Healthcare Locums PLC today releases a trading update for the half year ended 30 June 2012.
In the AGM statement of 23 May 2012, the Company indicated that unexpected delays in the tendering processes of several national and regional NHS procurement frameworks would have an impact on the timing of HCL signing supply agreements which in turn could affect the anticipated rate of growth for this year. This remains the case and as a result the UK gross profit in the first half of the year has been below management's expectations. HCL has continued to restructure its UK operations and as a result the overall performance at Adjusted EBITDA* level has improved in the UK compared with the second half of 2011.
In Australia, the Company previously stated that progress and trading were encouraging and opportunities for organic growth existed but the national roll out of the existing doctor locum business was behind schedule due to the change in management. Since then, trading in May and June has also been disappointing for the nursing agency and has been behind the Board's expectations. The Board now expects trading to improve in the second half of the year, as Australia moves into its seasonally busier time of the year and the benefits of investments made in the Australian business and of changes in the management team begin to come through.
Overall, with weaker trading than expected, the group expects to report a negative Adjusted EBITDA* for the first half.
HCL ended the first half with £10.3 million in cash compared to £14.2 million as at 31 December 2011. We remain in constructive talks with our lending banks, which have been supportive to date, to ensure banking covenants are appropriate for the business on an on-going basis.
Despite the disappointing trading in the first half, the Board remains confident that HCL is well placed to increase its share of NHS framework business and the increased cost it has put into Australia will begin to reap its reward.
*Adjusted EBITDA is defined as earnings before depreciation, amortisation, interest and tax and before highlighted operating costs and share based charges or credits.
For further information please contact:
Healthcare Locums plc
Stephen Burke, Chief Executive Officer
Sue Bygrave, Chief Finance Officer
020 7451 1451
Investec Bank plc
Gary Clarence/Patrick Robb/Daniel Adams
020 7597 5970
Pelham Bell Pottinger
David Rydell/Emma Kent/Duncan Mayall/Charlotte Offredi
020 7861 3232
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