Termination of coverage

Edison Investment Research is terminating coverage on Circle Holdings (CIRC). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

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Circle’s existing operations continued to progress in H116, with revenues ahead 6% year-on-year in H116 and both business units again generating positive EBITDA. The group EBITDA loss after central costs declined further and we estimate positive EBITDA for 2018. Management is focused on further diversifying the group offering and building the scale required to generate attractive overall returns. Already preferred bidder for a new musculoskeletal (MSK) contract in Greenwich, Circle seeks additio...

Update: Growth in revenues and new opportunities

In H115, Circle Holdings (Circle) achieved revenue growth of 28% y-o-y so that EBITDA losses fell to 6.4% of revenue from 12% the year before. Circle does not feel it is under the same pressure on NHS work as its competitor Spire, because it relies less on block bookings for NHS contracts and more on individual choice. The result of the UK general election has reduced some of the political uncertainty that had affected the company and the UK health economy and it is actively bidding for new cont...

Outlook: Steady progress but challenges remain

Circle Holdings (Circle) remains in a development phase. Revenue increased 32% in 2014 in line with expectations and EBITDA losses were reduced by 25% y-o-y. The challenge remains to expand and achieve critical mass by winning new hospital contracts or managing more NHS service contracts. A new hospital in Birmingham is being planned alongside more NHS contracts, but finance for the former could be a heavy burden for the group. Project Reset has been completed, simplifying the ownership structur...

Institutional Comment: Daily comment

Update: Revenue growth and narrowing losses

Circle Holdings achieved good revenue growth in H114 of 11% year-on-year, reduced its EBITDA losses further and produced a small EBITDAR profit of £0.4m; however, EBITDA progress was not as fast as we expected. The Bedfordshire NHS contract was successfully started in April and CircleBath property was sold to a US REIT, Medical Properties Trust, producing lower rent, a capital gain and a new relationship with a large finance provider. Project Reset is due to be completed in Q414. There were no ...

Institutional Comment: Daily Comment