Bupa hit by care home sales and other challenges
Healthcare group Bupa posted a 19% fall in profits last year after it sold part of its UK elderly care business and battled headwinds in the Australia business.
The company also warned that conditions will continue to be “challenging” in a number of its key markets.
Bupa made a pre-tax profit of £502 million in 2018 compared with £620m the year earlier as revenue fell to £11.9 billion from £12.2bn.
On an underlying basis, profits fell 12% to £613m.
Bupa incurred a £36m loss from the disposal of a portion of its UK care homes and its stake in Torrejon Salud, a public hospital that the company ran in Spain. It also booked a £36m impairment for its aged care business in New Zealand.
The company faced a number of challenges in its Australia business, with the health insurance unit affected by the Government’s limit on the annual premium rate increase to a level lower than claims inflation.
The elderly care business was hit by funding pressures, lower occupancy and compliance issues.
Underlying profit for Australia and New Zealand declined 9% to £313m, while profit for the UK arm fell 22% to £156m.
“Conditions in some of our key markets will continue to be challenging with a number of economic and political headwinds,” said CEO Evelyn Bourke.
“However, Bupa’s strong financial position means we are well placed to continue to invest to meet the needs of customers.”
“This financial strength enables us to balance short-term delivery with long-term investment for sustainable growth, while maintaining a focus on cost efficiency.”
The firm said it was preparing for various Brexit scenarios including a no-deal departure. It has already set up an insurance entity in Ireland to continue servicing customers living in the EU.