Revenues on the up at Bon Secours group

Pre-tax profits at the country’s largest privately owned hospital group last year increased by 20% to €11.68m.

Accounts filed by the Cork-based Bon Secours Health System Ltd, show the group recorded the rise in pre-tax profits after revenues increased from €218.9m to €221.7m in the 12 months to the end of December last.

The not-for-profit group operates 850 beds in privately run hospitals in Cork, Dublin, Galway, and Tralee employing 2,700 people.

However, group CEO Pat Lyons said yesterday pre-tax profits for 2012 will be down 50% to 60%.

Mr Lyons said a number of factors are behind the anticipated sharp drop in profits for 2012 — the lower yields on claim submissions to health insurers; unrecoverable inflationary costs such as payroll increments, and a reduction or downgrade of private health insurance cover and its impact on demand.

He said the percentage of Irish people holding private health insurance has dropped from 52% to 46%. He said for 2011, reimbursement rates fell by 3% and this was off-set by higher volumes of patients.

Bon Secours treated about 92,000 patients last year and it is expected to increase to 95,000 this year. The group must increase activity levels in order to maintain revenues as the yield per patient is lower, he said.

The directors report said a factor behind the increased pre-tax profits last year was a reduction of €488,000 in loan interest payments.

Mr Lyons said it is necessary for the group to generate surpluses each year to fund re-investment. Last year €14m was spent on capital investment with a further €10m being spent on capital projects this year.

Mr Lyons said that over the next two to three years a further €50m will be spent on capital projects.

Mr Lyons said that the group’s balance sheet “is strong”. Shareholder funds last year totalled €112.5m including €58.7m in accumulated profits. The group’s cash increased from €36.1m to €37.4m during the year.