Primary care firm scales back due to crunch
By Gareth Iacobucci
One of the UK's biggest private primary care providers has announced a scaling back of its business as it bids to fight off the impact of the credit crunch.
Assura, which has invested more than £500m in 150 sites across the country, including GP surgeries, polyclinics and LIFT schemes, is predicting full-year trading losses of up to £6m.
The company, which works with GPs under limited liability partnerships, revealed it had cut staff, implemented a 15% pay cut for board members and planned to sell off ‘non-core' property assets over the next three years.
However, it claimed that its move into primary care would continue, unlike Virgin Healthcare, which recently pulled the plug on its plans to launch a string of GP practices.
Assura had seen its shares plummet by almost 90% by November, although they staged a semi-recovery after it completed an additional £80m fundraising which it said would allow it to focus on its investment in its joint ventures with GPs.
A company spokesperson said management cuts were the result of ‘the reorganisation of the business from three divisions into one in order to focus on joint ventures with GPs' and reflected ‘the current difficult economic environment', although the companies turnover was up 60% in the first half.
He added: ‘We are confident of reaching our target of establishing GP-Cos covering more than three million patients, with in excess of 60 services commissioned, by the end of March 2009.'
Elsewhere Ali Parsa, managing partner at Circle, another private firm which has 700 GPs signed up to partnerships, said it was inevitable that all private companies would have to scale back their plans.
He said: ‘Anyone who says they have the same access to capital today as they did a year, or two years ago is in cloud cuckoo land.'
Virgin Healthcare announced it was shelving its plans to launch into general practice in September, despite more than 300 GPs having expressed interest in joining the company.