Life Healthcare reports firm operational gains as accounting charge drags HEPS

Key topics:Strong underlying trading performance: revenue +5.5% to 6.5%, NEPS +7% to 12%.Piramal fair value adjustment knocks ±201c off EPS/HEPS, masking core strength.LMI disposal, cost pressures and FMC renal business dilute margins and comparability.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.Life Healthcare Group Holdings Limited (LHC) announced its trading update and statement on November 19, 2025, for the financial year ended September 30, 2025 (FY2025). The Group described FY2025 as a significant year, highlighted by the conclusion of the Life Molecular Imaging (LMI) disposal and the return of substantial funds to shareholders. Total funds distributed to shareholders amounted to R4.5 billion during the current year.LHC delivered a good trading performance across the large majority of its facilities. Group overall revenue growth is expected to be between 5.5% and 6.5%, supported by a 5.1% tariff increase and a c. 1.1% increase in paid patient days (PPDs). The acute business saw revenue growth of approximately 5.0%. Weighted average occupancy for FY2025 improved slightly to 69.7% from 69.0% in the prior year (FY2024).The Group's Normalised EBITDA (NEBITDA), which excludes non-trading related costs, increased between 4.5% and 5.0%. On a like-for-like basis, NEBITDA growth was stronger, estimated between 6.6% and 7.1%.Operational performance was negatively impacted by a few facilities operating below expectation, as well as the renal dialysis business acquired from Fresenius Medical Care (FMC), which contributed a lower margin and diluted the overall EBITDA margin. Furthermore, ongoing overall cost pressures, where inflationary increases surpassed tariff increases, dampened the overall margin. However, if specific assets identified for portfolio optimisation are excluded, PPDs increased by more than 2.0%, and occupancy reached approximately 72%..The disposal of LMI in FY2025 and the Alliance Medical Group (AMG) in FY2024 complicates comparability between the two years.Focusing on the underlying southern African business, Normalised Earnings Per Share (NEPS)—which excludes non-trading related items—is expected to increase by 7% to 12% to range from +97.5 to +102.0 cents.However, the reported Earnings Per Share (EPS) and Headline Earnings Per Share (HEPS) were substantially impacted by a R2.9 billion fair value adjustment relating to the pre-existing Piramal liability. This adjustment, which is required by IFRS Accounting Standards to be included in continuing operations, is equivalent to a reduction of approximately 201 cents per share. Including this loss, HEPS from continuing operations is projected to range from -91.7 to -96.4 cents. The Group has provided pro forma figures, which deduct this fair value adjustment, to give a more realistic assessment of the underlying performance.The estimated financial information has not been reviewed or reported on by Life Healthcare’s external auditors, and the final results are expected to be released on or about November 27, 2025.

Life Healthcare reports firm operational gains as accounting charge drags HEPS

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