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Audited results for the year ended 30 September 2016 and declaration of scrip dividend and cash dividend alternative
LIFE HEALTHCARE GROUP HOLDINGS LIMITED
Registration number: 2003/002733/06
Income tax number: 9387/307/15/1
ISIN: ZAE000145892
Share code: LHC
AUDITED SUMMARISED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2016
AND DECLARATION OF SCRIP DIVIDEND AND CASH DIVIDEND ALTERNATIVE
Paid patient days (PPDs):
+4%
Revenue:
+12% to R16 404 million
Normalised EBITDA:
+6.6% to R4 314 million
Final dividend of 92 cents per share:
+7.1%
Headline earnings per share increased to:
+7.0%
Summarised consolidated statement of profit and loss and other comprehensive income
for the year ended 30 September 2016
R'm 30 September % 30 September
2016 Change 2015
Revenue 16 404 12.0 14 647
Operating expenses (12 744) (11 151)
Operating profit 3 660 4.7 3 496
Contingent consideration released 109 21
Transaction costs (12) (15)
Impairment of investment (370) -
Loss recognised on remeasuring previously held interest in associate
to fair value (23) -
Fair value (loss)/gain on derivative financial instruments (2) 29
Other (6) -
Finance income 12 12
Finance cost (512) (445)
Share of associates' and joint ventures' net profit after tax 8 14
Profit before tax 2 864 3 112
Tax expense (894) (884)
Profit after tax 1 970 (11.6) 2 228
Other comprehensive income, net of tax
Items that may be reclassified to profit or loss
Movement in foreign currency translation reserve (30) 158
Items that will not be reclassified to profit or loss
Retirement benefit asset and post-employment medical aid 8 (5)
Total comprehensive income for the year 1 948 (18.2) 2 381
Profit after tax attributable to:
Ordinary equity holders of the parent 1 616 (13.4) 1 866
Non-controlling interest 354 362
1 970 (11.6) 2 228
Total comprehensive income attributable to:
Ordinary equity holders of the parent 1 596 (20.6) 2 010
Non-controlling interest 352 371
1 948 (18.2) 2 381
Weighted average number of shares in issue (million) 1 043 1 037
Earnings per share (cents) 154.9 (13.9) 179.9
Headline earnings per share (cents) 192.5 7.0 179.9
Diluted earnings per share (cents) 154.4 (13.8) 179.2
Diluted headline earnings per share (cents) 191.9 7.1 179.2
Headline earnings (R'm)
Profit attributable to ordinary equity holders 1 616 1 866
Headline earnings adjustable items
Impairment of investment 370 -
Loss on remeasuring previously held interest in associate to fair value 23 -
Other (1) -
Headline earnings 2 008 7.6 1 866
Summarised consolidated statement of financial position
as at 30 September 2016
R'm 30 September 30 September
2016 2015
ASSETS
Non-current assets 14 395 13 152
Property, plant and equipment 7 752 7 101
Intangible assets 3 196 2 964
Other non-current assets 3 447 3 087
Current assets 3 102 2 771
Cash and cash equivalents 604 812
Other current assets 2 498 1 959
TOTAL ASSETS 17 497 15 923
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves 5 486 5 168
Non-controlling interest 1 312 1 280
TOTAL EQUITY 6 798 6 448
LIABILITIES
Non-current liabilities 6 111 5 852
Interest-bearing borrowings 5 469 5 263
Other non-current liabilities 642 589
Current liabilities 4 588 3 623
Bank overdraft 1 030 557
Interest-bearing borrowings 1 312 924
Other current liabilities 2 246 2 142
TOTAL LIABILITIES 10 699 9 475
TOTAL EQUITY AND LIABILITIES 17 497 15 923
Summarised consolidated statement of changes in equity
for the year ended 30 September 2016
R'm Total capital Non-controlling Total
and reserves Interest equity
Balance at 1 October 2015 5 168 1 280 6 448
Total comprehensive income for the period 1 596 352 1 948
Profit for the period 1 616 354 1 970
Other comprehensive income (20) (2) (22)
Issue of new shares as a result of Scrip Distributions 575 - 575
Gains on transactions with non-controlling interests 1 (1) -
Increase in ownership interest in subsidiaries (197) (39) (236)
Non-controlling interest arising on business combination - 9 9
Distributions to shareholders (1 662) (289) (1 951)
Purchase of treasury shares for staff benefit schemes (61) - (61)
Life Healthcare Employee Share Trust charge 35 - 35
Long Term Incentive Scheme charge 31 - 31
Balance at 30 September 2016 5 486 1 312 6 798
Balance at 1 October 2014 4 792 1 108 5 900
Total comprehensive income for the period 2 010 371 2 381
Profit for the period 1 866 362 2 228
Other comprehensive income 144 9 153
Transactions with non-controlling interests 7 (7) -
Increase in ownership interest in subsidiaries (36) - (36)
Distributions to shareholders (1 522) (192) (1 714)
Purchase of treasury shares for staff benefit schemes (120) - (120)
Profit on disposal of treasury shares 1 - 1
Life Healthcare Employee Share Trust charge 28 - 28
Long Term Incentive Scheme charge 8 - 8
Balance at 30 September 2015 5 168 1 280 6 448
Summarised consolidated statement of cash flows
for the year ended 30 September 2016
R'm 30 September % 30 September
2016 Change 2015
Cash generated from operations 4 024 4.7 3 842
Interest received 12 12
Tax paid (981) (903)
Net cash generated from operating activities 3 055 3.5 2 951
Capital expenditure (1 013) (1 181)
Investments (1 068) (2 037)
Other 29 -
Net cash utilised in investing activities* (2 052) (3 218)
Interest-bearing borrowings raised 1 961 4 268
Interest-bearing borrowings and preference shares repaid (1 437) (1 814)
Dividends paid (1 087) (1 520)
Other (1 114) (712)
Net cash (utilised in)/generated from financing activities (1 677) 222
Net decrease in cash and cash equivalents (674) (45)
Cash and cash equivalents - beginning of the year 255 267
Cash balances acquired through business combinations 56 20
Effect of foreign exchange rate movements (63) 13
Cash and cash equivalents - end of the year (426) 255
* The cash utilised in investing activities includes the acquisitions in Poland for R748 million, and the additional
shares in Max Healthcare Institute Limited, India for R320 million.
Segmental report
The Hospital segment comprises all the acute hospitals, acute rehabilitation, mental health, renal dialysis and
oncology units in southern Africa. The Healthcare Services segment comprises of Life Esidimeni, Life Occupational
Health and Careways Wellness. International comprises Poland while the Other segment comprises Corporate.
Inter-segment revenue that is eliminated relates to revenue with Careways Wellness Proprietary Limited of
R3 million (2015: Nil).
R'm 30 September 30 September
2016 2015
Operating segments
Revenue
Southern Africa
Hospitals 14 381 13 133
Healthcare Services 849 866
International
Hospitals 1 174 648
Total 16 404 14 647
EBITDA before items detailed below 4 314 4 048
Southern Africa
Hospitals 3 819 3 575
Healthcare Services 120 168
Other 255 214
International
Hospitals 120 91
Depreciation (530) (445)
Southern Africa (468) (408)
International (62) (37)
Amortisation (147) (127)
Southern Africa (124) (117)
International (23) (10)
EBIT
Southern Africa 3 602 3 432
International 35 44
EBIT before items detailed below 3 637 3 476
Retirement benefit asset and post-employment medical aid expenses 23 20
Operating profit 3 660 3 496
Contingent consideration released 109 21
Transaction costs (12) (15)
Impairment of investment (370) -
Loss recognised on remeasuring previously held interest in associate to fair value (23) -
Fair value (loss)/gain on derivative financial instruments (2) 29
Other (6) -
Finance income 12 12
Finance costs (512) (445)
Share of associates' and joint ventures' net profit after tax 8 14
Profit before tax 2 864 3 112
Operating profit before items detailed includes the segment's share of shared services and rental costs. These
costs are all at market-related rates.
R'm Year ended Year ended
30 September 30 September
2016 2015
Total assets before items below
Southern Africa 11 433 10 710
International 5 149 4 419
16 582 15 129
Employee benefit assets 433 394
Deferred tax assets 426 341
Derivative financial assets 17 23
Income tax receivable 39 36
Total assets per the balance sheet 17 497 15 923
Net debt
Southern Africa 6 121 5 625
International 1 086 307
7 207 5 932
Liabilities are reviewed on a net debt basis, which comprises all interest-bearing borrowings and overdraft
balances (net of cash on hand).
ACQUISITIONS AND DISPOSALS OF INVESTMENTS
Changes in ownership interest in subsidiaries as a result of non-controlling interest transactions.
The Group had marginal increases and decreases in its shareholdings in some of its subsidiary companies, due to
transactions with minority shareholders. On 11 August 2016, the Group acquired an additional 30% shareholding in
Flohoc Investments Proprietary Limited (Flohoc) for R306 million, resulting in Flohoc becoming a wholly owned
subsidiary of the Group. During September 2016, the Group disposed of 17.3% of its shareholding in Flohoc for
R110 million. The Group now owns 82.7%.
Increase in investment in Max Healthcare Institute Limited
The Group invested R320 million in Max Healthcare Institute Limited (Max) in November 2015, as its contribution to
Max's acquisition of 51% of Saket City, renamed Max Smart Super Speciality Hospital (Max Smart).
Business combinations
Scanmed Multimedis S.A. (Scanmed) acquired 100% of both Gastromed REM and Multimedycyna on 15 October 2015 and
12 November 2015 respectively, for a total of R31 million. These companies are incorporated in Poland and had no
significant contingent liabilities at the acquisition date.
The following additional material acquisitions took place during the current financial year:
Polska Grupa
Medyczna Carint
Group (PGM) Scanmed
Acquirer Scanmed Scanmed
Country of incorporation Poland Poland
Acquisition date 31 October 2015 1 April 2016
% voting equity interest acquired 100% 100%
Primary reasons for business combination Diversification Diversification
Qualitative factors that make up goodwill recognised Synergies Synergies
Contingent liabilities at acquisition None None
Details of the fair value of net assets acquired and goodwill are as follows:
PGM Carint
Scanmed
2016 2016
R'm R'm
Total purchase consideration (629) (158)
Cash portion (614) (103)
Contingent consideration (15) -
Fair value of equity interest held before the business combination - (55)
Fair value of net assets acquired 200 42
Inventories 12 1
Trade and other receivables 58 44
Trade and other payables (43) (20)
Cash and cash equivalents 54 2
Interest-bearing borrowings (47) (3)
Property, plant and equipment 103 15
Intangible assets 93 14
Deferred tax (21) (11)
Non-controlling interest (9) -
Goodwill (429) (116)
Contingent consideration
The contingent consideration is dependent on the business gaining additional contracts in the next 12-24 months.
The contingent consideration is calculated by applying the same EBITDA multiple used on the acquisition date.
Impact on consolidated information if each business combination took place on 1 October 2015.
PGM Carint
Scanmed
2016 2016
R'm R'm
Revenue 386 67
Net profit 25 16
Basis of presentation and accounting policies
The summarised consolidated financial statements are prepared in accordance with the requirements of the
JSE Limited Listings Requirements (Listings Requirements) for preliminary reports, and the requirements of the
Companies Act applicable to summary financial statements. The Listings Requirements require preliminary reports
to be prepared in accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council
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 consolidated financial statements from which the summary
consolidated financial statements were derived are in terms of IFRS, and are consistent with those applied in the
previous consolidated annual financial statements, except for the adoption of the new and revised standards.
These financial results have been prepared under the supervision of PP van der Westhuizen CA(SA), the Group Chief
Financial Officer.
Report of the independent auditor
This summarised report is extracted from audited information, but is not itself audited. The annual financial
statements were audited by PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The audited
annual financial statements and the auditor's report thereon are available for inspection at the Company's
registered office.
The directors take full responsibility for the preparation of the preliminary report and that the financial
information has been correctly extracted from the underlying annual financial statements.
Commentary
OVERVIEW
The Group delivered a solid southern African operational performance, largely driven by volume growth. The change
in case mix from surgical to medical resulted in a lower revenue per paid patient day (PPD) growth.
The weakening of the exchange rate in the first half of the year increased cost pressures on cost of sales and
information system licensing fees in the second half of the year. Costs were further impacted by the retrenchment
costs in respect of the loss of the Life Esidimeni Gauteng mental health contracts, professional fees incurred on
the Healthcare Market inquiry and increasing costs in malpractice insurance.
Poland produced a satisfactory underlying operating performance amidst negative regulatory changes on tariffs that
became effective 1 July 2016.
India generated strong EBITDA growth of 29.3%, which was, however, diluted by the additional acquisition funding costs.
The Group invested R763 million (including contingent consideration of R15 million) and R320 million in Poland and
India respectively. The Group's results were impacted by the impairment of R370 million of the Polish investment
due to regulatory changes impacting profitability. Earnings continue to be impacted by the dilutive effect of the
interest cost on the funding of the international acquisitions.
OPERATIONAL REVIEW
Southern Africa
The southern Africa business added 176 beds (2015: 253), 36 renal dialysis stations and one oncology centre.
The Group is focused on expanding the range of services it offers, and remains well positioned to serve the market.
Activities, as measured by PPDs, increased by 4.0% as a result of the investment in additional beds and an increase
in the length of stay (LOS). The underlying disease burden and ageing medical scheme population continue to drive
an increase in hospital utilisation as well as influencing the case mix.
Margins for the year declined to 27.5% (2015: 28.3%), however, key performance indicators remain strong, with
weighted occupancies higher at 72.5% (2015: 71.9%).
The Group continued to provide high-quality clinical care as evidenced by good clinical outcomes, hospital-
associated infection rates and patient incident rates in our facilities.
Poland
Scanmed expanded its network of facilities through a number of acquisitions during the year, executing on the
expansion strategy of its facilities, and continuing to invest in long-term growth opportunities. The Group
acquired PGM for R629 million and Carint for R103 million, which were funded from debt raised in Poland.
The Scanmed Group now consists of 624 beds, 12 inpatient cardiology centres and 40 medical facilities.
The Group's total investment in the business is now R2.2 billion (30 September 2015: R1.4 billion).
EBITDA margins reduced to 10.2% (2015: 14%), due to the negative impact of reduced regulated tariffs for cardiology
procedures. Cardiology accounts for approximately 45% of the Scanmed Group business. Further tariff reductions have
been announced by the government covering orthopaedic and neurology disciplines. The Group has therefore put on hold
its strategy for further investments until there is more clarity from the government in terms of its regulations and
the next rounds of contracting. The Group has also changed the senior management team to enable a greater focus on
cost management, driving efficiencies, as well as seconding some senior Life Healthcare management to Poland.
India
The total investment from South Africa into Max is R2.5 billion (30 September 2015: R2.2 billion), which includes
an additional R320 million invested during the year to fund the Max Smart acquisition in India by Max. Max added
331 beds during the period, primarily through the acquisition of Max Smart, bringing the number of operational
beds to 2 384. The Indian operations reported strong growth with net revenue growing by 16.7% and EBITDA by 29.3%.
The growth in revenue was driven by the addition of the 331 beds and an increase in occupancies to 75% (2015: 73%).
EBITDA margins improved to 10.9% (2015: 9.9%) on the back of improved occupancies, improved speciality and channel
mix and better cost control.
The holding company of Max, Max India Limited, listed in July 2016. The share price at 30 September 2016 gives
an approximate value of R5.3 billion for the Group's stake in Max.
FINANCIAL PERFORMANCE
Group revenue increased by 12.0% to R16 404 million (2015: R14 647 million). This is a product of the 8.8% increase
in southern African revenue to R15 230 million (2015: R13 999 million) and the growth in revenue from Poland of
81.2% to R1 174 million (2015: R648 million). The southern African Hospital division revenue increased by 9.5% to
R14 381 million (2015: R13 133 million) driven by a 4.0% increase in PPDs and a higher revenue per PPD of 5.2%,
made up of a 5.9% tariff increase and a 0.7% negative case mix impact. Healthcare Services revenue decreased by
1.9% to R849 million (2015: R866 million) as a result of the phasing out of selected government contracts of the
Life Esidimeni business.
Normalised EBITDA* increased by 6.6% to R4 314 million (2015: R4 048 million). The EBITDA contribution from
Poland was R120 million (2015: R91 million).
* Life Healthcare defines normalised EBITDA as operating profit plus depreciation, amortisation of
intangible assets, impairment of property, plant and equipment as well as excluding profit/loss and fair value
adjustments on disposal of businesses, fair value adjustments, transaction costs and surpluses/deficits on
retirement benefits.
R'm 30 September % 30 September
2016 2015
Normalised EBITDA
Operating profit 3 660 3 496
Depreciation on property, plant and equipment 530 445
Amortisation of intangible assets 147 127
Retirement benefit asset and post-employment medical aid (23) (20)
Normalised EBITDA 4 314 6.6 4 048
Southern Africa 4 194 6.0 3 957
International 120 91
Cash flow
After paying tax of R981 million (2015: R903 million), the Group generated R3 055 million (2015: R2 951 million)
in cash from its operating activities. The Group produced strong cash flows from operations, and continues to
anticipate positive free cash flow. The overall net cash flow position of the Group is negative, as a result of
investing activities, primarily associated with the continuing international investment opportunities of the Group.
This net cash outflow was funded through raising debt in South Africa and Poland.
Financial position
The Group demonstrated a strong financial position against the backdrop of a weak macroeconomic environment. Net
debt to normalised EBITDA as at 30 September 2016 was 1.67 times (2015: 1.49 times). This reflects the funding for
the Group's 2016 capital expenditure programme, and the impact of R763 million spent on acquisitions in Poland.
The bank covenant for net debt to EBITDA is 2.75 times.
The Max investment of R320 million was funded by available cash resources. Poland funded its acquisitions through
the raising of debt in country.
The impairment loss of R370 million recognised during the current year, relates to the Group's investment in
Poland. Contingent consideration in respect of previous Poland acquisitions, of R109 million (2015: R21 million)
was released.
Capital expenditure and Investments
During the current financial period, Life Healthcare invested R2 081 million (2015: R3 218 million), comprising
capital projects of R1 013 million (2015: R1 181 million), R320 million equity injection for the funding of the
acquisition of Max Smart by Max, and R748 million in new acquisitions by Poland. This investment in the Group's
facilities strengthen our service offering, and the new acquisitions are in line with the Group's focus on
expanding our international footprint.
Headline earnings per share (HEPS) and Normalised earnings per share
HEPS increased by 7.0% to 192.5 cps (2015: 179.9 cps). Earnings per share on a normalised basis, which excludes
non-trading related items listed below, increased by 2.6% to 182.1 cps (2015: 177.4 cps). The difference in growth
between HEPS and normalised earnings per share is as a result of the contingent consideration released in respect
of Polish acquisitions which will no longer be payable.
R'm 30 September % 30 September
2016 2015
Normalised earnings
Profit attributable to ordinary equity holders 1 616 1 866
Contingent consideration released (109) (21)
Impairment of investment 370 -
Other 22 (5)
Normalised earnings 1 899 3.3 1 840
Normalised EPS (cents) 182.1 2.6 177.4
Southern Africa operations (cents) 208.1 194.1
International operations (cents) (1.0) 1.8
Funding costs (international acquisitions) (cents) (25.0) (18.5)
Changes to board of directors
There have been no changes to the board of directors for the year ended 30 September 2016.
SCRIP DISTRIBUTION AND CASH DIVIDEND ALTERNATIVE
1. Introduction
The board has declared a final distribution for the year ended 30 September 2016, by way of the issue of fully
paid Life Healthcare Group Holdings Limited ordinary shares of 0.0001 cent each (the Scrip Distribution) payable
to ordinary shareholders (Shareholders) recorded in the register of the Company at the close of business on the
Record Date, being Thursday, 15 December 2016.
Shareholders will be entitled, in respect of all or part of their shareholding, to elect to receive a gross cash
dividend of 92 cents per ordinary share in lieu of the Scrip Distribution, which will be paid only to those
Shareholders who elect to receive the cash dividend, in respect of all or part of their shareholding, on or before
12:00 on Thursday, 15 December 2016 (the Cash Dividend). The Cash Dividend has been declared from income reserves.
A dividend withholding tax of 15% will be applicable to all shareholders not exempt therefrom after deduction of
which the net Cash Dividend is 78.2 cents per share.
The new ordinary shares will, pursuant to the Scrip Distribution, be settled by way of capitalisation of the
Company's distributable retained profits.
The Company's total number of issued ordinary shares is 1 057 800 021 as at 10 November 2016. The Company's Income
Tax reference number is 9387/307/15/1.
2. Terms of the Scrip Distribution
The Scrip Distribution will be done at a 2.5% discount to the 15-day volume weighted average price (VWAP).
The number of Scrip Distribution shares to which each of the Shareholders will become entitled pursuant to the Scrip
Distribution (to the extent that such Shareholders have not elected to receive the Cash Dividend) will be
determined by reference to such Shareholder's ordinary shareholding in Life Healthcare Group Holdings Limited (at
the close of business on the Record Date, being Thursday, 15 December 2016) in relation to the ratio that 92 cents
multiplied by 1.025 bears to the VWAP of an ordinary Life Healthcare Group Holdings Limited share traded on the JSE
during the 15-day trading period ending on Friday, 2 December 2016. Where the application of this ratio gives rise
to a fraction of an ordinary share, the number of shares will be rounded up to the nearest whole number if the
fraction is 0.5 or more, and rounded down to the nearest whole number if the fraction is less than 0.5.
Details of the ratio will be announced on the Stock Exchange News Service (SENS) of the JSE in accordance with the
timetable below.
3. Circular and salient dates
A circular providing shareholders with full information on the Scrip Distribution and the Cash Dividend
alternative, including a Form of Election to elect to receive the Cash Dividend alternative will be posted to
Shareholders on or about Wednesday, 23 November 2016. The salient dates of events thereafter are as follows:
Announcement released on SENS in respect of the ratio applicable to the Scrip
Distribution, based on the 15-day VWAP ending on Friday, 2 December 2016, by 11h00 on Monday, 5 December 2016
Announcement published in the press of the ratio applicable to the Scrip Distribution,
based on the 15-day VWAP ending on Friday, 2 December 2016 on Tuesday, 6 December 2016
Last day to trade in order to be eligible for the Scrip Distribution and the Cash
Dividend alternative Monday, 12 December 2016
Ordinary shares trade "ex" the Scrip Distribution and the Cash Dividend alternative on Tuesday, 13 December 2016
Listing and trading of maximum possible number of ordinary shares on the JSE in terms
of the Scrip Distribution from the commencement of business on Tuesday, 13 December 2016
Announcement released on SENS in respect of the cash payment for fractional
entitlements, based on the VWAP traded on the JSE on Tuesday, 13 December 2016,
discounted by 10% Wednesday, 14 December 2016
Last day to elect to receive the Cash Dividend alternative instead of the Scrip
Distribution, Forms of Election to reach the Transfer Secretaries by 12h00 on Thursday, 15 December 2016
Record Date in respect of the Scrip Distribution and the Cash Dividend alternative Thursday, 15 December 2016
Scrip Distribution certificates posted and Cash Dividend payments made, CSDP/broker
accounts credited/updated, as applicable, on Monday, 19 December 2016
Announcement relating to the results of the Scrip Distribution and the Cash Dividend
alternative released on SENS on Monday, 19 December 2016
Announcement relating to the results of the Scrip Distribution and the Cash Dividend
alternative published in the press on Tuesday, 20 December 2016
JSE listing of ordinary shares in respect of the Scrip Distribution adjusted to
reflect the actual number of ordinary shares issued in terms of the Scrip Distribution
at the commencement of business on or about Wednesday, 21 December 2016
All times provided are South African local times. The above dates and times are subject to change. Any change will
be announced on SENS.
Share certificates may not be dematerialised or rematerialised between Tuesday, 13 December 2016 and Thursday,
15 December 2016, both days inclusive.
COMPETITION COMMISSION MARKET INQUIRY
Life Healthcare has made detailed submissions on the subject matter of the Market Inquiry. Public hearings
commenced in February 2016, and Life Healthcare has participated in these hearings. We are yet to receive a revised
timetable for the subsequent sets of hearings. This is a large and complex inquiry, and Life Healthcare remains
committed to participating in the Healthcare Market Inquiry.
OUTLOOK
Whilst general market conditions are not expected to improve substantially in the foreseeable future, the Group is
well positioned strategically, has the advantage of cost competitive and operationally efficient structures, as
well as access to the funding necessary to fulfil its international expansion aspirations.
Southern Africa will take advantage of growth opportunities in 2017 through the addition of 15 acute healthcare
beds, 81 mental health beds and through the continued growth in renal dialysis and oncology.
The Group will pursue the development of greenfield facilities and/or acquisitions if they strictly meet our
success criteria, and will continue to invest in facilities through upgrades and procurement of equipment.
We will continue to deliver cost-effective care through efficient business processes, optimal resource utilisation
and benchmarking of facilities and doctors. A changing external environment reinforces the need to differentiate
ourselves through a patient-centric strategy, and focus on clinical outcomes.
Prospects for Poland remain uncertain due to the lack of clarity around pricing impacted by government regulations.
The Group will focus on providing excellent clinical quality. In light of sectoral regulatory changes in Poland,
the Group will continue to focus on driving further efficiencies, the integration of newly acquired businesses and
alignment to the Group's best operating practices. The effects of these plans, implemented to sustain growth and
manage costs, will only be seen over a reasonable period of time.
The Max business relies on the continued success of existing businesses, and on integrating new acquisitions.
Specific metrics of growth for the future positioning of Max include a footprint in northern India as well as
improving profitability of mature, at-scale hospitals through improvements in specialty/channel mix and cost
structures. Max will continue to focus on driving revenue through increasing the number of operational beds,
bedding down the Vaishali and Max Smart acquisitions, and improving operational efficiencies.
THANKS
The contribution of the doctors, nurses and employees of Life Healthcare have greatly enhanced the quality of our
performance. We thank them for their contributions.
Approved by the board of directors on 10 November 2016 and signed on its behalf:
Mustaq Brey Andre Meyer
Chairman Group Chief Executive Officer
Executive directors
A Meyer (Group Chief Executive Officer), PP van der Westhuizen (Group Chief Financial Officer)
Non-executive directors
MA Brey (Chairman), PJ Golesworthy, ME Jacobs, LM Mojela, MEK Nkeli, JK Netshitenzhe, MP Ngatane,
GC Solomon, RT Vice.
Company secretary
F Patel
Registered Office
Oxford Manor, 21 Chaplin Road, Illovo
Private Bag X13, Northlands 2116
Sponsors
Rand Merchant Bank, a division of FirstRand Bank Limited.
Date
11 November 2016
Note regarding forward-looking statements: The Company advises investors that any forward-looking statements or
projections made by the Company, including those made in this announcement, are subject to risk and uncertainties
that may cause actual results to differ materially from those projected and have not been reviewed or reported on
by the Company's external auditors.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.
LIFE HEALTHCARE GROUP HOLDINGS LIMITED
Registration number: 2003/002733/06
Income tax number: 9387/307/15/1
ISIN: ZAE000145892
Share code: LHC
www.lifehealthcare.co.za
Date: 11/11/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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