By Gabriella Griffith Wednesday, 07 August 2013

Cost cutting helps nurse Bupa's UK profits back to health

The struggling healthcare company has enjoyed a 124% leap in UK profits

Bupa has enjoyed a 124% hike in UK underlying profits, bringing the total up to £59.2m for the six months to 30 June. The private healthcare company has put the healthy results down to cost-cutting and reducing medical fees.

The rise gives the company a much-needed pump to the heart following last year’s 22% slump in profits. Customer numbers however have continued to fall, decreasing 3% to 2.8 million and sales have remained horizontal at £1.3bn.

CEO Stuart Fletcher, who joined Bupa in March 2012 from drinks giant Diageo (hmmm not so healthy), embarked on a fundamental ‘shake-up’ at the health company last year, splitting its health and wellbeing business into Bupa Health Funding and Bupa Health Clinics in a bid to make the two arms more efficient. The restructuring of the mutual company also saw a number of job losses. Coupled with the company’s negotiations with hospitals and doctors to lower fees, the strategy has clearly paid off (much to the consternation of NHS surgeons moonlighting in the private sector).

The healthcare company faces tough time ahead, however, trading at its care homes division remains slow with occupancy falling from 86.8% to 85.3%.

Bupa’s UK business might be performing slightly better but the company makes 70% of its revenues overseas, where profits only edged up 1% to $258.9m. In terms of the bottom line, profits for the company fell 15% to £218m. A clean bill of health still feels a long way off…

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