Market report: Spire is left in the sick bay after hospital build delays

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Delays at one of its hospitals hurt Spire shares today after it reported profits last year that were in worse shape than investors were hoping for. 

The private healthcare group said the redevelopment of St Anthony’s hospital in Sutton, where it has built six operating theatres, would take longer than planned and would mean it will not be at full capacity until later this year.

While revenues at £925 million were ahead of analyst forecasts,  the delays in getting St Anthony’s up to speed meant underlying profits last year were relatively flat at  £162 million.

Spire, which has been touted as a takeover target for its largest shareholder Mediclinic, also warned 2017 would be more or less than same before returning to stronger profit growth in 2018.

The shares were the weakest on the mid-cap index as they dived 30.7p, or 9%, to 314.4p.

After 12 days of gains, the FTSE 100 showed signs it might end its winning streak, off 17.73 points to 7272.76.

“European equities and US stock index futures are all on the back foot this morning and there are some investors wondering if the Trump rally has run its course,” said David Morrison, senior market strategist at spread-better Spread Co.

Donald Trump’s first news conference as president-elect yesterday was eventful, although his failure to elaborate on plans to spend big on infrastructure hit the dollar.

Its decline played into the hands of gold miners as the price of the precious metal, which is considered a hedge against the dollar, rose 1% to $1203 an ounce. Randgold Resources, the FTSE 100’s proxy play on gold, was 250p, or 4%, richer at 6810p.

Pharma shares were still under pressure after Trump said major drugs companies were “getting away with murder” for the amounts they charge the US government.

Shire, which has the biggest exposure to the US after its $32 billion takeover of Baxalta, fell 166.19p, or 3.6%, to 4515.31p, while Hikma, another drugmaker which relies heavily on US government payments, was off 65p, or 3.4%, at 1839p.

On the mid-cap index, Citi dealt satellite communications firm Inmarsat a blow when it moved its Buy rating in favour of a neutral, arguing that costs will probably outpace revenues this year.

A slightly weaker-than-expected fourth-quarter performance sent shares in fund management giant Jupiter 28.4p, or 6%, lower to 416.6p, while Paysafe, up 2.93p to 399.73p, left its short-sellers reeling as the digital payments firm said its annual results would be ahead of forecasts.

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January 13, 2017 |
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