For loss read investment - Circle chief
A �33MILLION loss made by Circle, Hinchingbrooke Hospital’s new managers, is nothing to worry about, the company insisted yesterday (Tuesday).
Chief executive Ali Parsa predicted when the rapidly-growing partnership took over the Huntingdon hospital in February that losses would continue for some time as investment not funded by debt-for-equity deals appeared on the balance sheet.
So the �33m loss was entirely predictable, he told The Hunts Post. “We shall break even in 2015 and be highly profitable by 2020,” he forecast.
In addition to Hinchingbrooke, the company has been building new private hospitals in Bath and Reading, and hopes the management franchise in Huntingdon will be a blueprint for taking over and turning round other cash-strapped NHS facilities.
“When you start a hospital from scratch, you don’t expect it to make money in year one,” he said. “You expect it in year five. We have a �250m investment programme, and year after year we’re investing �30m. That shows as a loss.
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“Hinchingbrooke is not going to make any money for us this year. That will also appear as a loss. But all kinds of people are investing in us, so they must agree that we’re sound. We have already invested a lot of money in Hinchingbrooke, where we’re not going to turn round a �10m loss overnight without cutting services – which we’re not going to do.”
Mr Parsa, a social entrepreneur with a background in civil engineering and investment banking, is a passionate critic of the short-term horizons of much of corporate Britain.
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“We need to stop worrying so much about the short-term. That kind of mentality is holding us back. We need to start investing again, particularly in manufacturing.
“Look where it’s got us. Twenty-five years ago we were in the top five economies in the world. Now we’re 28th because this kind of accounting culture has taken over.
“We need to be on the front foot in making long-term investment.”