patient satisfaction rating of good, very good or excellent (Patient satisfaction survey carried out by Howard Warwick & Associates, Jan - Sept 2009)
Directors’ report for financial statements
General Healthcare Group has produced strong revenue and profit growth during a challenging year. Revenue has increased 7.6% from 2008 levels which, coupled with tighter cost control, has seen its EBITDA margin increase from 26.4% to 26.6%. This generated EBITDA of £220.6m, up from £203.9m in 2008.
Corporate finance activities
During 2009 General Healthcare Group has strengthened its position as the leading private health care provider in the UK. The group has broadened its geographical coverage and improved its performance through the strategic acquisitions of City Medical and Fitzroy Square in central London, The Thornbury Radiosurgery Centre in Sheffield and The Woodlands private hospital in Darlington.
City Medical is a consultation and general surgery centre serving as a satellite unit to the group’s London hospitals.
Fitzroy Square boasts eight consulting rooms as well as a major and minor operating centre. It will improve accessibility for consultants and patients who spend most of their time in London.
The Thornbury Radiosurgery Centre is a joint venture between the group and the Centre’s consultants. It provides cutting edge non-invasive brain surgery used on a range of conditions.
The Woodlands private hospital is a 38 bed acute hospital in Darlington and services a key geographical position within our hospital network.
Financing and treasury transactions
No significant debt refinancing occurred during the year and there is no requirement for any refinancing in the forseeable future.
Operating performance
Revenue growth was driven by a rise in both NHS and insured caseload more than compensating for a fall in self-pay volumes. Cost-saving initiatives implemented during the year have ensured that this shift in case mix has not adversely affected the EBITDA margin.
The growth in EBITDA has fallen directly to the bottom line, represented by a £16m increase in profit before tax. Interest and finance charges have remained stable due to swapping out the variable loan interest rate for a fixed interest rate. The marginal increase in finance charges is due to the full year effect of the PropCo debt raised on the prior year acquisition of the ex-Nuffield hospitals.
The Group generated £130 million of operating cashflow. This was negatively affected by the working capital outflow experienced during the year. This is primarily due to the change in case mix from self pay (payment upfront) to NHS (prolonged payment days). This position has stabilised, and the group does not anticipate any further material adverse movements in this regard. Working capital was also adversely affected during the year by the catch-up in payments to Creditors, which built up during the introduction of the Shared Service Centre in 2008. This is also not expected to recur going forward.
