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Provisional summary audited consolidated financial statements for the year ended 30 June 2016
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 2016
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Restated*
Year ended Year ended
R’000 30 June 2016 30 June 2015
ASSETS
Non-current assets 329 078 112 857
Property, plant and equipment 251 317 59 487
Goodwill 28 561 25 461
Other financial assets 7 789 -
Intangible assets 28 333 25 788
Deferred taxation 13 078 2 121
Current assets 109 869 142 942
Inventories 9 093 6 587
Trade and other receivables 36 970 16 053
Other financial assets 6 477 3 382
Operating lease asset 2 381 185
Current tax receivable 2 104 1 450
Cash and cash equivalents 52 844 115 285
Non-current assets held for sale - 39 035
Total assets 438 947 294 834
EQUITY AND LIABILITIES
Capital and reserves 199 191 207 501
Stated capital 137 378 137 378
Share-based payment reserve 4 465 2 323
Foreign currency translation reserve 40 380 27 233
Retained earnings 16 968 40 567
Non-controlling interest 44 300 19 562
Total equity 243 491 227 063
Non-current liabilities 112 660 25 809
Other financial liabilities 71 169 14 152
Finance lease obligations 31 701 849
Operating lease liability 6 947 634
Provisions 2 013 1 993
Deferred taxation 830 8 181
Current liabilities 82 796 41 962
Other financial liabilities 9 240 5 597
Finance lease obligations 7 823 6 792
Trade and other payables 51 303 26 143
Provisions 3 688 779
Operating lease liabilities 1 175 41
Current tax payable 9 567 2 599
Bank overdraft - 11
Total equity and liabilities 438 947 294 834
Notes to statement of financial position
Total number of shares in issue ('000) 221 615 221 615
Net asset value per share (cents) 109.87 102.46
Net tangible asset value per share (cents) 84.20 79.33
* No third statement of financial position is presented as the restatement has no effect on the opening balances.
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Restated
Year ended Year ended
R’000 30 June 2016 30 June 2015
Revenue 241 192 180 144
Cost of sales (118 430) (80 529)
Gross profit 122 762 99 615
EBITDA (earnings before interest, impairment, tax, depreciation and
amortisation) (4 428) 37 898
Investment income 2 881 6 861
Depreciation and amortisation (16 152) (8 342)
Net finance costs (4 531) (1 805)
(Loss) / profit before taxation (22 230) 34 612
Taxation 6 501 (10 773)
(Loss) / profit for the year (15 729) 23 839
Other comprehensive (expense)/income for the year, net of tax 14 506 (897)
Total comprehensive (loss) / income for the year (1 223) 22 942
(Loss) / profit attributable to: (15 729) 23 389
Owners of the parent (18 311) 17 487
Non-controlling interest 2 582 6 352
Total comprehensive (loss) / income attributable to: (1 223) 22 942
Owners of the parent (5 164) 16 590
Non-controlling interest 3 941 6 352
Per share information:
Earnings per share (cents) (8.26) 7.89
Diluted earnings per share (cents) (8.25) 7.87
Notes to the statement of comprehensive income
Headline (loss) / earnings for the year attributable to ordinary
shareholders:
Headline (loss) / earnings per share (cents) (8.02) 4.00
Diluted headline (loss) / earnings per share (cents) (8.00) 3.99
- Total number of shares in issue (‘000) 221 615 221 615
- Weighted average number of shares (‘000) 221 615 221 615
- Diluted weighted average number of shares (‘000) 221 983 222 086
Reconciliation of headline earnings calculation:
Earnings for the year attributable to ordinary shareholders (18 311) 17 487
Net fair value gain on Investment properties - (15 417)
Loss on sale property, plant and equipment 1 181 223
Tax effects of adjustments (375) 4 558
Non-controlling interest effects of adjustments (262) 451
Headline (loss) / earnings for the year attributable to ordinary
shareholders (17 767) 7 302
ABRIDGED SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOW
Audited Restated
Year ended Year ended
R’000 30 June 2016 30 June 2015
Net cash flows from operating activities 4 334 26 333
Net cash flows from investing activities (135 743) (43 175)
Net cash flows from financing activities 62 407 (9 124)
Net decrease in cash and cash equivalents (69 002) (25 966)
Cash and cash equivalents at beginning of year 115 274 143 883
Effect of translation 6 572 (2 643)
Cash and cash equivalents at end of year 52 844 115 274
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Foreign
Net Revaluation based currency Retained Non-
stated on payment translation earnings controlling Total
capital reserve reserve reserve interest Equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 30 June 2014 120 378 2 037 1 286 31 297 17 876 15 462 188 336
Restated profit for the year - - - - 17 487 6 352 23 839
Other comprehensive
income for the year - 3 167 - (4 064) - - (897)
Shares issued for
acquisition of intangibl
assets 17 000 - - - - - 17 000
Share-based payment
expense - - 1 037 - - - 1 037
Transfer of revaluation to
retained earnings - (5 204) - - 5 204 - -
Acquisition of subsidiary - - - - - 273 273
Dividends declared - - - - - (2 525) (2 525)
Restated balance at
30 June 2015 137 378 - 2 323 27 233 40 567 19 562 227 063
Loss for the year - - - - (18 311) 2 582 (15 729)
Other comprehensive
income for the year - - - 13 147 - 1 359 14 506
Share-based payment
expense - - 2 142 - - - 2 142
Change in interest in
subsidiary - - - - (5 288) 5 288 -
Issue of shares in
subsidiary - - - - - 17 076 17 076
Dividends declared - - - - - (1 567) (1 567)
Balance at 30 June 2016 137 378 - 4 465 40 380 16 968 44 300 243 491
NOTES TO THE AUDITED SUMMARISED 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 and computations 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 and computations applied in the preparation of the previous consolidated annual
financial statements except for the restatement noted below.
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 30 August 2016.
The auditors, Mazars (Gauteng) Inc., have issued their unmodified opinion on the Group’s annual financial
statements for the year ended 30 June 2016. 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 R225 377 305 (2015:
R225 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 2015 221 615 225 845
IFRS 3 reverse acquisition adjustments - (88 000)
Balance as at 30 June 2016 221 615 137 378
SEGMENTAL REPORTING
Geographical Information
The group operates in two main regions, namely Australia and South Africa:
Audited Restated
Year ended Year ended
30 June 2016 30 June 2015
R’000 R’000
REVENUE 241 192 180 144
South Africa 39 579 26 446
Australia 200 740 183 011
Corporate 873 (29 313)
INTEREST INCOME 2 881 6 861
South Africa 98 57
Australia 414 909
Corporate 2 369 5 895
INTEREST EXPENSE 4 531 1 805
South Africa 1 886 95
Australia 2 645 1 710
Corporate - -
DEPRECIATION & AMORTISATION 16 152 8 342
South Africa 6 118 1 899
Australia 8 988 5 608
Corporate 1 046 835
PROFIT/LOSS FOR THE YEAR (15 729) 22 206
South Africa (20 498) (754)
Australia 5 736 23 789
Corporate (967) (829)
SEGMENT ASSETS 438 947 293 201
South Africa 214 497 24 602
Australia 222 815 142 939
Corporate 1 635 125 660
SEGMENT LIABILITIES 195 454 67 771
South Africa 100 814 17 707
Australia 94 056 55 012
Corporate 584 (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
An investment property, being Presmed Australia’s New South Wales’ property, to CC No 1 Pty Ltd and CC No
2 (Pty) Ltd that was kept as an asset held for sale has been disposed of in the current financial year for a total
consideration of AUD$4,1 million.
FINANCIAL LIABILITIES
Financial liabilities increased due to loans from financial institutions in both Australia and South Africa for the
procurement of fixed assets.
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.
RESTATEMENT OF FIGURES (2015)
The nature of the restatement relates to the accounting method used for investment property reflected
under non-current assets held for sale, which included transaction costs to dispose of the investment
property, which is not in accordance with the requirements of IFRS 5. The transaction costs for the year
ended 30 June 2015 amounted to R2,3 million before taxation and R1,6 million after taxation.
The net fair value gain on investment properties was thus understated.
The restated information as compared to the previously published information has been set out below:
Previously
Restated Published
Year ended Year ended
R’000 30 June 2015 30 June 2015
ASSETS
Non-current assets 112 857 113 556
Deferred taxation 2 121 2 820
Current assets 142 942 142 942
Non-current assets held for sale 39 035 36 703
Total assets 294 834 293 201
EQUITY AND LIABILITIES
Capital and reserves 207 501 205 868
Retained earnings 40 567 38 934
Non-controlling interest 19 562 19 562
Total equity 227 063 225 430
Non-current liabilities 25 809 25 809
Current liabilities 41 962 41 962
Total equity and liabilities 294 834 293 201
Effect on the consolidated statement of comprehensive income
Previously
Restated Published
Year ended Year ended
R’000 30 June 2015 30 June 2015
Revenue 180 144 180 144
Cost of sales (80 529) (80 529)
Gross profit 99 615 99 615
EBITDA (earnings before interest, impairment, tax, depreciation and
amortisation) 37 898 35 566
Profit before taxation 34 612 32 280
Taxation (10 773) (10 074)
Profit for the period 23 839 22 206
Total comprehensive income for the period 22 942 21 309
Profit attributable to:
Owners of the parent 17 487 15 854
Non-controlling interest 6 352 6 352
Total comprehensive income attributable to:
Owners of the parent 16 590 14 957
Non-controlling interest 6 352 6 352
The restatement has no effect on the consolidated statement of cash flow for the financial year ending
30 June 2015.
Effect on the earnings per share
Previously
Restated Published
Year ended Year ended
30 June 2015 30 June 2015
Earnings per share (cents) 7.89 7.15
Diluted earnings per share (cents) 7.87 7.14
Headline earnings per share (cents) 4.00 3.26
Diluted headline earnings per share (cents) 3.99 3.26
EXCHANGE RATES
The following exchange rates were used in foreign interest and foreign transactions during the year:
Rand/Australian Dollar 30 June 2016 30 June 2015
Closing rate 11.1343 9.4062
Average rate 10.5601 9.5515
INVESTOR PRESENTATION
There will be an investor presentation on 31 August 2016 and the presentation will be available on the
Company’s website.
COMMENTARY
HIGHLIGHTS
- The successful opening of 7 new facilities in South Africa.
- The completion of the largest ophthalmic and ENT day hospital in Australia.
- Revenue increased by 34% to R241,1 million.
- Patient numbers increased by 26%.
INTRODUCTION
The Advanced Health philosophy is in line with the changes which are taking place in the hospital industry,
where the move to compact and custom-designed short-procedure facilities are being accelerated by
technology, the latest being the key-hole surgery, which complements modern anaesthesiological techniques
in both South Africa and Australia.
FINANCIAL RESULTS
Key performance indicators aptly reflect the state of business in the two operating regions. There has been
good growth in both turnover and patients. Presmed Australia (PMA) operations contributed some 83% of
income (2015: 87%). The shift in contribution is as a result of more South African day-hospitals becoming
operational, in line with management intentions to target equal income from the two regions.
OVERVIEW
PMA, in which Advanced Health holds a 94.65% interest, has had an exciting, yet challenging year.
In January 2016, PMA completed the planned build of the largest ophthalmic and ENT day hospital in
Australia, the Chatswood Private Hospital (CPH), consisting of six theatres with femtosecond cataract laser
procedure room, and four private-warded overnight beds. A strategic decision was taken to merge the
recently acquired Sydney ENT Day Surgery Centre with Ophthalmic Surgery Centre (OSC), and move into
CPH. It is recognised that the first few years of operation of a new facility will be challenging before the
rewards of financial benefits materialise. The other PMA facilities of Central Coast Surgery Centre and
Epping Surgery Centre continue to perform to expectations.
Management continues to evaluate additional day-hospital investment opportunities in the greater Sydney
area and across Australia.
In South Africa, the aggressive expansion of the group’s footprint continued and, shortly after year-end, the
objective of having nine day hospitals operational was achieved four months ahead of target. A tenth
hospital is scheduled for opening in eMalahleni in October 2016.
The nine day hospitals are:
- Advanced Medgate Day Hospital in Roodepoort;
- Advanced eMalahleni Day Hospital in eMalahleni;
- Advanced Durbanville Surgical Centre in Cape Town;
- Advanced Panorama Surgical Centre in Cape Town;
- Advanced Groenkloof Day Hospital in Pretoria;
- Advanced Soweto Eye Day Hospital in Soweto;
- Advanced Worcester Surgical Centre in the Worcester;
- Advanced Knysna Surgical Centre in Knysna; and
- Advanced Vergelegen Surgical Centre in Somerset West;
The strong growth prompted a strengthening of staff at central level, to continue meeting objectives in line
with the growth in facilities and to realise long-term succession targets.
The success of the Advanced Health business model is based on strong day-hospital teams and partnerships
with participating medical practitioners to ensure that medical and quality objectives are met. These teams
are supported by an expert central team to ensure effective management, staffing and shared 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.
DIVIDEND DECLARATION
No dividend is proposed or recommended.
PROSPECTS
Advanced Health is firmly on track to achieve its aim of growing its footprint of independent, quality and
cost-effective day-hospitals, to the benefit of patients, doctors and medical schemes.
In South Africa two new day hospitals will open before the end of the 2017 calendar year. Other day
hospitals are in various stages of construction or negotiation, signalling that Advanced Health is on track to
achieve its objective of managing 20 day hospitals in South Africa and 6 in Australia by 2020 for which capital
will be raised. Investors are reminded of the nature of the roll-out of day hospitals, namely that the initial
building development of the hospital takes up to 18 months, depending on circumstances for the completion
of the construction and the commissioning process. The day hospitals then require a settling-in period of up
to 36 months 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
30 August 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 Muckleneuk
0002
Postnet Suite 668, Private Bag X1
The Willows, 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: 30/08/2016 03:24:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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