NHS Professionals has turned its first ever monthly profit, according to interim financial results shared with HSJ.
The company, which provides bank staff to NHS trusts, delivered a small profit in August and September and expects to break even by the end of the year. This follows losses of £6.2m last year and £16m three years ago.
Chief executive Neil Lloyd said it was “essential” for the company to generate sufficient cash from trading as it no longer receives central funding
In April, NHS Professionals changed from a special health authority to a private limited company owned by the Department of Health. The DH is looking for private sector investors.
Chief executive Neil Lloyd said it was “essential” for the company to generate sufficient cash from trading as it no longer receives central funding.
He said he was proud the small profits - of £20,000-£40,000 - had been achieved without charging “excessive margin on supply”.
But he denied that private investors would create pressure for the firm to increase its profit margin, saying: “Unless the investor wanted to turn us into an agency, that won’t happen. We’re working across trusts and driving out agencies.”
Gross profit was £11.1m in the six months to September 2010, 2.8 per cent ahead of the same period in 2009 after removing the effects of pandemic flu. But after tax, the firm made a £700,000 loss, while like for like revenue fell by 2.7 per cent.
However, in the same period operating costs dropped by 18 per cent to £11.8m, leaving overheads at 7.9 per cent of revenue. Mr Lloyd said he now hoped to reduce those to 5-6 per cent. He claimed this compared favourably with agencies, where overheads average 15-20 per cent.
NHS Professionals has contracts with 78 trusts in England, including 16 mental health trusts.
In the past six months it has signed an agreement with South West London and St George’s Mental Health Trust, which NHS Professionals describes as its “largest win since 2006-07.”
Mr Lloyd said NHS professionals now aimed to expand its client base and work across healthcare economies.
Although many trusts were trying to reduce spending on temporary staff, there were also advantages in maintaining workforce flexibility, he said.
He said ideally trusts should be aiming to fill half of their additional shifts with internal bank workers and the other half with an external bankof temporary staff who could be guaranteed 15-20 hours of work a week, ensuring continuity of care.
NHS professionals: performance breakthrough
- 2.7 per cent revenue reduction compared with same period in 2009
- Breakeven expected by end of financial year
- Operating costs reduced by 18 per cent
- Overheads fallen to 7.9 per cent of revenue
- Gross profit was £11.1m
Interim financial figures for six months ending 30 September 2010