Thu, 09 Jun 2022 | ADMINISTRATION
Private oncology provider Rutherford Health has announced that it will apply this week to appoint the official receiver (an Insolvency Service officer), with the group poised to enter liquidation. Established in 2015, the group has built a sophisticated network of oncology centres in the Thames Valley, Liverpool, South Wales and Northumberland.
The company has also recently opened a first-of-its-kind community diagnostics centre in Somerset. The Rutherford Group comprises several subsidiary firms, including Rutherford Diagnostics, Rutherford Cancer Centres, Rutherford Innovations and Rutherford Estates.
The group’s investor said that its highly developed network “led to a high and unsustainable cash burn”. This does, however, raise the prospect that individual centres, likely to be sold as going concerns during the liquidation process, could remain viable.
Initial reports have indicated that the group's sites are unlikely to be acquired by a single buyer, but negotiations are said to be underway for centres in Newport and Reading.
The group’s centres offer a wide range of advanced cancer treatments, with its South Wales centre being the first in the UK to provide high energy proton beam therapy. Other services offered at its centres include chemotherapy, immunotherapy, radiotherapy and diagnostic imaging, along with supportive care.
The decision to put the group into liquidation has been attributed to several factors, including the heavy investment that has been made in building its network and a drop in patient volumes during COVID-19. In an effort to increase patient flow, the group offered the NHS a not-for-profit national contract on top of its existing local contracts, but this was not taken up by the health service.
Rutherford investor Schroder UK Public Private Trust said that the group’s expansion strategy in its initial development phase was flawed and “laid the ground for an ultimately unsustainable funding need.” More than £240 million was invested in the development of Rutherford’s four oncology centres, along with capital expenditure on the site requirements and equipment needed to offer proton energy beam therapy.
Schroder has said its Rutherford holding was recently valued at £22.8 million. Due to the uncertainty of whether the liquidation will generate proceeds for Schroder, the trust’s alternative investment fund manager will write off the book value of its holding.
Rutherford’s group accounts for the year ending February 28 2021 show a total comprehensive loss of £32.5 million on revenue of £7.2 million. At the time, the group’s total assets were valued at £172.9 million, with total equity of £144.7 million.
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