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Summary financial information of Alliance Medical Group Limited
Life Healthcare Group Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2003/002733/06
JSE share Code: LHC
ISIN: ZAE000145892
(“Life Healthcare" or the “Company”)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
CANADA, AUSTRALIA AND JAPAN
SUMMARY FINANCIAL INFORMATION OF ALLIANCE MEDICAL GROUP LIMITED
1. Introduction
Life Healthcare shareholders are referred to the SENS announcements dated 16 November 2016 and
20 December 2016, wherein Life Healthcare announced the acquisition of Alliance Medical Group
Limited (“Alliance Medical”) and a proposed renounceable rights offer to refinance a portion of the
acquisition bridge facility.
The purpose of this announcement is to provide Life Healthcare shareholders with further financial
information in relation to Alliance Medical. For further information, Life Healthcare shareholders are also
referred to the updated investor presentation available on the Company’s website (www.life.co.za).
2. Presentation of financial information
Alliance Medical’s financial information as at and for the financial years ended 31 March 2016 and 2015
has been extracted, from Alliance Medical’s consolidated financial statements as at and for the financial
year ended 31 March 2016, which have been prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). Alliance
Medical’s financial statements as at and for the financial years ended 31 March 2016 and 2015 are
currently being audited under IFRS. Alliance Medical’s financial statements as at and for the financial
year ended 31 March 2015 have previously been audited under International Financial Reporting
Standards as adopted by the EU.
Alliance Medical’s financial information as at and for the six months ended 30 September 2016 and 2015
has been extracted, from Alliance Medical’s consolidated interim financial statements for the six months
ended 30 September 2016 and has been prepared in accordance with IAS 34, Interim Financial
Reporting. Alliance Medical’s consolidated interim financial statements as at and for the six months
ended 30 September 2016 are currently being reviewed under IFRS in terms of IAS34.
Until such time as the audit and review, as applicable, are complete and final numbers published, such
financial information may be subject to amendment and the final numbers may differ from those set out
herein.
The directors take full responsibility for the extraction of the financial information from the underlying
annual and interim financial statements.
3. Consolidated income statement
For the six months ended 30
For the year ended 31 March September
2016 2015 %change 2016 2015 %change
(£, in millions) Unaudited Unaudited
(1)
Unaudited Unaudited
Revenue 218.8 210.7 3.8% 119.1 104.5 14.0%
Cost of sales
excluding
depreciation (121.0) (112.0) 8.0% (67.4) (56.7) 18.9%
Depreciation (18.1) (17.9) 1.1% (9.0) (8.1) 11.1%
Gross profit 79.7 80.8 (1.4%) 42.7 39.7 7.6%
Administrative
expenses
Overheads (37.6) (44.6) 15.7% (19.2) (19.6) (2.0%)
Depreciation (1.1) (1.3) (15.4%) (1.4) (1.0) 40.0%
Loss on disposal
of property, plant
and equipment (0.8) (0.4) 100.0% - (0.3)
Amortisation (8.9) (8.9) - (4.9) (4.3) 14.0%
Other
administrative
expenses (11.8) (6.5) 81.5% (2.5) (4.2) (40.5%)
Profit before
interest &
taxation 19.5 19.1 2.1% 14.7 10.3 42.7%
Finance costs (10.9) (19.2) (43.2%) (4.3) (7.3) (41.1%)
Share of profit of
joint ventures 0.3 0.3 - 0.2 0.2 -
Profit before
taxation 8.9 0.2 4350.0% 10.6 3.2 231.3%
Taxation 0.1 (3.1) (1.3) (1.1) 18.2%
Profit/(loss) for
the period 9.0 (2.9) 9.3 2.1 342.9%
Profit for the
period
attributable to:
The equity
shareholders of
the Company 9.0 (2.9) 9.3 2.1 342.9%
Non-controlling
interests - - - -
Profit for the
period 9.0 (2.9) 9.3 2.1 342.9%
4. Consolidated balance sheet
As at 31 March As at 30 September
2016 2015 2016 2015
(£, in millions) Unaudited Unaudited(1) Unaudited Unaudited
ASSETS
Non-current assets
Property, plant and equipment 110.1 84.8 122.9 99.5
Goodwill 45.3 43.9 47.0 44.1
Other intangible assets 20.2 25.4 16.4 21.3
Investment in joint ventures 0.7 0.8 1.0 0.8
Deferred tax assets 0.4 0.2 0.1 0.2
176.7 155.1 187.4 165.9
Current assets
Inventories 0.3 0.2 0.4 0.1
Trade and other receivables 58.6 50.6 60.3 63.7
Current income tax receivable 0.3 - - -
Deferred tax assets 1.3 - 1.9 1.0
Cash and cash equivalents 38.8 60.3 31.8 26.6
99.3 111.1 94.4 91.5
TOTAL ASSETS 276.0 266.2 281.8 257.3
LIABILITIES
Non-current liabilities
Trade and other payables (2.2) (2.0) (2.9) (2.7)
Borrowings (22.9) (181.5) (23.8) (160.5)
Deferred tax liabilities (1.9) (4.6) - -
Retirement benefit obligations (3.6) (3.3) (3.6) (3.0)
Provisions (1.9) (2.2) (1.9) (2.2)
(32.5) (193.6) (32.2) (168.4)
Current liabilities
Trade and other payables (63.4) (54.5) (55.4) (58.6)
Borrowings (168.3) (9.2) (174.2) (17.2)
Deferred tax liabilities (1.1) (0.6) (2.7) (5.6)
Current income tax payable - (1.8) (1.5) (1.6)
Provisions (1.1) (0.5) (0.4) (0.3)
(233.9) (66.6) (234.2) (83.3)
TOTAL LIABILITIES (266.4) (260.2) (266.4) (251.7)
EQUITY
Share capital - - - -
Share premium account 127.4 126.6 127.4 126.6
As at 31 March As at 30 September
2016 2015 2016 2015
Translation reserve 4.8 8.0 1.3 7.5
Other reserves (126.6) (126.6) (126.6) (126.6)
Retained earnings 3.8 (2.1) 13.1 (2.0)
Equity attributable to shareholders
of the Company 9.4 5.9 15.2 5.5
Non-controlling interests 0.2 0.1 0.2 0.1
TOTAL EQUITY 9.6 6.0 15.4 5.6
(1) These financial statements have previously been audited under International Financial Reporting Standards as
adopted by the EU, these financial statements are currently being audited under IFRS as issued by the
International Accounting Standards Board.
5. Alliance Medical EBITA and EBITDA reconciliation
Alliance Medical historically defined EBITA as profit before interest, tax, amortisation of acquired
intangibles, profit/(loss) on disposal of property, plant and equipment, and other administrative expenses
and EBITDA as EBITA before depreciation. EBITDA and EBITA are non-IFRS financial measures and
should not be considered as alternatives to Alliance Medical’s historical financial results based on IFRS.
These non-IFRS measures are included because the directors believe that these measures enhance an
investor’s understanding of Alliance Medical’s results of operations and financial performance as they
present additional financial measures regularly used by the management to assess operating
performance. These measures are not uniformly defined by all companies, including those in the
healthcare and diagnostics industries. Accordingly, these measures may not be comparable with
similarly titled measures and disclosures by other companies.
The following table presents a reconciliation calculation from profit before interest and taxation to EBITA
and EBITDA:
Six months ended 30
Year ended 31 March September
2016 2015 2016 2015
(£, in millions)
Profit before interest and taxation 19.5 19.1 14.7 10.3
Adjustments:
Loss on disposal of property, plant
and equipment 0.8 0.4 - 0.3
Amortisation 8.9 8.9 4.9 4.3
(1)
Other administrative expenses 11.8 6.5 2.5 4.2
EBITA 41.0 34.9 22.1 19.1
Adjustments:
Depreciation 18.1 17.9 9.0 8.1
Depreciation 1.1 1.3 1.4 1.0
EBITDA 60.2 54.1 32.5 28.2
(1) Other administrative expenses in the year ended 31 March 2016 comprise reorganisation and restructuring
costs (£6.7 million), PET contract mobilisation (£3.3 million) and merger and acquisition costs (£1.8 million). Other
administrative expenses in the year ended 31 March 2015 comprise reorganisation and restructuring costs (£3.4
million), Alliance Medical Molecular Imaging Limited gain on consolidation (£1.5 million) and loss on disposal (£4.6
million).
6. Commentary on the financial results for the financial year ended 31 March 2016
Revenue increased by 3.8% to £218.8 million for the financial year ended 31 March 2016. This increase
was primarily due to volume growth at diagnostic imaging sites in the United Kingdom and Ireland as
well as growth in PET-CT scanning volume under the 10-year PET-CT contract with the National Health
Service in the United Kingdom (the “PET-CT National Contract”). Revenue growth was partially offset
by declines in the Italy, Spain and Northern Europe segments.
EBITDA increased by 11.3% to £60.2 million for the financial year ended 31 March 2016. This increase
was primarily a result of revenue growth and a decrease in overhead expenses resulting from savings
under Alliance Medical’s restructuring programme. This was partially offset by an increased cost of
sales, which was impacted by the mobilisation costs incurred in connection with the PET-CT National
Contract.
Other administrative expenses of £11.8 million in the financial year ended 31 March 2016, comprised
£6.7 million reorganisation and restructuring costs, £3.3 million PET-CT National Contract mobilisation
costs in the United Kingdom and £1.8 million relating to professional fees. Other administrative expenses
of £6.5 million in the financial year ended 31 March 2015, comprised £3.4 million for reorganising and
restructuring costs, a gain of £1.5 million on consolidation of Alliance Medical Molecular Imaging Limited,
following approval by the Competition and Markets Authority in August 2014, and a £4.6 million loss on
disposal of the Spanish mobile scanning business.
Alliance Medical reported a profit of £9.0 million for the financial year ended 31 March 2016, as
compared to a loss of £2.9 million in the financial year ended 31 March 2015. The increased profitability
was due in part to increased revenue and to a reduction in finance costs, following the repayment of a
portion of Alliance Medical’s senior indebtedness in 2015, which was replaced in part by lease facilities.
7. Commentary on the financial results of the six months ended 30 September 2016
Revenue increased by 14.0% to £119.1 million for the six months ended 30 September 2016. This was
primarily the result of revenue growth in the United Kingdom due to an increase in the number of PET-
CT scans conducted pursuant to the PET-CT National Contract and in Ireland due to the revenue impact
of new clinics. Revenue in the Spain and Northern Ireland segments also increased but remained
relatively flat in Italy.
EBITDA increased by 15.2% to £32.5 million for the six months ended 30 September 2016. This
increase was primarily a result of revenue growth and a decrease in overhead expenses as a result of
savings under Alliance Medical’s restructuring programme.
Other administrative expenses of £2.5 million in the six months ended 30 September 2016 comprised
£1.3 million costs in respect of the sale of Alliance Medical, £0.5 million reorganisation and restructuring
costs, £0.4 million PET-CT National Contract mobilisation costs in the United Kingdom and other costs
of £0.3 million. Other administrative expenses of £4.2 million in the six months ended 30 September
2015 comprised reorganisation and restructuring costs of £2.6 million, mobilisation of the PET-CT
National Contract of £1.5 million and other costs of £0.1 million.
Alliance Medical reported a profit of £9.3 million for the six months ended 30 September 2016, an
increase of 342.9% from the comparable six month period in 2015.
8. Consolidation
Alliance Medical has been consolidated as a subsidiary of Life Healthcare under IFRS since 21
November 2016, the effective date of the acquisition.
Illovo
12 January 2017
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Important Notice
The information contained herein is not for release, publication or distribution, directly or indirectly, in or
into Canada, Australia or Japan or any other jurisdiction in which the distribution or release would be
unlawful. These materials are not and do not contain an offer of securities for sale or a solicitation of an
offer to purchase or subscribe for securities in any jurisdiction, including the United States, Australia,
Canada or Japan or any other state or jurisdiction in which such release, publication or distribution would
be unlawful. The securities to which these materials relate (the “Securities”) have not been, and will not
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offered or sold in the United States unless registered under the Securities Act or pursuant to an
exemption from, or in a transaction not subject to, registration under the Securities Act. There will be no
public offer of the Securities in the United States. Subject to certain exceptions, the Securities may not
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resident or citizen of such countries.
These materials are only being distributed to and are only directed at: (i) persons who are outside the
United Kingdom; or (ii) to investment professionals falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (iii) high net worth entities, and
other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order; or (iv)
persons to whom an invitation or inducement to engage in investment activity (within the meaning of
section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any
securities may otherwise lawfully be communicated; or (v) persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as “relevant persons”). The Securities are
only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such
securities will be engaged in only with, relevant persons. Any person who is not a relevant person should
not act or rely on this announcement or any of its contents.
In any member state of the European Economic Area (other than the United Kingdom) that has
implemented Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU to the
extent implemented in the relevant Member State, together with any applicable implementing measures
in any Member State, the “Prospectus Directive”) this announcement is only addressed to and is only
directed at qualified investors in that Member State within the meaning of the Prospectus Directive.
These materials do not constitute or form a part of any offer or solicitation or advertisement to purchase
and/or subscribe for Securities in South Africa, including an offer to the public for the sale of, or
subscription for, or the solicitation or advertisement of an offer to buy and/or subscribe for, shares as
defined in the South African Companies Act, No. 71 of 2008 (as amended) or otherwise (the “Act”) and
will not be distributed to any person in South Africa in any manner that could be construed as an offer to
the public in terms of the Act. These materials do not constitute a prospectus registered and/or issued in
terms of the Act. Nothing in this announcement should be viewed, or construed, as “advice”, as that term
is used in the South African Financial Markets Act, No. 19 of 2012, as amended, and/or Financial
Advisory and Intermediary Services Act, No. 37 of 2002, as amended.
The contents of this announcement have not been verified by the banks appointed in connection with the
Rights Issue or any of their respective affiliates (together, the "Banks"). The Banks are each acting
exclusively for Life Healthcare and for no-one else in connection with any transaction mentioned in these
materials and will not regard any other person (whether or not a recipient of this announcement) as a
client in relation to any such transaction and will not be responsible to any other person for providing the
protections afforded to their respective clients, or for advising any such person on the contents of these
materials or in connection with any transaction referred to in this announcement.
No reliance may be placed for any purposes whatsoever on the information contained in this
announcement or on its accuracy or completeness. No representation or warranty, expressed or implied,
is given by or on behalf of Life Healthcare, Alliance Medical, the Banks or their respective affiliates,
directors, officers or employees, advisors or any other person as to the accuracy or completeness of the
information or opinions contained in this announcement, and no liability whatsoever is accepted for any
such information or opinions or any use which may be made of them.
Persons receiving this announcement should make all trading and investment decisions in reliance on
their own judgement and not in reliance on the Banks or this document. None of the Banks is providing
any such persons with advice on the suitability of the matters set out in this announcement or otherwise
providing them with any investment advice or personal recommendations. Any presentations, research
or other information communicated or otherwise made available in this document is incidental to the
provision of services by the Banks to Life Healthcare and is not based on individual circumstances.
All investment is subject to risk. The value of the securities offered may go down as well as up. Past
performance is no guarantee of future returns. Potential investors are advised to seek expert financial
advice before making any investment decision.
Forward-Looking Statements
This announcement includes certain forward-looking statements, beliefs or opinions, including
statements with respect to Life Healthcare or Alliance Medical’s business, financial condition, results of
operations and prospects. Forward-looking statements are typically identified by the use of forward
looking terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”, “intends”, “estimates”,
“plans”, “assumes”, “anticipates”, “annualized”, “goal”, “target” or “aim” or the negative thereof or other
variations thereof or comparable terminology, or by discussions of strategy that involve risk and
uncertainties. These statements reflect the directors' beliefs and expectations and involve risk and
uncertainty because they relate to events and depend on circumstances that will occur in the future. No
representation is made that any of these statements or forecasts will come to pass or that any forecast
results will be achieved. There are a number of risks, uncertainties and factors that could cause actual
results and developments to differ materially from those expressed or implied by these statements and
forecasts. Past performance cannot be relied on as a guide to future performance. Forward-looking
statements speak only as at the date of this announcement, and Life Healthcare expressly disclaims any
obligations or undertaking to release any update of, or revisions to, any forward-looking statements in
this announcement. No statement in this announcement is intended to be a profit forecast. As a result,
you are cautioned not to place any undue reliance on such forward-looking statements. Please refer to
the Life Healthcare’s Integrated Report for the financial year ended 30 September 2016 for a description
of certain important factors, risks and uncertainties that may affect Life Healthcare’s businesses.
Date: 12/01/2017 10:13:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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