08Spire Healthcare Annual Review 2010Chief Executive's statementWe have seen another period of double-digit earnings growth, demonstrating that this business is capable of delivering solid results even in the most challenging economic times.""

09One highlight of 2010 was continued strong growth in our out-patient and diagnostic services. In 2007 we correctly anticipated that by plugging identifiable service gaps in the UK private healthcare market and offering high-quality, easily accessible services to consultants and their patients, we would capture latent demand. We have made significant capital investments since 2007 in this area and are seeing the returns. This can be demonstrated by our diagnostic and out-patient revenues, up by 6.3% year-on-year, making up 29% of Spire's total revenue in 2010. We now have 22 MRI and 18 CT fixed-site scanners installed within our portfolio of hospitals and clinics. This provides our consultants and patients with ready access to high-end diagnostic facilities and is essential for many clinical specialties including growth areas like orthopaedics, general surgery and oncology.A key part of Spire Healthcare's growth strategy continues to be to position ourselves for expansion into specialty areas that allow us to diversify and drive new services. Strong advances in our strategy were achieved during 2010 in the service areas of cancer, pathology, fertility and mental health.Spire Healthcare has a robust network of pathology laboratories, which covers most of the UK. This service supports our own customers' needs but, increasingly, is achieving recognition from other primary and secondary care providers. We have transformed our network of laboratories by upgrading our capabilities, improving the speed of results reporting and increasing our operating efficiency. We succeeded in winning a number of third-party contracts during 2010 and we have continued that success into 2011. We expect that public healthcare reform will generate further opportunities in pathology for Spire.Having completed our third full operating year, I am proud to present Spire Healthcare's 2010 results. We have seen another period of double-digit earnings growth, demonstrating that this business is capable of delivering solid results even in the most challenging economic times. We achieved significant gains across all four key areas of our business: people, service quality, reputation and shareholder value. We did this through continued investment in staff and facilities, building strong relationships, a focus on innovation and driving operating efficiencies. Spire Healthcare is an agile and creative business, focused on delivering high-quality services. Looking forward, I am confident we are positioned to maximise opportunities within the market and we are well on our way to achieving our goal of being the UK's leading private provider of quality healthcare.Shareholder valueWe achieved another year of strong EBITDAR (pre-exceptional items) growth, up 10.5% from 2009 to £169.8 million, and our total revenue increased by 3.7%. This is especially satisfying as our gains have largely been achieved through expanding services and we believe we are taking share in a challenging market for privately insured healthcare. We have been able to increase profitability while also improving quality. Our EBITDAR (pre-exceptional items) margin increased by 1.6 percentage points year-on-year, and has improved from 21.6% in 2008 to 26.4% in 2010. We are constantly challenging ourselves to improve the way we deliver services to patients, including making the most efficient use of working practices, listening to our staff and simplifying procurement of supplies.Our core business of in-patient and day-case admissions remained strong in 2010, with revenue up 3.1% year-on-year, and within that we delivered a year-on-year increase in self-funding work.