Life Healthcare – interim results, 115% increase in comprehensive income

From SENS

Life Healthcare has released its interim results, and announced trading expectations of earning improvements of more than 20%  for its year end in September 2014. Life Healthcare has a market cap of R43.8bn and is trading nearly 1% down on the day (11h00).

Life Healthcare 1 year view
Life Healthcare Group 1 year view

Highlights:

  • Revenue increased by 10.2% to R6 211 million
  • Operating profit increased by 90.1% to R2 486 million
  • Paid patient days (PPDs) were up 2.7%
  • Headline earnings per share increased by 13.4% to 82.7 cents per share
  • Normalised earnings per share increased by 16.0% to 82.7 cents per share
  • Interim dividend increased by 16.7% to 63 cents per share

Total comprehensive income for the period increased by 115.8% to R2 009 million (2013: R931 million), largely due to the Life Healthcare’s disinvestment of its 49.3% shareholding in JMH.

The full 49.3% associate shareholding in Joint Medical Holdings Limited (JMH) was sold with an effective date of 24 February 2014. It was sold for R1.365 billion, resulting in a profit on sale of associate of R982 million, attracting capital gains tax of R28 million. The year to date equity accounted earnings, net of tax, up until the date of sale amounted to R41 million (2013: R42 million). The Group declared a special dividend of 100 cents per share from the proceeds of this sale on 17 March 2014.

Normalised EBITDA increased by 12.5% to R1 738 million (2013: R1 545 million).

To meet increased demand for private hospital services, the Group plans to add an additional 120 brownfield acute hospital beds in the next six months.

In addition, the Group has over 180 beds which are under construction which will be operational within the next 12 months, over 540 beds where health department license approval has been obtained but where local and municipal approvals are outstanding and over 1 100 beds where licence applications are pending.

Life Healthcare’s results for the full financial year ended 30 September 2014 are expected to show an improvement of more than 20% from those reported for the financial year ended 30 September 2013. This expected improvement is largely due to Life Healthcare’s disinvestment of its holding in JMH.

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