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Unaudited condensed consolidated interim financial statements for the 6 months ended 31 December 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
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
Six months Six months Year ended
R’000 31 Dec 2015 31 Dec 2014 30 June 2015
ASSETS
Non-current assets 242 909 99 356 113 556
Property, plant and equipment 182 340 60 961 59 487
Goodwill 28 054 27 412 25 461
Intangible assets 28 881 8 340 25 788
Deferred taxation 3 634 2 643 2 820
Current assets 155 475 158 961 142 942
Inventories 6 345 3 870 6 587
Trade and other receivables 22 487 13 937 16 053
Other financial assets 7 354 - 3 382
Operating lease asset 737 - 185
Current tax receivable 3 094 - 1 450
Cash and cash equivalents 115 458 141 154 115 285
Non-current assets held for sale - - 36 703
Total assets 398 384 258 317 293 201
EQUITY AND LIABILITIES
Capital and reserves 221 585 186 236 205 868
Stated capital 137 378 136 844 137 378
Foreign currency translation reserve 46 243 22 557 27 233
Retained earnings 34 571 23 050 38 934
Revaluation reserve - 2 037 -
Share-based payment reserve 3 393 1 748 2 323
Non-controlling interest 48 784 18 536 19 562
Total equity 270 369 204 772 225 430
Unaudited Unaudited Audited
Six months Six months Year ended
R’000 31 Dec 2015 31 Dec 2014 30 June 2015
Non-current liabilities 72 241 26 878 25 809
Other financial liabilities 65 478 13 743 14 152
Finance lease obligations 381 6 748 849
Operating lease liability 1 560 - 634
Provisions 2 526 2 016 1 993
Deferred taxation 2 296 4 371 8 181
Current liabilities 55 774 26 667 41 962
Other financial liabilities 8 458 2 970 5 597
Finance lease obligations 1 682 5 174 6 792
Trade and other payables 37 291 10 045 26 143
Provisions 2 023 2 622 779
Operating lease liabilities - 344 41
Current tax payable 6 320 5 512 2 599
Bank overdraft - - 11
Total equity and liabilities 398 384 258 317 293 201
Notes to statement of financial position
Total number of shares in issue ('000) 221 615 221 843 221 615
Net asset value per share (cents) 122.00 92.31 101.72
Net tangible asset value per share (cents) 96.31 76.19 78.60
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
R’000 31 Dec 2015 31 Dec 2014 30 June 2015
Revenue 103 563 92 721 180 144
Cost of sales (47 266) (41 966) (80 529)
Gross profit 56 297 50 755 99 615
EBITDA (earnings before interest, impairment, tax,
depreciation and amortisation) 7 719 13 527 35 566
Investment income 2 107 3 088 6 861
Depreciation and amortisation (5 461) (3 981) (8 342)
Net finance costs (916) (1 151) (1 805)
Profit before taxation 3 449 11 484 32 280
Taxation (1 067) (3 235) (10 074)
Profit for the period 2 382 8 249 22 206
Other comprehensive income/(expense) for the period, 24 411 (8 740) (897)
net of tax
Total comprehensive income for the period 26 793 (491) 21 309
Profit attributable to:
Owners of the parent 925 5 174 15 854
Non-controlling interest 1 457 3 075 6 352
Total comprehensive income attributable to:
Owners of the parent 19 935 (3 566) 14 957
Non-controlling interest 6 858 3 075 6 352
Per share information:
Earnings per share (cents) 0.42 2.33 7.15
Diluted earnings per share (cents) 0.42 2.33 7.14
Notes to the statement of comprehensive income
Headline earnings for the period attributable to
ordinary shareholders:
Headline earnings per share (cents) 0.51 2.33 3.26
Diluted headline earnings per share (cents) 0.51 2.33 3.26
- Total number of shares in issue (‘000) 221 615 221 843 221 615
- Diluted weighted average number of shares (‘000) 222 164 221 843 222 086
Reconciliation of headline earnings calculation:
Earnings for the period attributable to ordinary 925 5 174 15 854
shareholders
Net fair value gain on Investment properties - - (13 185)
Loss on sale property, plant and equipment 403 - 223
Tax effects of adjustments (121) - 3 889
Non-controlling-interest effects of adjustments (79) - 451
Headline earnings for the period attributable to
ordinary shareholders 1 128 5 174 7 232
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
Six months Six months Year ended
R’000 31 Dec 2015 31 Dec 2014 30 June 2015
Net cash flows from operating activities 18 589 6 515 26 333
Net cash flows from investing activities (96 610) (2 996) (43 175)
Net cash flows from (used in) financing activities 66 719 (4 564) (9 124)
Net decrease in cash and cash equivalents (11 302) (1 045) (25 966)
Cash and cash equivalents at beginning of year 115 274 143 883 143 883
Effect of translation of foreign operations 11 486 (1 684) (2 643)
Cash and cash equivalents at end of year 115 458 141 154 115 274
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 1 July 2014 120 378 2 037 1 286 31 297 17 876 15 462 188 336
Profit for the year - - - - 5 174 3 075 8 249
Other comprehensive
income for the year - - - (8 740) - - (8 740)
Specific issue of shares 17 000 17 000
Capital raising fees (535) (535)
Share-based payment
expense 462 462
Balance at 31 December
2014 136 843 2 037 1 748 22 557 23 050 18 537 204 772
Profit for the year 10 680 3 277 13 957
Other comprehensive
income for the year - 3 167 - 4 676 - - 7 843
Share-based payment
expense - - 575 - - - 575
Capital raising fees reversal 535 535
Transfer between reserve - (5 204) - - 5 204 - -
Acquisition of subsidiary - - - - - 273 273
Dividends - - - - - (2 525) (2 525)
Balance at 1 July 2015 137 378 - 2 323 27 233 38 934 19 562 225 430
Profit for the year - - - - 925 1 457 2 382
Other comprehensive
income for the year - - - 19 010 - 5 401 24 411
Share-based payment
expense - - 1 070 - - - 1 070
Share buy back - - - - - (936) (936)
Change in subsidiary
interest - - - - (5 288) 5 288 -
Issue of shares in subsidiary - - - - - 18 012 18 012
Balance at 31 December
2015 137 378 - 3 393 46 243 34 571 48 784 270 369
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PREPARATION
The unaudited condensed consolidated results for the period ended 31 December 2015 have been
prepared in accordance with, the requirements of the JSE Listing Requirements for interim reports,
the requirements of Companies Act applicable to summary financial statements and the
requirements of IAS 34: Interim Financial Reporting as well as the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee. The accounting policies applied in the preparation
of the unaudited condensed consolidated results for the period were derived, are in terms of IFRS
and are consistent with the accounting policies applied in the preparation of the previous unaudited
condensed consolidated results for the period and are presented in South African rand, which is the
Group's functional and presentation currency.
There are no significant reportable matters arising since the end of the period under review.
The unaudited condensed consolidated results for the period ended 31 December 2015 have been
prepared under the supervision of CJPG van Zyl CA (SA), in his capacity as Chief Financial Officer.
The results were approved by the board of directors on 23 February 2016 and have not been
reviewed or audited by the Group’s external auditors Mazars (Gauteng) Inc.
STATED CAPITAL
The issued stated capital of Advanced Health is 221 614 801 shares amounting to R218 377 305
(December 2014: 211 842 749 amounting to R208 377 305) 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) 221 615 208 378
IFRS 3 reverse acquisition adjustments - (88 000)
Share issued on 1 July 2015 to acquire intangible assets at R1.70 10 000 17 000
Consolidated share capital as at 1 July 2015 221 615 137 378
Balance as at 31 December 2015 221 615 137 378
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-15 31-Dec-14 30-June-15
R’000 R’000 R’000
REVENUE 103 563 92 721 180 144
South Africa 12 331 11 412 26 446
Australia 88 914 77 099 183 011
Corporate 2 318 4 210 (29 313)
INTEREST INCOME 2 107 3 088 6 861
South Africa 11 26 57
Australia 207 - 909
Corporate 1 889 3 062 5 895
INTEREST EXPENSE 916 1 151 1 805
South Africa 72 81 95
Australia 285 538 1 710
Corporate 559 532 -
DEPRECIATION & AMORTISATION 5 461 8 249 8 342
South Africa 1 633 406 1 899
Australia 3 378 6 697 5 608
Corporate 450 1 146 835
PROFIT/LOSS FOR THE YEAR 2 382 8 249 22 206
South Africa (1 355) 406 (754)
Australia 16 877 6 697 23 789
Corporate (13 140) 1 146 (829)
SEGMENT ASSETS 398 384 258 317 293 201
South Africa 94 793 52 460 24 602
Australia 198 817 115 450 142 939
Corporate 104 774 90 407 125 660
SEGMENT LIABILITIES 128 015 53 545 67 771
South Africa 26 978 2 206 17 707
Australia 68 500 26 290 55 012
Corporate 32 537 25 049 (4 948)
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.
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
The property that was kept as held for sale has subsequently been sold and the proceeds were
received in September 2015.
FINANCIAL LIABILITIES
Financial liabilities increased due to loans from banks in both Australia and South Africa.
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 31 Dec 2015 31 Dec 2014 30 June 2015
Closing rate 11.2391 9.4695 9.4062
Average rate 9.8331 9.7782 9.5515
COMMENTARY
INTRODUCTION
The directors of Advanced Health present the unaudited condensed consolidated interim results for
the six months ended 31 December 2015 (“the period”) reflecting a satisfactory performance based
on expectation.
FINANCIAL RESULTS
Group turnover increased by 12% to R103.6 million with the cash generated from operations up to
R18.6 million. The net asset value increased by 32% to 122.0 cents with the cash conversion rate
increasing to 240%.
The Australian operations contributed some 86% of income (2014 : 87%). Presmed Australia, in
which Advanced Health holds a 94.65% interest, once again reported a solid performance with a
12% growth in revenue on the back of a 39% increase in patient numbers.
OVERVIEW
In Australia, the flagship, six-theatre Chatswood Private Hospital in Sydney opened a few days after
the end of the reporting period, on 11 January 2016. This facility incorporates the merged
Ophthalmic Surgery Centre and Sydney ENT & Facial Day Surgery Centre, making it the only
dedicated EYE and ENT private hospital in Sydney. This new combined and enlarged entity, as well
as the Central Coast Day Hospital and the Epping Surgery Centre, are supported by 83 accredited
Ophthalmologists and ENT surgeons.
In South Africa the group embarked on an extensive expansion programme. The development of
the new day hospitals in South Africa have a lead time of up to 18 months, depending on
circumstances for the completion of the construction and the commissioning process. As stated
before, investors should be aware that the new developments require a settling in period before
the envisaged financial advantages fully materialise.
The company commenced with the development of seven new day hospitals during the 2015 and
2016 financial years of which the first opened, Advanced Durbanville Surgical Centre, in August
2015.
Six day hospitals are scheduled for completion in the 2016 calendar year:
- Advanced Panorama Surgical Centre (operational in mid-January 2016);
- Advanced Groenkloof Day Hospital (operational in January 2016);
- Advanced Soweto Day Hospital (operational March 2016);
- Advanced Worcester Surgical Centre (operational April 2016);
- Advanced Knysna Surgical Centre (operational July 2016); and
- Advanced Vergelegen Surgical Centre (Somerset West) (operational July 2016).
The main focus of Advanced Health has, for the past year, been on the development of new
facilities in line with its objective to manage and control 20 facilities by 2020. The management of
Advanced Health is now focussing on the marketing and promotion of the newly developed facilities
with the aim to maximise the utilisation of these.
Advanced Health remains on the lookout for quality investments to grow its portfolios in Australia
and South Africa.
DIVIDEND DECLARATION
No dividend is proposed or recommended.
PROSPECTS
The board remains committed to achieve the group’s long-term objective of implementing and
continuously refining a strategy which is focussed on the achievement of the business goals.
Management is committed to grow the group’s footprint in the short-procedure day-surgery market
to become the supplier of choice, offering cost-effective healthcare for the benefit of patients,
surgeons and medical funds.
On behalf of the board
Mr FA van Hoogstraten Mr CA Grillenberger Mr CJPG van Zyl
Chairman Chief Executive Officer Chief Financial Officer
25 February 2016
CORPORATE INFORMATION
Advanced Health Limited Registered Address:
(Incorporated in the Republic of South Africa) Building 2 Walker Creek Office Park
Registration number: 2013/059246/06 90 Florence Ribeiro Avenue
ISIN: ZAE000189049 JSE Code: AVL Pretoria 0002
Postnet Suite 668, Private Bag X1
Centurion, 0041
Executive directors Non-Executive Directors
Mr CA Grillenberger (Chief Executive Officer) Mr FA van Hoogstraten (Chairman)
Mr CJPG van Zyl (Chief Financial Officer) Mr PJ Jaffe#
Mr MC Resnik# (Chief Operational Officer Australia) Dr WT Mthembu
Dr J Oelofse
Mr 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: 25/02/2016 12:14:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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