Wrap Text
Audited group results for the year ended 30 September 2014
Netcare Limited ("Netcare", "the Company" or "the Group")
Registration number: 1996/008242/06 (Incorporated in the Republic of South Africa)
JSE share code: NTC
ISIN code: ZAE000011953 Registered office: 76 Maude Street (corner West Street), Sandton 2196, Private Bag X34, Benmore 2010
Executive directors: RH Friedland (Chief Executive Officer), KN Gibson (Chief Financial Officer), J Watts
Non-executive directors: SJ Vilakazi (Chairman), T Brewer, APH Jammine, JM Kahn, MJ Kuscus, KD Moroka, N Weltman
Company Secretary: L Bagwandeen
Sponsor: Nedbank Capital, a division of Nedbank Group Limited
Transfer secretaries: Link Market Services South Africa (Proprietary) Limited, 13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein 2001
Investor relations: ir@netcare.co.za
AUDITED GROUP RESULTS for the year ended 30 September 2014
FINANCIAL HIGHLIGHTS
Adjusted HEPS up 19.5% to 167.8 cents
Group cash flow from operations up 15.6% to 4 382 million
Revenue up 16.1% to R31 783 million
Final dividend per share up 18.5% to 48.0 cents
COMMENTARY
Overview
Netcare Limited's (Netcare) Group financial results reflect a strong trading performance from the South African (SA) operations across all business units and an
improved result from BMI Healthcare (also referred to as BMI OpCo), Netcare's operations in the United Kingdom (UK). Adjusted headline earnings per share
(adjusted HEPS) rose by 19.5% to 167.8 cents (2013: 140.4 cents).
During the year the Group adopted a number of new and revised International Financial Reporting Standards (IFRS), which are fully described in the notes to
the audited annual financial statements and notes 2 and 14 of the abridged fiancial statements. As IFRS 10: Consolidated Financial Statements, IFRS 11:
Joint Arrangements and IAS 19 (Revised): Employee Benefits require retrospective application, the comparative year's results have been restated accordingly.
The prior year's results include a non-recurring, non-cash profit of R3 257 million arising from the deconsolidation of the General Healthcare Group (GHG) Property
Businesses ("the Deconsolidation"), which took effect on 16 November 2012. To enable meaningful comparison, this commentary refers to normalised results which
exclude this non-recurring, non-cash profit.
On 23 September 2014, Netcare announced the appointment of Mrs J Watts as Group CEO of GHG with effect from 17 November 2014. Mrs Watts joins BMI
Healthcare from Ramsay Health Care (UK) where she was the CEO of their UK operations. Mrs Watts was appointed to the Netcare Board of Directors with effect
from 17 November 2014.
Netcare's achievements across the broader aspects that underpin sustainability, including our commitment to good governance and our economic, social and
environmental performance and contributions, have been recognised in our inclusion on the JSE SRI Index as one of the six top performers, and the Dow Jones
Sustainability World Index and Dow Jones Sustainability Emerging Markets Index.
Group financial review
Financial performance
The SA and UK operations both grew revenue in their respective local currencies, with Group revenue up 16.1% to R31 783 million (2013: R27 382 million). Currency
conversion accounted for 9.9% or R2 722 million of this increase. The average exchange rate used to convert offshore income and expenditure of R17.49 was 21.2%
weaker than the average rate of R14.43 in the 2013 financial year. The Rand continued to weaken against the Pound Sterling (Pound) during the year to end at a
closing rate of R18.29 to the Pound, 12.8% weaker than the closing rate of R16.22 for the prior year.
Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 18.3% to R6 868 million (2013: R5 805 million) before recognising R2
464 million (2013: R1 719 million) in rent paid to the GHG Property Businesses. The 2013 rental expense of R1 719 million related to ten-and-a-half months post the
Deconsolidation and would have been R1 994 million on a pro forma like-for-like basis. After these rentals, reported Group EBITDA improved by 7.8% to R4 404
million (2013: R4 086 million) and operating profit of R3 253 million by 8.5% compared to the prior year (2013: R2 997 million). However, on a like-for-like basis,
adjusting for the one-and-a-half month period affected by the Deconsolidation, EBITDA grew by 15.6% and operating profit rose by 17.5%.
Net financial expenses were significantly lower at R431 million compared to R653 million in the prior year. The decline was largely attributed to the reduction in interest
charges following the Deconsolidation (the 2013 results included one-and-a-half months of financial expenses relating to the GHG Property Businesses). In SA, net
interest paid increased from R101 million to R128 million, with the impact of a cumulative 75 basis point increase in the central bank interest rate being offset by lower
average net debt levels.
Normalised profit before taxation increased by 19.1% to R2 897 million (2013: R2 433 million). The taxation expense for the Group increased to R801 million (2013:
R640 million), representing an effective tax rate of 27.6% (2013: 26.3%). The effective tax rate of 27.9% for the SA operations was in line with the statutory tax rate of
28%. Profit after tax of R2 096 million was 16.9% higher than the 2013 normalised result of R1 793 million.
Financial position and cash flow
At 30 September 2014, Group net debt was R4 972 million (2013: R4 927 million). Net debt to normalised EBITDA strengthened to 1.1 times (2013: 1.2 times), while
interest cover improved significantly to 9.2 times (2013: 6.4 times).
In SA, net debt decreased from R3 214 million at 30 September 2013 to R2 967 million at 30 September 2014. This de-gearing was achieved notwithstanding a
year-on-year increase in capital expenditure, dividends and tax of R783 million. In February 2014, the Group raised a R550 million five-year note and a R250 million
three-year note under its Domestic Medium Term Note (DMTN) programme. The maturity profile of the SA debt is well balanced and the Group's funding needs over
the medium term are secured.
Net debt in the UK increased from £105.6 million at 30 September 2013 to £109.6 million at 30 September 2014.
Cash generated from operations increased 15.6% to R4 382 million (2013: R3 790 million). The increase is mainly attributable to operational growth and stringent
management of working capital resulting in a cash conversion ratio of 99.5%.
The Group invested R1 945 million (2013: R1 387 million) in capital expenditure, including intangible assets, and distributed R973 million (2013: R788 million) to
shareholders in ordinary dividends.
Divisional review
South Africa
The SA operations delivered a strong performance. The division's growth was largely organic in line with higher demand for private healthcare. Cost management and
operational efficiencies enabled the business to achieve solid operational leverage.
Revenue grew by 7.4% to R16 273 million (2013: R15 147 million) and EBITDA increased by 13.5% to R3 599 million (2013: R3 170 million) at a widened EBITDA
margin of 22.1% (2013: 20.9%). Operating profit grew by 15.6% to R3 112 million (2013: R2 692 million) and adjusted HEPS increased 15.4% to 161.8 cents (2013:
140.2 cents).
Cash conversion of 97.9% resulted in a 19.3% increase in cash generated from operations of R3 522 million (2013: R2 951 million). Capital expenditure, including
intangible assets, totalled R1 195 million (2013: R800 million).
Hospitals and Emergency services
The growing demand for private hospital services resulted in a strong contribution from the Hospitals and Emergency services division. Patient days grew by 2.6%,
with revenue per patient day increasing by 6.7%. Price inflation remained in line with CPI and there was a higher mix of complex cases.
Revenue grew 8.5% to R15 171 million (2013: R13 984 million) and EBITDA increased by 13.4% to R3 501 million (2013: R3 087 million), with the EBITDA margin
improving to 23.1% (2013: 22.1%). Operational efficiencies and cost containment initiatives continued to deliver benefits in 2014.
The division added 89 new beds in the year, the majority thereof coming on-stream in the latter part of the year. A further 65 under-utilised beds were converted to
disciplines for which there is higher demand. The total number of registered beds at year-end was 9 424 beds (2013: 9 289 beds). Netcare acquired the 28-bed
Ceres Private Hospital in the Western Cape, with effect from 1 November 2014.
The division's growth profile is strong, with major expansion projects underway. These include the construction of a new 100-bed hospital in Pinehaven, west of
Johannesburg, and a new 170-bed hospital in Polokwane. Commissioning is expected late in the 2015 financial year. The new Netcare Christiaan Barnard Memorial
Hospital in Cape Town is on track to open in 2016.
Planned capital expenditure of approximately R2 billion for the 2015 financial year will cover green-fields expansion projects as well as refurbishments and other
expansion projects. These projects will deliver some 510 new beds in 2015, including the newly acquired Ceres Private Hospital. This represents a 5.4% increase in
the number of registered beds.
Netcare's notable achievements were recognised as follows during the year:
- The 2014/15 Ask Afrika Orange Index award in the private hospitals category. The index tracks customer service excellence across various industries. Given that the
award is based on the feedback of our patients and their families, it is a particularly pleasing acknowledgement;
- Netcare St. Augustine's Hospital achieved first place in the best hospital category of the 2014 Daily News Your Choice awards for the fifth consecutive year;
- Netcare Pretoria East Hospital was voted as the best hospital in Pretoria by readers of the Rekord;
- Mail & Guardian's Most Empowered Companies Award in the healthcare sector;
- The Diversity Award in the 2014 Oliver Empowerment Awards and finalist in the Job Creation and Skills and Development categories;
- Certified as the top employer in the SA healthcare sector category for the third consecutive year;
- Winner in the health and pharmaceuticals category of the 11th annual Standard Bank Top Women's Award; and
- Retained Level 2 compliance accreditation from Empowerdex in terms of the Department of Trade and Industry Codes of Practice for Broad-based Black Economic
Empowerment.
Netcare remains committed to the Triple Aim objectives of best patient outcome, best patient experience and cost-effective care. We monitor more than 300 quality
measures across all of our divisions in SA on an ongoing basis, and we strive for broad-based improvements every year. We extended our strong track record for
quality leadership in 2014, with improved outcomes achieved in 74% of these quality measures.
With the Ebola pandemic affecting large areas of West Africa and the potential risk of it spreading to SA, Netcare has developed comprehensive policies and
procedures to manage this risk. We have also conducted extensive training of our personnel. In addition, all patients with a travel history to and from Africa in the last
30 days are comprehensively screened prior to admission. Netcare has donated four fully equipped ambulances to Liberia to assist them in treating this pandemic.
Primary Care
The division's national network of Medicross family medical and dental centres and Prime Cure clinics managed in excess of three million patient visits and
dispensed two million pharmacy scripts during the year. Prime Cure concluded its transition from a managed healthcare risk model to a managed healthcare
administration model.
In terms of its strategic focus, revenue declined by 5.2% to R1 102 million (2013: R1 163 million), EBITDA increased by 18.1% to R98 million (2013: R83 million) and
the division's EBITDA margin improved from 7.1% to 8.9%. The prior year's revenue included a residual amount for the terminated risk-based contracts that no longer
form part of Primary Care's business.
SA private healthcare market inquiry
The Competition Commission commenced its inquiry into the functioning of the private healthcare market in 2014. We are committed to contributing positively towards
this process and made comprehensive submissions to the Competition Commission on 31 October 2014. This inquiry is expected to be completed by the end of
2015.
United Kingdom
BMI Healthcare delivered a credible performance in what has remained a challenging trading environment. With healthcare being a late cycle beneficiary, the
improvement in the wider UK economy has not filtered through into the Private Medical Insurance (PMI) market. Total inpatient and day case volumes increased
marginally year-on-year, with growth in National Health Service (NHS) procedures largely compensating for declines in private activity. State funded caseload through
the NHS continued to show strong growth against the prior year and now comprises 35.3% of total caseload (2013: 32.2%). More stringent claims management
initiatives and a shift in the profile of PMI members to corporate policy holders (typically younger and healthier than independent members) continued to affect PMI
caseload. Self pay caseload declined marginally.
Revenue grew 4.5% to £886.2 million (2013: £847.9 million). Significant non-recurring costs of £6.3 million (2013: £3.0 million) relating to the UK Competition
Commission market inquiry and site closure provisions were incurred. Prior to recognising the GHG Property Businesses' rentals and these non-recurring costs,
EBITDA rose 5.4% to £194.0 million (2013: £184.0 million). However, after recognising property rentals of £140.9 million (2013: £136.3 million), EBITDA before
non-recurring costs increased 11.3% to £53.1 million (2013: £47.7 million) at an EBITDA margin of 6.0% (2013: 5.6%). EBITDA after non-recurring costs amounted to
£46.8 million (2013: £44.7 million). The impact on margins of the case mix shift towards NHS work at reduced year-on-year tariffs was contained through tight cost
control and a focus on higher acuity procedures.
The GHG Property Businesses were consolidated for one-and-a-half months of the 2013 financial year (prior to their deconsolidation on 16 November 2012). As a result
2013 and 2014 reported results are not directly comparable. Previously, inter-group rental paid for this period was eliminated on consolidation, but the impact was
largely offset by the GHG Property Businesses' depreciation and interest charges for the corresponding period.
The loss before taxation of £6.9 million was a significant improvement on the prior year's loss of £15.6 million, notwithstanding the higher non-recurring charges of £6.3
million (2013: £3.0 million). Taxes attributable to the UK segment amounted to net credit of £2.2 million (2013: £8.4 million, including a non-recurring credit of £7.9
million). The reported loss after tax was £4.7 million (2013: £7.2 million).
Capital expenditure, including intangible assets, amounted to £42.2 million (2013: £39.8 million). This was spread across projects initiated to enhance revenue
generation and maintain the hospital portfolio.
Net debt of £109.6 million at 30 September 2014 rose from £105.6 million at 30 September 2013. The business remains fully compliant with the covenants of its debt
facilities.
GHG Property Businesses
Attributable earnings of associates from GHG PropCo 2 amounted to £1.0 million for the year (2013: £1.7 million). The investment in GHG PropCo 1 was impaired to zero
in prior years and no further losses have been accounted for.
Discussions between the Board of GHG PropCo 1 and lenders (junior, senior and swap counterparties) are ongoing, to facilitate an orderly and consensual solution to
the GHG PropCo 1 debt facility of £1.5 billion. The original maturity of 15 October 2013 has been extended a number of times and is currently due on 15 January 2015.
Progress continues to be made on restructuring the GHG PropCo 1 debt.
The debt of GHG PropCo 1 is ring-fenced from BMI OpCo and GHG PropCo 2 and there is no recourse to Netcare and its SA operations in this regard.
Outlook
The demand for private healthcare in SA is expected to remain strong, which will support Netcare's growth over the next few years. We will continue to focus on cost
containment and optimisation initiatives to ensure operational excellence, broad-based quality improvement and delivering superior patient care. We expect to extract
further efficiency benefits from our IT optimisation projects in the years ahead.
Netcare has embarked on a long-term strategy to mitigate the impact of ongoing power interruptions and rising utility costs. Subsequent to year-end, we secured a
committed seven-year facility of R500 million from Nedbank Corporate Banking in conjunction with the Agence Française de Développement (French Development
Agency or AFD) on favourable terms. This facility will contribute to the funding of a range of energy efficiency and renewable energy projects across the Group.
Netcare anticipates that this will result in significant cumulative savings of an estimated R1 billion on our forecast electricity costs over the next 10 years.
We expect it to take more time before the economic recovery in the UK becomes evident in the healthcare sector. Given existing capacity, there remains significant
opportunity for private sector treatment of NHS patients. Under the leadership of newly appointed CEO, Mrs J Watts, the management team will seek to drive volumes,
increase acuity and rationalise the cost base, while dealing with the challenge of clinical staffing shortages.
Board and executive changes
Mr HR Levin retired as a non-executive director with effect from 28 February 2014. He served as a member of the Netcare Board from 6 November 1996. He chaired the
Remuneration Committee and was a member and former chair of the Audit Committee. The Board expresses its gratitude and appreciation to Mr Levin for his valued
contribution to the Group.
Following the success of refinancing BMI OpCo and the completion of the UK Competition Commission investigation, Mr S Collier elected to step down as Group CEO
of GHG after 32 years with the Company. The Board wishes to express its appreciation to Mr Collier for his stewardship of the UK business over the last three years.
Mrs J Watts has been appointed Group CEO of GHG with effect from 17 November 2014. Mrs Watts has an impressive track record in the private hospital sector, and is
recognised as a leader and opinion-shaper in the UK's healthcare sector. Mrs Watts was also appointed to the Board of Netcare Limited, effective 17 November 2014.
Declaration of final dividend number 11
Notice is hereby given that a gross final dividend of 48.0 cents per ordinary share was declared on 20 November 2014 in respect of the financial year ended 30
September 2014. The dividend has been declared from income reserves and is payable on Monday, 2 February 2015 to shareholders recorded in the register at the
close of business on Friday, 30 January 2015. There are no STC credits available for utilisation. The number of ordinary shares (inclusive of treasury shares) in issue at
date of this declaration is 1 478 972 776. The dividend will be subject to a local dividend withholding tax rate of 15%, which will result in a net final dividend to those
shareholders not exempt from paying dividend withholding tax of 40.8 cents per ordinary share and 48.0 cents per ordinary share for those shareholders who are
exempt from dividend withholding tax.
The Board has confirmed by resolution that the solvency and liquidity test as contemplated by the Companies Act 71 of 2008 has been duly considered, applied and
satisfied.
The salient dates applicable to the final dividend are as follows:
Last day to trade cum dividend Friday, 23 January 2015
Trading ex dividend commences Monday, 26 January 2015
Record date Friday, 30 January 2015
Payment date Monday, 2 February 2015
Share certificates may not be dematerialised nor rematerialised between Monday, 26 January 2015 and Friday, 30 January 2015, both days inclusive.
On Monday, 2 February 2015, the dividend will be electronically transferred to the bank accounts of all certificated shareholders. Holders of dematerialised shares will
have their accounts credited at their participant or broker on Monday, 2 February 2015.
Netcare Limited's tax reference number is 9999/581/71/4.
On behalf of the Board
Jerry Vilakazi
Chairman
Richard Friedland
Chief Executive Officer
Keith Gibson
Chief Financial Officer
Sandton
20 November 2014
Group income statement
for the year ended 30 September
Restated1 %
Rm Notes 2014 2013 change
Revenue 31 783 27 382 16.1
Cost of sales (18 227) (15 568)
Gross profit 13 556 11 814 14.7
Other income 350 306
Administrative and other expenses (10 653) (9 123)
Operating profit before profit on deconsolidation 3 253 2 997 8.5
Profit on deconsolidation2 3 - 3 257
Operating profit 4 3 253 6 254 (48.0)
Investment income 5 213 288
Financial expenses 6 (564) (754)
Other financial losses - net 7 (80) (187)
Attributable earnings of associates 39 53
Attributable earnings of joint ventures 36 36
Profit before taxation 2 897 5 690 (49.1)
Taxation 8 (801) (640)
Profit for the year 2 096 5 050 (58.5)
Attributable to:
Owners of the parent 2 107 5 044
Preference shareholders 46 47
Profit attributable to shareholders 2 153 5 091 (57.7)
Non-controlling interest (57) (41)
2 096 5 050 (58.5)
Cents
Earnings per share (cents)
Basic 157.5 381.2 (58.7)
Diluted 154.2 372.2 (58.6)
Total dividend per share (cents) 80.0 67.5 18.5
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised): Employee Benefits.
2. Profit on deconsolidation of the GHG Property Businesses.
Group statement of comprehensive income
for the year ended 30 September
Restated1
Rm 2014 2013
Profit for the year 2 096 5 050
Items that may not subsequently be reclassified to profit or loss (13) 239
Remeasurement of defined benefit obligation (18) (43)
Effect of translation of foreign entities - Deconsolidation of GHG Property Businesses - 274
Taxation on items that may not subsequently be reclassified to profit or loss 5 8
Items that may subsequently be reclassified to profit or loss 694 3 560
Effect of cash flow hedge accounting (39) 3 108
Deconsolidation of GHG Property Businesses - 2 473
Change in the fair value of cash flow hedges (39) 177
Reclassification of the cash flow hedge accounting reserve - 458
Effect of translation of foreign entities 732 521
Deconsolidation of GHG Property Businesses - 310
Other 732 211
Taxation on items that may subsequently be reclassified to profit or loss 1 (69)
Other comprehensive income for the year 681 3 799
Total comprehensive income for the year 2 777 8 849
Attributable to:
Owners of the parent 2 469 7 139
Preference shareholders 46 47
Non-controlling interest 262 1 663
2 777 8 849
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19
(Revised): Employee Benefits.
Group statement of financial position
as at 30 September
Restated1
Rm Notes 2014 2013
ASSETS
Non-current assets
Property, plant and equipment 11 504 10 401
Goodwill 3 879 3 466
Intangible assets 437 389
Equity-accounted investments, loans and receivables 9 2 015 1 646
Financial assets 45 72
Deferred taxation 1 419 1 218
Total non-current assets 19 299 17 192
Current assets
Loans and receivables 9 26 34
Inventories 987 912
Trade and other receivables 4 688 4 033
Taxation receivable 5 17
Cash and cash equivalents 1 712 1 620
Total current assets 7 418 6 616
Total assets 26 717 23 808
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital and premium 962 934
Treasury shares (735) (766)
Other reserves 2 560 2 146
Retained earnings 5 859 4 846
Equity attributable to owners of the parent 8 646 7 160
Preference share capital and premium 644 644
Non-controlling interest 2 882 2 611
Total shareholders' equity 12 172 10 415
Non-current liabilities
Long-term debt 10 4 939 5 290
Financial liabilities 97 8
Post-retirement benefit obligations 260 229
Deferred lease liability 74 70
Deferred taxation 1 360 1 129
Provisions 138 97
Total non-current liabilities 6 868 6 823
Current liabilities
Trade and other payables 5 726 5 066
Short-term debt 10 1 739 1 140
Financial liabilities 3 -
Taxation payable 203 247
Bank overdrafts 6 117
Total current liabilities 7 677 6 570
Total equity and liabilities 26 717 23 808
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised):
Employee Benefits.
Group statement of cash flows
for the year ended 30 September
Restated1
Rm 2014 2013
Cash flows from operating activities
Cash received from customers 31 456 27 197
Cash paid to suppliers and employees (27 074) (23 407)
Cash generated from operations 4 382 3 790
Interest paid (545) (812)
Taxation paid (822) (725)
Ordinary dividends paid by subsidiaries (3) (3)
Ordinary dividends paid (973) (788)
Preference dividends paid (46) (47)
Distributions to beneficiaries of the HPFL trusts (154) (66)
Net cash from operating activities 1 839 1 349
Cash flows from investing activities
Purchase of property, plant and equipment (1 902) (1 350)
Proceeds on disposal of property, plant and equipment and intangible assets 80 15
Additions to intangible assets (43) (37)
Proceeds from financial assets - 5
(Decrease)/increase in investments and loans (103) 316
Interest received 96 244
Dividends received 18 24
Proceeds from disposal of businesses 46 -
Acquisition of business (19) -
Increase in equity interest in subsidiaries - (172)
Net cash from investing activities (1 827) (955)
Cash flows from financing activities
Proceeds from issue of ordinary shares 28 94
Proceeds on disposal of treasury shares 121 36
Acquisition of non-controlling interests (4) -
Long-term debt repaid (614) (297)
Short-term debt raised/(repaid) 535 (1 065)
Settlement of derivatives - (120)
Net cash from financing activities 66 (1 352)
Net increase/(decrease) in cash and cash equivalents 78 (958)
Translation effects on cash and cash equivalents of foreign entities 125 148
Cash and cash equivalents at the beginning of the year 1 503 2 411
Cash and cash equivalents of businesses deconsolidated - (98)
Cash and cash equivalents at the end of the year 1 706 1 503
Consisting of:
Cash on hand and balances with banks 1 712 1 620
Short-term money market borrowings and bank overdrafts (6) (117)
1 706 1 503
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19
(Revised): Employee Benefits.
Condensed Group statement of changes in equity
as at 30 September
Equity
Ordinary Cash flow Foreign attributable Preference
share hedge currency to owners share Non- Total
capital and Treasury accounting translation Other Retained of the capital and controlling shareholders'
Rm premium shares reserve reserve reserves earnings parent premium interest equity
Balance at 1 October 2012 (as previously reported) 720 (654) (1 635) 1 290 854 427 1 002 644 (2 666) (1 020)
Restatement1 - - - - - - - - (12) (12)
Balance at 1 October 2012 (restated)1 720 (654) (1 635) 1 290 854 427 1 002 644 (2 678) (1 032)
Shares issued during the year 214 (120) - - - - 94 - - 94
Sale of treasury shares - 8 - - - 22 30 - - 30
Share-based payments reserve movements - - - - 36 - 36 - - 36
Tax recognised in equity - - - - - 21 21 - - 21
Preference dividends paid - - - - - - - (47) - (47)
Dividends paid - - - - - (813) (813) - (3) (816)
Distributions to beneficiaries of the HPFL trusts - - - - - (66) (66) - - (66)
Other reserve movements - - - - (523) 523 - - - -
Increase in equity interest in subsidiaries - - (6) 37 1 (41) (9) - (168) (177)
Deconsolidation of GHG Property Businesses - - - - - (274) (274) - 3 797 3 523
Total comprehensive income for the year - - 1 641 451 - 5 047 7 139 47 1 663 8 849
Deconsolidation of GHG Property Businesses - - 1 311 310 - 3 257 4 878 - 1 436 6 314
Other movements - - 330 141 - 1 790 2 261 47 227 2 535
Balance at 30 September 2013 (restated)1 934 (766) - 1 778 368 4 846 7 160 644 2 611 10 415
Shares issued during the year 28 - - - - - 28 - - 28
Sale of treasury shares - 31 - - - 69 100 - - 100
Share-based payments reserve movements - - - - 37 - 37 - - 37
Tax recognised in equity - - - - 2 2 4 - - 4
Preference dividends paid - - - - - - - (46) - (46)
Dividends paid - - - - - (973) (973) - (3) (976)
Distributions to beneficiaries of the HPFL trusts - - - - - (154) (154) - - (154)
Increase in equity interest in subsidiaries - - - - - (25) (25) - 12 (13)
Total comprehensive income for the year - - (19) 394 - 2 094 2 469 46 262 2 777
Balance at 30 September 2014 962 (735) (19) 2 172 407 5 859 8 646 644 2 882 12 172
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised): Employee Benefits.
Headline earnings
for the year ended 30 September
Restated1 %
Rm 2014 2013 change
Reconciliation of headline earnings
Profit for the year 2 096 5 050 (58.5)
Less:
Dividends paid on shares attributable to the Forfeitable Share Plan (5) (4)
Preference shareholders (46) (47)
Non-controlling interest 57 41
Earnings used in the calculation of basic earnings per share 2 102 5 040 (58.3)
Adjusted for:
Profit on deconsolidation - (3 257)
Profit on disposal of investments (net) (10) -
Loss on disposal of property, plant and equipment and intangible assets 27 10
Recognition/(reversal) of impairment of property, plant and equipment 1 (9)
Tax effect of headline adjusting items (5) (2)
Non-controlling share of headline adjusting items (4) (2)
Headline earnings 2 111 1 780 18.6
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised):
Employee Benefits.
Headline earnings adjusted for:
Amount reclassified from the cash flow hedge accounting reserve - 224
Fair value losses/(gains) on derivative financial instruments 77 (43)
Ineffectiveness losses on cash flow hedges - 12
Reversal of loan impairment (4) -
Reduction in UK statutory tax rate - (20)
Deferred tax adjustment relating to prior years - (103)
Fees related to UK debt refinancing - 41
Competition Commission costs2 145 55
Site closure costs 31 -
Remeasurement of defined benefit obligation - (61)
Tax effect of adjusting items (56) (7)
Non-controlling share of adjusting items (66) (24)
Adjusted headline earnings 2 238 1 854 20.7
Headline earnings per share (cents) 158.2 134.6 17.5
Diluted headline earnings per share (cents) 154.9 131.5 17.8
Adjusted headline earnings per share (cents) 167.8 140.4 19.5
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised):
Employee Benefits.
2. Adjusted headline earnings per share have been restated to exclude Competition Commission costs as these are regarded as
non-recurring and exceptional.
Condensed segment report
for the year ended 30 September
South Africa United Kingdom
Hospital and Adjustments
Emergency and
services Primary Care Total BMI OpCo GHG PropCo2 eliminations Total Group
30 September 2014
Income Statement
Revenue 15 171 1 102 16 273 15 510 - - 15 510 31 783
Attributable earnings of associates and joint ventures 35 - 35 40 - - 40 75
EBITDA 3 499 98 3 597 807 - - 807 4 404
EBITDA before capital items 3 501 98 3 599 819 - - 819 4 418
Capital items (2) - (2) (12) - - (12) (14)
Operating profit 3 045 65 3 110 143 - - 143 3 253
Operating profit before capital items 3 047 65 3 112 155 - - 155 3 267
Capital items (2) - (2) (12) - - (12) (14)
Segment assets and liabilities
Total assets 13 694 13 023 26 717
Total liabilities (6 710) (7 835) (14 545)
Restated 30 September 20131
Income Statement
External revenue 13 984 1 163 15 147 12 235 - - 12 235 27 382
Inter-segment revenue - - - - 275 (275) - -
PropCo 1 rent - - - - 264 (264) - -
PropCo 2 rent - - - - 11 (11) - -
Revenue 13 984 1 163 15 147 12 235 275 (275) 12 235 27 382
Attributable earnings of associates and joint ventures 52 - 52 37 - - 37 89
EBITDA 3 093 82 3 175 637 274 3 257 4 168 7 343
EBITDA before capital items and profit on deconsolidation 3 087 83 3 170 643 274 - 917 4 087
Capital items 6 (1) 5 (6) - - (6) (1)
EBITDA before profit on deconsolidation 3 093 82 3 175 637 274 - 911 4 086
Profit on deconsolidation3 - - - - - 3 257 3 257 3 257
Operating profit 2 649 48 2 697 (27) 227 3 357 3 557 6 254
Operating profit before capital items and profit on deconsolidation 2 643 49 2 692 (21) 227 100 306 2 998
Capital items 6 (1) 5 (6) - - (6) (1)
Operating profit before profit on deconsolidation 2 649 48 2 697 (27) 227 100 300 2 997
Profit on deconsolidation3 - - - - - 3 257 3 257 3 257
Segment assets and liabilities
Total assets 12 454 11 354 23 808
Total liabilities (6 727) (6 666) (13 393)
Notes:
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised): Employee Benefits.
2. The results of the GHG Property Businesses are included until the date of deconsolidation. Refer to note 3 for more detail.
3. Profit on deconsolidation of the GHG Property Businesses.
Condensed notes to the group financial statements
for the year ended 30 September
1. Basis of preparation and accounting policies
The provisional summarised consolidated financial statements for the year ended 30 September 2014 have been prepared in compliance with the Listings
Requirements of the JSE Limited, the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS),
the requirements of the International Accounting Standards (IAS) 34, Interim Financial Reporting, SAICA Financial Reporting Guidelines as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act, No. 71 of 2008. These
summarised consolidated financial statements were compiled under the supervision of Mr KN Gibson (CA)SA, Group Chief Financial Officer and have been audited
in terms of Section 29(1) of the Act.
The accounting policies applied in the preparation of these results are in accordance with IFRS and are consistent in all material respects with those applied in the
audited financial statements for the year ended 30 September 2013, with the exception of the adoption of Amendment to IFRS 7: Disclosures - Offsetting Financial
Assets and Financial Liabilities, IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements, IFRS 12: Disclosure of Interests in Other Entities, IFRS 13:
Fair Value Measurement, Amendment to IAS 19: Employee Benefits, Amendment to IAS 27: Separate Financial Statements, Amendment to IAS 28: Investments in
Associates and Joint Ventures, Amendment to IAS 36: Impairment of assets, Amendment to IAS 39: Financial Instruments: Recognition and Measurement and certain
improvements to IFRSs 2013.
The external auditors, Grant Thornton, have issued their opinion on the Group's consolidated financial statements for the year ended 30 September 2014. The audit
was conducted in accordance with International Standards on Auditing. The auditor responsible for the audit is EFG Dreyer. An unmodified audit opinion has been
issued on the consolidated financial statements. These provisional summarised consolidated financial statements have been derived and are consistent in all material
respects with the Group's consolidated financial statements. A copy of the audit report on the consolidated financial statements is available for inspection at the
Company's registered office. The auditor's report does not necessarily cover all the information contained in this announcement. Shareholders are therefore advised
that in order to obtain a full understanding of the nature of the auditor's work, they should obtain a copy of the auditor's unqualified audit report together with the
Group financial information from the Company's registered office. Any reference to future financial performance included in this announcement has not been audited
and reported on by the Group's external auditors.
2. Impact of the application of new and revised standards
The following standards and amendments to standards which are relevant to the Group have had no material effect on the presentation and disclosure of these
condensed Group financial statements, unless expressed otherwise.
IFRS 7: Disclosures - Offsetting Financial Assets and Financial Liabilities
The amendment applies to financial assets and financial liabilities that are offset in the statement of financial position, or are subject to enforceable master netting
arrangements or similar agreements. An entity is required to disclose amounts which are set-off in the financial statements and the effects of these rights of set-off
on the entity's rights and obligations.
IFRS 10: Consolidated Financial Statements
IFRS 10 establishes a single control model that applies to all entities, including special purpose entities, by revising the definition of control. The new standard
replaces SIC 12: Consolidation - Special Purpose Entities and the portion of IAS 27: Consolidated and Separate Financial Statements that addresses consolidated
financial statements.
The Group assessed its various investees and concluded that control does exist for all current subsidiaries with the exception of the Cell Captive investment.
Accordingly, it continues to consolidate all current subsidiaries with the exception of the Cell Captive, which it accounts for as an investment and is measured in
accordance with IAS 39: Financial Instruments: Recognition and Measurement.
The impact of the application of IFRS 10 on the Group's financial results is disclosed in note 14, and the comparative results for the year ended 30 September 2013
have been restated. No restatement was performed for earlier periods as the effect was not considered material to the Group, and management does not consider
the ability of users of these financial statements to make decisions to be impaired in any way as a result of this exclusion.
IFRS 11: Joint Arrangements
IFRS 11 requires the application of the equity method of accounting for joint ventures. The Group previously proportionately consolidated its share of the assets,
liabilities, income and expenses of joint ventures on a line-by-line basis in its financial statements.
In order to transition to the equity method, the investments in joint ventures were recognised and measured using the carrying amounts of the assets and liabilities,
including any attributable goodwill, which had previously been proportionately consolidated at 1 October 2012. The investment was thereafter adjusted for the
Group's subsequent share of profit or loss and movements in other comprehensive income, less dividends, as well as changes in loans. The Group's share of the
profit or loss of joint ventures is recognised as a single line item in profit or loss under the equity method.
The change from proportionate consolidation to equity accounting resulted in a change in individual asset, liability, income, expense and cash flow line items with no
impact on equity and profit attributable to owners of the parent.
- The Group income statement recognises attributable earnings of joint ventures in attributable earnings of associates and joint ventures. The Group's proportionate
share of the income and expenses of joint ventures has been removed from the individual line items. There has been no impact on other comprehensive income.
- The Group statement of financial position now includes the investment in joint ventures in equity-accounted investments, loans and receivables, in accordance with
the equity method. The Group's proportionate share of the assets and liabilities of joint ventures has been removed from the individual line items.
- The Group statement of cash flows includes dividends received from joint ventures together with dividends received from associates reflected under investing
activities. The loans advanced or repaid are also included in investing activities. The Group's proportionate share of the cash flows of joint ventures has been
removed from the individual line items.
- The Group segment report now includes attributable earnings of joint ventures together with earnings from associates. The Group's proportionate share of the
income and expenses of joint ventures has been removed from the individual line items.
The impact of the application of IFRS 11 on the Group's financial results is disclosed in note 14, and the comparative results for the year ended 30 September 2013
have been restated. No restatement was performed for earlier periods as the effect was not considered material to the Group, and management does not consider
the ability of users of these financial statements to make decisions to be impaired in any way as a result of this exclusion.
IFRS 12: Disclosure of Interests in Other Entities
IFRS 12 requires extensive disclosures relating to an entity's interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The new
standard requires disclosure of information to assist users of the financial statements to evaluate the nature of, and risks associated with, its interests in other entities
and the effect of those interests on its financial position, financial performance and cash flows. The adoption of this standard has resulted in additional presentation
and disclosure for the Group.
IFRS 13: Fair Value Measurement
IFRS 13 defines fair value, establishes a single source framework for fair value measurement and sets out disclosure requirements for fair value measurements. IFRS
13 does not introduce new requirements to measure assets or liabilities at fair value, but rather provides guidance on how to measure fair value under IFRS when fair
value is required or permitted by IFRS. The adoption of this standard has resulted in additional disclosure for the Group.
Amendment to IAS 19: Employee Benefits
IAS 19 (Revised) impacts the measurement of the defined benefit pension plan in the United Kingdom and related disclosures. The most significant change is the
requirement that all actuarial gains and losses are recognised immediately in other comprehensive income, thereby eliminating the corridor method. The Group is not
affected by this change as actuarial gains and losses have previously been recognised in other comprehensive income.
The Group is, however, impacted by the new requirement to calculate interest on the net defined benefit liability/asset. The Group has a defined benefit pension
scheme with plan assets. Under the previous version of IAS 19, the financing cost recognised in profit or loss consisted of the interest cost on the defined benefit
obligation and the expected return on plan assets. Following application of the amendments to IAS 19, the Group has calculated the interest based on the net liability,
and the expected return on plan assets is now recognised in other comprehensive income.
The impact of the application of IAS 19 on the Group's financial results is disclosed in note 14, and the comparative results for the year ended 30 September 2013
have been restated. No restatement was performed for earlier periods as the effect was not considered material to the Group, and management does not consider
the ability of users of these financial statements to make decisions to be impaired in any way as a result of this exclusion.
Amendment to IAS 27: Separate Financial Statements
The amended standard remains largely unchanged from the previous standard. The amendments contain the accounting and disclosure requirements for investments
in subsidiaries, joint ventures and associates when an entity prepares separate financial statements.
Amendment to IAS 28: Investments in Associates and Joint Ventures
The amended standard prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when
accounting for investments in associates and joint ventures.
Amendment to IAS 36: Impairment of assets
The amended standard requires the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of
disposal. In addition, if the recoverable amount was measured based on the present value technique, disclosure is required of the discount rates used in the current
and previous measurements. The amended standard should be applied in conjunction with IFRS 13.
Amendment to IAS 39: Financial Instruments: Recognition and Measurement
The standard was amended in June 2013 to include guidance on novation of derivative financial instruments. Under the amendments hedge accounting will not be
discontinued if a hedging derivative is novated, provided certain criteria are met.
3. Profit on deconsolidation
The 2013 non-cash profit on deconsolidation arose from the deconsolidation of GHG PropCo 1 and GHG PropCo 2 (collectively the "GHG Property Businesses").
After evaluation of the overall factors of control, including a decision to sell down Netcare's interests in GHG PropCo 1 to 50.0%, the GHG Property Businesses have
been deconsolidated with effect from 16 November 2012. The GHG Property Businesses were consolidated for the first one-and-a-half months of the 2013 financial
year, and thereafter they are equity accounted as Netcare continues to exercise significant influence.
Restated1
Rm 2014 2013
4. Operating profit
After including:
Profit on deconsolidation - 3 257
Depreciation and amortisation (1 151) (1 089)
GHG Property Businesses - (47)
Other (1 151) (1 042)
Operating lease charges (3 070) (2 266)
GHG Property Businesses (2 464) (1 719)
Other (606) (547)
5. Investment income
Expected return on retirement benefit plan assets 70 58
Interest on bank accounts and other 143 230
213 288
6. Financial expenses
Amortisation of arrangement fees (6) (23)
GHG Property Businesses - (11)
Other (6) (12)
Interest on bank loans and other (206) (399)
GHG Property Businesses - (185)
Other (206) (214)
Interest on promissory notes (262) (255)
Retirement benefit plan interest cost (90) (77)
(564) (754)
7. Other financial losses - net
Amount reclassified from the cash flow hedge accounting reserve - (224)
Fair value losses on derivative financial instruments - (4)
Fair value (losses)/gains on inflation rate swaps (not hedge accounted) (78) 44
Fair value gains on interest rate swaps (not hedge accounted) 1 3
Fair value (losses)/gains on other financial assets (3) 6
Ineffectiveness losses on cash flow hedges - (12)
(80) (187)
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19
(Revised): Employee Benefits.
Restated1
Rm 2014 2013
8. Taxation
South African normal and deferred taxation
Current year (819) (734)
Prior years (4) (2)
Capital gains tax (6) -
(829) (736)
Foreign normal and deferred taxation
Current year (16) (37)
Prior years 45 113
Rate change - 20
29 96
Dividend tax (1) -
Total taxation per the income statement (801) (640)
The 2013 prior year foreign taxation adjustment included an amount of R103 million
related to a change in the deferred taxation treatment of subsequent additions to
non-qualifying fixed assets that were initially acquired through business combinations.
9. Equity-accounted investments, loans and receivables
Non-current
Associated companies 602 628
Joint ventures 76 62
Loans and receivables 1 337 956
2 015 1 646
Current
Loans and receivables 26 34
2 041 1 680
Included in loans and receivables is an investment of R1 087 million (2013: R855 million) relating to the acquisition of a
contractual economic interest in the debt of BMI OpCo.
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19
(Revised): Employee Benefits.
Restated1
Rm 2014 2013
10. Debt
Long-term debt 4 939 5 290
Short-term debt 1 739 1 140
Total debt 6 678 6 430
Comprising:
Debt in South African Rand
Finance leases 23 47
Promissory notes and commercial paper in issue 3 567 3 851
Unsecured liabilities - 1
3 590 3 899
Debt in foreign currency
Secured liabilities 2 743 2 361
Finance leases 292 170
Accrued interest 67 17
Arrangement fees (14) (17)
3 088 2 531
6 678 6 430
Maturity profile
1-2 2-3 3-4
Rm Total < 1 year years years years > 4 years
2014
Debt in South African Rand 3 590 1 178 992 258 602 560
Debt in foreign currency 3 088 561 467 418 423 1 219
6 678 1 739 1 459 676 1 025 1 779
2013
Debt in South African Rand 3 899 1 095 1 176 1 011 8 609
Debt in foreign currency 2 531 45 421 400 355 1 310
6 430 1 140 1 597 1 411 363 1 919
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised): Employee Benefits.
Restated1
Rm 2014 2013
11. Commitments
Capital commitments 2 600 1 915
South Africa 2 399 1 776
United Kingdom 201 139
Operating lease commitments 55 542 45 722
South Africa 4 326 1 368
United Kingdom 51 216 44 354
12. Contingent liabilities
South Africa 171 481
13. Events after the reporting period
The directors are not aware of any matter or circumstance arising since the end of the financial year, not otherwise dealt
with in the Group's annual financial statements, which significantly affects the financial position at 30 September 2014 or
the results of its operations or cash flows for the year then ended.
1. Restated for the adoption of IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19
(Revised): Employee Benefits.
14. Restatement of comparative figures
Netcare Limited adopted IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IAS 19 (Revised): Employee Benefits on 1 October
2013. The effect of the new standards is detailed under note 2 and, as required by the standards, retrospective application has been applied. The results for
the comparative year ended 30 September 2013, have been restated, however no restatement has been performed for earlier comparative years. In line with
both the transitional provisions of the relevant standards, as well as IAS 1: Presentation of Financial Statements, the effect of the restatement for earlier years
is not required. The impact was assessed by management to be immaterial both qualitatively and quantitatively, and it was therefore considered that the
information would provide no benefit to the users of the annual financial statements.
The impact of the adoption of the standards on the 2013 financial results is detailed below:
Audited
Year ended 30 September 2013
IFRS 10 IFRS 11 IAS19R
Previously adjust- adjust- adjust-
Rm reported ments ments ments Restated
GROUP INCOME STATEMENT
Revenue 27 801 - (419) - 27 382
Cost of sales (15 746) - 178 - (15 568)
Gross profit 12 055 - (241) - 11 814
Other income 306 - - - 306
Administrative and other expenses (9 301) (6) 187 (3) (9 123)
Operating profit before profit on deconsolidation 3 060 (6) (54) (3) 2 997
Profit on deconsolidation1 3 257 - - - 3 257
Operating profit 6 317 (6) (54) (3) 6 254
Investment income 351 (2) (3) (58) 288
Financial expenses (756) - 2 - (754)
Other financial losses - net (193) 6 - - (187)
Attributable earnings of associates 58 - (5) - 53
Attributable earnings of joint ventures - - 36 - 36
Profit before taxation 5 777 (2) (24) (61) 5 690
Taxation (673) 2 19 12 (640)
Profit for the year 5 104 - (5) (49) 5 050
Earnings per share (cents)
Basic 384.9 - - (3.7) 381.2
Diluted 375.8 - - (3.6) 372.2
1. Profit on deconsolidation of the GHG Property Businesses. Refer to note 3 for more detail.
Audited
Year ended 30 September 2013
IFRS 10 IFRS 11 IAS19R
Previously adjust- adjust- adjust-
Rm reported ments ments ments Restated
GROUP STATEMENT OF COMPREHENSIVE INCOME
Profit for the year 5 104 - (5) (49) 5 050
Items that may not subsequently be reclassified to profit or loss 191 - - 48 239
Remeasurement of defined benefit obligation (103) - - 60 (43)
Effect of translation of foreign entities - Deconsolidation of GHG Property Businesses 274 - - - 274
Taxation on items that may not subsequently be reclassified to profit or loss 20 - - (12) 8
Items that may subsequently be reclassified to profit or loss 3 559 - 1 - 3 560
Effect of cash flow hedge accounting 3 108 - - - 3 108
Deconsolidation of GHG Property Businesses 2 473 - - - 2 473
Change in the fair value of cash flow hedges 177 - - - 177
Reclassification of the cash flow hedge accounting reserve 458 - - - 458
Effect of translation of foreign entities 520 - 1 - 521
Deconsolidation of GHG Property Businesses 310 - - - 310
Other 210 - 1 - 211
Taxation on items that may subsequently be reclassified to profit or loss (69) - - - (69)
Other comprehensive income for the year 3 750 - 1 48 3 799
Total comprehensive income for the year 8 854 - (4) (1) 8 849
Attributable to:
Owners of the parent 7 139 - 1 (1) 7 139
Preference shareholders 47 - - - 47
Profit attributable to shareholders 7 186 - 1 (1) 7 186
Non-controlling interest 1 668 - (5) - 1 663
8 854 - (4) (1) 8 849
14. Restatement of comparative figures continued
Audited
Year ended 30 September 2013
IFRS 10 IFRS 11 IAS19R
Previously adjust- adjust- adjust-
Rm reported ments ments ments Restated
GROUP STATEMENT OF FINANCIAL POSITION
ASSETS
Non-current assets
Property, plant and equipment 10 487 - (86) - 10 401
Goodwill 3 484 - (18) - 3 466
Intangible assets 389 - - - 389
Equity-accounted investments, loans and receivables 1 552 - 94 - 1 646
Financial assets 49 23 - - 72
Deferred taxation 1 225 - (7) - 1 218
Total non-current assets 17 186 23 (17) - 17 192
Current assets
Loans and receivables 34 - - - 34
Inventories 920 - (8) - 912
Trade and other receivables 4 073 - (40) - 4 033
Taxation receivable 20 - (3) - 17
Cash and cash equivalents 1 686 (39) (27) - 1 620
Total current assets 6 733 (39) (78) - 6 616
Total assets 23 919 (16) (95) - 23 808
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital and premium 934 - - - 934
Treasury shares (766) - - - (766)
Other reserves 2 146 - - - 2 146
Retained earnings 4 846 - - - 4 846
Equity attributable to owners of the parent 7 160 - - - 7 160
Preference share capital and premium 644 - - - 644
Non-controlling interest 2 628 - (17) - 2 611
Total shareholders' equity 10 432 - (17) - 10 415
Non-current liabilities
Long-term debt 5 293 - (3) - 5 290
Financial liabilities 8 - - - 8
Post-retirement benefit obligations 229 - - - 229
Deferred lease liability 71 - (1) - 70
Deferred taxation 1 129 - - - 1 129
Provisions 97 - - - 97
Total non-current liabilities 6 827 - (4) - 6 823
Current liabilities
Trade and other payables 5 145 (15) (64) - 5 066
Short-term debt 1 147 - (7) - 1 140
Taxation payable 251 (1) (3) - 247
Bank overdrafts 117 - - - 117
Total current liabilities 6 660 (16) (74) - 6 570
Total equity and liabilities 23 919 (16) (95) - 23 808
Audited
Year ended 30 September 2013
IFRS 10 IFRS 11 IAS19R
Previously adjust- adjust- adjust-
Rm reported ments ments ments Restated
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Non-controlling interest balance at 30 September 2012 (2 666) - (12) - (2 678)
Dividend paid (3) - - - (3)
Increase in equity interest in subsidiaries (168) - - - (168)
Deconsolidation of GHG Property Businesses 3 797 - - - 3 797
Total comprehensive income for the year 1 668 - (5) - 1 663
Balance at 30 September 2013 2 628 - (17) - 2 611
14. Restatement of comparative figures
CONDENSED SEGMENT REPORT
Previously reported South Africa Effect of restatement South Africa Restated South Africa
Hospital Adjust- Hospital Adjust- Hospital Adjust-
and ments and ments and ments
Emer- and Emer- and Emer- and
gency Primary elimi- gency Primary elimi- gency Primary elimi-
Rm services Care nations Total services Care nations Total services Care nations Total
30 September 2013
Income Statement
Revenue 14 354 1 163 - 15 517 (370) - - (370) 13 984 1 163 - 15 147
Attributable earnings of associates and joint ventures - - - - 52 - - 52 52 - - 52
EBITDA 3 164 82 - 3 246 (71) - - (71) 3 093 82 - 3 175
EBITDA before capital items 3 158 83 - 3 241 (71) - - (71) 3 087 83 - 3 170
Capital items 6 (1) - 5 - - - - 6 (1) - 5
Operating profit 2 705 48 - 2 753 (56) - - (56) 2 649 48 - 2 697
Operating profit before capital items 2 699 49 - 2 748 (56) - - (56) 2 643 49 - 2 692
Capital items 6 (1) - 5 - - - - 6 (1) - 5
Segment assets and liabilities
Total assets 12 546 (92) 12 454
Total liabilities (6 802) 75 (6 727)
Previously reported UK Effect of restatement UK Restated UK
Adjust- Adjust- Adjust-
ments ments ments
and and and
BMI GHG elimi- BMI GHG elimi- BMI GHG elimi-
Rm OpCo PropCo nations Total OpCo PropCo nations Total OpCo PropCo nations Total
30 September 2013
Income Statement
External revenue 12 284 - - 12 284 (49) - - (49) 12 235 - - 12 235
Inter-segment revenue - 275 (275) - - - - - - 275 (275) -
GHG PropCo1 rent - 264 (264) - - - - - - 264 (264) -
GHG PropCo2 rent - 11 (11) - - - - - - 11 (11) -
Revenue 12 284 275 (275) 12 284 (49) - - (49) 12 235 275 (275) 12 235
Attributable earnings of associates and joint ventures - - - - 37 - - 37 37 - - 37
EBITDA 652 274 3 257 4 183 (15) - - (15) 637 274 3 257 4 168
EBITDA before capital items and profit on deconsolidation 658 274 - 932 (15) - - (15) 64 274 - 917
Capital items and profit on deconsolidation (6) - 3 257 3 251 - - - - (6) - 3 257 3 251
Operating profit (20) 227 3 357 3 564 (7) - - (7) (27) 227 3 357 3 557
Operating profit before capital items and profit on deconsolidation (14) 227 100 313 (7) - - (7) (21) 227 100 306
Capital items and profit on deconsolidation (6) - 3 257 3 251 - - - - (6) - 3 257 3 251
Segment assets and liabilities
Total assets 11 373 (19) 11 354
Total liabilities (6 685) 19 (6 666)
Previously reported Effect of restatement Restated
Adjust- Adjust- Adjust-
ments ments ments
and and and
South elimi- South elimi- South elimi-
Rm Africa UK nations Total Africa UK nations Total Africa UK nations Total
30 September 2013
Income Statement
Revenue 15 517 12 559 (275) 27 801 (370) (49) - (419) 15 147 12 510 (275) 27 382
Attributable earnings of associates and joint ventures - - - - 52 37 - 89 52 37 - 89
EBITDA 3 246 926 3 257 7 429 (71) (15) - (86) 3 175 911 3 257 7 343
EBITDA before capital items and profit on deconsolidation 3 241 932 - 4 173 (71) (15) - (86) 3 170 917 - 4 087
Capital items and profit on deconsolidation 5 (6) 3 257 3 256 - - - - 5 (6) 3 257 3 256
Operating profit 2 753 207 3 357 6 317 (56) (7) - (63) 2 697 200 3 357 6 254
Operating profit before capital items and profit on deconsolidation 2 748 213 100 3 061 (56) (7) - (63) 2 692 206 100 2 998
Capital items and profit on deconsolidation 5 (6) 3 257 3 256 - - - - 5 (6) 3 257 3 256
Segment assets and liabilities
Total assets 23 919 (111) 23 808
Total liabilities (13 487) 94 (13 393)
Salient features
for the year ended 30 September
2014 2013
Share statistics
Ordinary shares
Shares in issue (million) 1 478 1 475
Shares in issue net of treasury shares (million) 1 337 1 329
Weighted average number of shares (million) 1 334 1 322
Diluted weighted average number of shares (million) 1 363 1 354
Market price per share (cents) 3 161 2 400
Currency conversion guide (R:£)
Closing exchange rate 18.29 16.22
Average exchange rate for the period 17.49 14.43
Disclaimer
Certain statements in this document constitute 'forward-looking statements'. Forward-looking statements may be identified by words such as 'believe', 'anticipate',
'expect', 'plan', 'estimate', 'intend', 'project', 'target', 'predict' and 'hope'. By their nature, forward-looking statements are inherently predictive, speculative and involve
risk and uncertainty because they relate to events and depend on circumstances that will occur in the future, involve known and unknown risks, uncertainties and
other facts or factors which may cause the actual results, performance or achievements of the Group, or the healthcare sector to be materially different from any
results, performance or achievement expressed or implied by such forward-looking statements. Forward-looking statements are not guarantees of future performance
and are based on assumptions regarding the Group's present and future business strategies and the environments in which it operates now and in the future. No
assurance can be given that forward-looking statements will prove to be correct and undue reliance should not be placed on such statements.
Forward-looking statements apply only as of the date on which they are made, and Netcare does not undertake other than in terms of the Listings Requirements of
the JSE Limited, to update or revise any statement, whether as a result of new information, future events or otherwise.
Date: 24/11/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.