Wrap Text
Provisional Summary Audited Consolidated Financial Statements for the Year Ended 30 June 2015
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
PROVISIONAL SUMMARY AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 30 JUNE 2015
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
Year ended Year ended
R’000 30 June 2015 30 June 2014
ASSETS
Non-current assets 113 556 82 538
Property, plant and equipment 59 487 60 601
Goodwill 25 461 10 412
Intangible assets 25 788 7 992
Deferred taxation 2 820 3 533
Current assets 142 942 164 997
Inventories 6 587 3 820
Trade and other receivables 16 053 13 976
Other financial assets 3 382 3 318
Operating lease asset 185 -
Current tax receivable 1 450 -
Cash and cash equivalents 115 285 143 883
Non-current assets held for sale 36 703 -
Total assets 293 201 247 535
EQUITY AND LIABILITIES
Capital and reserves 205 868 172 874
Stated capital 137 378 120 378
Foreign currency translation reserve 27 233 31 297
Retained earnings 38 934 17 876
Revaluation reserve - 2 037
Share-based payment reserve 2 323 1 286
Non-controlling interest 19 562 15 462
Total equity 225 430 188 336
Non-current liabilities 25 809 24 235
Other financial liabilities 14 152 14 512
Finance lease obligations 849 3 971
Operating lease liability 634 -
Provisions 1 993 1 264
Deferred taxation 8 181 4 488
Current liabilities 41 962 34 964
Other financial liabilities 5 597 7 852
Finance lease obligations 6 792 7 796
Trade and other payables 26 143 13 540
Provisions 779 1 612
Operating lease liabilities 41 141
Current tax payable 2 599 4 023
Bank overdraft 11 -
Total equity and liabilities 293 201 247 535
Notes to statement of financial position
Total number of shares in issue ('000) 221 615 211 615
Net asset value per share (cents) 101.72 89.00
Net tangible asset value per share (cents) 78.60 80.30
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
R’000 30 June 2015 30 June 2014
Revenue 180 144 155 791
Cost of sales (80 529) (77 842)
Gross profit 99 615 77 949
EBITDA (earnings before interest, impairment, tax, depreciation
and amortisation) 35 566 31 758
Investment income 6 861 1 451
Depreciation and amortisation (8 342) (7 778)
Net finance costs (1 805) (2 101)
Profit before taxation 32 280 23 330
Taxation (10 074) (7 851)
Profit for the period 22 206 15 479
Other comprehensive (expense)/income for the period, net of tax (897) 4 943
Total comprehensive income for the period 21 309 20 422
Profit attributable to:
Owners of the parent 15 854 7 740
Non-controlling interest 6 352 7 739
Total comprehensive income attributable to:
Owners of the parent 14 957 12 683
Non-controlling interest 6 352 7 739
Per share information:
Earnings per share (cents) 7.15 6.44
Diluted earnings per share (cents) 7.14 6.44
Notes to the statement of comprehensive income
Headline earnings for the period attributable to ordinary
shareholders:
Headline earnings per share (cents) 3.26 6.44
Diluted headline earnings per share (cents) 3.26 6.44
- Total number of shares in issue (‘000) 221 615 211 615
- Weighted average number of shares (‘000) 221 615 120 272
- Diluted weighted average number of shares (‘000) 222 086 120 273
Reconciliation of headline earnings calculation:
Earnings for the period attributable to ordinary shareholders 15 854 7 740
Net fair value gain on Investment properties (13 185) -
Loss on sale Property, plant and equipment 223 -
Tax effects of adjustments 3 889 -
Non-controlling interest effects of adjustments 451 -
Headline earnings for the period attributable to ordinary
shareholders 7 232 7 740
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Audited Audited
Year ended Year ended
R’000 30 June 2015 30 June 2014
Net cash flows from operating activities 26 333 33 249
Net cash flows from investing activities (43 175) (7 305)
Net cash flows from financing activities (9 124) 92 930
Net (decrease)/increase in cash and cash equivalents (25 966) 118 874
Cash and cash equivalents at beginning of year 143 883 28 956
Effect of translation of foreign operations (2 643) (3 947)
Cash and cash equivalents at end of year 115 274 143 883
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Foreign
Net based currency Non-
stated Revaluation payment translation Retained controlling Total
capital reserve reserve reserve earnings interest equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 30 June
2013 467 2 037 1 283 26 354 10 136 5 489 45 766
Profit for the year - - - - 7 740 7 739 15 479
Other comprehensive
income for the year - - - 4 943 - - 4 943
Shares issued for
acquisition of
subsidiaries 21 864 - - - - - 21 864
Specific issue of shares 20 000 - - - - - 20 000
General issue of shares 81 284 - - - - - 81 284
Capital raising fees (3 237) - - - - - (3 237)
Share-based payment
expense - - 3 - - - 3
Dividends - - - - - (2 166) (2 166)
Change of interest in
NCI - - - - - 1 581 1 581
Increase in NCI on
reverse acquisition - - - - - 2 819 2 819
Balance at 30 June
2014 120 378 2 037 1 286 31 297 17 876 15 462 188 336
Profit for the year - - - - 15 854 6 352 22 206
Other comprehensive
income for the year - 3 167 - (4 064) - - (897)
Shares issued for
acquisition of
intangible assets 17 000 - - - - - 17 000
Share-based payment
expense - - 1 037 - - - 1 037
Transfer between
reserve - (5 204) - - 5 204 - -
Acquisition of
subsidiary - - - - - 273 273
Dividends - - - - - (2 525) (2 525)
Balance at 30 June
2015 137 378 - 2 323 27 233 38 934 19 562 225 430
NOTES TO THE AUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PREPARATION
The summary audited consolidated financial statements are prepared in accordance with the
Listings Requirements of the JSE Limited for provisional reports, and the requirements of the
Companies Act applicable to summary financial statements. The JSE Listings Requirements require
provisional reports to be prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS)
and the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as
issued by the Accounting Practices Committee and to also, as a minimum, contain the information
required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of
the summary consolidated financial statements from which the summary financial statements were
derived are in terms of IFRS and are consistent with those accounting policies applied in the
preparation of the previous consolidated annual financial statements.
The summary audited consolidated financial statements have been prepared under the supervision
of CJPG Van Zyl CA (SA) in his capacity as Chief Financial Officer.
The summary audited consolidated financial statements for the year were authorised for issue by
the directors on 31 August 2015.
The auditors, Mazars (Gauteng) Inc., have issued their unmodified opinion on the Group’s annual
financial statements for the year ended 30 June 2015. A copy of the auditor’s report together with a
copy of the audited financial statements is available for inspection at the Company’s registered
office.
These summary audited consolidated financial statements have been derived from the Group’s
annual financial statements. The contents of this announcement are extracted from audited
information, although the announcement is not itself audited. The directors take full responsibility
for the preparation of the provisional report and the financial information has been correctly
extracted from the underlying annual financial statements.
The auditor’s report does not necessarily report on 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 engagement, they should obtain a copy of the auditor’s report together
with the accompanying financial information from the Company’s registered office.
STATED CAPITAL
The issued stated capital of Advanced Health is 221 614 801 shares amounting to R218 377 305
(2014: 211 614 801) being the legal entity listed on the JSE AltX.
Reconciliation of stated capital
Shares Share Value
’000 R’000
Balance as at 1 July 2014 (Legal entity) 211 615 208 378
IFRS 3 reverse acquisition adjustments - (88 000)
Consolidated share capital as at 1 July 2014 211 615 120 378
Share issued on 1 July 2015 to acquire intangible assets at R1.70 10 000 17 000
Balance as at 30 June 2015 221 615 137 378
BUSINESS COMBINATIONS
On February 6, 2015, Presmed Australia, the Australian subsidiary of Advanced Health, entered into
an agreement to acquire 68% of the ordinary Shares in Chatswood E.N.T. (Trading) Trust
(“Chatswood ENT”) for total cash consideration of R15 047 817. The Company’s core business is
providing specialised services for ear, nose and throat including short-procedures surgical facilities
services in day hospitals. The acquisition is consistent with the Company’s growth strategy.
In the four months to 30 June 2015, Chatswood E.N.T. contributed revenue of R8.3 million and a
loss of R100 396 to the results of Advanced Health. Had the acquisition occurred on 1 July 2014,
management estimates that Chatswood E.N.T. would have contributed R20 million revenue to the
Group.
Recognised provisional fair values on acquisition
Provisional Fair value
R’000
Property, plant & equipment 296
Inventories 1 219
Trade & other receivables 902
Cash & cash equivalents 1 559
Other financial liabilities (1 550)
Trade and other payables (1 205)
Deferred tax (366)
Net identifiable assets and liabilities 855
Goodwill on acquisition 14 466
Non-controlling interest (273)
Total net consideration 15 048
Cash acquired (1 559)
Net cash outflow 13 489
The goodwill is mainly attributable to the skills and technical talent of the Chatswood E.N.T. work
force. The carrying amount of trade and other receivables estimate their fair value and there are no
contractual accounts receivable acquired.
The acquisition of the above subsidiary is based on provisional fair values as the group has not yet
determined the fair values of the identifiable assets, liabilities and or contingent liabilities. The fair
value of the subsidiary will be accurately determined by the next reporting date.
SEGMENTAL REPORTING
Geographical Information
The group operates in two main geographical areas, namely South Africa and Australia, and the
segmental information is set out below:
2015 2014 2015 2014 2015 2014
South Africa South Africa Australia Australia Total Total
R’000 R’000 R’000 R’000 R’000 R’000
External revenue 23 377 7 259 156 767 148 532 180 144 155 791
Inter-segmental
revenue 3 069 - 26 244 38 320 - -
Total segment
revenue 26 446 - 183 011 186 852 180 144 155 791
Profit/(loss) for the
year (1 583) (2 618) 23 789 18 097 22 206 15 479
Segment assets 150 262 128 278 142 939 119 257 293 201 247 535
Segment liabilities 12 759 14 856 55 012 44 343 67 771 59 199
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.
COMPARISON WITH PROFIT FORECAST
In accordance with the JSE Listings Requirements, Advanced Health has set out a comparison
between the profit forecast as contained in the Company’s prospectus dated 31 March 2014 and
the audited report for the year ended 30 June 2015 summarised below:
Audited
Year ended Forecast
30-June-15 30-June-2015
R’000 R’000
Revenue 180 144 203 045
Operating profit 27 224 28 864
Profit after taxation 22 206 22 473
Other comprehensive income for the year (897) -
Total comprehensive income for the year 21 309 22 473
Profit attributable to:
Equity holders of parent 15 854 14 111
Non-controlling interest 6 352 8 362
Total comprehensive income attributable to:
Owners of parent 14 957 14 111
Non-controlling interest 6 352 8 362
Earnings per share
- Basic (cents per share) 7.15 6.71
- Diluted (cents per share) 7.14 6.71
Weighted average number of shares 221 615 210 831
Diluted weighted average number of shares 222 086 210 831
Whilst earnings per share and comprehensive income attributable to shareholders was higher than
the forecast in the prospectus issued by the company, revenue levels were not achieved primarily
due to the strengthening of the Rand against the Australian dollar, with revenues from Australia
representing approximately 87% of the group’s revenues. The exchange rate assumed in the
prospectus was R10.82 to the Australian Dollar, whilst the average exchange rate for the period
under review was R9.55. This impact has flowed through the operating results of the group.
Patient numbers and revenue per patient were substantially in line with those projected in the
prospectus. Other income resulted from the fair value of property previously occupied by the group
being transferred to property held for investment. The major variance on the share weighting
relates to specific shares that were issued for the acquisition of the intangible assets.
INTANGIBLE ASSETS AND ISSUE OF SHARES
During the period under review the Group entered into an agreement to acquire five start-up
companies which include specific rights to allow Advance Health to operate day hospitals once
development and construction is complete. The objective is 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 on 1 July
2014 at an issue price of R1.70 per share.
PLANT AND EQUIPMENT
The increase in plant and equipment relate capital costs incurred to expand operations in relation
specifically to the development of the new day clinics.
ASSETS HELD FOR SALE
During the 2015 financial year a building owned in Australia was transferred to investment
property, because of the development of Chatswood private hospital. Subsequently it was decided
that the building would be leased to a third party and as such was held for capital appreciation.
In June 2015, management received a firm offer for the purchase of the building for approximately
R39 million, subject to specific suspensive conditions which are anticipated to be completed within
the next financial year.
As a result of the offer, the investment property has been transferred to assets held for sale. Group
is now committed to selling the building and anticipate the sale of the building to be highly probable
within the next financial year.
Assets held for sale R’000
Net fair value of building as at 30 June 2015 36 703
When considering the fair value of buildings certain direct attributable costs have been considered
which result directly from and are essential to the transaction and would not have been incurred
had the decision to sell not been made.
RELATED PARTIES
During the year, certain subsidiaries, in the ordinary course of business, entered into loans and
transactions with related parties under terms that are no less favourable than those arranged with
third parties.
EXCHANGE RATES
The following exchange rates were used in foreign interest and foreign transactions during the
periods:
Rand/Australian Dollar 30 June 2015 30 June 2014
Closing rate 9.4062 9.9844
Average rate 9.5515 9.5257
COMMENTARY
HIGHLIGHTS
- Revenue increased by 15.6% to R180.1 million
- EBITDA increased by 12.0% to R35.5 million
- Profit before interest and taxation increased by 38.4% to R32.2 million
- Earnings of R15.8 million translated into diluted earnings per share of 7.14 cents.
INTRODUCTION
The company is an investment holding company that provides short procedure surgical facilities and
services in day hospitals in South Africa and Australia. The audited consolidated results for the year
ended 30 June 2015 reflect a satisfactory performance.
FINANCIAL RESULTS
Key financial indicators grew satisfactorily, in comparison to both the prior year actuals and the
projections made in the pre-listing prospectus.
The Presmed Australian operations contributed some 87% of income (2014 : 95%). The decrease in
the ratio of the Australian contribution to revenue is due mainly to the rand strengthening against
the Australian dollar. The results from the South African operations are for a full year against five
months in the 2014 results.
OVERVIEW
Presmed Australia, in which Advanced holds a 94,65% interest, once again reported a solid
performance with a 5.54% growth in revenue on the back of a 7.8% increase in patient numbers.
During the year under review, management remained actively involved with the construction of
what will be the largest ophthalmic day hospital in Australia, a six-theatre facility, and the
acquisition of another day hospital, bringing the number of operational Australian day hospitals to
four: the Central Coast Day Hospital, the Epping Surgery Centre, the Ophthalmic Surgery Centre and
the recently acquired two-theatre Sydney ENT Facial Day Surgery Centre.
The board continues to evaluate additional investments in the greater Sydney area and the Eastern
Sea Board of New South Wales.
The South African activities where focused mainly on developing additional day hospitals in order to
achieve its objective of aggressively expanding its footprint across the country. The board is
confident that its interim target of managing and operating nine day hospitals by the end of the
2016 calendar year will be achieved.
Growth optimisation is based on the Advanced Health business model, which offers participating
medical practitioners a shareholding in the management company of each day hospital, to ensure
that medical quality objectives are met. Advanced Health retains the majority shareholding,
concentrating on overall management, staffing and increased efficiencies through central services
such as information technology, marketing and administration. Properties are developed and
owned by property developers, and tenure secured through a long-term lease agreement with
Advanced Health.
The third South Africa day hospital to become operational, the Advanced Durbanville Surgical
Centre with two theatres, one procedure room and 20 beds, in August 2015, has been well received
by patients and specialists.
Estimated dates of completion of day hospitals currently under construction are:
- Advanced Panorama Surgical Centre, housed in the Panorama Healthcare Centre, which will
comprise three theatres, one laser room and 27 beds (operational November 2015);
- Advanced Groenkloof Day Hospital, in the Walker Creek business park with two theatres and
20 beds (operational December 2015);
- The 15-bed Advanced Worcester Surgical Centre (operational January 2016);
- The three-theatre Advanced Soweto Day Hospital in Protea Glen, which will be housed in a
building also containing doctors’ consulting rooms, a pharmacy, X-ray facilities and a
pathology laboratory (operational January 2016); and
- Day hospitals under construction and scheduled for completion during 2016 are the Advanced
Knysna Surgical Centre and the Advanced Waterkloof Surgical Centre construction in
Vergelegen, Somerset-West.
DIVIDEND DECLARATION
No dividend is proposed or recommended. After a period of approximately three years after listing,
the Board of Directors will consider the payment of a maiden dividend.
PROSPECTS
Advanced Health is firmly on track to achieve its aim of growing its footprint of independent, quality
and cost-effective same-day surgical facilities, to the benefit of patients, doctors and medical
schemes.
In Australia, management continues to increase Presmed’s presence in the greater Sydney area and
the eastern seaboard of New South Wales. It is firmly entrenched as a leading healthcare company,
supported by some 60 accredited ophthalmologists and 15 ENT surgeons.
In South Africa, the opening of the company’s third day hospital and the on-schedule construction
of six more is a clear signal that Advanced Health will achieve its objective of managing 20 day
hospitals by 2020 and being a leading, independent supplier of same-day facilities. In the medium
term, however, investors should be aware that such new developments require a settling-in period
before the envisaged financial advantages fully materialise.
On behalf of the board
FA van Hoogstraten CA Grillenberger CJPG van Zyl
Chairman Chief Executive Officer Chief Financial Officer
1 September 2015
CORPORATE INFORMATION
Advanced Health Limited Registered Address:
(Incorporated in the Republic of South Africa) Crossway Office Park
Registration number: 2013/059246/06 Cnr Jean & Lenchen Avenue
ISIN: ZAE000189049 JSE Code: AVL Pretoria 0046
Postnet Suite 668, Private Bag X1
Centurion, 0041
Executive directors Non-Executive Directors
CA Grillenberger (Chief Executive Officer) FA van Hoogstraten (Chairman)
CJPG van Zyl (Chief Financial Officer) PJ Jaffe#
MC Resnik# (Chief Operational Officer Australia) WT Mthembu
J Oelofse
YJ Visser (alternate)
# Australian
Company Secretary: M Janse van Rensburg
Auditors: Mazars (Gauteng) Inc.
Transfer Secretaries: Trifecta Capital Services Proprietary Limited
Designated Advisor
Arbor Capital Sponsors Proprietary Limited
Date: 01/09/2015 09:00:00 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.
Sharenet Sites 
