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NHS overhaul to hurt Freshwater FY profit
Wed, 08 Feb, 2012
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NHS overhaul to hurt Freshwater FY profit
Tue, 17 Aug 2010, 08:27:00
Shares in PR specialist <b>Freshwater</b> sank 26% after it warned an overhaul in government policy on the NHS will take full year pre-tax profit below market expectations. "Trading in the final quarter of the current financial year has been adversely affected by the Government's policy on the National Health Service," said Freshwater in today's trading update. Last month, the government announced plans to put GP's in charge of handling budgets totalling £80bn. The move will see the scrapping of 150 primary care trusts and strategic health authorities. The new government's plans to "abolish strategic health authorities, primary care trusts and some specialist health agencies combined with an across-the-board freeze on spending on external consultancies has disrupted normal trading relationships between the NHS and companies such as ours, the group said. However Freshwater said it is "continuing to trade profitably, having made good progress over the last nine months to align costs with changing market conditions." Freshwater said in the past few weeks, it has taken additional action to make cost savings and generate revenue from other quarters, but it is now clear this will not be sufficient to mitigate the loss of NHS revenue. As a result overall profit before taxation for the year ended 31 August 2010 will be below market expectations, it warned. The company said it forecast revenue from NHS clients of about £25,000 for the fourth quarter compared with NHS sales of £225,000 during the first half.
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