Credit Facility of
£60m. An RCF drawing of £50m was used for the October 2023
acquisition of Vita Health Group with £10m of this being repaid by the
end of the year. On 3 March 2023, the group successfully extended the
senior loan facility by a further year. The financial covenants relating to
this new agreement are materially unchanged.
The group has undertaken extensive activity to identify plausible risks
which may arise and mitigating actions, which in the first instance
would include management of working capital and constrained levels
of capital investment. Based on the current assessment of the likelihood
of these risks arising by 30 June 2025, together with their assessment
of the planned mitigating actions being successful, the directors have
concluded it is appropriate to prepare the accounts on a going concern
basis. In arriving at their conclusion, the directors have also noted that,
were these risks to arise in combination, it could result in a liquidity
constraint or breach of covenant, however, the risk of this is
considered remote.
The group has also assessed, as part of its reverse stress testing, what
degree of downturn in trading it could sustain before it breaches its
financial covenant. This stress testing was based on flexing revenue
downwards with a consistent percentage decline in variable costs,
whilst maintaining the forecast of fixed costs. The testing did not allow
for the benefit of any action that could be taken by management to
preserve cash. This testing suggested that there would have to be at
least a 21% fall in annual revenue before the group breaches its
financial covenant, we believe that the risk of an event giving rise to
this size of reduction in revenue is remote.
It should be noted that we are in a period of material geo-political and
macro-economic uncertainty. Whilst the directors continue to closely
monitor these risks and their plausible impact, their severity is hard to
predict and is dependent upon many external factors. Accordingly, the
actual financial impact of these risks may materially vary against the
current view of their plausible impact.
Disclosure of information to auditor
Having made enquiries of fellow directors and of the company’s
auditor, each of the directors confirms that:
– To the best of their knowledge and belief, there is no relevant audit
information of which the company’s auditor is unaware
– They have taken all the steps a director might reasonably be
expected to have taken to be aware of relevant audit information
and to establish that the company’s auditor is aware of that
information
Reappointment of auditor
Resolutions for the reappointment of Ernst & Young LLP as the auditor
of the company and to authorise the directors to determine its
remuneration will be proposed at the annual general meeting.
Ernst & Young LLP has expressed its willingness to be reappointed.
The directors’ report has been approved by the board and is signed
on its behalf by:
Philip Davies
Company Secretary
28 February 2024
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132
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and the
group’s financial statements in accordance with applicable United
Kingdom law and regulations.
Company law requires the directors to prepare financial statements for
each financial year. Under that law the directors have elected to
prepare the group and parent company financial statements in
accordance with UK adopted International Accounting Standards
(‘UK-adopted IFRS’) as issued by the International Accounting Standards
Board (‘IASB’) and in accordance with the Companies Act 2006. Under
company law the directors must not approve the group’s financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the group and the company and of the profit
or loss of the group and the company for that period.
In preparing these financial statements the directors are required to:
– Select suitable accounting policies in accordance with IAS 8
accounting policies, changes in accounting estimates and errors
and then apply them consistently
– Make judgements and accounting estimates that are reasonable
and prudent
– Present information in a manner that provides relevant, reliable,
comparable and understandable information
– Provide additional disclosures when compliance with the specific
requirements in IFRSs is insufficient to enable users to understand
the impact of particular transactions, other events and conditions on
the group and company financial position and financial performance
– In respect of the group financial statements, state whether
UK-adopted International Accounting Standards have been followed,
subject to any material departures disclosed and explained in the
financial statements
– In respect of the parent company financial statements, state
whether UK-adopted International Accounting Standards have been
followed, subject to any material departures disclosed and explained
in the financial statements
– Prepare the financial statements on the going concern basis unless it
is appropriate to presume that the company and/or the group will
not continue in business
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the company’s and group’s
transactions and disclose with reasonable accuracy at any time the
financial position of the company and the group and enable them to
ensure that the company and the group financial statements comply
with the Companies Act 2006. They are also responsible for safeguarding
the assets of the group and parent company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the directors are also responsible
for preparing a strategic report, directors’ report, directors’ remuneration
report and corporate governance statement that comply with that law
and those regulations. The directors are responsible for the maintenance
and integrity of the corporate and financial information included on the
company’s website.
Each of the directors confirms that, to the best of their knowledge:
– That the consolidated financial statements, prepared in accordance
with UK-adopted International Accounting Standards give a true and
fair view of the assets, liabilities, financial position and profit of the
parent company and undertakings included in the consolidation
taken as a whole
– That the annual report, including the strategic report, includes a fair
review of the development and performance of the business and
the position of the company and undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face
– That they consider the annual report, taken as a whole, is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the company’s position, performance, business
model and strategy
By order of the board.
Justin Ash
Chief Executive Officer
28 February 2024
Jitesh Sodha
Chief Financial Officer
28 February 2024
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Independent auditor’s report
Opinion
In our opinion:
– Spire Healthcare Group plc’s group financial statements and parent company financial statements (the
“financial statements”) give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 December 2023 and of the group’s profit for the year then ended;
– the group financial statements have been properly prepared in accordance with UK adopted International
Accounting Standards;
– the parent company financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards as applied in accordance with section 408 of the Companies Act 2006;
and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Spire Healthcare Group plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise:
Group
Consolidated balance sheet as at 31 December 2023
Parent company
Balance sheet as at 31 December 2023
Consolidated income statement for the year
then ended
Consolidated statement of comprehensive income for
the year then ended
Statement of changes in equity for the year then ended
Statement of cash flows for the year then ended
Consolidated statement of changes in equity for the
year then ended
Related notes C1 to C13 to the financial statements,
including a summary of significant accounting policies
Consolidated statement of cash flows for the year
then ended
Related notes 1 to 35 to the financial statements,
including material accounting policy information
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted
International Accounting Standards and as regards the parent company financial statements, as applied in
accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the group and parent in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the group and the parent company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the group and parent company’s ability to continue to adopt the going concern basis of
accounting included:
– The audit engagement partner and senior team members directed and supervised the audit procedures on
going concern, in particular assessing the going concern models, assumptions therein and the result of stress
testing scenarios.
– In conjunction with our walkthrough of the group’s financial close process, we confirmed our understanding
of management’s going concern assessment process and also engaged with management early to ensure all
key factors were considered in its assessment;
– In obtaining an understanding of management’s rationale for the use of the going concern basis of
accounting we have challenged the completeness of the assessment by ensuring that management had
considered all principal risks as well as emerging issues within the assessments;
Managements’ assessment and assumptions
– We obtained management’s board approved forecast cash flows and covenant calculations covering the
period of assessment from the financial statement approval date to 30 June 2025. We checked the models
for arithmetical accuracy and considered the group’s historical forecasting accuracy;
– We evaluated the appropriateness of the duration of the going concern assessment period to 30 June
2025 and considered the existence of any significant events or conditions beyond this period based on our
enquiries of management, the group’s five-year plan and knowledge arising from other areas of the audit;
– We assessed the reasonableness of the cashflow forecast by analysis of management’s historical
forecasting accuracy and understanding how any anticipated impact inflation on consumer spending,
surge in living costs and shortage in healthcare professionals have been modelled.
– We evaluated the relevance and reliability of the underlying data used to make the assessment through
considering corroborating evidence from external sources. We read analyst reports to identify potentially
contradictory evidence on future profitability to challenge the going concern assessment. We ensured
that climate change considerations were factored into future cash flows.
Debt covenants
– We obtained all the group’s borrowing facility agreements and performed a detailed examination of these
agreements. We assessed their continued availability to the group throughout the going concern period
and ensured the completeness of covenants identified by management.
– We assessed the accuracy of management’s covenant forecast model on the base case, verifying inputs to
the board approved forecasts and facility agreement terms.
– We obtained the signed extensions to the Senior Loan Facility dated 23 January 2023 and understood the
terms including maturity and arrangement fees and the impact on covenant and liquidity compliance in
the going concern period.
– We evaluated the compliance of the group with debt covenants in the forecast period by reperforming
calculations of the covenant tests. We further assessed the impact of the downside risk scenarios on
covenant compliance and applied sensitivity analysis
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Independent auditor’s report continued
Stress testing and evaluation of management’s plans for future actions
– We performed an independent reverse stress test to understand what it would take to breach available
liquidity and exhaust covenant headroom.
– We considered management’s plausible downside risk scenarios of the group’s cash flow forecast models
and their impact on forecast liquidity and banking covenants, specifically whether the downside risks
were reasonably possible. We considered the adverse effects that could arise from these risks individually
and also selected risks in combination.
– We considered the likelihood of management’s ability to execute feasible mitigating actions available to
respond to the downside risk scenarios based on our understanding of the group and the sector, including
considering whether those mitigating actions were controllable by management
Disclosures
– We considered whether management’s disclosures within the Annual Report and Accounts, sufficiently
and appropriately capture the impacts of the group’s principal risks on the going concern assessment and
through consideration of relevant disclosure standards.
Our key observations were:
– The Directors’ assessment forecasts that the group will remain compliant with its debt covenants and
maintain sufficient liquidity throughout the Going Concern assessment period.
– Stress testing performed indicated a 21% downturn in revenue is required for the group to breach its debt
covenants. Management considers such a scenario is not plausible, however, in such an event management
considers that the impact could be mitigated by measures within their control, which in the first instance
would include management of working capital and constrained levels of capital investment. The group’s
principal source of funding extends beyond the going concern period to 2027. No loan repayments are due in
the going concern period.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group and parent company’s
ability to continue as a going concern for a period to date 30 June 2025.
In relation to the group and parent company’s reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement
in the financial statements about whether the directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report. However, because not all future events or conditions can be predicted, this
statement is not a guarantee as to the group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope
– We performed an audit of the complete financial information of two
components and audit procedures on specific balances for a further
20 components.
Key audit matters
– The components where we performed full or specific audit procedures accounted
for 99% of Revenue, 98% of Profit Before Tax and 99% of Total Assets.
– Risk of impairment to property, plant and equipment
– Manipulation of NHS revenue by changes to the pricing master file
– Misstatement due to management posting fraudulent manual journal entries
to revenue
– Accounting for the acquisition of Vita Health Group in accordance with IFRS 3
Materiality
– Overall group materiality of £5.9m which represents 2.5% of Adjusted Earnings
Before Interest, Tax, Depreciation and Amortisation (‘Adjusted EBITDA’).
An overview of the scope of the parent company and group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality
determine our audit scope for each company within the Group. Taken together, this enables us to form an
opinion on the consolidated financial statements. We take into account size, risk profile, the organisation of the
group and effectiveness of group-wide controls, changes in the business environment and other factors such
as recent internal audit results when assessing the level of work to be performed at each entity.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had
adequate quantitative coverage of significant accounts in the financial statements, of the 45 (2022: 44)
reporting components of the Group, we selected 22 (2022:27) components which represent the principal
business units within the Group. The Group continues to operate solely within the UK.
Of the 22 (2022: 27) components selected, we performed an audit of the complete financial information of 2
(2022: 2) components (“full scope components”) which were selected based on their size or risk characteristics.
For the remaining 20 (2022: 25) components (“specific scope components”), we performed audit procedures
on specific accounts within that component that we considered had the potential for the greatest impact
on the significant accounts in the financial statements either because of the size of these accounts or
their risk profile.
The reporting components where we performed audit procedures accounted for 98% (2022: 99%) of the
Group’s Profit Before Tax, 99% (2022: 99%) of the Group’s Revenue and 99% (2022: 99%) of the Group’s Total
Assets. For the current year, the full scope components contributed 63% (2022: 48%) of the Group’s Profit
Before Tax, 96% (2022: 97%) of the Group’s Revenue and 79% (2022: 75%) of the Group’s Total Assets. The
specific scope components contributed 4% (2021: 0%) of the group’s revenue and 20% (2022: 24%) of the
group’s Total Assets. The audit scope of these components may not have included testing of all significant
accounts of the component but will have contributed to the coverage of significant accounts tested for the
group. It is not possible to present the split between full and specific scope components on an adjusted EBITDA
basis in a meaningful way. This is due to intra-group profits earned in certain specific scope components which
result in the aggregate adjusted EBITDA amounting to more than 100%.
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135
Independent auditor’s report continued
Of the remaining 23 components none are individually greater than 1% of the group’s Adjusted EBITDA. For
these components, we performed other procedures, including, analytical review, testing of consolidation
journals and testing of intercompany eliminations to respond to any potential risks of material misstatement
to the group financial statements.
The charts below illustrate the coverage obtained from the work performed by our audit teams.
Total revenue
1 3
Total PBT
32
1
1. Full scope components 96%
2. Specific scope components 0%
3. Other procedures 4%
1. Full scope components 63%
2. Specific scope components 35%
3. Other procedures 2%
Total assets
32
1
1. Full scope components 79%
2. Specific scope components 20%
3. Other procedures 1%
Changes from the prior year
Spire Healthcare Group plc acquired one new component in the current financial year which has
been assigned as specific scope, being, Vita Health Group. This component has been assigned
as specific scope for cash and revenue balances. Six components were dissolved in the year and removed
from our audit scope.
Involvement with component teams
All audit work performed for the purposes of the audit was undertaken by the Group audit team.
Climate change
Stakeholders are increasingly interested in how climate change will impact the group. The group has
determined that the most significant future impacts from climate change on its operations will be from severe
and extreme weather patterns, potential changes to laws and regulations, fluctuation in energy prices, and
increased costs as a result of measures to reduce carbon emissions. These are explained on pages 75 to 80 in
the required Task Force for Climate related Financial Disclosures and on pages 64 to 74 in the principal risks and
uncertainties. They have also explained their climate commitments on pages 39 to 44. All of these disclosures
form part of the “Other information,” rather than the audited financial statements. Our procedures on these
unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be
materially misstated, in line with our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of climate change on the group’s
business and any consequential material impact on its financial statements.
As explained in the group’s accounting policies and basis of preparation, the board has not identified any
climate related risks or opportunities that would have a material impact on the assets or liabilities of the group.
In notes 2, 13 and 14 to the financial statements, significant judgements and estimates relating to climate
change have been described on the impairment assessment of property, plant and equipment and intangible
assets in addition to financial assets and liabilities.
Our audit effort in considering climate change was focused on evaluating management’s assessment of the
impact of climate risk. Additionally, we also assessed the costs of energy being appropriately reflected in the
assessment of the carrying value of assets, impairment of assets, reduction of economic useful lives of tangible
and intangible assets and associated disclosures where values are determined through modelling future cash
flows, being the impairment tests of tangible and intangible assets and related disclosures.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern
and viability and associated disclosures.
Based on our work we have not identified the impact of climate change on the financial statements to be a key
audit matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
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Independent auditor’s report continued
Risk
Our response to the risk
Risk of impairment to intangible and tangible assets
We performed the following procedures:
Refer to the Audit Committee Report (page 107); Accounting
policies (page 149); and Note 13 of the Consolidated Financial
Statements (page 155 & 156)
At 31 December 2023 the carrying value of property, plant and
equipment was £1,618.8m (2022: £1,584.4m) including hospital
properties’ right of use assets of £633.6m (2022: £618.4m).
The UK economic environment also continues to be challenged
by factors including high inflation levels, higher interest rates,
an increased cost of living and supply chain disruptions,
specifically in the healthcare industry where capacity
constraints are being faced, combined with continued pressure
on higher wages.
This results in a higher degree of estimation uncertainty which
leads us to conclude there to be a higher likelihood of material
misstatement within the forecasts used in management’s
impairment assessments.
No impairment has been recognised (2022: £0m).
– We gained an understanding of the process management has in place for impairment assessments through a walkthrough.
– We validated that the methodology of the impairment exercise is consistent with the requirements of IAS 36 Impairment of Assets,
including appropriate identification of cash generating units for value in use calculations, by assessing the methodology against
the requirements of IAS 36.
– We also confirmed the mathematical accuracy of the models.
– We obtained management’s forecasts underlying the impairment review incorporating the continued impact from the macro-
economic environment and climate related matters. We agreed them to forecasts approved by the Board.
– We compared the forecast to other external sources such as industry analyst reports to assess the reasonableness of the
assumptions applied as well to identify any contrary evidence to assist the audit team in determining the impact of this
contrary evidence.
– We challenged management’s historical accuracy of forecasting through comparing the budgets to actual results from 2019 to
2022 to determine whether forecast cash flows were reliable based on past experiences.
– We performed sensitivity analysis by testing key assumptions in the model to recalculate a range of potential outcomes in relation
to the size of the headroom between the carrying value and the value in use. The sensitivities performed were based on the key
assumptions underpinning managements’ assessment.
– We have checked that the reasonable possible change assumptions applied by management are reasonable, complete and have
been correctly calculated and disclosed
In addition, we worked with our EY internal valuation specialists to:
– Assess the discount rate, benchmarking to external evidence and against industry averages and trends.
– Independently calculate the discount rate and compare this to the discount rate applied in the models by management.
We sensitised management’s calculation to use the discount rate independently calculated.
– We assessed the inputs applied by management for reasonableness by benchmarking them against peer companies and
recent transactions.
Disclosures
We evaluated the disclosures in the financial statements against the requirements of IAS 36 Impairment of Assets, in particular
in respect of the requirement to disclose sensitivities where a reasonably possible change in key assumptions could
cause an impairment.
We performed full and specific scope audit procedures over this risk area in 22 components, which covered 99% of the tangible
and intangible assets balance.
Key observations communicated to the audit committee
We concluded that the discount rate used by management was
at the lower end of the appropriate range determined by EY
internal valuation specialists. In addition, we concluded that key
assumptions in relation to EBITDA growth, capital maintenance
expenditure, discount rates and long-term growth rates applied
to the terminal values were reasonable.
We highlighted that a reasonably possible change in key
assumptions including a change in EBITDA could lead to
impairment charges to property plant and equipment.
We concluded that appropriate disclosures have been made in
the financial statements as required.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 137
Independent auditor’s report continued
Risk
Our response to the risk
Revenue recognition: Manipulation of NHS revenue through
changes to the pricing master file
Refer to the Audit Committee Report (page 107); Accounting
policies (page 144); and Note 5 of the Consolidated Financial
Statements (page 151 & 152)
NHS revenue 2023: £341.2m (2021: £295.4m)
The high volume of patient transactions, for which pricing is
derived from the NHS national tariff, leads to a higher likelihood
of material misstatement through intentional changes to
individual procedural pricing on the pricing master file.
We consider the pressure to achieve forecast results or
targets increases the risk of financial reporting manipulation
by management.
Misstatement due to management posting fraudulent manual
journal entries to revenue
Refer to the Audit Committee Report (page 107); Accounting
policies (page 144); and Note 5 of the Consolidated Financial
Statements (page 151 & 152)
Our assessment is that the majority of the revenue transactions
are non-complex, with no judgement applied over the amount
recorded.
We consider there is a potential for management override to
achieve revenue targets via topside manual journal entries
posted to revenue.
Accounting for the acquisition of Vita Health Group in
accordance with IFRS 3
Refer to the Audit Committee Report (page 108); Accounting
policies (page 146); and Note 34 of the Consolidation Finance
Statements (page 169)
Accounting for business combinations is complex and involves
judgement including around the assessment of the fair value of
assets and liabilities acquired. The valuation of intangible assets
can be a subjective process and there is risk that the accounting
treatment may be incorrect.
We have performed the following procedures to gain assurance over NHS pricing:
– We used data analytics to assess the accuracy of all the FY23 NHS billing data to publicly available NHS national tariff base prices,
adjusted by Market Force factors.
– For any material portion of the revenue population for which we were unable to agree the price billed to NHS national tariff base
prices, e.g. where the price was agreed locally for a specific procedure, we have agreed a sample of this billing data to appropriate
audit support. Specifically, we have agreed a sample of this billing data to the underlying signed agreement or, in instances where
no current contract or correspondence was available, we traced the settlement of the invoice directly to cash.
– We used data analytics, covering all NHS revenue transactions in the year, to test the correlation between revenue, accrued
revenue, accounts receivable and cash.
– We investigated whether there were any pricing disputes with the NHS during the year through discussions with legal counsel,
review of minutes and verifying any matters noted to correspondence, where available.
– We obtained a summary of aged NHS receivables and verified that the ageing is appropriate by testing a sample across the
different ageing categories. We have performed a search for any large or unusually long outstanding receivables that are outside
expected credit terms that may indicate that pricing disagreements exist.
– Whilst we have not relied on any of the work performed by internal audit, we reviewed the results from their individual site audits
completed during FY23, to understand if there were any revenue findings specific to NHS pricing which required further enquiry
and/or corroboration.
– We performed full scope audit procedures over this risk area in two components which covered 96% of NHS revenue.
We have performed the following procedures to gain assurance manual journal entries to revenue:
– We performed a walkthrough of the financial statement close process and obtained an understanding of the journal entry process,
including the journal entry process for the consolidation, and adjusting journals which are posted directly to the financial
statements.
– We performed journal testing by focusing on specific criteria designed to identify journals through which we believe management
could post fraudulent manual entries.
Using our data analytics tool, we have understood revenue trends through the use of analytics as follows:
– Analysis of double-entry postings to the related accounts and how these accounts are aligned with our understanding of the
revenue process, activity and source; and;
– Identifying revenue trends which do not correlate with our expectation and investigating and corroborating these
uncorrelated trends.
We performed the following procedures:
– We read and understood the sale and purchase agreement and other documents related to the acquisition.
– We agreed the purchase price paid of £83m to bank statements.
– We performed audit procedures on the acquired opening balance sheet of Vita Health Group and agreed material balances to
supporting documentation.
– We obtained an understanding of the internal controls over the preparation of the valuation model and over independent
third-party expert advice;
– We evaluated the integrity and expertise of management’s valuation advisors;
– We assessed the valuation methodologies and key inputs in determining the purchase price allocation including the discount rate,
cash flow forecast and other prospective financial information and the useful lives assigned, with the assistance of our
valuation specialists.
– We also reperformed calculations in the valuation models to check mathematical accuracy.
– We read the Group’s disclosures in relation to acquisition accounting made in the financial statements to confirm the adequacy of
disclosures of the acquisition of Vita Health Group.
Key observations communicated to the audit committee
We did not identify any material errors in the pricing master file,
nor evidence of management manipulation of revenue through
changes to the pricing master file.
We did not identify any indicators of pricing disputes with
the NHS.
Based on our audit procedures performed, we concluded that
revenue for the year is appropriately recognised and free from
material misstatement.
Based on our audit procedures we concluded that revenue,
and adjustments to revenue, are appropriately recognised
and recorded.
Based on the audit procedures performed we concluded that
the acquisition of Vita Health Group was accounted for in
accordance with IFRS 3, and the fair value adjustments and
Purchase Price Allocation were materially correct and
appropriately disclosed noting that due to the timing of the
acquisition, the initial accounting is not yet complete in line
with IFRS 3.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 138
Independent auditor’s report continued
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess
of £0.3m (2022: £0.3m), which is set at 5% of planning materiality, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed
above and in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report set out on pages 1-132 and
pages 175-180 other than the financial statements and our auditor’s report thereon. The directors are
responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
– the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of the financial statements. Materiality provides a
basis for determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £5.9 million (2022: £5.1 million), which is 2.5% (2022: 2.5%) of
Adjusted EBITDA. We believe that Adjusted EBITDA provides us with the most important metric for the users of
the financial statements, being the most important KPI for internal metrics and external analyst expectations.
We determined materiality for the Parent Company to be £12.4 million (2022: £11.6 million), which is 1%
(2022: 1%) of Equity.
Starting basis
– EBITDA: £238.2 million
Adjustments
– Adjusted items of £4.2m are recognised in accordance with the Group’s accounting
policy.
– Asset acquisitions, disposals, impairment and aborted project costs (£3.1m)
– Business reorganisation and corporate restructuring costs (£2.0m)
– Remediation of regulatory compliance or malpractice costs (£-0.9m)
Materiality
– Total Adjusted EBITDA: £234.0m
– Materiality of £5.9m (2.5% Adjusted EBITDA)
During the course of our audit, we reassessed initial materiality in line with actual Adjusted EBITDA to reflect
the actual reported performance of the Group for the year.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment,
our judgement was that performance materiality was 50% (2022: 50%) of our planning materiality, namely
£2.9m (2022: £2.5m). We have set performance materiality at this percentage due to our assessment of the
control environment and the history of audit adjustments identified.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial
statement accounts is undertaken based on a percentage of total performance materiality. The performance
materiality set for each component is based on the relative scale and risk of the component to the Group as a
whole and our assessment of the risk of misstatement at that component. In the current year, the range of
performance materiality allocated to components was £0.6m to £2.9m (2022: £0.5m to £2.5m).
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 139
Independent auditor’s report continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
– adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
– the parent company financial statements and the part of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and returns; or
– certain disclosures of directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit
Corporate governance statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the group and company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the Corporate Governance Statement is materially consistent with the financial statements or our knowledge
obtained during the audit:
– Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified 81;
– Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers
and why the period is appropriate 81;
– Director’s statement on whether it has a reasonable expectation that the group will be able to continue in
operation and meets its liabilities 81;
– Directors’ statement on fair, balanced and understandable 132;
– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks 64;
– The section of the annual report that describes the review of effectiveness of risk management and internal
control systems 64-67; and;
– The section describing the work of the audit committee 104-109
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 132, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group and parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud
is detailed below.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Stephney Dallmann
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
28 February 2024
140
Independent auditor’s report continued
However, the primary responsibility for the prevention and detection of fraud rests with both those charged
with governance of the company and management.
– We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and
determined that the most significant are the Companies Act 2006, 2018 UK Corporate Governance Code,
the relevant tax compliance regulations in the UK and those administered by the Care Quality Commission
in England and the equivalent organisation in Scotland and Wales. In addition, we concluded that there are
certain significant laws and regulations which may have an effect on the determination of the amounts and
disclosures in the financial statements being the Listing Rules of the London Stock Exchange, the UK Bribery
Act 2010 and regulation relating to employment law and data protection.
– We understood how Spire Healthcare Group plc is complying with those frameworks by making enquiries of
management, internal audit, those responsible for legal and compliance procedures and the company
secretary. We corroborated our enquiries through our review of board minutes, papers provided to the Audit
and Risk Committees and correspondence received from regulatory bodies.
– We assessed the susceptibility of the group’s financial statements to material misstatement, including how
fraud might occur by meeting with management within various parts of the business to understand where
they considered there was susceptibility to fraud. We also considered performance targets and their
influence on efforts made by management to manage earnings or influence the perceptions of analysts. We
considered the programmes and controls that the Group has established to address the risk identified, or
that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes
and controls. Where this risk was considered to be higher, we performed audit procedures to address each
identified fraud risk. We have involved internal specialists as required in assessing compliance with relevant
laws and regulations.
– Based on this understanding we designed our audit procedures to identify non-compliance with such laws
and regulations. Our procedures involved; review of board minutes to identify non-compliance with such
laws and regulations; reviewing external specialist reports, review of reporting to the Audit and Risk
Committee on compliance with regulations; enquiries with legal counsel, group management and internal
audit; testing of manual journals.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Other matters we are required to address
– Following a competitive tender process, we were reappointed by the company at its annual general meeting
on 14 May 2020 to audit the financial statements for the year ending 31 December 2020 and subsequent
financial periods.
– The period of total uninterrupted engagement including the period prior to the Company’s admission
to the London Stock Exchange in 2014 is 16 years, covering the years ending 31 December 2008 to
31 December 2023.
– The audit opinion is consistent with the additional report to the audit committee.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 141
Consolidated income statement
For the year ended 31 December 2023
Note
5
6
7
8
8
11
Total before
Adjusting
items
1,359.0
(734.8)
624.2
(497.4)
3.6
130.4
1.4
(93.0)
38.8
(6.4)
32.4
2023
Adjusting
items
(Note 10)
–
–
–
(6.7)
2.5
(4.2)
–
–
(4.2)
(0.3)
(4.5)
Total before
Adjusting
items
1,198.5
(660.1)
538.4
(435.8)
3.0
105.6
–
(91.5)
14.1
2.5
16.6
Total
1,359.0
(734.8)
624.2
(504.1)
6.1
126.2
1.4
(93.0)
34.6
(6.7)
27.9
2022
Adjusting
items
(Note 10)
–
–
–
(10.2)
–
(10.2)
–
–
(10.2)
1.8
(8.4)
Total
1,198.5
(660.1)
538.4
(446.0)
3.0
95.4
–
(91.5)
3.9
4.3
8.2
Consolidated statement of comprehensive income
For the year ended 31 December 2023
(£m)
Profit for the year
Items that may be reclassified to profit or loss in subsequent periods
(Loss)/gain on cash flow hedges
Taxation of cash flow hedges
Other comprehensive (loss)/profit for the year
Note
21
2023
27.9
(4.2)
0.9
(3.3)
2022
8.2
9.3
(2.2)
7.1
Total comprehensive profit for the year, net of tax
24.6
15.3
Attributable to:
Equity holders of the parent
Non-controlling interests
24.0
0.6
24.6
15.7
(0.4)
15.3
31.8
(4.5)
27.3
17.0
(8.4)
8.6
The notes on pages 144-169 form an integral part of these financial statements.
0.6
–
0.6
(0.4)
–
(0.4)
12
12
7.9
7.7
(1.1)
(1.1)
6.8
6.6
4.2
4.1
(2.1)
(2.0)
2.1
2.1
(£m)
Revenue
Cost of sales
Gross profit
Other operating costs
Other income
Operating profit (EBIT)
Finance income
Finance cost
Profit before taxation
Taxation
Profit for the year
Profit for the year attributable to
owners of the parent
Profit/(loss) for the year
attributable to
non-controlling interests
Earnings per share
(in pence per share)
– basic
– diluted
The notes on pages 144-169 form an integral part of these financial statements.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 142
Consolidated statement of changes in equity
For the year ended 31 December 2023
(£m)
As at 1 January 2022
Profit / (loss) for the year
Other comprehensive profit for the year
Total comprehensive profit
Dividends to non-controlling interests
Dividends paid in respect of vested share awards
Share-based payments
Deferred tax adjustment on share-based payments reserve
Issue of new shares
Utilisation of EBT shares for share awards
Purchase of non-controlling interest
As at 1 January 2023
Profit for the year
Other comprehensive loss for the year
Total comprehensive profit
Dividends paid
Share-based payments
Deferred tax adjustment on share-based payments reserve
Settlement on vested share awards
Purchase of own shares by EBT
Issue of own shares by EBT in respect of share awards
Additional interest acquired of non-controlling interest
Financial liability to acquire non-controlling interests
As at 31 December 2023
The notes on pages 144-169 form an integral part of these financial statements.
Note
27
27
Share
capital
(Note 21)
4.0
–
–
–
–
–
–
–
–
–
–
4.0
–
–
–
–
–
–
–
–
–
–
–
4.0
Share
premium
(Note 21)
826.9
–
–
–
–
–
–
–
3.1
–
–
830.0
–
–
–
–
–
–
–
–
–
–
–
830.0
Capital
reserves
(Note 21)
376.1
–
–
–
–
–
–
–
–
–
–
376.1
–
–
–
–
–
–
–
–
–
–
–
376.1
EBT share
reserves
(Note 21)
(0.8)
–
–
–
–
–
–
–
–
0.8
–
–
–
–
–
–
–
–
–
(3.1)
2.4
–
–
(0.7)
Hedging
reserve
(Note 21)
(0.5)
–
7.1
7.1
–
–
–
–
–
–
–
6.6
–
(3.3)
(3.3)
–
–
–
–
–
–
–
–
3.3
Retained
earnings
(496.1)
8.6
–
8.6
–
(0.1)
2.3
(0.1)
–
(0.8)
0.5
(485.7)
27.3
–
27.3
(2.0)
3.7
(0.3)
(0.6)
–
(2.4)
(3.2)
(9.6)
(472.8)
Non-
controlling
interests
(Note 16)
(4.8)
(0.4)
–
(0.4)
(0.2)
–
–
–
–
–
(0.5)
(5.9)
0.6
–
0.6
–
–
–
–
–
–
3.2
–
(2.1)
Total
709.6
8.6
7.1
15.7
–
(0.1)
2.3
(0.1)
3.1
–
0.5
731.0
27.3
(3.3)
24.0
(2.0)
3.7
(0.3)
(0.6)
(3.1)
–
(3.2)
(9.6)
739.9
Total
Equity
704.8
8.2
7.1
15.3
(0.2)
(0.1)
2.3
(0.1)
3.1
–
–
725.1
27.9
(3.3)
24.6
(2.0)
3.7
(0.3)
(0.6)
(3.1)
–
–
(9.6)
737.8
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 143
Consolidated balance sheet
As at 31 December 2023
(£m)
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Derivatives
Financial assets
Current assets
Inventories
Trade and other receivables
Derivatives
Cash and cash equivalents
Non-current assets held for sale
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
Capital reserves
EBT share reserves
Hedging reserve
Retained loss
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Non-current liabilities
Bank borrowings
Lease liabilities
Financial liabilities
Deferred tax liabilities
Current liabilities
Bank borrowings
Lease liabilities
Provisions
Trade and other payables
Income tax payable
Total liabilities
Total equity and liabilities
Consolidated statement of cash flows
For the year ended 31 December 2023
(£m)
Cash generated from operations
Tax paid
Net cash flows from operating activities
Cash flows from investing activities
Receipt from financial asset
Acquisition of a subsidiary, net of cash acquired
Purchase of property, plant and equipment
Proceeds of disposal of property, plant and equipment
Proceeds of disposal of assets held for sale (adjusting items)1
Interest received on bank deposits
Movement in restricted cash
Net cash used in investing activities
Cash flows from financing activities
Interest paid and other financing costs
Interest on lease liabilities
Payment of lease liabilities
Proceeds from senior loan facility
Repayment of senior loan facility
Draw down on revolving credit facility
Repayment on revolving credit facility
Proceeds from the issue of new shares
Purchase of own shares by EBT
Purchase of non-controlling interests (adjusting item)1
Settlement on vested share awards
Dividend paid to non-controlling interests
Dividends paid to equity holders of the parent
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Adjusting items (Note 10)
Adjusting items paid included in the cash flow
Total pre-tax adjusting items
Note
28
19
10
2023
215.6
(0.1)
215.5
0.7
(73.2)
(84.4)
0.8
–
1.4
(2.5)
(157.2)
(17.0)
(73.0)
(27.2)
–
–
60.0
(20.0)
–
(3.1)
–
(0.6)
–
(2.0)
(82.9)
(24.6)
74.2
49.6
(2.7)
(4.2)
2022
181.7
(0.1)
181.6
0.5
(11.3)
(87.7)
–
3.2
–
–
(95.3)
(21.1)
(73.5)
(20.2)
325.0
(425.0)
–
–
3.1
–
(2.7)
–
(0.3)
–
(214.7)
(128.4)
202.6
74.2
(6.4)
(10.2)
1. Adjusting item was not charged to profit and loss in the prior financial year and is therefore not included in the adjusting items paid
included in the cash flow.
The notes on pages 144-169 form an integral part of these financial statements.
Note
2023
2022
13
14
22
15
17
18
22
19
20
21
21
21
21
21
22
22
32
23
22
22
24
25
1,618.8
438.3
0.4
10.0
2,067.5
44.3
121.6
4.0
49.6
219.5
1.1
220.6
2,288.1
4.0
830.0
376.1
(0.7)
3.3
(472.8)
739.9
(2.1)
737.8
361.9
793.3
9.6
67.9
1,232.7
3.4
98.4
16.4
197.1
2.3
317.6
1,550.3
2,288.1
1,584.4
345.8
5.0
4.6
1,939.8
40.6
100.5
3.6
74.2
218.9
1.1
220.0
2,159.8
4.0
830.0
376.1
–
6.6
(485.7)
731.0
(5.9)
725.1
321.4
773.7
–
56.2
1,151.3
2.9
92.8
21.7
164.5
1.5
283.4
1,434.7
2,159.8
These consolidated financial statements and the accompanying notes were approved for issue by the board on
28 February 2024 and signed on its behalf by:
Justin Ash
Chief Executive Officer
Jitesh Sodha
Chief Financial Officer
The notes on pages 144-169 form an integral part of these financial statements.
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144
Notes to financial statements
For the year ended 31 December 2022
1. General information
Spire Healthcare group plc (the ‘company’) and its subsidiaries (collectively, the ‘group’) owns and operates
private hospitals and clinics in the UK and provides a range of private healthcare services.
The financial statements for the year ended 31 December 2023 were authorised for issue by the board of
directors of the company on 28 February 2024.
The company is a public limited company, which is listed on the London Stock Exchange, incorporated,
registered and domiciled in England and Wales (registered number: 09084066). The address of its registered
office is 3 Dorset Rise, London, EC4Y 8EN.
2. Accounting policies
The material accounting policies applied in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements of the group have been prepared in accordance with UK-adopted
International Accounting Standards (UK-adopted IFRS) as issued by the International Accounting Standards
Board (IASB) and in accordance with the Companies Act 2006.
The consolidated financial statements have been prepared on a historical cost basis except for derivative
financial instruments and financial assets and liabilities measured at fair value. The group financial statements
are presented in UK sterling and all values are rounded to the nearest million pounds (£m), except when
otherwise indicated.
The preparation of financial statements in accordance with UK-adopted IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
group’s accounting policies. Further details on the group’s critical judgements and estimates are included
in Note 3.
The group has considered the future potential environmental impact on its current and future financial
position and considered the impact to below.
Going concern
The group assessed going concern risk for the period through to 30 June 2025. As at 31 December 2023 the
group had cash of £49.6m, a Senior Loan Facility of £325m and an undrawn Revolving Credit Facility of £60m.
An RCF drawing of £50m was used for the October 2023 acquisition of Vita Health Group with £10m of this
being repaid by the end of the year. On 3 March 2023, the group exercised the option to extend the senior loan
facility by a further year. The financial covenants relating to this new agreement are materially unchanged and
there have been no modifications to the agreement terms.
The group has undertaken extensive activity to identify plausible risks which may arise and mitigating actions,
which in the first instance would include management of working capital and constrained levels of capital
investment. Based on the current assessment of the likelihood of these risks arising by 30 June 2025, together
with their assessment of the planned mitigating actions being successful, the directors have concluded it is
appropriate to prepare the accounts on a going concern basis. In arriving at their conclusion, the directors have
also noted that, were these risks to arise in combination, it could result in a liquidity constraint or breach of
covenant, however, the risk of this is considered remote.
The group has also assessed, as part of its reverse stress testing, what degree of downturn in trading it could
sustain before it breaches its financial covenant. This stress testing was based on flexing revenue downwards
with a consistent percentage decline in variable costs, whilst maintaining the forecast of fixed costs. The
testing did not allow for the benefit of any action that could be taken by management to preserve cash. This
testing suggested that there would have to be at least a 21% fall in annual forecast revenue before the group
breaches its financial covenant, we believe that the risk of an event giving rise to this size of reduction in
revenue is remote.
It should be noted that we are in a period of material geopolitical and macroeconomic uncertainty. Whilst the
directors continue to closely monitor these risks and their plausible impact, their severity is hard to predict and
is dependent upon many external factors. Accordingly, the actual financial impact of these risks may materially
vary against the current view of their plausible impact.
Further detail on both macroeconomic related risk is provided in the risk management and internal control
section on pages 64 to 74.
Other specific scenarios covered by our testing were as follows:
– The group is subject to temporary suspension of trade, with a temporary adverse impact on revenue,
for example, as a result of a successful cyber-attack on key business systems
– The downside modelling of a number of risks which result in a decline in earnings, including the loss of
a contractual relationship with a key insurer
– Significant change in government policy resulting in consultants going on payroll
– Short-term disruption to trade at a sub-set of hospitals owing to an extreme weather event
This review included the following key assumptions:
– No change in capital structure given the group has refinanced its existing senior finance facility and
revolving credit facility in February 2022 and exercised the option to extend the senior finance facility for a
further year; and
– The government will not make significant change to its existing policy towards utilising private provision
of healthcare services to supplement the NHS
Revenue recognition
The group derives its revenue primarily from providing private healthcare services to both the public sector
and private patients in the UK. Revenue from charges to patients is recognised when the treatment is provided.
Revenue from contracts with customers
The criteria for revenue recognition are as follows; identify the contract with the customer, identify the
performance obligation, determine the transaction price, allocate the transaction price to the performance
obligations, and satisfying the performance obligation. It applies to all contracts with customers, except those
in the scope of other standards.
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Notes to financial statements continued
2. Accounting policies continued
Revenue from contracts with customers continued
Revenue is recorded as services are transferred to the patient, with the consideration based on the total
amount the group expects to receive, taking account of discounts where they are quantifiable and probable.
Approximately 70% of the group’s revenue is derived from inpatient and daycase admissions. Revenue is
recognised day by day, as services are provided to patients. These services are typically provided over a short
time frame, that is, one to three days. Outpatient cases and other revenue represent approximately 30% of the
group’s revenue. Outpatient cases generally do not involve surgical procedures and revenue is recognised on
an individual component basis when performance obligations are satisfied. Similarly, other revenue, which
includes consultant revenue, and other third-party revenue streams, is recognised when performance
continued obligations are satisfied and the control of goods or services is transferred.
The group reports disaggregated revenue by material revenue stream (ie type of payor: PMI, NHS and self-pay)
and other revenue which includes consultant revenue, third-party revenue streams (eg pathology
services), ‘commissioning for quality and innovation payments’ (CQUIN) and rehabilitation, counselling and
physiotherapy revenue. Material revenue streams are consistent in nature, being the consideration received in
return for the provision of healthcare services to patients. The timing and uncertainty of cash flows is similar
for PMI and NHS business while self-pay revenue is received in advance or collected by credit card shortly after
treatment. In addition, where possible and meaningful, Spire Healthcare reports revenue split between
inpatient/daycase, outpatient and other. As noted above, in all cases, revenue is recognised as performance
obligations are completed in the form of services being provided to patients. Unbilled revenue is accrued at
period ends. Invoices for the combination of services provided to patients are generally produced within three
days of discharge.
As a result of the in-year acquisition other revenue for 2023 includes rehabilitation, counselling and
physiotherapy revenue which is recognised over the period to which it relates. The majority of the revenue is
received under multi-year contracts spread over the term of the contract.
Interest income
Interest is recognised on an effective interest rate basis.
Cost of sales
Cost of sales principally comprises salaries of clinical staff, consultant and clinical fees, medical services and
inventories, including drugs, consumables and prostheses.
Other operating costs
Other operating costs mainly comprise non-clinical staff costs, rent associated with short or low value leases,
the depreciation of property, plant and equipment and right-of-use assets and the maintenance and running
costs of properties and equipment. It also includes administrative expenses, including the provision of central
support services, IT and other administrative costs.
Other income
Other income comprises fair value movements on the financial asset, a profit share arrangement with Genesis
Care, and recovery of insurance claims.
Operating profit
Operating profit is the profit arising from the normal, recurring operations of the business and after charging
adjusting items, as defined below. Operating profit is adjusted to exclude adjusting items to calculate the Key
Performance Indicator (KPI) ‘Operating profit before adjusting items (adjusted EBIT)’.
Adjusting items
Adjusting items are those items which the directors believe, by virtue of their nature, size or incidence, either
individually or in aggregate, should be disclosed separately to allow a full understanding and comparison of the
underlying performance of the group. Examples of items which may be considered this way in nature include
significant write-downs of goodwill and other assets, restructuring costs relating to strategic review,
impairments, hospital closures and set-up costs, business acquisition costs, medical malpractice provisions,
aborted project costs and compliance set-up costs.
Taxation including deferred taxation
Total income tax on the result for the year comprises current and deferred tax. Income tax is recognised in
the income statement except to the extent that it relates to items recognised directly in equity and other
comprehensive income.
The group has applied the mandatory temporary exemption in IAS 12 Income Taxes to recognising and
disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
Current tax is the expected tax payable on the taxable result for the year, using tax rates enacted, or
substantively enacted, at the balance sheet date, and any adjustments to tax payable in respect
of previous years.
Where there is an uncertain tax position, a provision is recognised when it is not probable that the tax
authority will accept the uncertain tax position, based on either the most likely amount where the range
of results is binary, or as a weighted average of possible outcomes where a range of outcomes is possible.
Deferred tax is provided on all temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes, except for:
Deferred tax is provided on all temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes, except for:
– Goodwill not deductible for tax purposes
– The initial recognition of an asset or liability in a transaction that is not a business combination and which,
at the time of the transaction, affects neither the accounting profit nor the taxable profit or loss and does
not give rise to equal taxable and deductible temporary differences.
– Investments in subsidiary companies where the timing of the reversal of the temporary difference
is controlled by the group and it is probable that the temporary difference will not reverse in the
foreseeable future
It should be noted that the initial recognition exception does not apply to the majority of the group’s freehold
property portfolio as these were acquired through the Bupa and Classics acquisitions in 2007 and 2008, which
were accounted for as a business combination.
The amount of deferred tax recognised is based on the expected manner of realisation or settlement of the
carrying amounts of assets and liabilities, using tax rates enacted, or substantively enacted, at the balance
sheet date. The group offsets deferred tax assets and deferred tax liabilities if, and only if, it has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis,
or to realise the assets and settle the liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or recovered.
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146
Notes to financial statements continued
2. Accounting policies continued
Taxation including deferred taxation continued
In assessing the recoverability of deferred tax assets, the group relies on the same forecast assumptions used
elsewhere in the financial statements and in other management reports, which, among other things, reflect
the potential impact of climate-related development on the business, such as increased costs as a result of
measures to reduce carbon emission.
A deferred tax asset, subject to the offsetting above, is only recognised to the extent that it is probable that
future taxable profits will be available against which the asset can be used.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation. Major projects are treated as
assets in the course of construction until completed when they are transferred to the appropriate asset class.
No depreciation is charged on freehold land or assets in the course of construction. Other assets are depreciated
so as to write off the carrying amounts of the assets, less their estimated residual values, over their expected
useful lives, as follows:
Freehold property and improvements
Leasehold improvements
– 5 to 60 years
– lower of unexpired lease term or expected life, with a maximum
Equipment
of 35 years
– 3 to 10 years
The expected useful lives and residual values of property, plant and equipment are reviewed semi-annually and
revised as appropriate. The review of the asset lives and residual values of properties takes into consideration
the plans of the business and levels of expenditure incurred on an ongoing basis to maintain the properties
in a fit and proper state for their ongoing use as hospitals. In addition, the potential impact of future climate
change is considered. In the case of major facilities opening in new locations, depreciation may be applied
to only those assets available for use at the official opening date to reflect that the site is not always fully
operational at this opening date.
Consolidation
The results of all subsidiary undertakings are included in the consolidated financial statements. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date the group gains control until the date the group ceases
to control the subsidiary.
Control is achieved when the group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the group
controls an investee if, and only if, the group has:
– Power over the investee (ie existing rights that give it the current ability to direct the relevant activities
of the investee)
– Exposure, or rights, to variable returns from its involvement with the investee
– The ability to use its power over the investee to affect its returns
The Employee Benefit Trust (EBT) is treated as an extension of the group and the company.
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of
any non-controlling interests in the acquiree. For each business combination, the group elects whether to
measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the
acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in other
operating costs.
The group determines that it has acquired a business when the acquired set of activities and assets include
an input and a substantive process that together significantly contribute to the ability to create outputs.
The acquired process is considered substantive if it is critical to the ability to continue producing outputs,
and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience
to perform that process or it significantly contributes to the ability to continue producing outputs and is
considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability
to continue producing outputs.
When the group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date.
Goodwill
Goodwill represents the excess of the cost of acquisition (being the fair value of consideration transferred) over
the fair value of the assets, liabilities and contingent liabilities of acquired businesses at the date of acquisition.
Goodwill is stated at cost less accumulated impairment losses.
Goodwill is allocated to one cash-generating unit and is not amortised but is tested annually for
impairment, or more frequently if there is an indication that the value of the goodwill may be impaired
(see impairment policy).
Intangible assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at
cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition
date where it is probable that the expected future economic benefits that are attributable to the asset will
flow to the entity and the fair value of the asset can be measured reliably; the intangible asset is separable or
arises from contractual or other legal rights.
As at 31 December 2023 the intangible assets, other than goodwill are assessed to have finite lives.
Amortisation is recognised so as to write off the cost or carrying amounts of the assets, less their estimated
residual values, over their expected useful lives, as follows:
Customer contracts
IT projects
Mobilisation costs
– 13 to 15 years
– 20% straight line
– in line with relevant customer contract length which is typically
between 5 to 10 years’
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Notes to financial statements continued
2. Accounting policies continued
Intangible assets other than goodwill continued
The amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the
expense category that is consistent with the function of the intangible assets.
Mobilisation costs
Mobilisation costs within intangible assets have been recognised on acquisition of Vita Health Group Limited
and relate to set-up costs when a new NHS contract is won. These costs are incurred for the benefit of running
the contract over its entire term and are classified as intangible assets as these costs are incremental costs of
obtaining the contract as determined under IFRS 15. The group’s policy is to capitalise these costs and amortise
them over the fixed term of the contract on a straight-line basis.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand and form an integral part of the group’s cash management are included as a component of cash and
cash equivalents for the purpose only of the statement of cash flows. There are no bank overdrafts in either
year presented.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
i) Financial assets other than derivatives
Initial recognition and measurement
Financial assets are classified as financial assets at fair value through profit or loss, amortised cost or fair value
through other comprehensive income (OCI).
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the group’s business model for managing them. With the exception of trade receivables
that do not contain a significant financing component or for which the group has applied the practical expedient,
the group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component
or for which the group has applied the practical expedient are measured at the transaction price determined
under IFRS 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs
to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The group’s business model for managing financial assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.
The company’s financial assets include cash and short-term deposits, trade and other receivables, unbilled
receivables and receivables from profit share arrangements. Unbilled receivables may include contract assets
where the performance obligation has been met, but the invoice not raised due to agreement with the
customer being required in respect of the variable consideration. Unbilled receivables can also include
amounts where the performance obligation has been met, but the invoice not yet raised due to the timing
of the reporting period.
Subsequent measurement
Trade receivables and unbilled receivables are accounted for at amortised cost. The group applies the IFRS 9
simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all
trade receivables. At each reporting period, the group makes an assessment of the asset’s recoverable amount
based on forward-looking information. Losses arising from impairment are recognised in the consolidated
income statement in other operating costs.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. On initial recognition, loans and receivables are measured at fair value plus directly
attributable transaction costs. Subsequently, such assets are measured at amortised cost, using the effective
interest rate (EIR) method, less any allowance for impairment.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included in interest receivable in the consolidated
income statement.
Receivables relating to profit share arrangements are recognised as fair value through profit and loss. At each
reporting period, the assets are revalued, with any movement in fair value being recognised in the consolidated
income statement. Any cash received from profit share arrangements is presented within cash flows from
investing activities within the cash flow statement.
Derecognition
A financial asset is derecognised when the rights to receive cash flows from the asset have expired, or the
group has transferred its rights to receive cash flows from the asset including transferring substantially all
the risks and rewards of the asset.
Impairment
The group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the group expects to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows from
the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For trade receivables and contract assets (including unbilled receivables), the group applies a simplified
approach in calculating ECLs. Therefore, the group does not track changes in credit risk, but instead recognises a
loss allowance based on lifetime ECLs at each reporting date. The group has established a provision matrix that
is based on its historical credit loss experience, adjusted for forward-looking factors specific to the receivables
and the economic environment. To measure the expected credit losses, trade receivables have been grouped
based on shared characteristics and the days past due. The group has concluded that the expected loss rates
for trade receivables, are a reasonable approximation of the loss rates for each ageing bucket based on
historical debt trends of our portfolio of customers for the last two reporting periods, with the exception
of patient debt. Patient debt is more susceptible to the economic environment. As a result, the group have
reviewed the expected loss rates for this payor group, as well as considering forward-looking information
(specifically the cost of living) and increased the loss rates accordingly.
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148
Notes to financial statements continued
2. Accounting policies continued
Financial Instruments continued
ii) Financial liabilities other than derivatives
Financial liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit or
loss, or at amortised cost. The group determines the classification of financial liabilities at initial recognition.
Amounts deferred in equity are recycled in the income statement in the periods when the hedged item is
recognised, in the same line of the income statement as the recognised hedged item. If cash flow hedge
accounting is discontinued, the amount that has been accumulated in the consolidated statement of other
comprehensive income is maintained if the hedged future cash flows are still expected to occur. Otherwise,
the amount is immediately reclassified to profit or loss as a reclassification adjustment.
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, net of directly
attributable transaction costs.
iv) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance
sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
The group’s financial liabilities include trade and other payables, loans and borrowings, and derivative financial
instruments.
Subsequent measurement
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost
using the effective interest rate (EIR) method. Gains and losses arising on the repurchase, settlement or
otherwise cancellation of liabilities are recognised respectively in interest receivable and interest payable in the
consolidated income statement. Amortised cost is calculated by taking in to account any discount or premium
on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance
costs in the consolidated income statement.
Financial liabilities to purchase own equity instruments
Financial agreements entered into with non-controlling interests for the future purchase of the remaining
interest is recognised as a financial liability measured initially at fair value where there is an obligation on the
group to settle a liability. On initial recognition the financial liability is recognised through equity. In subsequent
periods, the liability will be measured at amortised cost with changed in the expected cash flows recognised in
the income statement. Cash flows are discounted using the weighted average cost of debt.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as the derecognition of the original liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the consolidated income statement.
iii) Derivative financial instruments
The group may enter into derivative financial instrument arrangements to manage its exposure to interest
rate risk. Derivatives are initially recognised at fair value on the date on which a derivative contract is entered
into and subsequently remeasured at fair value at each balance sheet date. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative.
The group applies cash flow hedge accounting to such derivatives if the criteria for doing so are met. At the
inception of a hedge relationship, the group formally designates and documents the hedge relationship to
which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking
the hedge.
The effective portion of the changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is
recognised immediately in the income statement. The cash flow hedge reserve is adjusted to the lower of the
cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost means purchase price, less trade
discounts, calculated on an average basis. Net realisable value means estimated selling price less incremental
costs including trade discounts and all costs to be incurred in marketing, selling and distribution.
The group holds consignment stock on sale or return. The group is only required to pay for the equipment
it chooses to use and therefore this stock is not recognised as an asset.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended
use or sale.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
Provisions
A provision is recognised in the consolidated balance sheet when the group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required
to settle the obligation. If the effect is material, provisions are determined by discounting the expected,
risk-adjusted, future cash flows at a pre-tax risk-free rate. Management consider their best estimate of the likely
outcomes of the obligation when determining the recognition. Where a material range of outcomes could arise,
details are disclosed accordingly. Provisions are measured gross of any expected insurance recovery. Any such
insurance recoveries are recognised in other receivables when the receipt of them is judged virtually certain.
Leases
At inception, the group assesses whether a contract is or contains a lease. This assessment involves the exercise
of judgement about whether the group obtains substantially all the economic benefits from the use of that
asset, and whether the group has the right to direct the use of the asset when considering whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. After initial recognition, the lease liability is measured at amortised cost using the effective
interest method. A reassessment of the lease liability occurs when there is a change in lease payments. The
incremental borrowing rate is only revised where the change in payments is a result of a change in floating
interest rates, lease term change or a change in assessment relating to the exercise of purchase option charges.
The group has elected not to separate lease and non-lease components for leases of vehicles or buildings.
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Notes to financial statements continued
2. Accounting policies continued
Leases continued
The group recognises a Right-of-Use (ROU) asset and a lease liability at the commencement of the lease. The
ROU is initially measured based on the present value of lease payments, less any incentives received. Initial
direct costs and costs to dismantle or restore an asset are included. The ROU is depreciated over the shorter
of the lease term or the useful life of the underlying asset. The incremental borrowing rate is used to discount
the assets over the relevant term. The ROU is subject to testing for impairment if there is an indicator
for impairment.
Lease payments generally include fixed payments and variable payments that depend on an index (such as
inflation index) or rate. When the lease contains an extension or purchase option that the group considered
reasonably certain to be exercised, the cost of the option is included in the lease payments. The incremental
borrowing rate is used to discount the lease payments over the term of the lease.
ROU assets are categorised to reflect the nature of the underlying asset and to be consistent with the plant,
property and equipment (PPE) note. The assets are depreciated over the term of the lease, accounting for break
clauses or options to extend in line with the lease liability decision.
ROU assets are disclosed as PPE on the balance sheet (non-current) with a separate disclosure within the
associated note, and the lease liability is included in the headings lease liability (current and non-current)
on the Consolidated balance sheet.
The group has elected not to recognise ROU assets and liabilities for leases where the total lease term is less
than 12 months, or for leases of low value equipment. The payments for such leases are recognised in the
Consolidated income statement on a straight-line basis over the lease term.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
are deducted from share premium. Where the employee benefit trust purchases the company’s equity share
capital, the consideration paid, including any directly attributable incremental costs, is deducted from equity
attributable to the company’s equity holders in both the company and the consolidated balance sheet until
the shares are cancelled or reissued.
Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the group’s financial
statements in the period in which the dividend is approved by the company’s shareholders. Interim dividends
are recognised when paid.
Pensions
The group operates the Spire Healthcare Pension Plan, a defined contribution scheme. The assets of the
scheme are held separately from those of the group in independently administered funds.
Obligations for contributions to defined contribution pension schemes are recognised as an expense in the
income statement as incurred.
Other employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided. A provision is recognised for the amount expected to be paid under short-term cash
bonuses if the group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Share based payments
The group operates a number of equity-settled share-based payment schemes under which the group receives
services from employees as consideration for equity instruments of the group. The fair value of the employee
services received in exchange for the grant of the options is recognised as an expense. The group has estimated
the relevant fair value of the share options and awards, which are subject to total shareholder return (TSR)
market-related performance criteria, using a Monte Carlo simulation model (see Note 27). This applies to LTIP
Awards and Deferred Share Bonus Schemes.
The group also operates a Save-As-You-Earn (SAYE) scheme, which is open to all employees. Employees are
required to save a fixed amount, up to a cap, every month for three years. At the end of the three year period
employees are entitled to use their savings to purchase shares in the company at a stated exercise price.
Employees are free to stop contributing to the scheme and obtain a refund of contributions at any time, but
forfeit their entitlement to exercise the options if they do so. Payment of contributions into a SAYE scheme is
not a vesting condition; it does not meet the definition of a performance condition because it has no link to
service. Failure to meet a non-vesting condition (eg by ceasing to contribute to an SAYE scheme) is accounted
for as a cancellation of the options so that the expense is accelerated and recognised in the income statement,
with a corresponding adjustment to equity as required. The IFRS 2 charge has been calculated using an
adjusted Black Scholes model with judgements including leavers of the scheme (employees who may cease
to save) and dividend yields.
At the end of each year, the group revises its estimates of the number of options that are expected to vest
based on the non-market conditions and recognises the impact of the revision to original estimates, if any,
in the income statement, with a corresponding adjustment to equity.
Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met
only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its
present condition. Management must be committed to the sale, which should be expected to qualify for
recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying
amount and fair value less costs to sell.
Impairment
The group applies its impairment policy to non-financial assets, being intangible assets (goodwill), plant,
property and equipment and right-of-use assets. The group assesses, at each reporting date, whether there
is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing
for an asset is required, the group estimates the asset’s recoverable amount. An asset’s recoverable amount
is the higher of an asset’s or CGU’s fair value less costs of disposal or its value-in-use. The recoverable amounts
is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired, and is written down to its
recoverable amount.
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150
Notes to financial statements continued
2. Accounting policies continued
Impairment continued
In assessing value-in-use, the estimated future cash flows are discounted to their present value using a
discount rate that reflects current market assessments of the time value of money and risks specific to the
asset. As part of this, the group assesses where climate risks could have a significant impact, such as the
introduction of emission-reduction legislation that may increase costs. These risks in relation to climate-related
matters are included as key assumptions where they materially impact the measure of recoverable amount.
The group bases its impairment calculation on most recent budgets and forecast calculations, which are
prepared for each CGU. The forecasts generally cover a five-year period. A long-term growth rate is calculated
and applies to project future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in the consolidated income statement in other
operating costs. Impairment is likely to be considered an Adjusting item.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an
indication that previously recognised impairment losses no longer exist or have decreased. If such indication
exists, the group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such
reversal is recognised in the statement of profit or loss.
Goodwill is tested for impairment annually as at 31 December and when circumstances indicate that the
carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs)
to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an
impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.
Intangible assets with indefinite useful lives are tested for impairment annually as at 31 December at the
CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
Changes in accounting policy and estimates
New standards, interpretations and amendments applied
The following amendments to existing standards were effective for the group from 1 January 2023. Other than
some additional disclosures, these amendments have not had a material impact.
Effective date*
Amendments to IAS 8 – Definition of accounting estimates
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
Amendments to IAS 12 – Deferred tax related to assets and liabilities arising from a single
transaction
Amendments to IAS 12 – International Tax Reform—Pillar Two Model Rules
IFRS 17 – Insurance contracts
* The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations that are consistent with the
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
endorsement process for use in the UK.
New standards, interpretations and amendments in issue, but not yet effective
As at date of approval of the group financial statements, the following new and amended standards,
interpretations and amendments in issue are applicable to the group but not yet effective and thus, have not
been applied by the group:
Amendments to IAS 1 – Classification of liabilities as current or non-current
Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements
Amendments to IFRS 16 – Lease Liability in a sale and leaseback
Amendments to IAS 21 – Lack of exchangeability
* The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations. As the group prepares its
financial statements in accordance with IFRS as issued by the IASB as endorsed by the UK, the application of new standards and
interpretations will result in an effective date subject to that agreed by the UK Endorsement process.
1 January 2024
1 January 2024
1 January 2024
1 January 2025
Effective date*
3. Critical accounting judgements and estimates
In the application of the group’s accounting policies, the directors are required to make judgements and
estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
Judgements
Adjusting items
Judgements are required as to whether items that are material in size, unusual or infrequent in nature should
be disclosed as adjusting items. Deciding which items meet the respective definitions requires the group to
exercise its judgement. Details of these items categorised as adjusting items are outlined in Note 10.
Leases
The application of IFRS 16 requires the group to make certain judgements which affect the value of the ROU
asset and lease liability, and these include: determining contracts in the scope of IFRS 16 and the contract term.
The lease term is determined by the group and includes the non-cancellable period of lease contracts, periods
covered by an option to extend the lease if the group is reasonably certain to exercise that option and period
covered by an option to terminate the lease if the group is reasonably certain not to exercise that option. The
group reviews the business plan, investment in leasehold improvements and market conditions when
considering the certainty of options to extend or terminate. For lease contracts with an indefinite term, the
group determines the length of the contract to be equal to the average or typical market contract term of the
particular type of lease. The same life is then applied to determine the depreciation rate of ROU assets.
Significant accounting estimates
The preparation of the group’s consolidated financial statements includes the use of estimates and
assumptions. The significant accounting estimates with a significant risk of a material change to the carrying
value of assets and liabilities within the next year in terms of IAS 1, ‘Presentation of Financial Statements’, are:
Identified intangible assets in a business combination
Estimation is required in determining the fair value of assets and liabilities acquired in a business combination.
In determining the fair value of intangible assets, being customer contracts, management have obtained an
external valuation and made judgements in relation to the nature of the contracts, future expected cash flows
related to current contracts, rate of customer contract renewal, estimated useful life of the contract and an
appropriate discount rate for the acquiree.
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151
Notes to financial statements continued
3. Critical accounting judgements and estimates continued
Significant accounting estimates continued
Goodwill
Goodwill is tested for impairment at least annually or more frequently if there is an indication that goodwill
may be impaired. This is achieved by comparing the carrying value in the accounts with the recoverable
amount (being the value-in-use), as set out in the impairment policy. The value-in-use calculations require
the group to estimate future cash flows expected to arise in the future, taking into account market conditions.
The current value of goodwill is underpinned by these forecasts. The present value of these cash flows is
determined using an appropriate discount rate.
Provisions for medical malpractice
In response to the publication of the Public Inquiry report on Paterson on 4 February 2020 the group
established a provision in respect of the implementation of the recommendations, which included a detailed
patient review and support for patients. The provision is utilised for patient claim settlements. The variables
include the number of patients which are found to have been harmed following review, the level of harm, and
the associated compensation claim. The project is complex and the process for review and settlement takes
time. It is possible that, as further information becomes available, an adjustment to this provision will be
required, but at this time, it reflects management’s best estimate of the costs and settlement of claims. This
provision remains subject to ongoing review.
The assumptions are considered to be most critical in reviewing goodwill for impairment are contained
in Note 14.
Details of the provision can be found in Note 24.
Property impairment
Property, including property ROU assets, is considered for indicators of impairment at each reporting date, or
earlier if a trigger indicates, as set out in the impairment policy. The recoverable amount, being the value-in-use,
requires the group to estimate cash flows expected to arise in the future, taking into account market
conditions. The variables in the cash flows are interdependent and reflect management’s expectations based
on past experience and current market trends, it takes into account both current business and committed
initiatives. The present value of these cash flows is determined using an appropriate discount rate.
The assumptions are considered to be most critical in reviewing properties for impairment are contained
in Note 13.
Other areas of accounting estimates
The consolidated financial statements include other areas of judgement and accounting estimates. While
these areas do not meet the definition under IAS 1 of significant accounting estimates and critical accounting
judgements, the recognition and measurement of certain material assets and liabilities are based on
assumptions and/or are subject to longer-term uncertainties. The other areas of accounting estimates
and judgement are:
Leases
The present value of the lease payment is determined using the discount factor (incremental borrowing rate)
which is based on a risk free UK gilt rate plus an applicable credit spread or margin to reflect the credit standing
of the group observed in the period when the lease contract commences or is modified. The incremental
borrowing rate applied reflects a rate for a similar term and security to that of the lease and is determined
at inception.
Details of incremental borrowing rates can be found in Note 22.
Expected credit losses
The group has not changed the methodology in respect of the expected credit loss (ECL) calculations. The
group’s customer profile includes large organisations that have stable credit ratings, and the payment profiles
have remained stable for historical debts. The exception to this is patient debt where economic circumstances
can have a significant impact and, given the current economic uncertainty, remains the highest risk for the
group. The ECL as at December 2023 is £5.5 million (December 2022: £5.0 million). See Note 18.
Climate-related risk and opportunities on the financial statements
To date, the board has not identified any climate-related risks or opportunities that would have a material
impact on the assets or liabilities of the group, and therefore has not adjusted financial balances for climate-
related risks or opportunities.
4. Auditor’s remuneration
During the year, the group (including its subsidiary undertakings) obtained the following services from the
group’s external auditor as detailed below:
(£m)
Audit of these financial statements
Audit of the financial statements of subsidiaries of the company pursuant to
legislation
Audit-related assurance services
Total
2023
1.2
0.3
0.1
1.6
2022
1.0
0.3
0.1
1.4
5. Segmental reporting
In determining the group’s operating segment, management has primarily considered the financial information
in internal reports that are reviewed and used by the executive management team and board of directors
(who together are the chief operating decision maker of Spire Healthcare) in assessing performance and in
determining the allocation of resources. The financial information in those internal reports in respect of
revenue and expenses has led management to conclude that the group has a single operating segment,
being the provision of healthcare services. All revenue is attributable to, and all non-current assets are located
in, the United Kingdom.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
152
Notes to financial statements continued
5. Segmental reporting continued
Revenue by location (inpatient, daycase or out-patient) and wider customer (payor) group is shown below:
7. Operating profit
Arrived at after charging/(crediting):
(£m)
Inpatient
Daycase
Out-patient
Other1
Total revenue
Insured
Self-pay
NHS
Other1
Total revenue
2023
535.5
399.9
365.4
58.2
1,359.0
615.7
344.0
341.1
58.2
1,359.0
2022
487.5
348.0
333.1
29.9
1,198.5
538.7
338.0
295.4
26.4
1,198.5
1. Other revenue includes fees paid to the group by consultants (eg for the use of group facilities and services), third-party revenue (eg
pathology services to third parties) and rehabilitation, counselling and physiotherapy revenue from the recent VHG acquisition.
Group revenues increased 13.4% to £1,359.0 million (2022: £1,198.5 million). The increase is driven by demand
for private healthcare which remained strong throughout the year. The group’s self-pay business remained
robust with revenue up year-on-year delivered through a strong focus on mix, where it targeted more complex,
higher margin treatments in orthopaedics, while scaling back in high volume but low value areas such as
ophthalmology and cosmetics. Included in other revenue is £31.4 million related to new services of which
£18.3 million of revenue relates to our recent acquisition of Vita Health Group and £13.1 million (2022: £0.1
million) relates to The Doctors Clinic Group acquired in the prior year. Revenue from new services were not
material in FY23. From FY24, new services will be presented separately.
6. Other income
(£m)
Fair value movement on financial asset
Realised profit in respect of financial asset
Settlement from an insurer (adjusting items)
Total other income
2023
2.8
0.8
2.5
6.1
2022
2.3
0.7
–
3.0
The fair value movement and realised profit in respect of the financial asset reflect the on-going profit share
arrangement with Genesis Care which arose as part of the sale of the Bristol Cancer Centre sold in 2019.
(£m)
Depreciation of property, plant and equipment (see Note 13)
Depreciation of right-of-use assets (see Note 13)
Amortisation of intangible assets
Acquisition-related transaction costs (adjusting Item) (see Note 10)
Lease payments made in respect of low value and short leases
Provision following a court judgement related to Ian Paterson (adjusting Item)
(see Note 10)
Impairment on assets held for sale (see Note 20)
Movement on the provision for expected credit losses of trade receivables
(see Note 18)
(Profit) / loss on disposal of property, plant and equipment
Fair value adjustment on financial liability
Staff restructuring costs (see Notes 9)
Staff costs (net of staff restructuring costs and including share-based payment
charge) (see Note 9 and 27)
Inventory recognised as an expense in the current year is disclosed in Note 17.
8. Finance income and costs
(£m)
Finance income
Interest income on bank deposits
Total finance income
Finance cost
Interest on bank facilities
Refinancing fees
Amortisation of fee arising on facilities extensions/borrowing costs1
Accelerated amortisation and loss on extinguishment of loan1
Interest on obligations under leases
Total finance costs
Total net finance costs
2023
65.5
37.5
0.6
2.5
18.6
2.5
–
0.5
(0.3)
–
2.0
2022
64.2
33.7
–
1.8
13.6
0.3
0.5
0.9
0.3
0.8
4.5
475.2
413.9
2023
2022
1.4
1.4
18.5
–
1.5
–
73.0
93.0
91.6
–
–
12.4
1.0
1.5
3.1
73.5
91.5
91.5
1. £5.0 million of borrowing costs were capitalised on the refinancing of the senior facility, these are being amortised. In the prior year
£3.1 million of unamortised fees on the old facility were charged to the profit and loss in the year on the extinguishment of the old
facility.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 153
Notes to financial statements continued
9. Staff costs
(No.)
The average number of persons employed by the group (including directors) during
the year:
Clinical
Non-clinical
Central
Total
(No.)
The average number of full-time equivalent persons employed by the group during
the year:
Clinical
Non-clinical
Central
Total
The aggregate payroll costs of these persons were as follows:
(£m)
Wages and salaries
Social security costs
Pension costs, defined contribution scheme
Aggregate payroll costs excluding share based payments
Share based payment charge
Aggregate payroll costs
2023
2022
7,455
5,514
776
13,745
7,388
5,227
614
13,229
2023
2022
5,831
4,349
695
10,875
2023
398.7
38.9
35.9
473.5
3.7
477.2
5,539
4,017
538
10,094
2022
348.0
34.7
33.4
416.1
2.3
418.4
Adjusting items comprise those matters where the directors believe the financial effect should be adjusted for,
due to their nature, size or incidence, in order to provide a more accurate comparison of the group’s underlying
performance.
Asset acquisitions, disposals, impairment and aborted project costs of £3.1m mainly relate to asset
acquisitions. In October 2023, the group acquired 100% of the share capital in Vita Health Group Limited for
£83.0 million as part of its strategic investment in its broader healthcare offering. The costs of acquisition of
£2.5 million have been incurred in the period. Costs for integration are expected to continue into FY24. £0.4
million of integration related costs have been incurred following the acquisition of The Doctors Clinic Group in
December 2022.
In the prior year, the costs mainly related to Claremont Hospital and the purchase of the remaining non-
controlling interest, and an impairment of £0.5 million was recognised on the St Saviours property which was
sold in H2 2022.
During H2 21, the group announced a strategic, group-wide initiative that impacts the operating model of the
group to allow a more efficient governance and reporting structure, as well as a drive on digital functionality.
This initiative will be implemented over several phases. In the period, £2.0 million (2022: £4.5 million) has been
incurred. The initial phase of the initiative was completed in 2022, with the majority of the project completed
in 2023. It is expected that some costs will be incurred in 2024 as the project enters into the next strategic
phase.
The group has recognised a credit of £0.9 million during the year in respect of Remediation of Regulatory
Compliance or Malpractice Costs relating to Paterson. This comprises £2.5 million funds received from its
insurer and £0.9 million reduction in provision which had been held to resolve the matter. This is offset by an
increased separate provision in respect of Paterson by £2.5 million (2022: £0.9 million), which relates to a
detailed patient review initiative which commenced in 2021, supporting patients of Paterson. During 2023 the
group has re-evaluated the expected cost of completing this complex project, and its associated settlement of
patient claims.
Hospital set-up and closure costs mainly relate to the maintenance costs of non-operational sites.
There were £1.6 million wages and salaries and social security costs for year ended 31 December 2023 in
Adjusting items (2022: £4.7 million) of which £1.0 million relate to business restructuring costs and which
are included in staff costs (2022: £4.5 million), and are set out in Note 7.
Pension costs are in respect of the defined contribution scheme; unpaid contributions at 31 December 2022
were £3.7 million (2022: £2.7 million).
10. Adjusting items
(£m)
Asset acquisitions, disposals, impairment and aborted project costs
Business reorganisation and corporate restructuring costs
Remediation of regulatory compliance or malpractice costs
Hospital set up and closure costs
Total pre-tax adjusting items
Income tax credit on adjusting items
Total post-tax adjusting items
2023
3.1
2.0
(0.9)
–
4.2
0.3
4.5
2022
4.3
4.5
1.1
0.3
10.2
(1.8)
8.4
11. Taxation
(£m)
Current tax
UK corporation tax expense
Adjustments in respect of prior years
Total current tax credit
Deferred tax
Origination and reversal of temporary differences
Adjustments in respect of prior years
Total deferred tax charge/(credit)
Total tax charge/(credit)
2023
2022
0.9
(1.3)
(0.4)
10.0
(2.9)
7.1
6.7
0.1
(0.7)
(0.6)
(2.6)
(1.1)
(3.7)
(4.3)
In addition to the above, a credit of £0.9 million has been recognised in Other Comprehensive income
(2022: £2.1 million charge) and £0.3 million credit (2022: £0.1 million charge) through equity. The £0.3 million
credit through equity relates to movements on share-based payments, and reflects a £0.5 million deferred tax
charge, offset by a current tax credit of £0.8 million.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 154
Notes to financial statements continued
11. Taxation continued
Corporation tax is calculated at 23.5% (2022: 19.0%) of the estimated taxable profit or loss for the year. The
effective tax rate on profit before taxation for the year is 19.4%, although not truly reflective of the current
year position as a result of adjustments to the prior years (2022: not meaningful as a result of adjustments in
respect of prior years and movements on deferred tax which are not directly linked to profit). Excluding the
adjustments to prior years in 2023, the effective tax rate is 31.5%. The adjustments to prior years includes the
recognition of a deferred tax asset in respect of Corporate Interest restrictions which has recognised a credit of
£3.3 million for deferred tax purposes, as well as the recognition of deferred tax on acquired losses of £1.9
million in respect of an acquisition. In the prior year, the group reassessed the useful life and residual value of
its freehold property portfolio. This resulted in a one-off deferred tax credit of £9.0 million. Deferred tax is
detailed in Note 23.
The effective tax assessed for the year, all of which arises in the UK, differs from the standard weighted rate
of corporation tax in the UK. The reconciliation of the actual tax charge to that at the domestic corporation tax
rate is as follows:
This assessment is based on the most recent information available regarding the financial performance of the
constituent entities in the group. Based on the assessment performed, Pillar Two effective tax rates in the UK,
being the only jurisdiction in which the group operates, has been above 15% in the current and previous
financial years, and management is not currently aware of any circumstances under which this might change.
Therefore, the group does not expect a potential exposure to Pillar Two top-up taxes.
12. Earnings per share (EPS)
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares outstanding during the year.
Profit for the year attributable to ordinary equity holders of the parent (£m)
Weighted average number of ordinary shares for basic EPS (No.)
Adjustment for weighted average number of shares held in EBT
Weighted average number of ordinary shares in issue (No.)
Basic earnings per share (in pence per share)
2023
27.3
404,117,249
(468,363)
403,648,886
6.8
2022
8.6
402,756,797
(77,501)
402,679,296
2.1
(£m)
Profit before taxation
Tax at the standard rate
Effects of:
Expenses and income not deductible or taxable
Tax adjustment for the super-deduction allowance
Impairment charge in respect of held for sale assets (not tax deductible)
One-off impact of revision to useful economic life and residual value of freehold
property portfolio (deferred tax)
Reallocation to equity
Adjustments to prior year
Difference in tax rates
Deferred tax not previously recognised
Total tax charge/(credit)
2023
34.6
8.1
3.2
(0.8)
–
–
–
(4.2)
0.2
0.2
6.7
2022
3.9
0.7
8.2
(2.6)
0.1
(9.0)
–
(1.8)
0.1
–
(4.3)
Expenses and income not deductible or taxable relate mostly to depreciation on non-qualifying fixed assets,
disallowable entertaining and legal and professional fees.
The current year and prior year charges are driven by expenses not deductible for tax purposes, offset by
adjustments to prior year and the claim of the super deduction for capital allowance purposes.
The group does not hold any uncertain tax positions under IFRIC 23 at the year-end (2022: none).
Pillar Two legislation, reflecting the OECDs Base Erosion Profit Shifting (‘BEPs’) framework, seeks to enforce a
minimum tax rate on large and multinational groups in each jurisdiction in which it operates. This legislation
has been enacted or substantively enacted in the UK, being the only jurisdiction in which the group operates.
The legislation will be effective for the group’s financial year beginning 1 January 2024. The group has
performed an assessment of the group’s potential exposure to Pillar Two income taxes.
For dilutive EPS, the weighted average number of ordinary shares in issue is adjusted to include all dilutive
potential ordinary shares arising from share options. Refer to the remuneration committee report for the
terms and conditions of instruments generating potential ordinary shares that affect the measurement
of diluted EPS.
Profit for the year attributable to ordinary equity holders of the parent (£m)
Weighted average number of ordinary shares in issue (No.)
Adjustment for weighted average number of contingently issuable shares
Diluted weighted average number of ordinary shares in issue (No.)
Diluted earnings per share (in pence per share)
2023
27.3
403,648,886
9,494,645
413,143,531
6.6
2022
8.6
402,679,296
9,363,470
412,042,766
2.1
The directors believe that EPS excluding adjusting items (adjusted EPS) better reflects the underlying
performance of the business and assists in providing a clearer view of the performance of the group.
Reconciliation of profit after taxation to profit after taxation excluding adjusting items (adjusted profit):
Profit for the year attributable to owners of the parent (£m)
Adjusting items (see Note 10)
Adjusted profit (£m)
Weighted average number of Ordinary Shares in issue
Weighted average number of dilutive Ordinary Shares
Adjusted basic earnings per share (in pence per share)
Adjusted diluted earnings per share (in pence per share)
2023
27.3
4.5
31.8
403,648,886
413,143,531
7.9
7.7
2022
8.6
8.4
17.0
402,679,296
412,042,766
4.2
4.1
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
155
Notes to financial statements continued
13. Property, plant and equipment
(£m)
Cost:
At 1 January 2022
Additions
Acquisition of a subsidiary (Note 32)
Additions to ROU assets
Adjustments to existing assets
(eg indexation)
Disposals
Transfers
At 1 January 2023
Additions
Acquisition of a subsidiary (Note 32)
Additions to ROU assets
Adjustments to existing assets
(eg indexation)
Disposals
Transfer
At 31 December 2023
Accumulated depreciation and
impairment:
At 1 January 2022
Charge for the year
Disposals
At 1 January 2023
Charge for the year
Disposals
Transfers
At 31 December 2023
Net book value:
At 31 December 2023
At 31 December 2022
Freehold
property
Leasehold
improvements
Equipment
Assets in the
course of
construction
Right-of-use
(ROU)
177.7
6.4
–
–
–
(3.7)
–
180.4
12.1
–
–
–
(2.4)
13.3
203.4
54.4
9.3
(3.6)
60.1
9.8
(2.4)
–
67.5
480.6
55.9
0.6
–
–
(71.8)
(10.0)
455.3
42.3
1.3
–
–
(21.6)
9.9
487.2
320.8
42.6
(71.6)
291.8
43.5
(21.6)
0.2
313.9
10.9
19.3
–
–
–
–
–
30.2
22.3
–
–
–
(0.4)
(26.9)
25.2
–
–
–
–
–
–
–
–
825.9
–
–
4.9
34.0
(0.9)
10.0
873.9
–
1.3
14.7
36.7
(0.1)
–
926.5
222.7
33.7
(0.9)
255.5
37.5
(0.1)
–
292.9
Total
2,340.4
90.1
0.6
4.9
34.0
(80.0)
–
2,390.0
83.9
2.6
14.7
36.7
(25.2)
–
2,502.7
786.9
97.9
(79.2)
805.6
103.0
(24.7)
–
883.9
135.9
120.3
173.3
163.5
25.2
30.2
633.6
618.4
1,618.8
1,584.4
845.3
8.5
–
–
–
(3.6)
–
850.2
7.2
–
–
–
(0.7)
3.7
860.4
189.0
12.3
(3.1)
198.2
12.2
(0.6)
(0.2)
209.6
650.8
652.0
The net book value of land is £156.3 million (2022: £156.3 million). Nine of the group’s freehold properties are
pledged as security against the senior finance facility, the net book value of these properties are £124 million
(2022: £157.6 million). There were no borrowing costs capitalised during the year ended 31 December 2023
(2022: Nil).
Impairment testing
The directors consider property and property right-of-use assets for indicators of impairment semi-annually.
As equipment and leasehold improvements do not generate independent cash flows, they are considered
alongside the property as a single cash-generating unit (CGU). When making the assessment, the value-in-use
of the property is compared with its carrying value in the accounts. Where headroom is significant, no further
work is undertaken. Where headroom is minimal, a detailed assessment is performed for the property, which
includes identifying the factors resulting in limited headroom and undertaking financial forecasts to assess the
level of sensitivity this has to key assumptions.
In order to estimate the value-in-use, management has used trading projections covering the period to
December 2028 from the most recent board approved strategic plan. The variables in the cash flows are
interdependent and reflect management’s expectations based on past experience and current market trends,
it takes into account both current business and committed initiatives. To the extent that there was a shortfall
between the recent actual cash flows and forecast, the future cash flows have been adjusted to reflect any
initiatives implemented by management to address the underlying cause. In addition, management consider
the potential financial impact from short-term climate change scenarios, and the cost of initiatives that have
substantially commenced by the group to manage the longer-term climate impacts.
Key assumptions
Management identified a number of key assumptions relevant to the value-in-use calculations, being EBITDA
growth over the five-year period, capital maintenance spend, discount rates and long-term growth rates. The
assumptions are based on past experience and external sources of information.
There was one property triggered for detailed review in the period owing to the relatively lower level of
headroom. Management has performed a sensitivity analysis on these properties using reasonably possible
changes for each key assumption, keeping all other assumptions constant. The sensitivity analysis included
an assessment of the break-even point for each of the key assumptions.
The trading projections for the five-year period underlying the value-in-use reflect a growth in EBITDA. EBITDA
is based on a number of elements of the operating model over the longer term, including pricing trends,
volume growth and the mix and complexity of procedures and assumptions regarding cost inflation.
The property triggered for detail review has headroom (amount that recoverable amount exceeded the
carrying amount) of £3.9 million. The sensitivity analysis identified that a reasonably possible change in the
EBITDA growth over the five year period for the triggered property, would result in the elimination of
headroom. The average annual EBITDA growth over the five years is 8.8%. The annual EBITDA over the five year
period would have to decrease by 16.0% per annum to eliminate the headroom.
During the year the group moved to a post IFRS 16 discount rate, the group has used a pre-tax discount rate of
11.5% (2022: 10.6% adjusted for the effect of IFRS 16). A long-term growth rate of 2.0% has been applied to
cash flows beyond 2028 based on a long-term view of inflation, revenue growth and market conditions. Capital
maintenance spend is based on historic run rates and our expectations of the group’s requirements. The
sensitivity testing identified no reasonably possible changes in the discount rate, capital maintenance and
long-term growth rates that would cause the carrying amount of any CGU to exceed its recoverable amount.
As a result, management believe that some of the key impairment review assumptions constitute a major
source of estimation uncertainty as they consider that there is a significant risk of a material change to its
estimate of these assumptions within the next 12 months.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 156
Notes to financial statements continued
13. Property, plant and equipment continued
Right-of-use (ROU) assets
(£m)
Cost:
At 1 January 2022
New leases entered
Adjustments to existing assets (eg indexation)
Disposals
Transfers
At 1 January 2023
New leases entered
Acquisition of a subsidiary (Note 32)
Adjustments to existing assets (eg indexation)
Disposals
At 31 December 2023
Accumulated depreciation and impairment:
At 1 January 2022
Charge for year
Disposals
At 1 January 2023
Charge for the year
Disposals
At 31 December 2023
Net book value:
At 31 December 2023
At 31 December 2022
Leasehold
property
Equipment and
motor vehicles
815.5
0.4
34.0
(0.1)
–
849.8
4.3
1.3
36.7
–
892.1
218.2
29.9
(0.1)
248.0
31.8
–
279.8
612.3
601.8
10.4
4.5
–
(0.8)
10.0
24.1
10.4
–
–
(0.1)
34.4
4.5
3.8
(0.8)
7.5
5.7
(0.1)
13.1
21.3
16.6
Total
825.9
4.9
34.0
(0.9)
10.0
873.9
14.7
1.3
36.7
(0.1)
926.5
222.7
33.7
(0.9)
255.5
37.5
(0.1)
292.9
633.6
618.4
14. Intangible assets
(£m)
Cost or valuation:
At 1 January 2022
Acquisition of a subsidiary
Adjustment to prior year goodwill
acquired
At 31 December 2022
Acquisition of a subsidiary
Additions
At 31 December 2023
Impairment:
At 1 January 2022 and 31 December
2022
Amortisation charge during the year
At 31 December 2023
Carrying amount:
At 31 December 2023
At 31 December 2022
Goodwill
Customer
contracts
IT projects
Mobilisation
costs
535.8
11.1
(0.1)
546.8
65.3
–
612.1
201.0
–
201.0
411.1
345.8
–
–
–
–
20.6
–
20.6
–
0.2
0.2
20.4
–
–
–
–
–
4.3
0.3
4.6
–
0.3
0.3
4.3
–
–
–
–
–
2.4
0.2
2.6
–
0.1
0.1
2.5
–
Total
535.8
11.1
(0.1)
546.8
92.6
0.5
639.9
201.0
0.6
201.6
438.3
345.8
Acquisition during the year
On 18 October 2023, the group acquired 100% of the voting shares of Vita Health Group, a non-listed company
based in England who are a provider of mental and physical health services in the UK, for a net cash
consideration of £73.2 million generating goodwill of £65.3 million. On acquisition the group acquired £27.3
million of other intangible assets relating to IT projects, mobilisation costs related to NHS contracts and
customer relationship contracts. In determining the fair value of intangible assets acquired in line with IFRS 3
the group obtained an independent valuation of customer contracts relating to NHS and corporate contracts
and recognised acquired intangibles of £20.1 million.
Impairment testing
The directors treat the hospital business and The Doctors Clinic Group as separate cash-generating units for
the purposes of testing goodwill for impairment as the goodwill can be reliably allocated. The goodwill
recognised for the VHG acquisition has not yet been allocated as the initial accounting is not yet complete. The
recoverable amount of goodwill is calculated by reference to its estimated value-in-use. In order to estimate
the value-in-use, management has used trading projections covering the period to December 2028 from the
most recent board-approved strategic plan. The variables in the cash flows are interdependent and reflect
management’s expectations based on past experience and current market trends, it takes into account both
current business and committed initiatives. In addition, management consider the potential financial impact
from short-term climate change scenarios, and the cost of initiatives by the group to manage the longer-term
climate impacts.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 157
Notes to financial statements continued
14. Intangible assets continued
Key assumptions
Management identified a number of key assumptions relevant to the value-in-use calculations, being EBITDA
growth over the five-year period, capital maintenance spend, discount rates and long-term growth rates. The
assumptions are based on past experience and external sources of information.
Management has performed a sensitivity analysis using reasonably possible changes for each key assumption,
keeping all other assumptions constant. The sensitivity analysis included an assessment of the break-even
point for each of the key assumptions.
The table below provides the headroom and the reasonably possible change identified in the sensitivity
analysis mentioned above which would result in the elimination of headroom.
The group has recognised a financial asset in respect of this gross profit share and the asset is classed as a fair
value through profit and loss asset. The financial asset is valued using the expected present value technique –
method 2 in determining the fair value. Management uses forward looking and historical trends of gross
profits, growth rate, risk premium and an appropriate discount rate to determine the fair value. At the
inception of the transaction we applied a risk premium to the fair value of the asset reflecting the fact that it
was a new venture and so any future forecasted cashflows contained an element of uncertainty. This risk
premium has been reduced over time and reflects our growing confidence in the operation’s ability to hit its
future forecasts. Sensitivities are also taken into account when reviewing the fair value.
This valuation is reviewed at each reporting date, with movements in fair value being recognised through the
consolidated income statement. Cash received is adjusted against the financial asset, and is included within
cash flows from investing activities on the consolidated statement of cash flows.
Hospital business
The Doctors Clinic Group (“DCG”)
Headroom
Average EBITDA growth
Sensitivity for decrease of
£m
793.7
7.2
over the five year period
9.0%
87.9%
EBITDA per annum
23.2%
30.3%
(£m)
Valuation at 1 January
Cash receipt
Fair value adjustments
Carrying amount at 31 December (Note 30)
2023
4.6
(0.8)
3.7
7.5
2022
2.3
(0.7)
3.0
4.6
The trading projections for the five-year period underlying the value-in-use reflect a growth in EBITDA. EBITDA
is dependent on a number of elements of the operating model over the longer term, including pricing trends,
volume growth and the mix and complexity of procedures and assumptions regarding cost inflation. During
the year DCG made a small loss owing to the effect of integration costs, one off investments in new clinics and
a planned delay in the offer of in-house laboratory services. This is now rolling out and 2024 is expected to see
a return to profitability, which is factored into the growth in EBITDA.
Management completes relevant sensitivities on the inputs when assessing the fair value.
With all other inputs remaining constant:
– A 1.2% increase (decrease) in the discount rate used, would see a decrease (increase) in fair value of £0.8
million (£0.6 million) (2022: 1.2% increase (decrease) £0.6 million (£0.3 million))
During the year the group moved to a post IFRS 16 discount rate, and has used a pre-tax discount of 11.5%
(2022: 10.6% adjusted for the effect of IFRS 16).
– A 20% increase (decrease) in the forecast annual cash flow of £0.16 million (2022: £0.14 million), would see
an increase (decrease) in fair value of £1.4 million (£1.4 million) (2022: £0.6 million (£1.1 million))
A long-term growth rate of 2.0% has been applied to cash flows beyond 2028 based on long-term view of
inflation and market conditions. Capital maintenance spend is based on historic run rates and our expectation
of the group’s requirements. The sensitivity testing identified no reasonably possible changes in the capital
maintenance and long-term growth rates that would cause the carrying amount of any CGU to exceed its
recoverable amount.
As a result, management believe that some of the key impairment review assumptions constitute a major
source of estimation uncertainty as they consider that there is a significant risk of a material change to its
estimate of these assumptions within the next 12 months.
15. Financial assets
Financial assets consist of a £7.5 million (2022:£4.6 million) profit share arrangement and a prepayment of the
Montefiore option to purchase the remaining 25% interest £2.5 million (2022:nil). Refer to Note 32 for further
information relating to the non-controlling interest option.
On 31 October 2019, the group entered into a profit share arrangement with Genesis Care. The agreement
provides the group with an entitlement to a gross profit share relating to the chemotherapy business
transferred to Genesis Care as part of the sale of the Bristol Cancer Centre in perpetuity. Under the agreement
after the ten-year anniversary of the agreement the buyer (Genesis Care) may exit the arrangement by serving
notice and paying a multiple of ten times the Gross Margin in the preceding 12 months.
16. Subsidiary undertakings and non-controlling interest
As at 31 December 2023, these consolidated financial statements of the group comprise the company and the
following companies, most of which are incorporated in, and whose operations are conducted in, the United
Kingdom. All subsidiaries are 100% owned unless otherwise indicated.
Incorporated in England and Wales and registered at 3 Dorset Rise, London, EC4Y 8EN,
unless otherwise stated
Claremont Hospital Holdings Limited
Claremont Hospital LLP!^
Classic Hospitals Group Limited#
Classic Hospitals Limited#
Classic Hospitals Property Limited
Didsbury MSK Limited°
Fox Healthcare Acquisitions Limited
Lifescan Limited#
Maitland Medical Service Limited
Medicainsure Limited
Montefiore House Limited+
SHC Holdings Limited^
Soma Health Limited
Spire Cambridge (Disposal) Limited#
Principal activity
Holding company
Health provision
Holding company
Non-trading company
Property company
Health provision
Leasing company
Non-trading company
Health provision
Non-trading company
Health provision
Holding company
Health provision
Non-trading company
Class of share
Ordinary
N/A
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
158
Notes to financial statements continued
16. Subsidiary undertakings and non-controlling interest continued
Incorporated in England and Wales and registered at 3 Dorset Rise, London, EC4Y 8EN,
unless otherwise stated
Spire Fertility (Disposal) Limited#
Principal activity
Non-trading company
Class of share
Ordinary
Spire Healthcare (Holdings) Limited
Spire Healthcare Finance Limited*
Spire Healthcare Holdings 1&#
Spire Healthcare Property Developments Limited
Spire Healthcare Holdings 2 Limited^
Spire Healthcare Limited
Spire Healthcare Properties Limited
Spire Property 1 Limited
Spire Property 4 Limited
Spire Property 5 Limited
Spire Property 6 Limited
Spire Property 13 Limited
Spire Property 16 Limited
Spire Property 18 Limited
Spire Property 19 Limited
Spire Property 23 Limited
Spire Thames Valley Hospital Limited#
Spire Thames Valley Hospital Propco Limited
Spire UK Holdco 4 Limited
The Doctors Clinic Group Ltd
The London Doctors Clinic Ltd
Kingfisher Topco Limited
Kingfisher Midco Limited
Kingfisher Bidco Limited
Vita Health Group Limited
Crystal Palace Physio Holdings Limited
Vita Health Solutions Limited
Pennine MSK Partnership Limited
Physio For All Limited
Physiotherapy2fit Ltd
Physiotherapy Specialists Ltd
The Abbey Clinic Limited
The Bisham Abbey Knee Clinic Limited
Vita Health Wellness Limited
° Ownership interest is 51.0%.
+ Ownership interest is 50.1%.
* Direct shareholding of the company.
& Spire Healthcare Holdings 1 is an undertaking with unlimited liability.
! The LLP has ‘Members’ capital classified as equity’ in lieu of ‘Class of shares’.
#
^ The company was dissolved on 23 December 2023
In liquidation and expected to be dissolved during 2024.
Holding company
Holding company
Holding company
Development company
Holding company
Health provision
Property company
Property company
Property company
Property company
Property company
Property company
Property company
Property company
Property company
Property company
Non-trading company
Property company
Holding company
Holding company and
health provision
Non-trading company
Holding company
Holding company
Holding company
Health provision
Holding company
Health provision
Health provision
Health provision
Health provision
Health provision
Health provision
Health provision
Health provision
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A Ordinary &
B Ordinary
Ordinary
A Ordinary &
B Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
In FY21, in order to simplify the structure of the group and reduce costs, the group undertook a process in
which a number of companies within the group were identified for members’ voluntary liquidation. The
entities in members’ voluntary liquidation at year end are shown above and they are expected to be formally
dissolved at Companies House during 2024.
Non-controlling interest
Financial information of subsidiaries that have a material non-controlling interest is provided below. The
entities, as set out above, are Montefiore House Limited and Didsbury MSK Limited. During the period, Spire
Healthcare acquired an additional 24.9% interest in Montefiore House Limited, and now owns 75% of this
entity. The accumulated interest relating to Montefiore has therefore been reclassified to retained earnings.
Accumulated balances of material non-controlling interest:
(£m)
Accumulated balances of non-controlling interest at
1 January 2022
Profit/(loss) allocated to non-controlling interests
Recycled profit for non-controlling interest purchased
by parent
Accumulated balances of material non-controlling
interest at 1 January 2023
Profit allocated to non-controlling interests
Recycled loss for non-controlling interest purchased
by parent
Accumulated balances of non-controlling interest at
31 December 2023
Montefiore
House Limited
Didsbury MSK
Limited
Claremont
Hospital LLP
(5.6)
(0.8)
–
(6.4)
–
3.2
(3.2)
0.3
0.4
–
0.5
0.6
–
1.1
0.5
-
(0.5)
–
–
–
–
Total
(4.8)
(0.4)
(0.5)
(5.9)
0.6
3.2
(2.1)
Within the entities, the most material assets and liabilities relate to right of use assets and lease liabilities in
respect of property. Except for the lease rental payments, the majority of cash flows are generated through
operations. In the period, the group entered into an agreement with the non-controlling interest of Montefiore
House Limited, in which both parties can exercise an option for Spire to purchase the remaining 25% interest in
the subsidiary at a future date. The purchase price is calculated in line with pre-determined metrics which are
based on the subsidiary’s EBITDA performance and the group multiple.
Guarantees with group undertakings for the year ended 31 December 2023
Spire Healthcare Group Plc agreed to provide a guarantee, in the course of ordinary business to the below
subsidiaries to take exemption from having their financial statements audited under section 479A to 479C of
the Companies Act 2006. The guarantee to these subsidiaries is to guarantee outstanding liabilities, including
contingent and prospective liabilities, for the financial year ended 31 December 2023. In respect to this
guarantee, it is judged to be remote that any cash outflow will arise.
Subsidiary
Spire Healthcare Properties Limited
Spire Healthcare Property Developments Limited
Claremont Hospital Holdings Limited
Spire Thames Valley Hospital Propco Limited
Fox Healthcare Acquisitions Limited
Classic Hospitals Property Limited
Companies house registration number
01829406
08996103
08534235
06480375
06487777
05389607
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 159
Notes to financial statements continued
16. Subsidiary undertakings and non-controlling interest continued
Guarantees with group undertakings for the year ended 31 December 2023 continued
Subsidiary
Spire UK Holdco 4 Limited
Spire Property 1 Limited
Spire Property 4 Limited
Spire Property 5 Limited
Spire Property 6 Limited
Spire Property 13 Limited
Spire Property 16 Limited
Spire Property 18 Limited
Spire Property 19 Limited
Spire Property 23 Limited
17. Inventories
Companies house registration number
06342689
06408718
06408872
06408908
06408930
06409008
06409066
06409117
06409119
06409139
Trade receivables comprise amounts due from private medical insurers, the NHS, self-pay patients, consultants
and other third parties who use the group’s facilities. Invoices to customers fall due within 60 days of the date
of issue.
The group was successful in its bid to be included on the NHSE Framework for purchasing additional activity
from the independent sector, which commenced in April 2021. Inclusion on the Framework is at an agreed
price for activity, based on the NHS tariff, but carries no guaranteed volumes. For contracts under the
framework that include an estimated contract value, billing is in advance for the expected volume, with a
quarterly true-up for actual volumes undertaken. For contracts under the framework without an estimated
contract value (which can include local agreements), billing is in arrears based on actual volumes only.
The ageing of trade receivables is shown below and shows amounts that are past due at the reporting date
(excluding payments on account where there is no right to offset these at the reporting date). A provision for
expected credit losses has been recognised at the reporting date through consideration of the ageing profile
of the group’s trade receivables and the perceived credit quality of its customers reflecting net debt due. The
carrying amount of trade receivables, net of expected credit losses, is considered to be an approximation to
its fair value.
(£m)
Prostheses, drugs, medical and other consumables
2023
44.3
2022
40.6
The loss allowance as at 31 December 2023 for trade receivables was determined as follows:
Cost of sales for the year ended 31 December 2023 includes inventories recognised as an expense amounting
to £265.0 million (2022: £244.0 million).
18. Trade and other receivables
(£m)
Amounts falling due within one year:
Trade receivables
Unbilled receivables
Prepayments
Other receivables
Allowance for expected credit losses
Total current trade and other receivables
2023
2022
74.8
20.2
21.9
10.2
127.1
(5.5)
121.6
59.8
18.2
15.7
11.8
105.5
(5.0)
100.5
Unbilled receivables reflects work in progress where a patient had treatment, or was receiving treatment, at
the end of the period and the invoice had not yet been raised.
Other receivables includes the £4.6 million insurance reimbursement right (2022: £5.4 million); as well as
£4.1 million (2022: £2.6 million) reimbursement right related to the Paterson fund, which is being held
by solicitors on account until payments are made, with any amount not paid out being returned to Spire
Healthcare. During the year, £3.9 million was paid out of this fund and an additional £5.5 million was paid into
the fund. The amounts paid to the new Paterson fund do not reflect an investment in a financial asset, but
merely a right to reimbursement should the fund not be utilised in full.
Trade and other receivables of £12.7 million have been recognised on the acquisition of Vita Health Group
during the year (Note 34).
Expected loss rate
Gross debt (£m)
Less payments on account (£m)
Carrying amount of trade receivables (£m)
Loss allowance (£m)
Current
0.0%
75.3
0-30 days
2.7%
14.8
31-90 days
16.3%
4.3
91-364 days
29.0%
6.2
1-2 years
41.9%
6.2
–
0.4
0.7
1.8
2.6
The loss allowance as at 31 December 2022 for trade receivables was determined as follows:
Expected loss rate
Gross debt (£m)
Less payments on account (£m)
Carrying amount of trade receivables (£m)
Loss allowance (£m)
Current
0.0%
27.8
0-30 days
1.8%
16.8
31-90 days
8.3%
8.4
91-364 days
29.2%
8.9
1-2 years
17.5%
8.0
–
0.3
0.7
2.6
1.4
Total
5.1%
106.8
(32.0)
74.8
5.5
Total
7.2%
69.9
(10.1)
59.8
5.0
Trade receivables are written off when there is no longer a reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a
repayment plan with the group, and failure to make contractual payments for a period of greater than two
years past due.
The group assesses on a forward-looking basis expected credit losses associated with its debt instruments
carried at amortised cost. The impairment methodology applied for trade receivables is the simplified
approach, which requires expected lifetime losses to be recognised from initial recognition of the
trade receivables.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
160
Notes to financial statements continued
18. Trade and other receivables continued
Trade receivables after expected credit losses comprise the following wider customer/payor groups:
20. Non-current assets held for sale
(£m)
Private medical insurers
NHS
Patient debt
Other
2023
29.5
25.0
4.1
10.7
69.3
2022
30.4
8.2
7.2
9.0
54.8
(£m)
Bostocks Lane (East Midlands Cancer Centre)
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
21. Share capital and reserves
(£m)
At 1 January
Provided in the year
Utilised during the year
Released during the year
At 31 December
Authorised shares
Ordinary share of £0.01 each
2023
5.0
1.6
(0.3)
(0.9)
5.5
2022
4.1
1.1
(0.2)
–
5.0
As at 31 December 2023 the group’s management have committed to sell a parcel of land at Bostocks Lane as
the group has accepted an offer on the property. The sale is considered highly probable and the assessment
has not changed. It therefore remains as classified as held for sale.
The group applies the IFRS 9 simplified approach to measuring Expected Credit Losses (ECLs) for trade
receivables. Under this standard, lifetime ECL provisions are recognised for trade receivables using a matrix
of rates dependent on age thresholds and customer types. The ECL rates are determined with reference to
historical performance of each payor age group during the last two years.
To develop the ECL matrix, trade receivables were grouped according to shared characteristics (payor/payor
type) and the days past due. As the majority of the group’s debt is receivable from large, well-funded insurance
companies, the National Health Service or from a large number of individuals, the group has concluded that
historical debt performance of the portfolio during the last two reporting periods provides a reasonable
approximation of the future expected loss rates for each payor age category.
19. Cash and cash equivalents
(£m)
Cash at bank
Short-term deposits
2023
20.7
28.9
49.6
2022
67.1
7.1
74.2
Cash and cash equivalents comprise cash balances, short-term deposits and other short-term highly liquid
investments (including money market funds) with maturities not exceeding three months placed with
investment grade counterparties which are subject to an insignificant risk of change in value.
Cash and cash equivalents of £9.8 million has been added on the acquisition of Vita Health Group during the
year (Note 34).
Issued and fully paid
At 31 December 2023
At 31 December 2022
During the year, the authorised share capital was increased by £181.60 by the issue of 18,160 ordinary shares of
£0.01 each.
Share premium
(£m)
At 1 January
Issue of new shares
At 31 December
2023
830.0
–
830.0
2022
826.9
3.1
830.0
During the year the group issued 18,160 shares to settle share awards of which 18,160 shares were exercised
under the save as you earn 2019 scheme at an average price of £1.09 per share. The proceeds from the issue of
shares were £29,163.
Capital reserves
This reserve represents the loans of £376.1 million due to the former ultimate parent undertaking and
management that were forgiven by those counterparties as part of the reorganisation of the group prior to
the IPO in 2014.
2023
1.1
1.1
2022
1.1
1.1
2023
2022
404,126,630
404,126,630
404,108,470
404,108,470
£0.01 ordinary shares
Shares
£’000
404,126,630
404,108,470
4,042
4,041
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
161
Notes to financial statements continued
21. Share capital and reserves continued
EBT share reserves
Equiniti Trust (Jersey) Limited is acting in its capacity as trustee of the company’s Employee Benefit Trust (EBT).
The purpose of the EBT is to further the interests of the company by benefitting employees and former
employees of the group and certain of their dependants. The EBT is treated as an extension of the group
and the company.
During the year, the EBT purchased 1,339,634 shares and exercised 1,054,620 shares (2022: 88,354 shares
issued and 300,491 exercised) in order to settle share awards in relation to the directors’ share bonus award
and Long-Term Incentive Plan.
Where the EBT purchases the company’s equity share capital the consideration paid, including any directly
attributable incremental costs, is deducted from equity attributable to the company’s equity holders until the
shares are cancelled or reissued. As at 31 December 2023, 312,160 shares (2022: 27,146) were held by the EBT in
relation to the directors’ share bonus award and Long-Term Incentive Plan. The EBT share reserve represents the
consideration paid when the EBT purchases the company’s equity share capital, until the shares are reissued.
As with prior years, the company will continue to fund the Spire Healthcare Employee Benefit Trust (EBT), a
discretionary trust held for the benefit of the group’s employees, for the ongoing acquisition of shares to satisfy
the exercise of share plan awards by employees.
(Number of shares)
At 1 January
Purchased
Exercised
At 31 December
2023
(Number of
shares)
27,146
1,339,634
(1,054,620)
312,160
(£m)
–
3.1
(2.4)
0.7
2022
(Number of
shares)
239,283
88,354
(300,491)
27,146
(£m)
0.8
–
(0.8)
–
Hedging reserve
The balance of £3.3 million at 31 December 2023 (2022: £6.6 million) reflects the £4.4 million debit (2022: £1.2
million credit) recycled in the period, the fair value credit of £0.2 million (2022: £8.1 million credit) and the £0.9
million tax credit on the profit (2022: £2.2 million charge) to give a net movement of a decrease of £3.3 million
during the year (2022: an increase of £7.1 million) on a hedged transaction. See Note 22 for further information.
22. Borrowings
The group has borrowings in two forms, bank borrowings and lease liabilities as disclosed on the consolidated
balance sheet. Total borrowings at 31 December 2023 were £1,257.0 million (2022: £1,190.8 million). More
detail in respect of these two forms of borrowings are set out below.
Bank borrowings
The bank loans are secured on fixed and floating charges over both the present and future assets of material
subsidiaries of the group. On 24 February 2022, the group successfully refinanced its debt facilities with a
syndicate of existing and new lenders. As part of the exercise and in recognition of the fact that the group
had substantial cash reserves at 31 December 2021, the group repaid £100.0 million of the Senior Loan Facility.
During the year the group exercised its option to extend the facility by one year the arrangement has a
maturity of February 2027. The financial covenants relating to this new agreement are materially unchanged.
The loan is non-amortising and carries interest at a margin of 2.05% over SONIA (2022: 2.05% over SONIA).
The group drew down £60.0 million on its revolving credit facility to acquire Vita Health Group in October 2023.
Since the acquisition the group has repaid £20.0 million.
(£m)
Amount due for settlement within 12 months
Amount due for settlement after 12 months
Total bank borrowings
2023
3.4
361.9
365.3
2022
2.9
321.4
324.3
Terms and debt repayment schedule
The maturity date is the date on which the relevant bank loans are due to be fully repaid.
The carrying amounts drawn (after issue costs and including interest accrued) under facilities in place at the
balance sheet date were as follows:
(£m)
Senior finance facility
Revolving credit facility
Maturity Margin over SONIA
February 2027
February 2027
2.05%
1.95%
2023
325.3
40.0
2022
324.3
–
Net debt for the purposes of the covenant test in respect of the Senior Loan Facility was £315.4 million
(December 2022: £250.8 million) and the net debt to EBITDA ratio was 2.2x (December 2022: 2.2x). The net
debt for covenant purposes comprises the senior facility of £325.0 million, drawn revolving credit facility of
£40.0 million less cash and cash equivalents of £49.6 million. EBITDA for covenant purposes comprises Adjusted
EBITDA for Last Twelve Months (LTM) of pre-IFRS 16 Adjusted EBITDA of £152.9 million (December 2022: £123.9
million) less the rental of a finance lease pre-IFRS 16 of £10.0 million (2022: £9.5 million).
The interest cover for covenant purposes was 8.5x (2022: 8.5x) and is calculated as the pre-IFRS 16 EBITDA
described above over pre-IFRS 16 finance costs paid.
The senior finance facility includes a sustainability-linked element connected to environmental and quality
factors. The group also has access to a further £60.0 million through a committed and undrawn revolving
credit facility to February 2027.
Lease liabilities
Obligations under finance leases
The group has finance in respect of hospital properties, vehicles, office and medical equipment. The leases
are secured on fixed and floating charges over both the present and future assets of material subsidiaries in
the group. Leases, with a present value liability of £891.7 million (2022: £866.5 million), expire in various years
to 2046 and carry incremental borrowing rates in the range 3.2% – 14.6% (2022: 3.1% – 14.6%). Rents in respect
of hospital property leases are reviewed annually with reference to RPI or CPI, subject to assorted floors and
caps. The discount rates used are calculated on a lease by lease basis, and are based on estimates of
incremental borrowing rates. A movement in the incremental borrowing rate of 1% would result in an 7.5%
movement in lease liability.
In the year, the group recognised charges of £3.8 million (2022: £3.3 million) of lease expenses relating to low
value leases and £14.8 million (2022: £10.3 million) of lease expense in respect of short-term leases for which
the exemption under IFRS 16 has been taken. Cash outflows in respect of these are materially in line with the
expense recognised, resulting in a total cash outflow of £118.8 million (2022: £105.6 million). The group has not
made any variable lease payments in the year. The group is not a lessor for any leases to external parties.
Where new leases have the right to extend and management is not reasonably certain to exercise the
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
162
Notes to financial statements continued
22. Borrowings continued
Lease liabilities continued
extension option, those future cash flows are not reflected in the above.
Some leases receive RPI increases on an annual basis which affects both the cash flow and interest charged on
those leases. Except for this increase, cash flows and charges are expected to remain in line with current year.
The cash flows above do not reflect any termination, extension or break clause options as management is
reasonably certain that the options will not be exercised. There are no significant restrictions or covenants
which impact the cash flows in respect of these leases.
See Note 13 for more detail on the depreciation of the Right-of-use (ROU) assets and Note 8 for more detail on
the interest expense relating to leases.
Changes in bank borrowings and lease liabilities arising from financing activities
(£m)
2023
Bank loans
Lease liabilities
Total
(£m)
2022
Bank loans
Lease liabilities
Total
1 January
Cash flows
324.3
866.5
1,190.8
(17.0)
(100.2)
(117.2)
1 January
Cash flows
427.5
837.8
1,265.3
(121.1)
(93.7)
(214.8)
Non cash
changes1
18.0
73.0
91.0
Non cash
changes1
17.9
73.5
91.4
Additions2
31 December
40.0
52.4
90.8
365.3
891.7
1,257.0
Additions2
31 December
–
48.9
48.9
324.3
866.5
1,190.8
1. Non-cash changes reflect interest charged on the loan.
2. Additions include both new leases entered into, indexation of existing leases and acquisitions of subsidiaries.
Derivatives
The following derivatives were in place at 31 December:
31 December 2023 (£m)
Interest rate swaps
31 December 2022 (£m)
Interest rate swaps
(£m)
Amount due for settlement within 12 months
Amount due for settlement after 12 months
Total derivatives (asset)/liability
Interest rate
Maturity date Notional amount
Carrying value
Asset
2.7780%
Feb 2026
243.8
2.7780%
Feb 2026
243.8
2023
4.0
0.4
4.4
4.4
8.6
2022
3.6
5.0
8.6
The group entered into interest rate swaps on the 25 July 2022. The movement in respect of derivatives
reflects £4.4 million (December 2022: £1.2 million) recycled in the period and a £0.2 million credit (December
2022: £8.1 million credit) in fair value. All movements are reflected within other comprehensive income.
23. Deferred tax
(£m)
At 1 January 2022
(Credit)/charge to the
profit or loss
Charge to other
comprehensive income
and equity
Adjustment in respect of
prior year
At 1 January 2023
(Credit)/charge to the
profit or loss
(Credit)/charge to other
comprehensive income
and equity
Adjustment in respect of
prior year
Recognised on acquisition
At 31 December 2023
Disclosed within liabilities
Property,
plant and
equipment
87.3
Intangible
–
IFRS 16
leases –
spreading
(47.0)
Share-
based
payments
(4.2)
IFRS 16
28.7
Provisions
and other
temporary
differences
(2.3)
Losses
(4.8)
Total
57.7
(7.1)
–
(2.2)
78.0
7.2
–
0.3
1.1
86.6
86.6
–
–
–
–
–
–
–
5.0
5.0
5.0
1.8
2.8
0.1
(0.8)
0.6
(2.6)
–
–
0.1
–
–
(45.2)
2.3
1.5
33.0
1.4
–
(4.0)
(0.6)
–
–
0.5
–
–
(42.9)
(42.9)
–
–
34.4
34.4
–
–
(4.1)
(4.1)
(0.6)
(6.2)
–
–
–
(1.1)
(7.3)
(7.3)
2.1
0.2
0.6
2.2
(1.1)
56.2
(0.3)
10.0
(0.9)
(0.4)
(3.2)
–
(3.8)
(3.8)
(2.9)
5.0
67.9
67.9
Deferred tax on property, plant and equipment has arisen on differences between the carrying value of the
relevant assets and the tax base. In the prior year, a one off credit to the profit and loss of £9.0 million in respect
of the change in useful life and residual value of the freehold properties was recognised.
In the current period, the group has recognised a deferred tax asset in respect of the corporate interest
restriction of £3.3 million which is reflected in the adjustments to prior year line.
On the acquisition of Vita Health Group Limited, a deferred tax asset has been recognised for losses as they are
expected to be available for utilisation across the wider group from the fifth anniversary of the acquisition
date. In addition, a deferred tax liability has been recognised in respect of fixed assets. On acquisition, the
group has recognised an intangible asset in respect of customer contracts. A deferred tax liability of £5 million
has been recognised in respect of this asset, and will unwind in line with amortisation of the intangible in
future years.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realised or the liability settled, based on tax rates that have been enacted, or substantively enacted,
at the balance sheet date. The group has separately calculated the tax rates applicable in respect of Adjusting
items for the period. Deferred tax in the current period continues to be measured at 25%.
Deferred tax assets are recognised on the basis that the deferred tax liabilities represent forecast profits of the
appropriate type (either capital or trading) and therefore represent a suitable taxable profit against the reversal
of the deferred tax assets can be offset. Deferred tax assets and liabilities in relation to property are only offset
to the extent that they relate to the same site.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 163
Notes to financial statements continued
23. Deferred tax continued
The group has unrecognised deferred tax assets (which do not expire) as follows:
Provisions as at 31 December 2023 are materially considered to be current and expected to be utilised at any
time within the next twelve months, subject to external factors beyond the group’s control.
2023
2022
25. Trade and other payables
(£m)
Trading losses
Tax basis for future capital disposals
Total
Gross
11.7
11.6
23.3
Tax effected
2.6
2.9
5.5
Gross
8.0
11.6
19.6
Tax effected
2.0
2.9
4.9
These amounts are the expected tax value of the gross temporary difference at the enacted long-term tax rate
of 25% (2022: 25%) following the substantive enactment of the increased corporation tax rate of 25% effective
from 1 April 2023. A deferred tax asset has not been recognised in respect of these amounts due to
uncertainties as to the timing of future profits that the trading losses could be offset against and tax basis for
capital disposals could be utilised.
24. Provisions
(£m)
At 1 January 2023
Increase in existing provisions
Provisions utilised
Provisions released
At 31 December 2023
Medical
malpractice
19.4
3.8
(7.1)
(1.0)
15.1
Business
restructuring
and other
2.3
–
(1.0)
–
1.3
Total
21.7
3.8
(8.1)
(1.0)
16.4
Medical malpractice relates to estimated liabilities arising from claims for damages in respect of services
previously supplied to patients. During the period £3.8 million was added due to additional claims received, and
£7.1 million utilised and £1.0 million was released. Amounts are shown gross of insured liabilities. Any such
insurance recoveries of £4.6 million (December 2022: £5.4 million) are recognised in other receivables.
In response to the publication of the Public Inquiry report on Paterson on 4 February 2020, Spire Healthcare
established a provision in respect of implementing the recommendations including a detailed patient review
and support for patients. The provision is being utilised, including £9.2 million in patient claim settlements. The
provision to complete the reviews, settle any claims and costs in respect of other Paterson items has been
increased by £2.5 million. The project is complex and the process for review and settlement takes some time. It
is possible that, as further information becomes available, an adjustment to this provision will be required, but
at this time, it reflects management’s best estimate of the costs and settlement of claims at this point. The
variables include the number of patients which are found to have been harmed following review, the level of
harm, and the associated compensation claim, as well as the time to review each case can vary significantly.
This provision remains subject to ongoing review. In addition, and as disclosed in Note 10 adjusting items, this
was offset by the release of a £0.9 million provision which had been held to resolve a matter with an insurer.
As at 31 December 2023, the business restructuring and other provisions primarily includes acquisition related
provisions related to tax matters other than income tax which is expected to be utilised or released as the
relevant tax years close for review. During the year the group settled non-patient claims as appropriate and
sought external counsel on this settlement.
(£m)
Trade payables
Accrued expenses
Deferred income
Social security and other taxes
Other payables
Trade and other payables
2023
63.9
65.9
10.4
15.2
41.7
197.1
2022
67.2
58.4
–
9.7
29.2
164.5
Trade and other payables of £26.1 million have been added on the acquisition of Vita Health Group during the
year (see Note 34) of which £10.4 million relates to deferred income related to contract revenue.
Accrued expenses includes general operating expenses incurred but not invoiced as at the year end, as well
as holiday pay accrued of £2.1 million (2022: £5.2million), and bonuses accrued during the year and paid during
the following year of £12.7 million (2022: £7.0 million).
Other payables include an accrual for pensions and payments on account. Revenue is not recognised in respect
of payments on account until the performance obligation has been met at year end the balance of payments
on account was £10.3 million (2022: £11.9 million). In addition other credit balances re-classed from trade
debtors were £32.0 million (2022: £28.2 million), which largely relate to NHS credits. Payments on account are
expected to be utilised against patient procedures within the following 12 months. The balance of payments
on account as at 31 December 2022 were utilised in the current year when the patient attended the procedure,
and not cancelling or deferring treatment, such payments on account could result in repayment to the patient
should they request so.
26. Dividends
(£m)
Final dividend for the year ended 31 December 2022 (0.5 pence per share)
Dividend paid to non-controlling interests
Dividend paid in respect of grants under the LTIP share scheme that have vested
Total dividends paid
2023
2.0
–
–
2.0
2022
–
0.2
0.1
0.3
Since the end of the financial year, the directors have proposed a final dividend of approximately 2.1 pence per
share. The dividend is subject to approval by shareholders at the Annual General Meeting and is therefore not
included in the balance sheet as a liability at 31 December 2023.
27. Share-based payments
The group operates a number of share-based payment schemes for executive directors and other employees,
all of which are equity settled.
The group has no legal or constructive obligation to repurchase or settle any of the options in cash. The total
cost in respect of LTIPs and SAYE recognised in the income statement was £3.7 million in the year ended
31 December 2022 (2022: £2.3 million). Employer’s National Insurance is being accrued, where applicable, at
the rate of 14.3%, which management expects to be the prevailing rate at the time the options are exercised,
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
164
Notes to financial statements continued
27. Share-based payments continued
based on the share price at the reporting date. The total National Insurance charge for the year was £0.4 million
(2022: £0.3 million).
The following table analyses the total cost between each of the relevant schemes, together with the number
of options outstanding:
2023
2022
Long Term Incentive Plan
Deferred Share Bonus Plan
Save As You Earn (SAYE)
Charge
£m
3.0
–
0.7
3.7
Number of
options
(thousands)
12,394
449
3,252
16,095
Charge
£m
1.8
–
0.5
2.3
Number of
options
(thousands)
12,787
525
3,652
16,964
A summary of the main features of the scheme is shown below:
Long Term Incentive Plan
The Long Term Incentive Plan (LTIP) is open to executive directors and designated senior managers, and awards
are made at the discretion of the remuneration committee. Awards are subject to market and non-market
performance criteria.
Awards granted under the LTIP vest subject to achievement of performance conditions measured over a period
of at least three years, unless the committee determines otherwise. Awards may be in the form of conditional
share awards or nil-cost options or any other form allowed by the plan rules.
Vesting of awards will be dependent on a range of financial, operational or share price measures, as set by
the committee, which are aligned with the long-term strategic objectives of the group and shareholder value
creation. No less than 30% of an award will be based on share price measures. The remainder will be based on
either financial and/or operational measures. At the threshold performance, no more than 25% of the award
will vest, rising to 100% for maximum performance.
On 18 March 2021, the company granted a total of 3,595,102 options to the executive directors and other
senior management. The options will vest based on return on capital employed (ROCE) (35%) targets for the
financial year ending 31 December 2023, relative total shareholder return (TSR) (35%) targets on performance
over the three-year period to 31 December 2023 and operational excellence (OE) (30%) targets based on
employee engagement targets and regulatory ratings for the current portfolio of hospitals, subject to
continued employment. Upon vesting, the options will remain exercisable until March 2031. The executive
directors are subject to a two-year holding period, whilst other senior management are not.
On 14 March 2022, the company granted a total of 3,097,060 options to the executive directors and other
senior management. The options will vest based on return on capital employed (ROCE) (35%) targets for the
financial year ending 31 December 2024, relative total shareholder return (TSR) (35%) targets on performance
over the three-year period to 31 December 2024 and operational excellence (OE) (30%) targets based on
employee engagement targets and regulatory ratings for the current portfolio of hospitals, subject to continued
employment. Upon vesting, the options will remain exercisable until March 2032. The executive directors are
subject to a two-year holding period, whilst other senior management are not.
On 15 March 2023, the company granted a total of 2,980,384 options to the executive directors and other
senior management. The options will vest based on return on capital employed (ROCE) (35%) targets for the
financial year ending 31 December 2025, relative total shareholder return (TSR) (35%) targets on performance
over the three-year period to 31 December 2025 and operational excellence (OE) (30%) targets based on
employee engagement targets and regulatory ratings for the current portfolio of hospitals, subject to
continued employment. Upon vesting, the options will remain exercisable until March 2033. The executive
directors are subject to a two-year holding period, whilst other senior management are not.
Deferred Share Bonus Plan
The Deferred Share Bonus Plan is a discretionary executive share bonus plan under which the remuneration
committee determines that a proportion of a participant’s annual bonus will be deferred. The market value of
the shares granted to any employee will be equal to one-third of the total annual bonus that would otherwise
have been payable to the individual. The awards will be granted on the day after the announcement of the
group’s annual results. The awards will normally vest over a three-year period.
On 18 March 2021, the company granted a total of 138,888 options to executive directors, with a vesting date
of 18 March 2024. The options will vest based on a target EBITDA net debt leverage ratio for the year ending
31 December 2022, and subject to continued employment.
On 14 March 2022, the company granted a total of 142,427 options to executive directors, with a vesting
date of 14 March 2025. There are no performance conditions in respect of the scheme and is subject to
continued employment.
On 15 March 2023, the company granted a total of 168,042 options to executive directors, with a vesting date
of 14 March 2026. There are no performance conditions in respect of the scheme and is subject to continued
employment.
Save As You Earn
The Save As You Earn (SAYE) is open to all Spire Healthcare employees. Vesting will be dependent on continued
employment for a period of three years from grant. The requirement to save is a non-vesting condition.
On 24 April 2022, the company granted 3,800,557 options to employees with a vesting date of 1 June 2025.
There are no performance conditions in respect of the scheme. Upon vesting, the options will remain
exercisable for six months. The IFRS 2 charge has been calculated using an adjusted Black Scholes model
with judgements including leavers of the scheme (employees who may cease to save) and dividend yields.
The aggregate number of share awards outstanding for the group and their weighted average contractual life
is shown below:
At 1 January
Granted
Exercised
Surrendered1
Cancelled2
At 31 December
Exercisable at 31 December
Weighted average contractual life
LTIP (ROCE
condition)
(thousands)
2,169
1,043
–
(69)
(67)
3,076
–
2.6 years
LTIP (TSR
condition)
(thousands)
4,726
1,043
(652)
(69)
(590)
4,457
–
2.0 years
2023
LTIP (EPS
condition)
(thousands)
1,540
–
(380)
–
(258)
903
–
0.7 years
LTIP (OE
condition)
(thousands)
4,343
894
(636)
(59)
(584)
3,958
–
2.0 years
Deferred Share
Bonus Plan
(thousands)
525
168
(244)
–
–
449
–
1.3 years
SAYE
(thousands)
3,652
–
(18)
–
(382)
3,252
14
1.4 years
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
165
Notes to financial statements continued
27. Share-based payments continued
The following information is relevant to the determination of the fair value of the awards granted for the years
ended 31 December 2023 and 2022, respectively, under the schemes:
At 1 January
Granted
Exercised
Surrendered1
Cancelled2
At 31 December
Exercisable at 31 December
Weighted average contractual life
LTIP (ROCE
condition)
(thousands)
1,133
1,084
–
(48)
–
2,169
–
2.4 years
LTIP (TSR
condition)
(thousands)
4,175
1,079
(208)
(205)
(115)
4,726
–
3.2 years
2022
LTIP (EPS
condition)
(thousands)
1,975
–
–
(77)
(358)
1,540
–
0.4 years
LTIP (OE
condition)
(thousands)
4,166
925
(93)
(198)
(457)
4,343
–
2.8 years
Deferred Share
Bonus Plan
(thousands)
383
142
–
–
–
525
–
1.1 years
SAYE
(thousands)
3,114
3,811
(2,916)
–
(357)
3,652
37
2.5 years
1. These are shares where the participants are considered to be good leavers and forfeit a proportion of their shares on pro-rata basis.
2. These are shares where the participants forfeit all share options.
The weighted average share price for the share awards exercised during the period is £2.18 per share.
Share options outstanding at the end of the year have the following expiry date:
2023
Option pricing model
Fair value at grant date (£)
Fair value at grant date for
shares subject to holding
period(£)
Weighted average share price
at grant date (£)
Exercise price (£)
Weighted average contractual
life
Expected dividend yield
Risk-free interest rate
Volatility1
Expiry date
Exercise price
(£)
Share options
thousands
2023
2022
2022
Option pricing model
Grant – vest
LTIP grants
30/09/2014 – December 2016
30/03/2017 – March 2020
28/03/2018 – March 2021
25/03/2019 – March 2022
06/04/2020 – April 2023
18/03/2021 – March 2024
14/03/2022 – March 2025
15/03/2023 – March 2026
Deferred Share Bonus Plan
06/04/2020 – April 2023
18/03/2021 – March 2024
14/03/2022 – April 2025
15/03/2023 – March 2026
Save As You Earn
03/05/2019 – June 2022
26/04/2022 – June 2025
30/09/2024
30/03/2027
28/03/2028
25/03/2029
06/04/2030
18/03/2031
14/03/2032
15/03/2033
05/04/2030
17/03/2031
01/04/2032
15/03/2033
31/11/2022
31/11/2025
–
–
–
–
–
–
–
–
–
–
–
–
1.09
1.98
–
2
18
1,188
2,396
3,038
2,860
2,892
–
139
142
168
–
3,252
32
2
326
1,118
5,112
3,199
2,997
–
244
139
142
–
18
3,634
Fair value at grant date (£)
Fair value at grant date for
shares subject to holding
period(£)
Weighted average share price
at grant date (£)
Exercise price (£)
Weighted average contractual
life
Expected dividend yield
Risk-free interest rate
Volatility1
During the year, 1,054,620 shares, relating to LTIPs, were exercised from the company’s Employee Benefit Trust
(EBT), during the year (see Note 21 for more information). Where considered the most appropriate use of
surplus cash, the company will continue to fund the Spire Healthcare Employee Benefit Trust (EBT), a
discretionary trust held for the benefit of the group’s employees, for the ongoing acquisition of shares to
satisfy the exercise of share plan awards by employees.
LTIP
(TSR condition)
Monte Carlo
1.26
LTIP
(ROCE condition)
Fair value at
grant date
2.10
LTIP
(OE condition)
Fair value at
grant date
2.10
1.07
2.10
Nil
1.78
2.10
Nil
1.78
2.10
Nil
3.1 years
n/a
3.4%
49%
3.1 years
n/a
n/a
49%
3.1 years
n/a
n/a
49%
LTIP
(TSR condition)
Monte Carlo
1.75
LTIP
(ROCE condition)
Fair value
at grant date
2.44
LTIP
(OE condition)
Fair value
at grant date
2.44
1.48
2.44
Nil
2.2 years
n/a
1.4%
53%
2.06
2.44
Nil
2.2 years
n/a
n/a
53%
2.06
2.44
Nil
0.2 years
n/a
n/a
53%
Deferred Share
Bonus Plan
n/a
n/a
n/a
n/a
Nil
1.8 years
n/a
n/a
n/a
Deferred Share
Bonus Plan
n/a
n/a
n/a
n/a
Nil
3.0 years
n/a
n/a
n/a
Save as you Earn
Black-Schöles
model
0.71
n/a
2.10
1.98
1.4 years
n/a
n/a
n/a
Save as you Earn
Black-Schöles
model
0.71
n/a
2.21
1.98
2.5 years
n/a
n/a
n/a
1. The expected volatility is based on the historical volatility of the company and a comparator group of other international healthcare
companies.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 166
Notes to financial statements continued
28. Reconciliation of cash generated from operations
(£m)
Cash flows from operating activities
Profit before taxation
Adjustments to reconcile profit before tax to net cash flows:
Impairment of assets held for sale (adjusting items) (see Note 10)
Fair value adjustment on financial liability (adjusting items) (see Note 10)
(Profit)/loss on disposal of property, plant and equipment
Adjusting items – other
Depreciation of property, plant and equipment and right-of-use assets
Amortisation on intangible assets
Finance income
Finance costs
Other income
Share-based payments expense
Note
20
13
12
8
8
6
27
Movements in working capital:
Increase in trade receivables and prepayments
Increase in inventories
Increase in trade and other payables
Decrease in provisions
Cash generated from operations
2023
34.6
–
–
(0.3)
1.5
103.0
0.6
(1.4)
93.0
(3.6)
3.7
(12.7)
(3.7)
2.2
(1.3)
215.6
2022
3.9
0.5
0.8
0.3
2.5
97.9
–
–
91.5
(3.0)
2.3
(6.9)
(0.4)
8.2
(15.9)
181.7
31. Financial risk management and impairment of financial assets
The group has exposure to the following risks from its use of financial instruments:
– Credit risk
– Liquidity risk
– Market risk
This note presents information about the group’s exposure to each of the above risks, the group’s objectives,
policies and processes for measuring and managing risk. Further quantitative disclosures are included
throughout these financial statements.
The directors have overall responsibility for the establishment and oversight of the group’s risk
management framework.
The group’s risk management policies are established to identify and analyse the risks faced by the group,
to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Credit risk and impairment
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the group’s receivables from customers and
investment securities.
29. Commitments
Consignment stock
At 31 December 2023, the group held consignment stock on sale or return of £24.5 million (2022: £24.3 million).
The group is only required to pay for the equipment it chooses to use and therefore this stock is not recognised
as an asset.
Capital commitments
Capital commitments comprise amounts payable under capital contracts which are duly authorised and in
progress at the consolidated balance sheet date. They include the full cost of goods and services to be provided
under the contracts through to completion. The group has rights within its contracts to terminate at short
notice and, therefore, cancellation payments are minimal.
Trade and other receivables
The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The group’s exposure to credit risk from trade receivables is considered to be low because of the nature of
its customers and policies in place to prevent credit risk occurring in normal circumstances.
Most revenues arise from insured patients’ business and the NHS. Insured revenues give rise to trade
receivables which are mainly due from large insurance institutions, which have high credit worthiness.
The remainder of revenues arise from individual self-pay patients and consultants.
The group establishes an allowance for impairment that represents its ECL in respect of trade and other
receivables. This allowance is composed of specific losses that relate to individual exposures and also an
ECL component established using rates reflecting historical information for payor groups, and forward
looking information.
Capital commitments at the end of the year were as follows:
(£m)
Contracted but not provided for
2023
31.6
2022
27.0
During the period, trade receivables have increased in line with revenue, but aged debt has reduced. Individual
self-pay patients continues to be the largest risk for the group given the current economic uncertainty. The
group has considered the provision required and maintained a provision accordingly through the expected loss
rate percentages, which is in line with the position at December 2022. The Expected Credit Loss (ECL) as at year
end is £5.5 million (December 2022: £5.0 million).
30. Contingent liabilities
The group had the following guarantees at 31 December 2023:
– The bankers to Spire Healthcare Limited have issued a letter of credit in the maximum amount of £1.5 million
(2022: £1.5 million) in relation to contractual pension obligations
– Under certain lease agreements entered into on 26 January 2010, the group has given undertakings relating
to obligations in the lease documentation and the assets of the group are subject to a fixed and floating charge
– See Note C11 for details of contingent liability in respect of lease arrangements and agreements.
Note 18 shows the ageing and customer profiles of trade receivables outstanding at the year end.
Unbilled receivables are considered for expected credit losses, but these are not considered material and
therefore not recognised.
Investments
The group limits its exposure to credit risk by only investing in short-term money market deposits with large
financial institutions, which must be rated at least Investment Grade by key rating agencies.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
167
Notes to financial statements continued
31. Financial risk management and impairment of financial assets continued
Market risk
Market risk is the risk that changes in market prices, such as interest rates, will affect the group’s income or
the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return on risk.
Interest rate risk
The group is exposed to interest rate risk arising from fluctuations in market rates. This affects future cash
flows from money market investments and the cost of floating rate borrowings.
From time-to-time, the group considers the cost benefit of entering into derivative financial instruments to
hedge its exposure to interest rate volatility based on existing variable rates, current and predicted interest
yield curves and the cost of associated medium-term derivative financial instruments.
Interest rates on variable rate loans are determined by SONIA fixings on a quarterly basis. Interest is settled
on all loans in line with agreements and is settled at least annually.
Liquidity is managed across the group and consideration is taken of the segregation of accounts for regulatory
purposes. Short-term operational working capital requirements are met by cash in hand.
Typically the group ensures that it has sufficient cash on demand to meet expected operational expenses for
a period of at least 90 days, including the servicing of financial obligations. In addition to cash on demand,
the group has available the following line of credit:
– £60.0 million of revolving credit facility, which was undrawn as at 31 December 2023 (2022: £60.0 million
undrawn)
The following are contractual maturities, at as the balance sheet date, of financial liabilities, including interest
payments and excluding the impact of netting agreements:
At 31 December 2023
(£m)
Trade and other payables
Bank borrowings
Lease liabilities
Carrying
amount
171.5
365.3
891.7
1,428.5
Contractual
cash flows
171.5
434.3
1,818.7
2,424.5
Within
1 year
171.5
24.7
99.8
296.0
Between 1
and 2 years
–
19.9
100.0
119.9
Between 2
and 3 years
–
18.7
98.1
116.8
Between 3
and 4 years
–
371.0
97.8
468.8
Between 4
and 5 years
–
–
97.7
97.7
More than 5
years
–
–
1,325.3
1,325.3
Maturity analysis
31 December 2023 (£m)
Effective interest rate (%)
31 December 2022 (£m)
Effective interest rate (%)
Variable
365.0
5.63%
325.0
4.85%
Total Undrawn facility1
60.0
365.0
5.63%
325.0
4.85%
100.0
Derivative financial assets
Interest rate swaps
1. If this facility was drawn the interest rate would be in line with the variable rate loans.
The group has an interest rate swap derivative asset of £4.4 million (2022: £8.6 million liability) in place (refer
to Note 22).
The fair value of this instrument is considered the same as its carrying value and level 2 of the fair value
hierarchy is used to measure the fair value of the instrument. The variable rate consideration received by the
group is Sterling three month SONIA
Sensitivity analysis
A change of 25 basis points (bp) in interest rates at the reporting date would have increased/(decreased) equity
and reported results by the amounts shown below. This analysis assumes that all other variables
remain constant.
At 31 December 2022
(£m)
Trade and other payables
Bank borrowings
Lease liabilities
Derivative financial assets
Interest rate swaps
(4.4)
1,424.1
(5.0)
2,419.5
(4.1)
291.9
(0.8)
119.1
(0.1)
116.7
–
468.8
–
97.7
–
1,325.3
Maturity analysis
Carrying
amount
154.8
324.3
866.5
1,345.6
Contractual
cash flows
154.8
394.4
1,819.1
2,368.3
Within
1 year
154.8
20.2
92.8
267.8
Between 1
and 2 years
–
22.1
93.2
115.3
Between 2
and 3 years
–
20.5
93.6
114.1
Between 3
and 4 years
–
331.6
92.2
423.8
Between 4
and 5 years
–
–
92.2
92.2
More than 5
years
–
–
1,355.1
1,355.1
(8.6)
(8.6)
(9.2)
(9.2)
(2.9)
(2.9)
(3.6)
(3.6)
(2.1)
(2.1)
(0.6)
(0.6)
–
–
–
–
(£m)
At 31 December 2023
Variable rate instruments
At 31 December 2022
Variable rate instruments
Profit or loss
Equity
25bp increase
25bp decrease
25bp increase
25bp decrease
(0.3)
(0.2)
0.3
0.2
(0.3)
(0.2)
0.3
0.2
Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.
The group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the group’s reputation.
Capital management
The group’s objective is to maintain an appropriate balance of debt and equity financing to enable the group
to continue as a going concern, to continue the future development of the business and to optimise returns
to shareholders and benefits to other stakeholders.
The board closely manages trading capital, defined as net assets plus net debt. The group’s net assets at
31 December 2023 were £737.8 million (2022: £725.1 million) and net debt, calculated as bank borrowings of
£365.3 million (2022: £324.3 million) less cash and cash equivalents of £49.6 million (2022: £74.2 million
amounted to £315.7 million (2022: £250.1 million).
The principal focus of capital management revolves around working capital management and compliance
with externally imposed financial covenants see Note 22 for more detail.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
168
Notes to financial statements continued
31. Financial risk management and impairment of financial assets continued
Capital management continued
Major investment decisions are based on reviewing the expected future cash flows and all major capital
expenditure requires approval by the board.
At the balance sheet date, the group’s committed undrawn facilities, and cash and cash equivalents were
as follows:
(£m)
Committed undrawn revolving credit facility
Cash and cash equivalents
2023
60.0
49.6
2022
100.0
74.2
Fair value measurement
As of 31 December 2023, except for an interest rate swap and financial asset relating to a gross profit share,
the group did not hold financial instruments that are included in level 1, 2 or 3 of the hierarchy.
Management assessed that cash and short-term deposits, trade and other receivables, unbilled receivables,
trade payables and other current liabilities approximate their carrying amounts largely due to the short-term
maturities of these instruments. The carrying value of debt is approximately equal to its fair value. During the
year ended 31 December 2023, there were no transfers between the levels in the fair value hierarchy.
In determining fair value measurement, the impact of potential climate-related matters, including legislation,
which may affect the fair value measurement of assets and liabilities in the financial statements has
been considered.
A derivative is a financial instrument whose value is based on one or more underlying variables. The group
uses derivative financial instruments to hedge its exposure to interest rate risk. Derivatives are not held for
speculative reasons. Fair values are obtained from market observable pricing information including interest
rate yield curves and have been calculated as follows; fair value of interest rate swaps is determined as the
present value of the estimated future cash flows based on observable yield curves.
During the year, Spire Healthcare received a profit share in respect of the financial asset of £0.8 million (2022:
£0.7 million). In addition an unrealised fair value movement of £3.0 million (2022: £3.0 million) was recognised
in income upon review of the financial asset to increase the value of the financial asset on the balance sheet.
As at 31 December 2022, the group held the following financial instruments measured at fair value:
Financial instruments measured at fair value
(£m)
Financial assets at fair value through profit and loss
Profit share arrangement (Note 15)
Interest rate swaps
Financial assets measured at fair value
Value as at
31 December
2022
4.6
8.6
13.2
Maturity analysis
Level 1
Level 2
Level 3
–
–
–
–
8.6
8.6
4.6
–
–
Cash flow hedge
The group designate, as cash flow hedges, interest rate swaps entered into with three counterparties maturing
in February 2026. These interest rate swaps convert floating interest rate liabilities into fixed interest rate
liabilities. The swaps run concurrently with the hedged item, being the group’s floating rate liabilities under
the senior finance facility.
For the years ended December 2023 and 2022, there were no significant amounts recognised in the profit
or loss relating to the ineffective portion of hedges or portions excluded from the assessment of hedge
effectiveness. The movement in the interest rate swap relates to fair value movement and is recognised
through other comprehensive income.
Fair value hierarchy
The group uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:
The financial asset reflects a profit share arrangement with a partner. There are no market observable prices
for the valuation. Management therefore assesses forward looking information and appropriate discount rates
and risk factors to determine the fair value. Sensitivities are also taken into account when reviewing the fair
value (Note 15).
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not
based on observable market data.
As at 31 December 2023, the group held the following financial instruments measured at fair value:
Financial instruments measured at fair value
(£m)
Financial assets at fair value through profit and loss
Profit share arrangement (Note 15)
Interest rate swaps
Financial assets measured at fair value
Value as at
31 December
2023
7.5
4.4
11.9
Maturity analysis
Level 1
Level 2
Level 3
–
–
–
–
4.4
4.4
7.5
–
7.5
32. Financial liabilities
Financial instruments to purchase non-controlling interest
In the period, the group entered into an agreement with the non-controlling interest of one of its subsidiaries,
Montefiore House Limited, in which both parties can exercise an option for Spire Healthcare to purchase the
remaining 25% interest in the subsidiary at a future date. The purchase price is calculated in line with pre-
determined metrics which are based on the subsidiary’s EBITDA performance and the group multiple. The
option can be exercised between two to five years. The expected future cash flow to settle the obligation is
discounted at the group cost of debt of 8.1%. The financial liability is initially recognised through equity at the
present value of future cash flows and subsequently recognised at amortised cost.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
169
Notes to financial statements continued
32. Financial liabilities continued
(£m)
Valuation at 1 January
Option to purchase non-controlling interests
Valuation at 31 December
2023
–
9.6
9.6
2022
–
–
–
33. Related party transactions
Key management personnel
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the group, directly or indirectly. They include the board and executive committee,
as identified on pages 95 to 98.
Compensation for key management personnel is set out in the table below:
Key management compensation
(£m)
Salaries and other short-term employee benefits
Post-employment benefits
Share-based payments
2023
5.2
0.4
1.3
6.9
2022
5.0
0.5
1.1
6.6
Further information about the remuneration of individual directors is provided in the audited part of the
directors’ remuneration report on pages 110 to 128.
There were no transactions with related parties external to the group in the year to 31 December 2023
(2022: nil).
34. Business combinations
Acquisitions in 2023
Acquisition of Kingfisher TopCo Limited (together ‘Vita Health Group’)
On 18 October 2023, the group acquired 100% of the voting shares of Kingfisher TopCo Limited (which in turn
owns 100% of the shares of Vita Health Group), a non-listed company based in England a market-leading
provider of mental and physical health services in the UK, for £83.0 million and a net cash consideration of
£73.2 million. This acquisition complements our existing business and aligns well with our strategy of
developing new services and moving into adjacent markets.
Assets acquired and liabilities assumed
The fair values of the identifiable assets and liabilities of Vita Health Group as at the date of acquisition were:
(£m)
Assets
Intangible assets (Note 14)
Plant, property and equipment (Note 13)
Right of use assets (Note 13)
Trade and other receivables (Note 18)
Cash and cash equivalents (Note 19)
Fair value
recognised on
acquisition
27.3
1.3
1.3
12.7
9.8
(£m)
Liabilities
Trade and other Payables (Note 25)
Income tax and withholding tax payable
Deferred tax liability (Note 23)
Lease liabilities (Note 22)
Total identifiable net assets at fair value
Goodwill arising on acquisition (Note 14)
Purchase consideration transferred
Fair value
recognised on
acquisition
26.1
2.3
5.0
1.3
17.7
65.3
83.0
The initial accounting for the business combination is not complete due to the timing of the acquisition which
occurred close to the year end. Amounts recognised, are subject to adjustment in line with IFRS 3 for up to 12
months from acquisition, with goodwill being adjusted accordingly. Therefore, goodwill has not been allocated.
The fair value of the trade receivables amounts to £12.7 million. The gross amount of trade receivables is
£13.2 million and it is expected that the full contractual amounts can be collected.
From the date of acquisition, Vita Health Group contributed £18.3 million of revenue and profit of £1.1 million
to profit before tax from continuing operations of the group. If the combination had taken place at the
beginning of the year, revenue from continuing operations would have been £1,450.5 million and loss before
tax from continuing operations for the group would have been £40.1 million.
Goodwill has been recognised to reflect the synergies which the group believes are available to expand its
offering for mental and physical health services in line with its strategic plan which reflect intangibles that
cannot be separately quantified. This goodwill is not deductible for tax purposes.
Purchase consideration transferred
(£m)
Net cash acquired with the subsidiary
Cash paid
Net cash flow on acquisition
Cash flow on
acquisition
9.8
83.0
73.2
Transaction costs of £2.5 million were expensed and are included within adjusting Items.
Prior year Acquisition of The Doctors Clinic Group Ltd
(together ‘The Doctors Clinic Group’)
During the year, the group reviewed its goodwill position in respect of The Doctors Clinic Group in line with
IFRS 3 and no adjustment has been recognised.
35. Events after the reporting period
There have been no other events to disclose after the reporting date.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
Company statements of changes in equity
For the year ended 31 December 2023
(£m)
At 1 January 2022
Profit for the year
Issue of new shares
Share-based payment
Utilisation of EBT shares
Dividend paid
As at 1 January 2023
Profit for the year
Purchase of own shares by EBT
Share-based payment
Utilisation of EBT shares
Dividend paid
As at 31 December 2023
Share
capital
4.0
–
–
–
–
–
4.0
–
–
–
–
–
4.0
Share
premium
826.9
–
3.1
–
–
–
830.0
–
–
–
–
–
830.0
EBT
share
reserves
(0.8)
–
–
–
0.8
–
–
–
(3.1)
–
2.4
–
(0.7)
Retained
earnings
285.0
51.4
–
2.3
(0.8)
(0.1)
337.8
67.1
–
3.7
(2.4)
(2.0)
404.2
Total
equity
1,115.1
51.4
3.1
2.3
–
(0.1)
1,171.8
67.1
(3.1)
3.7
–
(2.0)
1,237.5
170
Company balance sheet
As at 31 December 2023
(Registered number 09084066)
(£m)
ASSETS
Non-current assets
Investments
Other receivables
Current assets
Other receivables
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
EBT share reserves
Retained earnings
Total equity
Current liabilities
Income tax payable
Trade and other payables
Total liabilities
Total equity and liabilities
Note
2023
2022
C9
C7
C7
C6
21
21
C8
840.6
179.8
1,020.4
226.9
0.1
227.0
1,247.4
4.0
830.0
(0.7)
404.2
1,237.5
9.3
0.6
9.9
1,247.4
840.5
168.3
1,008.8
170.2
0.2
170.4
1,179.2
4.0
830.0
–
337.8
1,171.8
1.8
5.6
7.4
1,179.2
The profit attributable to the owners of the company for the year ended 31 December 2023 was £67.1 million
(2022: £51.4 million).
The financial statements on pages 170 to 174 were approved by the board of directors on 28 February 2024
and signed on its behalf by:
Justin Ash
Chief Executive Officer
Jitesh Sohda
Chief Financial Officer
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 171
Company statement of cash flows
For the year ended 31 December 2023
Notes to the parent company financial statements
For the year ended 31 December 2023
(£m)
Cash flows from operating activities
Profit before taxation
Dividend received
Profit before taxation (excluding dividend received)
Adjustments for:
Share-based payments
Interest income
Finance costs
Movements in working capital:
Increase in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Dividend received
Net cash generated from investing activities
Cash flows from financing activities
Purchase of own shares by EBT
Dividend paid to equity holders of the Parent
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2023
2022
74.5
(52.1)
22.4
3.6
(27.6)
–
(1.6)
(45.6)
0.1
(47.1)
52.1
52.1
(3.1)
(2.0)
(5.1)
(0.1)
0.2
0.1
52.1
(46.9)
5.2
–
(9.8)
3.4
(1.2)
(45.9)
0.3
(46.8)
46.9
46.9
–
(0.1)
(0.1)
–
0.2
0.2
This section contains the notes to the company financial statements. The issued share capital and EBT share
reserves are consistent with the Spire Healthcare Group plc group financial statements. Refer to Note 21 of
the group financial statements.
C1. Basis of preparation
The financial statements have been prepared in accordance with UK-adopted International Accounting Standards
(IAS) in accordance with the Companies Act 2006 and on an historical cost basis. The financial statements
are presented in UK sterling and all values are rounded to the nearest million pounds (£m), except when
otherwise indicated.
See Note 1 for general information about the company.
The financial statements have been prepared on a going concern basis as the directors believe there are no
material uncertainties that lead to significant doubt that the company can continue as a going concern until June
2025 (see the going concern section in Note 2 for more detail).
The company applies consistent accounting policies, as applied by the group. To the extent that an accounting
policy is relevant to both group and company financial statements, refer to the group financial statements for
disclosure of the accounting policy. Material policies that apply to the company only are included as appropriate.
The company has used the exemption granted under s408 of the Companies Act 2006 that allows for the
non-disclosure of the income statement of the parent company.
The company did not have items to be reported as other comprehensive income; therefore, no statement of
comprehensive income was prepared.
C2. Significant accounting policies in this section
Investment in subsidiaries
The company’s investments in subsidiaries are carried at cost less provisions resulting from impairment.
In testing for impairment, the carrying value of the investment is compared to its recoverable amount, being its
value-in-use. In addition, market capitalisation is compared to the investments of the company when assessing
impairment requirements.
Share-based payments
The financial effect of awards by the company of options over its equity shares to employees of subsidiary
undertakings is recognised by the company in its individual financial statements as an increase in its investment in
subsidiaries with a credit to equity equivalent to the IFRS 2 cost in subsidiary undertakings. The subsidiary, in turn,
will recognise the IFRS 2 cost in its income statement with a credit to equity to reflect the deemed capital
contribution from the company.
C3. Key estimates and assumptions in this section
Impairment testing of investments in subsidiaries
The market capitalisation of the company is compared to the investments of the company to determine if there is
a trigger for impairment review. The company’s investments in subsidiaries have been tested for impairment by
comparison against the underlying value of the subsidiaries’ assets, based on value-in-use calculated using the
same assumptions as noted for the testing of goodwill impairment in Note 14 of the group financial statements
adjusted for the assumption that internal and external borrowings have been settled. See Note C9 for more detail.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
172
Notes to the parent company financial statements continued
C4. Staff costs and directors’ remuneration
The company had no employees during the year, except for the directors. The information on compensation for the
directors, being considered as the key management personnel of the company, is disclosed in Note C12.
C5. Auditor’s remuneration
During the year, the company obtained the following services from the company’s external auditor, as detailed
below:
(£’000)
Amounts payable to auditor in respect of:
Audit of the company’s annual financial statements
C6. Cash and cash equivalents
(£m)
Cash at bank
C7. Other receivables
(£m)
Amounts owed by subsidiary undertakings – current
2023
2022
15.0
15.0
2023
0.1
0.1
2023
226.9
226.9
15.0
15.0
2022
0.2
0.2
2022
170.2
170.2
The amounts owed by subsidiary undertakings bear interest at SONIA plus 2.05% (2022: SONIA plus 2.05%). No
allowance for expected credit losses has been included for amounts receivable from subsidiary undertakings
as the provision rates are immaterial. As described in the directors’ report, the group has sufficient resources to
satisfy going concern and viability considerations. All subsidiaries are under common control and resources
could be made available for settlement of debts as and when required.
(£m)
Amounts owed by subsidiary undertakings – non-current
2023
179.8
179.8
2022
168.3
168.3
The amounts owed by subsidiary undertakings bear interest at SONIA plus 2.05% (2022: SONIA plus 2.05%).
The amounts are unsecured and repayable on demand.
C8. Trade and other payables
(£m)
Amounts owed to subsidiary undertakings
Accruals
2023
–
0.6
0.6
2022
5.1
0.5
5.6
The amounts owed to subsidiary undertakings bear interest at SONIA plus 2.05% (2022: SONIA plus 2.05%). The
amounts are unsecured and repayable on demand.
C9. Investment in subsidiaries
(£m)
Net book value
At 1 January 2022
Additions – IFRS 2 costs
At 1 January 2023
Additions – IFRS 2 costs
At 31 December 2023
Subsidiary
undertakings
838.2
2.3
840.5
0.1
840.6
Details of the company’s subsidiaries at the balance sheet date are in Note 16 to the group
financial statements.
At the year end, investments in subsidiaries were reviewed for indicators of impairment.
Management acknowledged indicators of impairment at the year end, being, the net assets of the company
are higher than that of the group’s consolidated net assets and that the market capitalisation exceeds the
investment value including intercompany receivables.
The recoverable amount of investments is calculated by reference to its estimated value-in-use calculation
adjusted for the assumption that internal and external borrowings have been settled.
In order to estimate the value-in-use, management has used trading projections covering the period to
December 2028 from the most recent board approved strategic plan. The variables in the cash flows are
interdependent and reflect management’s expectations based on past experience and current market trends,
it takes into account both current business and committed initiatives. In addition, management consider the
potential financial impact from short-term climate change scenarios, and the cost of initiatives by the group to
manage the longer-term climate impacts.
Management determined that no impairment was required as the recoverable amount exceeds the carrying
amount by £1,364.0 million.
Key assumptions
Management identified a number of key assumptions relevant to the value-in-use calculations, being EBITDA
growth over the five-year period, capital maintenance spend, discount rates and long-term growth rates. The
assumptions are based on past experience and external sources of information.
Management has performed a sensitivity analysis using reasonably possible changes for each key assumption,
keeping all other assumptions constant. The sensitivity analysis included an assessment of the break-even
point for each of the key assumptions.
The trading projections for the five-year period underlying the value in use reflect a growth in EBITDA. EBITDA
is dependent on a number of elements of the operating model over the longer term, including pricing trends,
volume growth and the mix and complexity of procedures and assumptions regarding cost inflation. The
average annual EBITDA growth over the five years is 10.9%. The annual EBITDA over the five year period would
have to decrease by 36.8% per annum to eliminate the headroom.
During the year the group moved to a post IFRS 16 discount rate, and has used a pre-tax discount of 11.5%
(2022: 10.6% adjusted for the effect of IFRS 16).
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
173
Notes to the parent company financial statements continued
C9. Investment in subsidiaries continued
A long-term growth rate of 2.0% has been applied to cash flows beyond 2028 based on long term view of
inflation and market conditions. Capital maintenance spend is based on historic run rates and our expectation
of the group’s requirements. The sensitivity testing identified no reasonably possible changes in the capital
maintenance and long-term growth rates that would cause the carrying amount of any CGU to exceed its
recoverable amount.
(£m)
Financial liabilities: carrying amount and fair value:
Amortised cost
Amounts owed to subsidiary undertakings
2023
2022
–
–
5.1
5.1
As a result, management believe that some of the key impairment review assumptions constitute a major
source of estimation uncertainty as they consider that there is a significant risk of a material change to its
estimate of these assumptions within the next 12 months.
All of the above financial liabilities have a maturity of less than one year.
The fair value of financial assets and liabilities approximates their carrying value.
C10. Capital management and financial instruments
The capital structure of the company comprises issued capital, reserves and retained earnings as disclosed
in the company statement of changes in equity totalling £1,237.5 million (2021: £1,171.8 million) as at
31 December 2023, and cash amounted to £0.1 million (2021: £0.2 million).
Credit risk
As at 31 December 2023, the company had amounts owed by subsidiary undertakings of £406.7 million
(2022: £338.5 million). The company’s maximum exposure to credit risk from these amounts is £406.7 million
(2022: £338.5 million).
Liquidity risk
The company finances its activities through its investments in subsidiary undertakings.
The company anticipates that its funding sources will be sufficient to meet its anticipated future
administrative expenses and dividend obligations as they become due over the next 12 months.
Dividends paid in the year:
(£m)
Final dividend for the year ended 31 December 2022 (0.5 pence per share)
Dividend paid in respect of grants under the LTIP share scheme that have vested
Total dividends paid
2023
2.0
–
2.0
2022
–
0.1
0.1
Since the end of the financial year, the directors have proposed a final dividend of approximately 2.1 pence per
share. The dividend is subject to approval by shareholders at the Annual General Meeting and is therefore not
included in the balance sheet as a liability at 31 December 2023.
(£m)
Financial assets: carrying amount and fair value:
Loans and receivables
Cash and cash equivalents
Amounts owed by subsidiary undertakings
The above financial assets are not impaired.
2023
2022
0.1
406.7
406.8
0.2
338.5
338.7
Market risk
Interest rate risk and sensitivity analysis
As at 31 December 2023 the company had short-term borrowings of Nil (2022: £5.1 million) owed to subsidiary
undertakings, which are repayable on demand and bear interest at SONIA plus 2.05% (2022: SONIA plus 2.05%).
Interest on these borrowings in the year amounted to Nil (2022: £3.4 million) and the directors do not perceive
that servicing this debt poses any significant risk to the company given its size in relation to the company’s
net assets.
IFRS 7 Financial Instruments: Disclosures required a market risk sensitivity analysis illustrating the fair values
of the company’s financial instruments and the impact on the company’s income statement and shareholders’
equity of reasonably possible changes in selected market risks. Excluding cash and cash equivalents, the
company has no financial assets or liabilities that expose it to market risk, other than the amounts owed by/to
subsidiary undertakings of £406.7 million (2022 £338.5 million) and Nil (2022: £5.1 million) respectively.
The directors do not believe that a change of 25 basis points in the SONIA interest rates will have a material
impact on the company’s income statement or shareholders’ equity.
C11. Contingent liabilities
The below financial guarantees have been assessed in line with the requirements of IFRS 17 insurance
contracts and are exempt as the guarantees have not been asserted explicitly as insurance contracts and as
such the accounting for insurance contracts is not applicable.
Lease arrangements with a consortium of investors
The company has given a guarantee to a consortium of investors, comprising Malaysia’s Employees Provident
Fund (EPF), affiliated funds of Och-Ziff Capital Management group and Moor Park Capital, in relation to the
sale of 12 of the Spire Healthcare group’s property-owning companies on 17 January 2013. With effect from
17 January 2013, the total third-party annual commitments of the group under these leases increased by
£51.3 million per annum.
As a result of the sale, the group has long-term institutional lease arrangements (up to December 2042, subject to
renewal or extension), with the landlord for each of the 12 properties. The leases include key terms such as annual
rental covenants and minimum levels of capital expenditure invested by the group. The capital expenditure
covenants measured on an average basis over each five-year period during the term of the leases, require the
group to incur, in total, £5.0 million of maintenance capital expenditure and £3.0 million of additional capital
expenditure on the portfolio of 12 hospitals each year, such being subject to indexation in line with RPI. If the
minimum rent cover ratio is not met, the group is required to enter into an asset performance recovery plan in
order to comply with the covenants, but no default would be deemed to have occurred. The company is a party
to this guarantee. As at 31 December 2023 the group complied with the required covenants and the lease
liability held on the consolidated balance sheet is £628.7 million (2022: £611.4 million).
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information
174
Notes to the parent company financial statements continued
C11. Contingent liabilities continued
Lease agreements entered into by Classic Hospitals Limited (novated to Spire Healthcare Limited
during the year)
Under lease agreements entered into on 26 January 2010 by Classic Hospitals Limited, a subsidiary undertaking
of the company, the company has undertaken to guarantee the payment of rentals over the lease term to
August 2040, and to ensure that the other covenants in the lease are observed. The lease has been moved to
Spire Healthcare Limited, another subsidiary undertaking of the company, to allow Classic Hospitals Limited to
enter Members’ Voluntary Liquidation as part of the entity rationalisation carried out during the year. The initial
rentals payable under the leases in 2010 were £6.3 million per annum, which will be subject to an increase
in future years. As part of these arrangements, the assets of the company are subject to a fixed and floating
charge in the event of a default. As at 31 December 2023, there was no breach in the required covenants
and the lease liability held on the Consolidated balance sheet is £81.2 million (2022: £80.8million).
Directors’ remuneration
The remuneration of the non-executive directors of the company is set out below. Further information about
the remuneration of individual directors is provided in the audited part of the directors’ remuneration report
on pages 110 to 128.
(£m)
Short-term employee benefits*
Share-based payments
Total
2023
1.1
1.0
2.1
2022
1.0
–
1.0
* Emoluments and share-based payment charges for the executive directors are borne by a subsidiary company, Spire Healthcare Limited.
Share-based payment related charges for the Executive Chairman prior to Admission (ie directors’ Share Bonus Plan) are also borne by a
subsidiary company, Spire Healthcare Limited. Please refer to Note 27 of the group consolidation statements.
Based on the liquidity and expected cash generation of Spire Healthcare Limited, the expected credit loss in
respect of these financial guarantees, as at 31 December 2023, is not considered to be significant. As a result,
no liability has been recorded (2022: Nil).
Directors’ interests in share-based payment schemes
Refer to Note 27 to the group financial statements for further details of the main features of the schemes
relating to share options held by the chairman, executive directors and senior management team.
C12. Related party transactions
The company’s subsidiaries are listed in Note 16 to the group financial statements. The following table provides
the company’s balances that are outstanding with subsidiary companies at the balance sheet date:
C13. Events after the reporting period
There have been no events to disclose after the reporting date.
(£m)
Amounts owed from subsidiary undertakings – Spire Healthcare Finance Limited,
Spire Healthcare Limited and Spire Healthcare (Holdings) Limited
Amounts owed to subsidiary undertakings – Spire Healthcare Limited
2023
2022
406.7
–
406.7
338.5
(5.1)
333.4
The amounts outstanding are unsecured and repayable on demand.
The following table provides the company’s transactions with subsidiary companies recorded in the profit for
the year:
(£m)
Amounts invoiced to subsidiaries
Amounts invoiced by subsidiaries
Dividend received from subsidiaries
2023
73.3
–
52.1
2022
57.8
–
46.9
Amounts invoiced to/by subsidiaries relate to general corporate purposes.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 175
Shareholder information
Spire Healthcare group websites
Shareholders are encouraged to visit our websites at www.spirehealthcare.com, www.vitahealthgroup.co.uk,
www.londondoctorsclinic.co.uk and spireoccupationalhealth.com which have a wealth of information about
the company and the services it offers.
There is a section designed specifically for investors at www.investors.spirehealthcare.com where shareholder
and media information can be accessed. This year’s annual report and notice of annual general meeting can
also be viewed there.
Registered office and group head office
Spire Healthcare Group plc
3 Dorset Rise
London EC4Y 8EN
Tel +44 (0)20 7427 9000
Fax +44 (0)20 7427 9001
Registered in England and Wales No. 09084066
Shareholder enquiries
All shareholder enquiries regarding your shares should be addressed to the company’s share registrar at the
address on page 178, or as follows:
Equiniti Limited
Tel (UK only) 0371 384 2030*
Tel (non-UK) +44 (0)121 415 7047
For the hard of hearing, Equiniti Limited offers a special Textel service that can be accessed by dialling 0371 384
2255*
(or +44 (0)121 415 7028 from outside the UK).
Managing your shares
Please contact our registrar, Equiniti Limited, to manage your shareholding if you wish to:
– Register for electronic communications
– Transfer your shares
– Change your registered name or address
– Register a lost share certificate and obtain a replacement
– Consolidate your shareholdings
– Manage your dividend payments
– Notify the death of a shareholder
When contacting Equiniti Limited or registering online, you should have your shareholder reference number at
hand. This can be found on your share certificate or latest dividend confirmation. You can manage your
shareholding online by registering for Shareview at
www.shareview.co.uk. This website has a ‘frequently asked questions’ section which addresses the most
common shareholder problems.
* Lines are open from 8.30am to 5.30pm, Monday to Friday, UK time.
All other shareholder enquiries not related to the share register should be addressed to the company
secretary at the registered office or emailed to companysecretary@spirehealthcare.com.
Electronic shareholder communications
Registering for online communications gives shareholders more control of their shareholding. The registration
process is via our registrar’s secure website at www.shareview.co.uk. Once registered you will be able to:
– Elect how we communicate with you
– Amend your details
– Amend the way you receive dividends
– Buy or sell shares online
This does not mean shareholders can no longer receive paper copies of documents if they so wish. We are
able to offer a range of services and tailor communication to meet your needs.
Share dealing services
UK resident shareholders can sell shares on the internet or by phone using Equiniti Limited’s Shareview
Dealing facility by either logging onto www.shareview.co.uk/dealing or by calling 0345 603 7037 between
8.00am and 4.30pm on any business day (excluding bank holidays).
In order to gain access to this service, the shareholder reference number is required, which can be found at
the top of the Company’s share certificates.
ShareGift
It may be that you have a small number of shares which would cost you more to sell than they are worth. It is
possible to donate these to ShareGift, a registered charity, who provide a free service to enable you to dispose
charitably of such shares. There are no implications for Capital Gains Tax purposes (no gain or loss) on gifts of
shares to charity and it is also possible to obtain income tax relief. More information on this service can be
obtained from www.sharegift.org or by
calling +44 (0)207 930 3737.
Dividend mandate
If you are a shareholder who has a UK bank or building society account, you are recommended to arrange
payment electronically through a bank or building society mandate. There is no fee for this service and
notification confirming details of any dividend payment will be sent to your registered address. Please
contact Equiniti on 0371 384 2030 or download an application form from www.shareview.co.uk.
Overseas dividend payment service
Equiniti Limited provides a dividend payment service to over 30 countries that automatically converts
payments into the local currency by an arrangement with Citibank Europe PLC. Further details, including an
application form and terms and conditions of the service, are available on www.shareview.co.uk or from
Equiniti Limited by calling +44 (0)121 415 7047 or writing to them at Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA (please quote Overseas Payment Service with the Company name and your
shareholder reference number).
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 176
Shareholder information continued
Shareholder security
From time-to-time, in common with other listed companies, shareholders may receive unsolicited phone calls
or correspondence concerning investment matters. These are typically from overseas-based ‘brokers’ who
target UK shareholders, using persuasive and high-pressure tactics to lure investors into scams in what often
turn out to be worthless, non-existent or high-risk shares in US or UK investments. These operations are
commonly known as ‘boiler rooms’.
Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers
of free company reports. Further information on how to avoid share fraud or to report a scam can be found on
our website at www.spirehealthcare.com.
2
1
2024 financial calendar
2024 annual general meeting
Final dividend record date
Final dividend payment date
Announcement of 2024 half year results
Analysis of ordinary shareholders
Holding of ordinary shares as at 31 December 2023
9 May 2024
24 May 2024
21 June 2024
12 September 2024
1. Private 31.45%
2. Institutional and others 68.55%
Private
Institutional and other
Total
Investor type
Number of holders
Percentage of holders
Percentage of shares held
Investor type
Number of holders
Percentage of holders
Percentage of shares held
2023
161
2022
147
31.45% 29.28%
0.17%
0.20%
2023
351
68.55%
99.80%
2022
355
70.72%
99.83%
2023
512
100%
100%
2022
502
100%
100%
Corporate advisers
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
1–1,000
1,001–50,000
50,001–500,000
500,001+
2023
85
2022
74
2022
72
16.60% 14.74% 46.29% 49.80% 23.63% 21.12% 13.48% 14.34%
93.76% 94.56%
0.68% 0.76%
0.01% 0.01%
5.55% 4.67%
2022
250
2022
106
2023
237
2023
69
2023
121
Shareholders percentage by shareholder
Shareholders percentage by shareholding
4
3
1
2
1. 1-1,000 16.6%
2. 1,001-50,000 42.29%
3. 50,001-500,000 23.63%
4. 500,001 13.48%
Brokers
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Deutsche Numis
45 Gresham Street
London EC2V 7BF
Legal advisers
Freshfields Bruckhaus
Deringer LLP
100 Bishopsgate
London EC2P 2SR
Remuneration consultants
Deloitte LLP
2 New Street Square
London EC4A 3BZ
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 177
Alternative performance measures definitions
Performance measure
Definition
Purpose
Adjusted operating profit;
or, adjusted EBIT
Operating profit, less adjusting items
before interest and tax.
Provides a comparable measure of
operating profit performance over time.
Conversion of adjusted
EBITDA to cash
Adjusted EBITDA
Adjusted EBITDA divided by
operating cash flows before
adjusting items and taxation.
Adjusted EBITDA is calculated as
operating profit, adjusted to add
back depreciation, and adjusting
items.
Adjusted EBITDA margin
Adjusted EBITDA as a percentage of
revenue.
Intends to show the group’s efficiency
at converting adjusted EBITDA into
cash.
Adjusted EBITDA shows the group’s
earning power independent of capital
structure and tax situation with the
purpose of simplifying comparisons
with other companies in the same
industry as it excludes non-cash
accounting entries, such as
depreciation.
Provides a comparable performance
metric, expressed as a percentage of
revenues.
Net debt
Net bank debt
Pre IFRS 16
Interest-bearing liabilities, less cash
and cash equivalents.
Measurement of net group
indebtedness for covenant purposes.
Interest-bearing liabilities, excluding
borrowing costs, less cash and cash
equivalents.
Reported numbers before applying
the effects of IFRS 16 Leases.
Measurement of net group
indebtedness.
To provide an understanding of the
impact of IFRS 16 to the reported
numbers and allow comparison to
previously reported numbers.
Net debt/EBITDA
Net debt at the end of the period
divided by EBITDA.
Indicates the group’s ability to service
its debt from cash earnings.
Clinical staff costs as a
percentage of revenue
Clinical staff costs and medical fees
as a percentage of revenue.
Provides a comparable measure of cost
performance over time in relation to
revenue activity.
Other direct costs as a
percentage of revenue
Other direct costs include, direct
costs and medical fees as a
percentage of revenue.
Provides a comparable measure of cost
performance over time in relation to
revenue activity.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 178
Glossary
The following definitions apply throughout the
Annual Report 2023, unless the context requires
otherwise:
CQUIN
Act
The Companies Act 2006, as
amended
Acute care
Adjusted
EBITDA
Admission
Articles
Board
active but short-term treatment
for a severe injury or episode of
illness
Adjusted EBITDA is calculated as
operating profit, adjusted to add
back depreciation, and adjusting
items
the admission of the shares to the
premium listing segment of the
Official List and to trading on the
London Stock Exchange’s main
market for listed securities
the articles of association of the
company
the board of directors of the
company
CAGR
compound annual growth rate
Cardiology
specialty which encompasses the
treatment of patients with
cardiovascular disease
CGSC
CMA
Clinical governance and safety
committee
the UK Competition and Markets
Authority
Company
Spire Healthcare Group plc
CQC
CO2e
Care Quality Commission
carbon dioxide equivalent
CRC Energy
Efficiency
Scheme
CREST
CRM
CT
DAISY
DPA
DSBP
EBITDA
EPS
eRS
EU
commissioning for quality and
innovation payment which is
earned for meeting quality targets
on NHS work
the CRC (Carbon Reduction
Commitment) scheme aims to
incentivise energy efficiency and
cut emissions in large energy
users in the UK’s public and
private sectors
the UK-based system for the
paperless settlement of trades
in listed securities, of which
Euroclear UK and Ireland Limited
is the operator
customer relationship
management system/software
computerised tomography
Diseases Attacking the Immune
System
GDP
GDPR
GHG
GIRFT
GMC
GP
GPG
Group
FRC
the Financial Reporting Council
FTSUG
Freedom to Speak Up Guardian
gross domestic product
General Data Protection
Regulation
greenhouse gas
Getting it Right First Time
IFRS
IPO
IRIS
International Financial Reporting
Standards, as adopted by the EU
initial public offering of shares
to certain institutional and other
investors
Inclusive Recognition of
Inspirational Staff
ISO 14001
environmental management
system
General Medical Council
ISO 18001
health and safety management
system
General practitioner
Gender Pay Gap
ITU
Intensive Therapy Unit
Spire Healthcare Group plc and its
subsidiaries
JAG
accreditation
The Joint Advisory Group on
Gastrointestinal Endoscopy (JAG)
accreditation: formal recognition
an endoscopy service has the
competence to deliver against
measures in the Endoscopy Global
Rating Scale standards
Directors
the executive directors and
non-executive directors
Data Protection Act
HD
Hospital director
Health &
Safety Act
The Health & Safety at Work etc
Act 1974
HIS
HIW
Health Improvement Scotland
Health Inspectorate Wales
Deferred Share Bonus Plan
HMRC
HM Revenue & Customs
Earnings before interest, tax,
depreciation and amortisation
earnings per share
Electronic Referral System
the European Union
HSE
ICBs
ICSs
Executive
directors
the executive directors of the
company
FCA
the Financial Conduct Authority
Health and Safety Executive
Integrated Care Boards: NHS
organisation which plans how to
meet local population health
needs, associated budget and
provision.
Integrated Care Systems:
Partnerships of NHS
organisations, local authorities
and others to collectively plan
services.
KPI
key performance indicator
Listing Rules
the listing rules of the FCA made
under section 74(4) of the
Financial Services and Markets
Act 2000
LTIP
MAC
MHFA
MQEM
MRI
NDC
Long Term Incentive Plan
Medical advisory committee
Mental Health First Aid
Macmillan Quality Environment
Mark
magnetic resonance imaging
Spire Healthcare’s national
distribution centre in Droitwich
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 179
Glossary continued
NHS
NI
NIC
NJR
Non-
executive
directors
Official List
the National Health Services in
England, Scotland, Wales and
Northern Ireland, collectively
National Insurance
National Insurance Contributions
National Joint Registry: records,
monitors, analyses and reports on
performance outcomes in joint
replacement surgery
the non-executive directors of
the company
the record of whether a
company’s shares are officially
listed, maintained by the FCA
(the UKLA Official List)
Registration
regulations
the Care Quality Commission
(Registration) Regulations 2009
Regulated
activities
regulations
the Health and Social Care Act
2008 (Regulated Activities)
Regulations 2010
UKAS
UK Accounting Standards
UK Code
the UK Corporate Governance Code
issued by the Financial Reporting
Council, as amended from time-to-
time
RIDDOR
ROCE
SAP
SDG
Self-pay
YOY
Year on year
Reporting of Injuries, Diseases and
Dangerous Occurrences
Regulations
return on capital employed
global software developer/
software
Sustainable Development Goal,
set by the United Nations
when a procedure or treatment
provided is funded by the patient
directly
Safe Effective Quality
Occupational Health Service,
benchmarks for occupational
health services
Oncology
specialty which encompasses the
treatment of people with cancer
SEQOHS
PHIN
Private Healthcare Information
Network
PILON
payment in lieu of notice
Shareholders the holders of shares in the capital
PMI
PPE
PROMs
PSIRF
Private medical insurance
property, plant and equipment
Patient Reported Outcome
Measures
Patient Safety Incident Response
Framework
Registrar
Equiniti Limited
Shares
tCO2e
TSR
UK
of the company
the ordinary shares of 1 pence
each in the company, having the
rights set out in the articles
tonnes of carbon dioxide
equivalent
total shareholder return
the United Kingdom of Great
Britain and Northern Ireland
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information 180
Forward-looking statements
Important information: forward-looking statements
These materials contain certain forward-looking statements relating to the business of Spire Healthcare Group
plc (the ‘company’) and its subsidiaries (collectively, the ‘group’), including with respect to the progress, timing
and completion of the group’s development, the group’s ability to treat, attract, and retain patients and
customers, its ability to engage consultants and GPs and to operate its business and increase referrals, the
integration of prior acquisitions, the group’s estimates for future performance and its estimates regarding
anticipated operating results, future revenue, capital requirements, shareholder structure and financing. In
addition, even if the group’s actual results or development are consistent with the forward-looking statements
contained in this presentation, those results or developments may not be indicative of the group’s results or
developments in the future. In some cases, you can identify forward-looking statements by words such as
‘could,’ ‘should,’ ‘may,’ ‘expects,’ ‘aims,’ ‘targets,’ ‘anticipates,’ ‘believes,’ ‘intends,’ ‘estimates,’ or similar words.
These forward-looking statements are based largely on the group’s current expectations as of the date of this
presentation and are subject to a number of known and unknown risks and uncertainties and other factors
that may cause actual results, performance or achievements to be materially different from any future results,
performance or achievement expressed or implied by these forward-looking statements. In particular, the
group’s expectations could be affected by, among other things, uncertainties involved in the integration of
acquisitions or new developments, changes in legislation or the regulatory regime governing healthcare in the
UK, poor performance by consultants who practice at our facilities, unexpected regulatory actions or
suspensions, competition in general, the impact of global economic changes, and the group’s ability to obtain
or maintain accreditation or approval for its facilities or service lines. In light of these risks and uncertainties,
there can be no assurance that the forward-looking statements made during this presentation will in fact be
realised and no representation or warranty is given as to the completeness or accuracy of the forward-looking
statements contained in these materials.
The group is providing the information in these materials as of this date, and we disclaim any intention or
obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Spire Healthcare Group plcAnnual Report and Accounts 2023Governance reportOverviewStrategic reportFinancial statementsOther information Designed and produced by Gather
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Spire Healthcare Group plc
3 Dorset Rise
London
EC4Y 8EN
spirehealthcare.com