Circle has raised a further £47.5 million through a share placing on the stock market.
The deal involved both existing shareholders and Invesco, which Circle described as “a significant new institutional investor”. Invesco accounts for around £20 million of the new equity.
Circle outlined a range of uses for the proceeds, including meeting working capital requirements at its private hospital in Bath, and at NHS Hinchingbrooke, where it began a management franchise in February.
It will also use the fundraising to repay its outstanding £14.1 million loan from JCAM, and to complete the commissioning of its new private hospital in Reading. However, Circle confirmed the funds would not be used for the construction of Circle Manchester.
Circle chief executive Ali Parsa (pictured) told HealthInvestor he believed this would be the firm’s last fundraising: “In terms of equity raising, this should be it for now – unless we grow faster than our projections. If we open hospitals in the sequence that we plan, and we win more government work, we will be sustainable.”
Parsa said that the fundraising would also send a strong message to its customer base.
“We wanted to show our customers that we had sufficient bandwith to continue to grow,” he said. “Our competitors like to say we won’t be around for the long term, but we will be."
Since the start of 2011, Circle has raised over £100 million from its investors.
The share placing was announced on the same day the firm reported results for the year ended 31 December 2011. Circle continued to make an operating loss, though this was down 46.6% to £18.5 million (2010: £34.7 million). Loss and total comprehensive loss for the financial year fell 18% to £32.3 million.
Total revenues were down 2.4% to £74.6 million (2010: £76.5 million), though Circle pointed out the fall included the loss of its Burton NHS Treatment Centre.
Revenue at Circle's remaining treatment centre in Nottingham rose 6.6% to £51.2 million, and revenues more than doubled at Circle Bath to £12.2 million.
The Nottingham centre is due to be re-tendered before Circle’s contract expires in July 2013. The firm said it is “awaiting details of the proposed re-tendering”, but added that if the re-tendering process does not commence soon, “we expect that an extension to the current contract is a reasonable prospect”.
As well as looking for more NHS work, Circle said it was continuing to explore funding options “in challenging financial markets” for the construction of new private hospitals in Manchester and Birmingham.