Investment summary

A number of key messages emerge from the interim statement. The first, that new revenue streams are gaining momentum and will compensate for what should be a temporary gap in demand for new primary care, due to delayed NHS reforms. These new business sources, such as extra care social housing schemes, contributed 18% of H112 revenue (FY11: 2%). Further such projects are due to be secured shortly, as well as the first scheme for a private sector health provider. The pipeline of NHS-derived work fell to £115m (FY11: £131m). It should pick up in FY13, prompted by resolution of the ongoing healthcare debate. The interim statement anticipates full recovery in NHS-led revenues over the medium term.

Last updated on 31/01/2012

Industry outlook

The proposed NHS reforms, contained in the Health & Social Care Bill, now appear due to become statute in Q112. The changes should encourage demand for modern healthcare facilities and prompt renewed commitments from group clients. Although the pick-up has been delayed by the debate, the group does have a £131m (design-and-build value) pipeline of schemes where it is already working or expects to recognise revenues over the next two years.

Last updated on 09/12/2011