Circle Health has announced it is “encouraged” by the emergence of franchise-type opportunities to run hospitals and integrated services.

A trading update published by the company today said it was expecting operating profit and consolidated revenue to be “slightly better than expected” for 2012 when it announces its full results on 18 April.

The statement said: “The group is encouraged by the emergence of further NHS opportunities.

“These comprise similar franchise-type hospital opportunities that are expected to come to market through a formal procurement process open to both the independent sector and NHS bidders as well as individual service lines for integrated pathways.”

The statement added: “In relation to its pipeline of independent facilities, the Group notes increasing appetite in the financing markets for the development of CircleManchester following overseas interest in the UK healthcare real estate market.”

Circle is the only private company currently running a franchise hospital and marked 12 months at Hinchingbrooke Health Care Trust this month.

Last week senior sources told HSJ interest in government in using the franchise model for other hospitals – whether to independent providers or foundation trusts – has significantly dropped.

HSJ understands senior officials are concerned by the complexity of arrangements, the political challenges and lack of evidence the model will deliver sustainable solutions.

One source said: “The model [franchising] is not off the table but interest has waned dramatically in the last 12 months. There is not much appetite from either foundation trusts or the private sector.”

Read HSJ Local Briefing which analyses Circle’s progress at Hinchingbrooke Health Care Trust and the prospects for wider use of the franchise model.