Spire Healthcare Group plc

("Spire Healthcare", "the Company" or "the Group")

Spire Cheshire Hospital sale and leaseback

22 December 2021

Spire Healthcare Group plc (LSE: SPI), a leading UK independent hospital group, announces it has agreed terms to sell the freehold assets of Spire Cheshire through the sale of the shares in a wholly owned subsidiary in which the property is held to NWI Jersey Ltd. for £89m in cash before costs, generating a book profit of approximately £23m on gross assets of £66m. Spire Healthcare will continue to operate the hospital and will lease the property at an initial rent of £3.8m, with annual rent inflation linked to CPI and capped at 4%.

Net proceeds after deal costs and applicable taxes are expected to be £85m. In FY22, Spire Healthcare's lease liabilities under IFRS 16 will increase by £56m to c.£800m, and net finance costs will rise by £3m with negligible impact to depreciation.

Spire Cheshire is a medium-sized hospital rated Outstanding by the CQC, comprising 46 beds, 3 main theatres and a minor operations room. The hospital generates an EBITDA margin in line with the Group average and the transaction will have no impact on the operation of the hospital or patient care.

The sale proceeds of the transaction will be used to provide financial flexibility for post COVID opportunities, and an improved cash position while COVID-19 uncertainty continues and the Company undertakes to re-finance its existing bank debt in 2022, which is due to mature in mid-2023. The freehold sale also presents an excellent opportunity to demonstrate the value of the Group's freehold property portfolio.

Following the transaction, the acquisition of the Claremont hospital, which completed on 30 November 2021, and the sale of the Sussex hospital, which is due to complete in Q1 2022, Spire Healthcare will comprise 19 freehold and 20 leased properties. Spire Healthcare has always maintained a proactive approach to portfolio management. The Company fully considers the risks and benefits of freehold versus leasehold properties and seeks to maintain a prudent balance between the two.

Supplementary information update

The supplementary information provided at the interim results on 9 September has been updated. In Q1, the Company operated under an NHS contract. The updated supplementary information provides a breakdown of costs in Q2 to go alongside revenue breakdowns already provided. This breakdown shows a gross margin of 42.2% in Q2. The supplementary information in respect of Q2 can be found on the Spire Healthcare website at https://investors.spirehealthcare.com/investors/reports-and-accounts/

Spire Healthcare will report its FY21 results on 3 March 2022.

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For further information please contact:

Registered Office and Head Office:

Spire Healthcare Group plc
3 Dorset Rise
London
EC4Y 8EN

Registered number 09084066

About Spire Healthcare

Spire Healthcare is a leading independent hospital group in the United Kingdom, with 40 private hospitals and eight clinics across England, Wales and Scotland.

Working in partnership with around 7,500 experienced consultants, Spire Healthcare delivered tailored, personalised care to almost 750,000 in-patients and daycase patients in 2020, and is the leading private provider, by volume, of knee and hip operations in the United Kingdom.

The Group's well-located and scalable hospitals have delivered successful and award-winning clinical outcomes, positioning the Group well with patients, consultants, the NHS, GPs and Private Medical Insurance ("PMI") providers. 90% of Spire Healthcare's hospitals are rated 'Good' or 'Outstanding' by the CQC (or the equivalent in Scotland and Wales).

Spire Healthcare treats patients through a variety of routes including PMI, Self-pay and the NHS, providing the Group with diversified access to the expected growth opportunities in the UK healthcare market, which faces significant supply challenges as a result of NHS budget constraints and increasing demand from a growing population with longer life expectancy.