Bupa profits slide after invesment hit

Private healthcare insurer Bupa today revealed a 53% plunge in annual profits after taking a hit on the value of investments and acquisitions.

The group said pre-tax profits – which are all re-invested back into the business – dropped to £187.1m (€203.9m) last year and warned of worsening trading conditions over the year ahead.

It suffered a £116.5m (€126.9m) writedown in the value of recent acquisitions and saw losses of £97.7m (€106.4m) on its portfolio of “alternative” assets as the credit crunch took its toll.

But Bupa said the business showed “good momentum” on an underlying basis, with profits up 9% to £408.6m (€445m), excluding the impact of the credit squeeze.

Customer numbers grew by nearly a third to 10.3 million and revenues rose 39% to £5.87bn (€6.39bn), boosted largely by acquisitions.

Ray King, chief executive of Bupa, said: “We are not immune from the economic downturn. Looking into 2009, I expect trading conditions to weaken.

“Nevertheless, I believe that the group’s breadth of activities in terms of geography, sector and focus on health will help us weather the recession in our key markets.”

As a provident, Bupa does not have shareholders and profits are ploughed back into the business.