By Alexander Bueso
Date: Tuesday 24 Nov 2020
LONDON (ShareCast) - (Sharecast News) - Take a deep breath. It's possible to do good and make money - at the same time even.
That was the main reason for the Mail on Sunday's Midas column's decision at the weekend to recommend buying shares of Inspiration Healthcare.
The company, which focuses on neonatal care - saving babies - and ventilators in particular, had come a long way since it was founded in 2003 and since listing on AIM in 2015, Midas said.
Just last July, the company reached a major milestone, acquiring SLE, which should prove "transformative", according to the tipster.
That was followed in October by the firm's maiden dividend, an interim payout of 0.2p per share.
Furthermore, with full-year sales to January 2021 expected to double to roughly £35m and profits set to hit £1.4m, the full-year dividend is expected to be 0.6p.
But it gets even better, said Midas.
Inspiration's boss, Neil Campbell, is keen to triple sales to at least £100m over the following five to seven years, which in turn should boost profits and dividends.
"Campbell has a simple philosophy - that good businesses should be growing, profitable and generating cash, Midas added.
"They should then reward the shareholders who took the risk of investing in them. Inspiration ticks all these boxes. It also helps some of the most vulnerable children in the world and has played a key role in combating Covid-19. At 66p, the shares are a buy."
Spire Healthcare's shares have outperfomed more recently but remain sharply below the level at which they floated on AIM in 2014, Sabah Meddings wrote in the Sunday Times's 'Inside the City' column.
Business appeared to be turning up before the pandemic, which drove the private hospitals group's revenues 18% lower at the half to £ 401.9m.
The result of that was a pre-tax loss of £231.3m, against profits of £9.6m one year earlier.
Indeed, were it not for a deal with NHS under which Spire treats NHA patients and the health service covers its rents and wages, the business might have gone under.
That deal is expected to carry on until at least the end of 2020 "but what does the future hold when it ends?", Meddings asked out loud.
Compounding matters, the risk exists that people will postpone non-essential elective care due to the pandemic.
"The prospect of any Spire recovery rests on a rebound in people taking out private medical insurance. Rates have plunged this year.
"Shares in Spire have outperformed the market. As NHS waiting lists stay long, the company will be keen to participate in tenders to move operations into the private sector. Yet Spire is in far from rude health, and the future is uncertain. Hold."
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