A celeb clinic whose earlier purchasers have included Kate Moss, Robbie Williams and Paul Gascoigne, is ‘burning money’ and dealing with an ‘unaffordable’ hire invoice, in accordance with a US funding analysis agency.
Priory Group operates a community of hospitals and remedy centres throughout the UK specialising in remedies for psychological well being, dependancy and consuming issues.
The clinic additionally gives providers to the NHS, together with lodging for sufferers who’re sectioned below the Mental Health Act.
Overall, the agency gives round 10 per cent of NHS psychological healthcare beds and reported that it revamped 90 per cent of its income from public organisations final 12 months.
But the well being service’s reliance on Priory has come starkly into focus after a report printed final month by analysts at US danger administration group Hedgeye argued the enterprise was ‘burning money’ and was locked in onerous hire agreements with an American medical property group.
Rehab for the celebs: The Priory Clinic in London and, proper, Kate Moss
A supply near Priory Group, nevertheless, dismissed the claims.
The supply stated that the agency’s accounts confirmed it was solvent and had been signed off by auditors with none concern about its means to proceed working.
In accounts filed with Companies House this summer time, Priory reported a lack of £28million for 2022 following losses of £37million the earlier 12 months.
According to Hedgeye, the accounts additionally urged Priory Group isn’t producing sufficient money to pay its hire.
The enterprise confronted lease funds of £61million, however solely generated £38million in money that 12 months after shelling out on repairs prices on buildings and gear.
The agency’s reserves – funds put aside for a wet day – have fallen from practically £55million in the beginning of 2021 to only £10.5million on the finish of final 12 months. It is nursing money owed of practically £1.1billion.
Hedgeye analyst Rob Simone stated: ‘The monetary image for Priory is troubling, to say the least. The firm is paying practically £61million in hire yearly however is just producing round £38million in money, which means it must depend on exterior funding to prop up its steadiness sheet.’
‘This clearly is not sustainable, and if Priory cannot receive financing from different events, it will likely be in deep trouble.
‘The hire is just unaffordable.’
Concerns about Priory’s rental prices had been initially raised in an article within the Financial Times in 2021 after it was acquired by Dutch non-public fairness agency Waterland for practically £1.1billion.
The takeover was virtually completely financed by a sale and leaseback settlement of round 40 of Priory’s hospitals to US property fund Medical Properties Trust (MPT).
In July, Priory signed one more sale and leaseback cope with MPT, this time for 5 websites, elevating practically £44million.
When contacted by The Mail on Sunday, Dr Andre Schmidt, head of German healthcare outfit Median Group, which owns Priory, stated the agency was ‘very effectively financed and has comfy ranges of hire cowl to satisfy its lease funds, having been in partnership with its property homeowners for over ten years’.
He added: ‘We are in a sturdy monetary place, and stay targeted on guaranteeing our providers present the best high quality of care.’