TIDMSPI

RNS Number : 5452U

Spire Healthcare Group PLC

06 April 2021

Spire Healthcare Group plc

6 April 2021

2020 Annual Report and 2021 Notice of Annual General Meeting

Spire Healthcare Group plc (the "Company") released its preliminary announcement of its annual results for the year ended 31 December 2020 ("Preliminary Announcement") on Thursday, 4 March 2021.

Further to that Preliminary Announcement, the Company confirms that its Annual Report and Accounts for the year ended 31 December 2020 ("2020 Annual Report"), 2021 Notice of Annual General Meeting and Form of Proxy have now been published. Printed copies have been posted to shareholders who have requested hard copies.

The following documents are available on the Company's website:

   2020 Annual Report:               www.spirehealthcare.com/AR2020 
   2021 Notice of Meeting:         www.spirehealthcare.com/Notice2021 

In accordance with Listing Rule 9.6.1, the Company will submit its 2020 Annual Report and other shareholder documents to the National Storage Mechanism. These documents should then be available for inspection within two working days at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

Arrangements for the Annual General Meeting in light of COVID-19

The Annual General Meeting of the Company will be held at 2.00pm on Thursday, 13 May 2021 at 3 Dorset Rise, London EC4Y 8EN (the "2021 AGM").

Due to the COVID-19 pandemic and the legislation and government guidance prohibiting public gatherings and restricting non-essential travel, shareholders will not be able to attend the 2021 AGM.

The Board always welcomes questions from shareholders and we request that these are submitted by e-mail to companysecretary@spirehealthcare.com . We will ensure that answers to questions are placed on the Company's website ahead of the meeting.

Details of the resolutions to be proposed at the 2021 AGM are set out in the 2021 Notice of Meeting. The voting results of all resolutions put before the 2021 AGM will be announced to the market following the meeting.

Should government guidelines change, and shareholders be able to attend the 2021 AGM in person, we will advise this via the Company's website, www.spirehealthcare.com and via a Regulatory Information Service.

Appendix

The Appendix to this announcement contains information required for the purposes of compliance with DTR 6.3.5 (1) of the Disclosure and Transparency Rules, including a Statement of Directors' responsibilities. This information is extracted, in full unedited text, from the 2020 Annual Report and should be read in conjunction with the Preliminary Announcement, which contained other information required by DTR 6.3.5 (1), released to the market on Thursday, 4 March 2021.

Enquiries:

Philip Davies

Company Secretary

Tel: 07803 508348

Appendix

Principal risks

 
Principal Risk         Risk Description                Risk Impact                      Risk Mitigation 
 1. Patient Safety and Clinical Quality 
 Executive Owner(s)     There is a risk to              Reputational and financial       In response to the 
  Group Clinical        the provision of high-quality    loss could occur if              COVID-19 pandemic, 
  Director              patient care due to:             the Group fails to               the Group introduced 
  Group Medical         Nosocomial Covid-19              address adequately               a specific infection 
  Director              infection                        issues identified                prevention control 
                        A shortage of skilled            by incidents, audits,            programme to minimise 
  Risk movement         workforce (see Risk              complaints, PROMs,               the risk of hospital 
  in 2019               1);                              National Registries,             acquired COVID-19 
  Decrease              Clinical and non-clinical        Whistleblowing, Freedom          infections that included: 
                        staff and Consultants            to speak up, workforce           Red, Amber & Green 
                        failing to follow                feedback and the internal        patient pathways, 
  Risk movement         guidelines, standards            Patient Safety Quality           PPE, 
  in 2020               and policies resulting           Reviews and Care Quality         Testing of patients, 
  No change             in patient harm; and,            Commission.                      colleagues and Consultants. 
                        Failing to learn from 
                        incidents and Patient                                             The Group maintains 
  Link to Strategy      Notification Exercises                                            controls to mitigate 
  Uncompromising                                                                          against a failure 
  on patient safety                                                                       of patient safety 
  and clinical                                                                            and clinical quality: 
  care.                                                                                   A reporting culture 
                                                                                          of openness and shared 
                                                                                          learning from Ward-to-Board, 
                                                                                          with a FSUG at each 
                                                                                          site 
                                                                                          Incident reporting 
                                                                                          via a database with 
                                                                                          central oversight 
                                                                                          Continual monitoring 
                                                                                          of clinical standards, 
                                                                                          reporting progress 
                                                                                          via the Clinical 
                                                                                          Governance and Safety 
                                                                                          Committee (CGSC). 
                                                                                          A schedule of robust 
                                                                                          and regular hospital 
                                                                                          audits including 
                                                                                          the Patient Safety 
                                                                                          and Quality Reviews, 
                                                                                          with an action plan 
                                                                                          for improvement. 
                                                                                          Colleague induction, 
                                                                                          clinical competencies 
                                                                                          requirements and 
                                                                                          mandated training. 
                                                                                          Reporting on clinical 
                                                                                          outcomes with workforce 
                                                                                          and Consultants including 
                                                                                          the Chairs of hospital 
                                                                                          Medical Advisory 
                                                                                          Committees. 
 2. Workforce 
 Executive Owner(s)     There is a global               The Group is able                The Group seeks to 
  Human Resources       shortage of nursing              to provide safe patient          retain staff through: 
  Director              and allied healthcare            care only with delays            A common purpose 
                        practitioners. In                to treatment because             and a positive workplace 
  Risk movement         addition, the Group              of scarce resources.             culture. 
  in 2019               has an ageing workforce.                                          Maintaining competitive 
  Increase              The Covid-19 pandemic            Over the medium to               pay and benefits. 
                        has caused up to 10%-15%         long term, this could            Responding to key 
                        of the workforce to              result in a decline              metrics such as staff 
  Risk movement         be absent at its peak.           in the Group's profits           turnover, rookie 
  in 2020                                                and affect expected              staff levels (less 
  No change             The Group's ability              revenue growth from              than one-years' service), 
                        to attract and retain            more complex surgical            vacancy rates and 
                        clinical practitioners,          procedures and treatment         levels of positive 
  Link to Strategy      in particular, is                of higher-risk patients.         engagement from staff 
  First choice          affected by:                                                      surveys. 
  for private           Growth of waiting                                                 Continuous investment 
  healthcare            lists affecting more                                              in its equipment, 
                        nurses required in                                                facilities and services 
  Uncompromising        NHS/IS reducing availability                                      to retain high-quality 
  on patient safety     of colleagues.                                                    clinicians. 
  and clinical          Demand for nursing/healthcare                                     The Group seeks to 
  care                  workers increases                                                 recruit staff through: 
                        resulting in more                                                 A centralised recruitment 
                        competitive pay rates.                                            processes 
                        Government respond                                                An overseas recruitment 
                        by raising pay in                                                 capability to secure 
                        the NHS.                                                          skilled healthcare 
                        Government immigration                                            workers from outside 
                        policy and the post                                               the EU where necessary. 
                        Brexit labour market                                              Offering apprenticeship 
                        The impact of the                                                 programmes to support 
                        NHS Agenda for Change                                             the development of 
                        causing inflationary                                              clinical and non-clinical 
                        wage pressure                                                     teams across the 
                        Our business strategy                                             business. 
                        of increasing complexity                                          Working with the 
                        of medical procedures                                             Royal Colleges to 
                        that requires a higher                                            offer Consultant-training 
                        skilled workforce                                                 opportunities in 
                        The changing Pensions                                             the private sector. 
                        and Tax (IR35) landscape                                          Building of local 
                        that might reduce                                                 bank staff pools 
                        the availability of                                               The Group manages 
                        Consultants, bank                                                 immediate staff shortages 
                        and agency staff.                                                 with agency and bank 
                        The reduction in elective                                         workers. 
                        activity within Trusts 
                        reducing the training 
                        opportunities for 
                        new Consultants. 
 3. PMI Market Dynamics 
 Executive Owner(s)     The PMI market is               Loss of, or renewal              The Group works hard 
  Chief Commercial       concentrated, with              at lower tariffs,                to maintain good 
  Officer                the top four companies          of an existing contractual       relationships and 
                         (Bupa, AXA, Aviva               relationship with                a joint product/patient 
  Risk movement          and VitalityHealth)             any of the key insurers          health offering with 
  in 2019                having a market share           could significantly              the PMI companies, 
  Decrease               estimated at over               reduce revenue and               which, in the opinion 
                         85%.                            profit for the Group.            of the Directors, 
                                                                                          assists the healthcare 
  Risk movement          In addition to this             A slower recovery                sector as a whole 
  in 2020                market concentration,           of the PMI market                in delivering high-quality 
  No change              the major PMI providers         could reduce revenues            patient care. 
                         are collaborating               and profits in the 
                         on service line tenders         short term.                      The Group ensures 
  Link to Strategy       to increase their                                                it has long-term 
  First choice           purchasing power.                                                contracts in place 
  for private            There is a risk that                                             with its PMI partners 
  healthcare             the PMI providers                                                to avoid co-termination 
                         will put cost before                                             of contractual arrangements. 
  Improving revenue,     clinical quality. 
  profit and cash.                                                                        The Group believes 
                         The Group has individual                                         continuing to invest 
                         contractual relationships                                        in its well-placed 
                         for the provision                                                portfolio of hospitals 
                         of its services with                                             provides a natural 
                         all the major PMI                                                fit to the local 
                         providers. These contracts                                       requirements of all 
                         come up for renewal                                              the PMI providers 
                         on a recurring basis.                                            long term. 
                         There is a risk that 
                         renewal of contract                                              The Group continues 
                         terms cannot be secured                                          to invest in efficiency 
                         on historical terms.                                             programmes to ensure 
                                                                                          that it can offer 
                         Following the COVID-19                                           cost effective high 
                         pandemic, the speed                                              quality patient care. 
                         of recovery of the 
                         PMI market for the 
                         Group is uncertain. 
                         There is a risk that 
                         PMI patient volumes 
                         will not recover to 
                         pre-pandemic levels 
                         as quickly as the 
                         Group anticipates. 
 4. Macroeconomics 
 Executive Owner(s)     In 2019, before the             Reduction of Private             The evidence available 
  Chief Commercial       COVID-19 pandemic,              patients and associated          to the Group indicates 
  Officer                the Group derived               revenue and profit               that the COVID-19 
                         c.70% of its revenue            contributions.                   pandemic has left 
  Risk movement          from private patients,                                           high levels of pent 
  in 2019                either through insurance        Reduction in the operational     up demand for the 
  Increase               paid for by their               efficiency of our                Group's services. 
                         employer or themselves,         existing hospital 
                         or patients paying              network.                         The ability for patients 
  Risk movement          for services directly.                                           to access private 
  in 2020                In 2020, as reported                                             care does not appear 
  Increase               elsewhere, that model                                            presently to be constrained 
                         changed completely                                               financially. The 
                         after March 2020 when                                            Group understands 
  Link to Strategy       the NHS contracted                                               that private medical 
  First choice           private healthcare                                               insurance policy 
  for private            providers to support                                             renewals and sales 
  healthcare.            the pandemic response.                                           remain healthy, and 
                                                                                          the Group has itself 
  Improving revenue,     Since May 2020, and                                              seen higher enquiries 
  profit and cash.       under the current                                                from self-pay patients 
                         NHS contractual arrangements                                     than in 2019 with 
                         in England, Scotland                                             a rapid recovery 
                         and Wales, the Group                                             in self-pay patient 
                         is able to use unutilised                                        care seen in Q4 2020. 
                         capacity for private 
                         patients.                                                        In the medium to 
                                                                                          long term, the Group 
                         Given the uncertain                                              seeks to have flexibility 
                         economic outlook,                                                to respond to changing 
                         there is a risk that                                             economic circumstances 
                         post the COVID-19                                                with a blend of private 
                         pandemic, private                                                and NHS funded work 
                         patients may not be                                              that does not leave 
                         able to access private                                           the Group over reliant 
                         healthcare to the                                                on one income source, 
                         same pre-pandemic                                                supported by an efficient 
                         levels because of                                                cost base. 
                         either: 
                         capacity constraints 
                         from contracted NHS 
                         work to address the 
                         NHS waiting lists 
                         for Elective treatment; 
                         or 
                         loss of insurance 
                         cover if withdrawn 
                         by an employer or 
                         patients lose employment; 
                         or they suffer a loss 
                         of disposal income. 
 5. Competitor Challenge 
 Executive Owner(s)     The Group operates              The potential impact             The Group maintains 
  Chief Commercial       in a highly competitive         would be the loss               a watching brief 
  Officer                market. New or existing         of market share due             on new and existing 
                         competitors may enter           to aggressive competitor        competitor activity 
  Risk movement          the market of one               activity a new competitor       and retains the ability 
  in 2019                or more of our existing         and reduced profitability       to react quickly 
  No change              hospitals, or offer             and cash flow.                  to changes in patient 
                         new services.                                                   and market demand. 
 
  Risk movement          In the current economic                                         The Group considers 
  in 2020                environment, there                                              that a partial mitigation 
  No change              is a risk that the                                              of the impact of 
                         pressures on competitors                                        competitor activity 
                         results in irrational                                           is ensured by providing 
  Link to Strategy       market behaviour manifesting                                    patients with high-quality 
  First choice           itself in low pricing                                           clinical care and 
  for private            on tenders or self                                              by maintaining good 
  healthcare.            pay.                                                            working relationships 
                                                                                         with General Practitioners 
  Key partner                                                                            and Consultants. 
  of the NHS. 
                                                                                         The Group continues 
                                                                                         to invest in the 
                                                                                         brand and deliver 
                                                                                         an effective acquisition 
                                                                                         capability both direct 
                                                                                         and via our partners 
                                                                                         in order to protect 
                                                                                         our market position. 
                                                                                         It has also strengthened 
                                                                                         its pricing and tendering 
                                                                                         capabilities. 
 
                                                                                         Despite the COVID-19 
                                                                                         pandemic, the Group 
                                                                                         plans to maintain 
                                                                                         its investment into 
                                                                                         the estate and clinical 
                                                                                         equipment to differentiate 
                                                                                         our proposition. 
 
                                                                                         The Group monitors 
                                                                                         the market for opportunities, 
                                                                                         should they arise, 
                                                                                         to acquire or open 
                                                                                         facilities in specific 
                                                                                         geographies creating 
                                                                                         incremental volume. 
 6. Insurance & Indemnity 
 Executive Owner(s)     The Group procures              The Group's insurance            The Group reviews 
  Group General          insurance from global           premiums may increase           and maintains insurance 
  Counsel                insurers and syndicates         and, if there is a              to mitigate the possibility 
                         with a presence in              significant deterioration       of a major loss. 
  Risk movement          the Lloyds of London            in its claims experience,       Adequacy of cover 
  in 2019                insurance market.               insurance may not               is reviewed annually 
  Decrease                                               be available on acceptable      with the Group's 
                         The Group could be              terms.                          brokers with coverage 
                         subject to litigation                                           being maintained 
  Risk movement          for actions by third            There may also be               or increased depending 
  in 2020                parties or may be               costs relating to               on that advice. 
  No change              found liable for damages        damages and defence 
                         which may not be covered        costs.                          Personal injury claims 
                         by its insurance policies,                                      relating to patients, 
  Link to Strategy       if the claims are               As a substantive buyer          third parties and 
  Uncompromising         in excess of cover              of corporate insurance,         employees are covered 
  on patient safety      or claims are not               the Group could be              by insurance once 
  and critical           covered by the Group's          faced with increased            predetermined deductible 
  care                   insurance due to other          premiums, reduced               levels have been 
                         policy limitations              cover or withdrawal             reached. 
                         or exclusions or where          of cover because of 
                         it has failed to comply         hardening global insurance      The Group engages 
                         with the terms of               markets.                        in consultation information 
                         the policy.                                                     events relating to 
                                                                                         indemnity and has 
                                                                                         developed a bespoke 
                                                                                         affinity insurance 
                                                                                         product MedicaInsure 
                                                                                         to provide Consultants 
                                                                                         with a high-quality, 
                                                                                         regulated alternative 
                                                                                         to discretionary 
                                                                                         cover. The Group 
                                                                                         has made robust 
                                                                                         representations 
                                                                                         to Government and 
                                                                                         the Paterson Inquiry 
                                                                                         with regard to the 
                                                                                         need to end discretionary 
                                                                                         indemnity and to 
                                                                                         regulate the medical 
                                                                                         defence organisations. 
 7. Liquidity and Covenants 
 Executive Owner(s)     The Group may not               Failure to meet its              The Group actively 
  Chief Financial        have sufficient liquidity       obligations or covenants         monitors and manages 
  Officer                to meet its financial           would have a substantial         its liquid asset 
                         liabilities as they             adverse effect on                position, its financial 
  Risk movement          fall due, or breach             the Group's reputation           liabilities falling 
  in 2019                financial covenants             and may lead to borrowings       due and the cover 
  Decrease               linked to its borrowings.       becoming repayable               against its loan 
                                                         earlier than contracted.         covenants is actively 
                         The Group may not                                                focused on cash management 
  Risk movement          be able to refinance                                             and capital expenditure. 
  in 2020                on favourable terms. 
  No change                                                                               At the onset of the 
                                                                                          COVID-19 pandemic, 
                                                                                          the Group was able 
  Link to Strategy                                                                        to engage positively 
  Improving revenue,                                                                      with its banking 
  profit and cash                                                                         group with the result 
                                                                                          that the Group benefited 
                                                                                          from covenant waivers 
                                                                                          in 2020. For June 
                                                                                          2021, the banking 
                                                                                          group has again agreed 
                                                                                          to waive the covenant 
                                                                                          tests under its current 
                                                                                          loan agreements, 
                                                                                          and provide additional 
                                                                                          headroom for the 
                                                                                          December 2021 covenant 
                                                                                          tests. Note 22 to 
                                                                                          the Financial Statements 
                                                                                          describes the extended 
                                                                                          facility to 2023. 
 
                                                                                          The Group retains 
                                                                                          access to an unutilised 
                                                                                          GBP100m (reducing 
                                                                                          to GBP87m from July 
                                                                                          2022 until July 2023) 
                                                                                          revolving credit 
                                                                                          facility should its 
                                                                                          current cash position 
                                                                                          materially deteriorate. 
 
                                                                                          The Group has a solid 
                                                                                          asset base with the 
                                                                                          ability to leverage 
                                                                                          in a short timescale, 
                                                                                          if required. 
                                                                                          The Board has considered 
                                                                                          the risk in detail 
                                                                                          as part of its assessment 
                                                                                          of the viability 
                                                                                          of the Group. 
 8. Government & NHS Policy 
 Executive Owner(s)     The COVID-19 pandemic           Changes to NHS commissioning     Historically, the 
  Chief Commercial       has seen significant            models, if adverse,              Group derived 70% 
  Officer                changes in the way              could lead to reduced            of its revenues from 
                         the NHS has interacted          access to patients,              PMI and Self-pay 
  Risk movement          with the private healthcare     reduced tariffs, or              patients that provided 
  in 2019                sector. NHS England             reduced prices adversely         a natural hedge against 
  Increase               has contracted at               influencing revenues             exposure to Government 
                         a national level for            and/or margins.                  and NHS policy. Post 
                         the first time.                                                  pandemic, the Group 
  Risk movement                                          A reduction in patient           will seek to recover 
  in 2020                The Group expects               volumes could lead               its private revenues 
  No change              the NHS to continue             to a reduction in                as far as possible 
                         to develop the pre-pandemic     the operational efficiency       to restore that hedge. 
                         policy of regional              of our existing hospital 
  Link to Strategy       Integrated Care Systems.        network.                         The Group has successfully 
  Key partner                                                                             secured accreditation 
  of the NHS.            There is a risk that            Changes in HM Government         on the NHS Framework 
                         the developments in             fiscal policy or spending        to be considered 
                         the provision of healthcare     policy towards corporate         for future contracts. 
                         in the UK could result          organisations, or 
                         in a short- to medium-term      the healthcare sector            Through the COVID-19 
                         material change in              in particular, could             pandemic, the Group 
                         NHS commissioning               materially affect                has increased its 
                         models and/or changes           the profitability                relationships with 
                         in the tariff structures.       of the Group.                    the Government via 
                                                                                          DoHSC, NHS England, 
                         The economic policy                                              NHS Improvement and 
                         of HM Government post                                            maintained close 
                         the COVID-19 pandemic                                            communications with 
                         is unknown. There                                                NHS leads in Scotland, 
                         is a risk that future                                            Wales, the local 
                         economic policy is                                               Trusts and Commissioners. 
                         unfavourable to the                                              Contact is both direct 
                         healthcare sector                                                and through the Independent 
                         as a whole.                                                      Healthcare Providers 
                                                                                          Network where the 
                                                                                          Group contributed 
                                                                                          staff across working 
                                                                                          groups set up to 
                                                                                          manage the private 
                                                                                          sector's response 
                                                                                          to the COVID-19 pandemic. 
 9. UK-EU Trade Relations 
 Executive Owner(s)     On 30 December 2020,              The Group may experience       In 2019, the Group 
  Chief Financial        the UK and European               disruption to the              undertook a risk 
  Officer                Union signed the UK-EU            Group's business including:    assessment. It developed 
  Chief Operating        Trade and Cooperation             Supply Chain e.g.              comprehensive plans 
  Officer                Agreement (TCA). The              Medicines                      across all key risk 
                         Agreement introduced              Consumables                    areas to minimise 
  Risk movement          new trading relationships         Prostheses                     disruption, including: 
  in 2019                between the EU and                Food                           utilising its national 
  Decrease               UK.                               Transport disruption           supply chain and 
                         Whilst the TCA clarified          Cross border data              distribution centre 
                         tariff regimes for                flows                          to efficiently utilise 
  Risk movement          many physical goods,                                             stock; undertaking 
  in 2020                new border procedures                                            supplier assurance; 
  No change              and custom duties                                                liaising with NHS 
                         came into force on                                               England and the Department 
                         1 January 2021 with                                              of Health planning 
  Link to Strategy       member states of the                                             team and promoting 
  First choice           EU.                                                              the EU settlement 
  for private                                                                             scheme to relevant 
  healthcare.            80% of the Group consumable                                      staff. 
                         supplies are sourced 
  Key partner            from, or via, the                                                In 2021, the Group's 
  of the NHS.            EU.                                                              Brexit Steering Committee 
                                                                                          continues to monitor 
  Uncompromising         There is a risk that                                             the Group's resilience 
  on patient safety      the Group's operations                                           to the identified 
  and clinical           may experience disruption                                        key risk areas. The 
  care.                  from the new border                                              Group has maintained 
                         procedures.                                                      its pre-Brexit key 
  Improving revenue,                                                                      supply levels as 
  profit and cash.                                                                        a precautionary measure. 
                                                                                          To date there has 
                                                                                          been minimal disruption 
                                                                                          to the Group's operations. 
 10. Information Governance and Security 
 Executive Owner(s)     The Group has to maintain       The Group's business             The Group has a governance 
  Chief Financial       and manage a range               could be disrupted              structure, with Board 
  Officer               of physical and digital          if its information              oversight, that monitors 
                        data assets including            systems fail are breached,      the risk and mitigations 
  Risk movement         patient records, commercial      destroyed or damaged.           for information governance. 
  in 2019               information and staff                                            To support the governance 
  Increase              data.                            Staff and patient               structure the Group 
                                                         data could be stolen            has a range of policies 
                        Personal data has                or compromised.                 and practices covering 
  Risk movement         to be managed in compliance                                      information governance. 
  in 2020               with the principles              The Group could also            All staff have to 
  Increase              set out in the Data              be subject to litigation        complete annual mandatory 
                        Protection Act 2018              by third parties and            training on information 
                        and the General Data             law enforcement agencies.       governance and data 
  Link to Strategy      Protection Regulations                                           protection. 
  First choice          (GDPR).                          A successful cyber-attack 
  for private                                            and a breach of data            The Group's IT team 
  healthcare.           The level of risk                security could result           have a cyber-security 
                        to Spire Healthcare's            in:                             strategy for continuous 
  Key partner           IT architecture and              material costs to               improvement based 
  of the NHS.           systems continues                recover operations,             on industry standards. 
                        to grow as the volume            material financial              It covers the processes 
  Uncompromising        of cyber security                penalties for breaches          from identifying 
  on patient safety     threats are increasing           of Data Protection              specific risks, to 
  and clinical          and becoming more                law,                            protecting physical 
  care.                 sophisticated.                   compensation for patients       and digital data 
                                                         or staff if personal            assets through to 
  Improving revenue,    Healthcare and pharmaceutical    data is compromised;            recovery in the event 
  profit and cash.      organisations saw                and,                            of a successful cyber-attack. 
                        increased hostile                Reputational damage. 
                        cyber activity in                                                The Group works with 
                        2020 because of the                                              a number of industry 
                        COVID-19 pandemic.                                               leading technical 
                        The group anticipates                                            partners to provide: 
                        that the Healthcare                                              multiple layers of 
                        sector will remain                                               business protection 
                        a higher risk sector                                             through the use of 
                        from cyber-attacks.                                              advanced detection 
                                                                                         and protection systems, 
                                                                                         Regular third-party 
                                                                                         penetration testing 
                                                                                         on new and existing 
                                                                                         IT systems. 
                                                                                         Assessment of maturity 
                                                                                         of control environment 
                                                                                         against international 
                                                                                         control frameworks. 
 11. COVID-19 Pandemic (NEW) 
 Executive Owner(s)     Repeated waves of               Further lockdown measures        To maximise the utilisation 
  The whole Executive   infection occur that             could adversely impact           of the hospitals 
  Committee, led        risk overwhelming                Spire Healthcare's               the Group has: 
  by the Chief          the NHS and forcing              operations and its               Negotiated a short-term 
  Executive Officer.    HM Government to re-introduce    profitability by:                contract from 1 Jan 
                        severe lock-down measures        Reducing the amount              2021 - 31 March 2021 
  Risk movement         either regionally                of elective procedures           based on activity 
  in 2019               or nationally.                   the hospitals can                with a minimum activity 
  N/A                                                    carry out because                underpin. 
                                                         of additional Infection          Negotiated national 
  Risk movement                                          Prevention Control               contracts with the 
  in 2020                                                measures or patients             NHS to support them 
  Increase                                               reluctance to attend             to provide capacity 
                                                         hospital.                        for treating the 
                                                         A substantive number             backlog of elective 
  Link to Strategy                                       of staff have to self-isolate    procedures. 
  Uncompromising                                         because they or household        Maintained capacity 
  on patient safety                                      members show symptoms,           within the contractual 
  and clinical                                           are tested positive              arrangements with 
  care.                                                  or are instructed                the NHS for PMI and 
                                                         to self-isolate by               Self-pay patients 
  First choice                                           the HM Government's              (overridden in Surge 
  for private                                            contact tracing operations.      scenarios). 
  healthcare.                                            Spire Healthcare hospitals       Maintained close 
                                                         are required to support          links with the Consultant 
  Key partner                                            local NHS trusts that            community and support 
  of the NHS.                                            declare Surge, preventing        them build their 
                                                         them from treating               private patient activities. 
  Improving revenue,                                     private patients.                Maintained the Infection 
  profit and cash.                                       There is a short-term            Prevention Control 
                                                         risk of material financial       measures to reduce 
                                                         losses under the current         the risk of cross 
                                                         contract to 31 March             contamination amongst 
                                                         2021 before mitigations.         staff at Spire Healthcare 
                                                         Consultants and anaesthetists    facilities. These 
                                                         are required to support          measures include 
                                                         their NHS trusts to              regularly testing 
                                                         treat Covid-19 patients          all staff and patients 
                                                         reducing their availability      for COVID-19. 
                                                         to undertake work                The Group is supporting 
                                                         in Spire Healthcare              the national vaccination 
                                                         facilities.                      programme. Frontline 
                                                                                          clinical staff will 
                                                                                          be prioritised with 
                                                                                          NHS frontline clinical 
                                                                                          staff. 
 12. Brand Reputation 
 Executive Owner(s)     The COVID-19 pandemic           If we fail to protect            The Group's primary 
  Chief Commercial       has resulted in a               or grow the brand                mitigations against 
  Officer                substantial amount              it may harm our ability:         damage to its brand 
                         of positive media               to maintain or grow              reputation is through 
  Risk movement          coverage for the Group.         income                           the good management 
  in 2019                The Group's actions             to attract and retain            of its principal 
  Increase               to support the NHS              the best staff and               risks, in particular: 
                         has generated a substantial     clinicians                       Patient safety and 
                         amount of goodwill              to win new contracts             clinical quality; 
  Risk movement          at national and regional        to raise capital at              Cyber security and 
  in 2020                level within the NHS.           competitive rates                data protection; 
  No change                                              to meet our regulatory           and, 
                         Its brand presence              obligations                      Compliance and regulation. 
                         within the consumer 
  Link to Strategy       and NHS & HM Government                                          Specifically in 2021 
  First choice           is higher than at                                                the Group will: 
  for private            any point.                                                       Continue to support 
  healthcare.                                                                             the NHS through the 
                         The Group's future                                               COVID-19 pandemic; 
  Key partner            growth depends upon                                              Continue to focus 
  of the NHS.            its ability to maintain,                                         on enhanced infection 
                         and continue to enhance,                                         prevention control 
                         its reputation amongst                                           to minimise patient 
                         patients, clinicians                                             and staff risk from 
                         and other stakeholders.                                          COVID-19 
                                                                                          Substantially complete 
                         As the Group's brand                                             its response to the 
                         presence grows, the                                              recommendations of 
                         risk increases that                                              the Independent Inquiry 
                         adverse events such                                              into the issues raised 
                         as:                                                              by Ian Paterson 
                         patient notifications                                            Launch its first 
                         and recalls;                                                     national television 
                         mishandling of patient                                           advertising campaign 
                         data; or,                                                        focused on its core 
                         a breach of law or                                               purpose. 
                         regulation will have 
                         a more material impact                                           The Group has built 
                         on the Group.                                                    greater capability 
                                                                                          to manage its social 
                                                                                          media, online presence 
                                                                                          and public relations 
                                                                                          during 2020. 
 13. Compliance & Regulation 
 Executive Owner(s)     The increasing range            Failure to comply                The Group has a Ward-to-Board 
  Group General          and complexity of               with laws, regulations           system of governance 
  Counsel                the legislation and             or regulatory standards          that ensures compliance 
  Chief Financial        regulation which impact         may expose the Group             with law and regulation 
  Officer                on the Group, plus              to claims, fines,                and provides the 
  Chief Commercial       the fact that, alongside        penalties, and damage            pathways to add different 
  Officer                many other complex              to reputation, suspension        elements of compliance, 
  Chief Operating        and highly-regulated            from the treatment               should regulation/laws 
  Officer                entities, the Group             of NHS patients, loss            change and thus the 
  Group Clinical         fully expects that              of hospital licence              need arise. 
  Director               the legal and regulatory        and loss of private 
  Group Medical          landscape in which              patients.                        Key components that 
  Director               it operates will change                                          support the Ward-to-Board 
                         and become more onerous,        New laws and regulations         governance structure 
  Risk movement          complex and demanding,          may require new compliance       for compliance and 
  in 2019                means that this is              programmes to provide            regulation include: 
  No change              considered an area              assurance that the               A dedicated legal 
                         of potential risk               Group is in compliance           team and company 
  Risk movement          for the Group and               increasing overhead              secretary that, with 
  in 2020                its operations.                 costs.                           external counsel, 
  Increase                                                                                monitors legal and 
                         In addition, as the                                              regulatory developments 
                         UK makes the transition                                          and advises the group 
  Link to Strategy       from being part of                                               thereon. 
  First choice           the EU, there will                                               Regular, role specific, 
  for private            be flux in legal and                                             mandatory training 
  healthcare.            regulatory developments,                                         for all staff (both 
                         potentially arising                                              clinical and non-clinical) 
  Key partner            from the interpretation                                          across a range of 
  of the NHS.            of retained EU law                                               the most important 
                         by the UK courts or                                              legal and regulatory 
  Uncompromising         from the direction                                               compliance areas, 
  on patient safety      taken by the UK following                                        e.g. data protection, 
  and clinical           the end of the transition                                        health & safety laws 
  care.                  period; it is not                                                and safeguarding. 
                         possible to determine                                            Centralised clinical 
                         with any degree of                                               and non-clinical 
                         certainty the speed,                                             internal audit teams 
                         impact or direction                                              that carry out site 
                         of forthcoming legal                                             audits and assists 
                         or regulatory change.                                            hospitals in establishing 
                         This will therefore                                              and maintaining a 
                         require monitoring,                                              high level of internal 
                         compliance and assurance.                                        control. 
---------------------  ------------------------------  -------------------------------  ------------------------------ 
 

Statement of Directors' responsibilities

The Directors are responsible for preparing the annual report and the group 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 International Accounting Standards in conformity with the requirements of the Companies Act 2006 (and IFRSs adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union). Under company law the directors must not approve the group 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.

Under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, group financial statements are required to be prepared in accordance with IFRSs adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

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's financial position and financial performance;

- in respect of the group financial statements, state whether IFRSs in conformity with the Companies Act 2006 and IFRSs adopted pursuant to Regulation(EC) No 1606/2002 as it applies in the European Union 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 IFRSs in conformity with the Companies Act 2006 have been followed, subject to any material departures disclosed and explained in the financial statements, and

- 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 and, with respect to the group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the group and parent company and group 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 IFRSs in conformity with the Companies Act 2006 and IFRSs adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, 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; and

- 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.

Related party transactions

31. 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 120 to 123.

Compensation for key management personnel is set out in the table below:

Key management compensation

 
(GBPm)                                            2020  2019 
------------------------------------------------  ----  ---- 
Salaries and other short term employee benefits    4.4   3.6 
------------------------------------------------  ----  ---- 
Post-employment benefits                           0.5   0.5 
------------------------------------------------  ----  ---- 
Termination benefits                               0.4     - 
------------------------------------------------  ----  ---- 
Share-based payments                               0.8   0.8 
------------------------------------------------  ----  ---- 
                                                   6.1   4.9 
------------------------------------------------  ----  ---- 
 

Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on pages 146 to 155.

There were no transactions with related parties external to the Group in the year to 31 December 2020 (2019: nil).

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April 06, 2021 09:22 ET (13:22 GMT)

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