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Unaudited condensed consolidated interim Financial Statements for the 6 months ended 31 Dec 2014
ADVANCED HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/059246/06)
(“the Company” or “Advanced Health”)
ISIN Code: ZAE000189049 JSE Code: AVL
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 31 DECEMBER 2014
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
Six months Six months Year ended
31-Dec-14 31-Dec-13 30-June-14
R’000 R’000 R’000
ASSETS
Non-current assets 99 356 50 727 82 538
Property, plant and equipment 60 961 49 169 60 601
Goodwill 27 412 - 10 412
Intangible assets 8 340 335 7 992
Deferred taxation 2 643 1 223 3 533
Current assets 158 961 49 759 164 997
Inventories 3 870 2 990 3 820
Trade and other receivables 13 937 6 530 13 976
Other financial assets - - 3 318
Cash and cash equivalents 141 154 40 239 143 883
Total assets 258 317 100 486 247 535
EQUITY AND LIABILITIES
Capital and reserves 186 236 41 680 172 874
Stated capital 136 844 467 120 378
Foreign currency translation reserve 22 557 26 237 31 297
Retained earnings 23 050 12 939 17 876
Revaluation reserve 2 037 2 037 2 037
Share-based payment reserve 1 748 - 1 286
Non-controlling interest 18 536 8,642 15 462
Total equity 204 772 50 322 188 336
Non-current liabilities 26 878 28 571 24 235
Other financial liabilities 13 743 15 669 14 512
Other loans - 7 580 -
Finance lease obligations 6 748 3 260 3 971
Provisions 2 016 - 1 264
Deferred taxation 4 371 2 062 4 488
Current liabilities 26 667 21 593 34 964
Other financial liabilities 2 970 3 260 7 852
Finance lease obligations 5 174 4 265 7 796
Trade and other payables 10 045 11 016 13 541
Provisions 2 622 - 1 612
Operating lease liabilities 344 - 141
Current tax payable 5 512 3 052 4 023
Total equity and liabilities 258 317 100 486 247 535
Notes to statement of financial position
Total number of shares in issue ('000) 221 843 90 467 211 615
Net asset value per share (cents) 92.31 55.62 89.00
Net tangible asset value per share (cents) 76.19 55.25 80.30
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
31-Dec-14 31-Dec-13 30-June-14
R’000 R’000 R’000
Revenue 92 721 74 677 155 791
Cost of sales (41 966) (37 089) (71 443)
Gross profit 50 755 37 588 84 348
EBITDA (earnings before interest, impairment, tax, 13 527 15 162 31 758
depreciation and amortisation)
Investment income 3 088 - 1 451
Depreciation and amortisation (3 981) (2 822) (7 778)
Net finance costs (1 151) (1 015) (2 101)
Profit before taxation 11 483 11 325 23 330
Taxation (3 235) (4 397) (7 851)
Profit for the period 8 249 6 928 15 479
Other comprehensive (expense)/income for the period, (8 740) 31 4 943
net of tax
Total comprehensive (loss)/ income for the period (491) 6 959 20 422
Profit attributable to:
Owners of the parent 5 174 3 776 7 740
Non-controlling interest 3 075 3 152 7 739
Total comprehensive (expense)/ income attributable to:
Owners of the parent (3 566) 3 807 12 683
Non-controlling interest 3 075 3 152 7 739
Earnings per share (cents) 2.33 4.17 6.44
Diluted earnings per share (cents) 2.33 4.17 6.44
Notes to the statement of comprehensive income
Headline earnings for the period attributable to ordinary
shareholders:
Headline earnings per share (cents) 2.33 4.17 6.44
Diluted headline earnings per share (cents) 2.33 4.17 6.44
- Total number of shares in issue(‘000) 221 843 90 467 211 615
- Weighted average number of shares (‘000) 221 615 90 467 120 272
- Diluted weighted average number of shares (‘000) 221 843 90 467 120 273
Reconciliation of headline earnings calculation:
Earnings for the period attributable to ordinary 5 174 3 776 7 740
shareholders
Headline earnings for the period attributable to ordinary 5 174 3 776 7 740
shareholders
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
Six months Six months Year ended
31-Dec-14 31-Dec-13 30-June-14
R’000 R’000 R’000
Net cash flows from operating activities 6 515 15 727 33 249
Net cash flows from investing activities (2 996) (4 063) (7 305)
Net cash flows from financing activities (4 564) (2 020) 92 930
Net increase/(decrease) in cash and cash equivalents (1 045) 9 644 118 874
Effect of translation of foreign operations (1 684) 1 639 (3 947)
Cash and cash equivalents at beginning of year 143 883 28 956 28 956
Cash and cash equivalents at end of year 141 154 40 239 143 883
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
Six months Six months Year ended
31-Dec-14 31-Dec-13 30-June-14
R’000 R’000 R’000
Equity – opening balance 188 336 45 766 45 766
Profit for year 5 174 3 776 7 740
Non-controlling interest 3 075 3 152 7 739
Foreign currency translation reserve (8 740) 31 4 943
Share issue for acquisition of subsidiaries - - 21 864
Specific issue of shares 17 000 - 20 000
General issue of shares - - 81 284
Capital raising fees (535) - (3 237)
Share-based payment expense 462 - 3
Dividend paid to non-controlling interest - (2 166) (2 166)
Change of interest in NCI - (237) 1 581
Increase in NCI on reverse acquisition - - 2 819
Equity – closing balance 204 772 50 322 188 336
CONDENSED SEGMENTAL REPORTING
Geographical Information
The group operates in two main regions, namely Australia and South Africa:
Unaudited Unaudited Audited
Six months Six months Year ended
31-Dec-14 31-Dec-13 30-June-14
R’000 R’000 R’000
REVENUE
SOUTH AFRICA 13 001 - 7 259
External revenue 13 001 - 7 259
AUSTRALIA 79 720 74 677 148 532
External revenue 79 720 74 677 148 532
INTEREST INCOME 3 088 - 1 451
South Africa 3 088 - 1 451
Australia - - -
INTEREST EXPENSE (151) (1 015) (2 102)
South Africa (81) - (198)
Australia (1 070) (1 015) (1 904)
DEPRECIATION AND AMORTISATION (3 981) (2 822) (7 778)
South Africa (1 297) - (952)
Australia (2 684) (2 822) (6 826)
PROFIT/(LOSS) FOR THE PERIOD BEFORE TAX 11 483 11 325 23 330
South Africa 1 199 - (2 760)
Australia 10 284 11 325 26 090
SEGMENT ASSETS 258 317 100 486 247 535
South Africa 142 867 - 128 278
Australia 115 450 100 486 119 257
SEGMENT LIABILITIES 53 545 50 164 (59 200)
South Africa 5 144 - (14 856)
Australia 48 401 50 164 (44 344)
The revenue from external parties and all other items of income, expenses, profits and losses
reported in the segment report are measured in a manner consistent with that in the statement of
comprehensive income.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PREPARATION
The unaudited condensed consolidated interim financial statements have been prepared in
accordance with and containing the information required by IAS 34: Interim Financial Reporting as
well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the
JSE Listing Requirements and the Companies Act, 2008 (No. 71 of 2008) as amended. They have
been prepared on the historical cost basis, except for certain financial instruments which are
measured at fair value, and are presented in South African Rand, which is the Group's functional
and presentation currency.
The accounting policies are in terms of International Financial Reporting Standards (“IFRS”) and are
consistent with those of the consolidated Annual Financial Statements at 30 June 2014.
The unaudited condensed consolidated interim financial statements have been internally prepared
under the supervision of CJPG van Zyl CA(SA), in his capacity as Chief Financial Officer.
The interim unaudited condensed consolidated financial statements have not been reviewed or
audited by Mazars (Gauteng) Inc, the Group's external auditors.
GOODWILL AND ISSUE OF SHARES
During the period under review the company entered into an agreement to develop five day
hospitals, one in Gauteng and four in the Western Cape. Construction has commenced on some of
these day clinics. The acquisition consideration was settled through the issue of 10 000 000 new
shares at an issue price of R1.70 per share.
R’000
Opening balance – 30 June 2014 10 412
Acquiring of new companies 17 000
Closing balance – 31 December 2014 27 412
EXCHANGE RATES
The following exchange rates were used in foreign interest and foreign transactions during the
periods:
Rand/Australian Dollar 31 Dec 2014 31 Dec 2013 30 June 2014
Closing rate 9.4695 9.3055 9.9844
Average rate 9.7782 9.2929 9.5257
COMMENTARY
HIGHLIGHTS
• Revenue is at R92.7 million
• Profit for the period before tax is R11.5 million
• Headline earnings of R5.2 million translating into diluted earnings per share of 2.33 cents
INTRODUCTION
The directors of Advanced Health present the unaudited condensed consolidated interim results for
the six months ended 31 December 2014 (“the period”), reflecting a satisfactory performance.
OVERVIEW
In Australia, construction of the largest ophthalmic day hospital in the country has commenced. The
six-theatre facility is scheduled for completion towards the end of 2015.
Sundry negotiations with different role players within the day hospital environment are ongoing
and, if successful, will provide Presmed Australia with an improved coverage of specialised day
hospitals in the greater Sydney area. The above initiatives will add further growth opportunities for
the Australian subsidiaries.
The South African activities were focussed mainly on transactions to develop additional day
hospitals, which will be achieved through negotiations with like-minded partners, as outlined in the
pre-listing prospectus.
Management is confident that, by the end of June 2016, the South African subsidiary will be in
control of at least nine day hospitals compared to the current two operational units.
Projects in the pipeline for South Africa include:
- Advanced Durbanville Surgical Centre (under construction, operational Q3 2015);
- Advanced Panorama Surgical Centre (under construction, operational Q1 2016);
- Advanced Soweto Day Hospital (under construction, operational Q1 2016);
- Advanced Knysna Surgical Centre (construction Q1 2015, operational Q1 2016);
- Advanced Waterkloof Somerset Surgical Centre (construction Q1 2015, operational Q1 2016);
- Advanced Worcester Surgical Centre (construction Q1 2015, operational Q1 2016)
- Advanced Groenkloof Surgical Centre (construction Q4 2015, operational Q1 2016)
The board remains committed to achieving the group’s long-term objective to implement and
continuously refine a strategy which is focussed on the achievement of the business goals.
Management is committed to growing the Company’s share in the short-procedure day-surgery
market to become the Group of choice, offering cost-effective healthcare to the benefit of patients,
surgeons and medical funds.
FINANCIAL RESULTS
The Group’s revenue is up by 24.1% to R92.7 million from the comparable six month period in 2013.
Approximately 86% of the revenue was generated in Australia and the balance in South Africa.
Profit after taxation attributable to the parent for the six months ended 31 December 2014, has
increased to R5.2 million compared to R3.8 million for the period ended 31 December 2013.
However due to the increased number of shares in issue pursuant to the listing, the earnings per
share and headline earnings per share are 2.33 cents for the six months ended 31 December 2014
(based on the weighted average number of shares 221 614 801) compared to earnings per share
and headline earnings per share of 4.17 cents for the six months ended 31 December 2013 (based
on the weighted average number of shares in issue of 90 467 000).
It should be noted that the R100 million cash raised in conjunction with the listing is held for future
developments which will only start generating income for the group in the next financial year.
DIVIDEND DECLARATION
No dividend is proposed or recommended. The Board of Directors will consider the payment of
dividends on an annual basis based in terms of the group policy of commencing dividend payments
approximately three years after listing.
PROSPECTS
The prospects for the group remain positive, with the construction of new day clinics in both
Australia and South Africa underway in line with expectations and plans of the Board.
On behalf of the board
FA van Hoogstraten CA Grillenberger CJPG van Zyl
Chairman Chief Executive Officer Chief Financial Officer
24 February 2015
CORPORATE INFORMATION
Advanced Health Limited Registered Address:
(Incorporated in the Republic of South Africa) Crossway Office Park, Building 2
Registration number: 2013/059246/06 Cnr Jean & Lenchen Avenue
ISIN: ZAE000189049 JSE Code: AVL Centurion, 0046
Postnet Suite 668, Private Bag X1
Centurion, 0041
Transfer Secretaries: Trifecta Capital Services Proprietary Limited
Designated Advisor: Arbor Capital Sponsors Proprietary Limited
Directors:
Executive directors
CA Grillenberger (Chief Executive Officer)
CJPG van Zyl (Chief Financial Officer)
MC Resnik# (Chief Operational Officer Australia)
NON-EXECUTIVE DIRECTORS
PJ Jaffe#
FA van Hoogstraten (Chairman)
WT Mthembu
YJ Visser (alternate)
J Oelofse
# Australian
Company Secretary: M Janse van Rensburg
Auditors: Mazars (Gauteng) Inc.
Designated Advisor: Arbor Capital Sponsors Proprietary Limited
Date: 24/02/2015 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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