Bupa profit declines after selling UK care homes and challenges in Australia
The healthcare firm also warned of continued economic and political headwinds in key markets.
Healthcare group Bupa posted a 19% fall in profits last year after it sold part of its UK elderly care business and battled headwinds in the Australia business.
The company also warned that conditions will continue to be “challenging” in a number of its key markets.
Bupa made a pre-tax profit of £502 million in 2018 compared with £620 million the year earlier as revenue fell to £11.9 billion from £12.2 billion.
On an underlying basis, profits fell 12% to £613 million.
Bupa’s strong financial position means we are well placed to continue to invest to meet the needs of customers Evelyn Bourke, Bupa chief executive
Bupa incurred a £36 million loss from the disposal of a portion of its UK care homes and its stake in Torrejon Salud, a public hospital that the company ran in Spain.
It also booked a £36 million impairment for its aged care business in New Zealand.
The company faced a number of challenges in its Australia business, with the health insurance unit affected by the Government’s limit on the annual premium rate increase to a level lower than claims inflation.
The elderly care business was hit by funding pressures, lower occupancy and compliance issues.
Underlying profit for Australia and New Zealand declined 9% to £313 million, while profit for the UK arm fell 22% to £156 million.
Looking ahead, chief executive Evelyn Bourke said “conditions in some of our key markets will continue to be challenging with a number of economic and political headwinds”.
“However, Bupa’s strong financial position means we are well placed to continue to invest to meet the needs of customers,” she said.
“This financial strength enables us to balance short-term delivery with long-term investment for sustainable growth, while maintaining a focus on cost efficiency.”
Regarding Britain’s impending departure from the European Union, the company said it was preparing for various scenarios including a no-deal Brexit and previously disclosed it had set up an insurance entity in Ireland to continue servicing customers living in the bloc.