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LIFE HEALTHCARE GROUP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/002733/06)
ISIN: ZAE000145892
JSE and A2X share Code: LHC
("Life Healthcare" or "the Group" or "the Company")
LIFE HEALTHCARE FUNDING LIMITED
(Incorporated in the Republic of South Africa with limited liability)
(Registration number 2016/273566/06)
LEI: 3789SJPQJZF8ZYXTZ394
Bond company code: LHFI
TRADING UPDATE AND TRADING STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2025
Life Healthcare provides shareholders with a trading update and trading statement covering the six-month period from 1 October 2024 to
31 March 2025 ("the current period" or "H1-FY2025"). Reference is also made to the six-month period 1 October 2023 to 31 March 2024
("prior period" or "H1-FY2024") and the twelve-month period 1 October 2023 to 30 September 2024 ("FY2024").
Commentary relates to the results for the current period and comparisons are to the prior period, unless otherwise stated.
Following the announcement on the Stock Exchange News Service of the JSE Limited on 13 January 2025 of the proposed disposal of Life
Molecular Imaging (LMI) to Lantheus Holdings Inc. (Lantheus), LMI has been classified as an asset held for sale in terms of IFRS Accounting
Standards as issued by the International Accounting Standards Board. Consequently, the financial information contained in this
announcement refers to continuing operations, consisting of our southern African operations and to discontinued operations, which
comprises the LMI and Alliance Medical Group's (AMG) operations. The trading update specifically refers only to continuing operations.
Details of the LMI disposal and the pro forma financial effects on the Group were included in the circular to Life Healthcare shareholders
distributed on 27 February 2025.
Trading update
Trading highlights
The southern African business experienced good underlying activity growth for the period H1-FY2025 compared to the prior period. Overall
paid patient days (PPDs) increased by c.2%(1) with overall occupancies improving to 68.6% (H1-FY2024: 66.6%). Acute hospitals PPDs
increased by c.2%1 with the acute hospitals' occupancy improving to 68.3% (H1-FY2024: 66.2%). Complementary services PPDs grew by
c.2% with occupancies improving to 71.6% (H1-FY2024: 70.4%). The southern African business has benefited in the current period from the
timing of the Easter holidays falling in April 2025 vs in March in FY2024.
Revenue per PPD has increased by c.6.1% due to a changing case mix and a tariff increase of 5.1%. This has resulted in revenue growth of
between 8.0% and 9.0%.
The southern African business is in line to meet it's 2025 outlook guidance of:
Growth:
' 79 additional beds and commencement of the construction and development of a new 140 bed hospital
' Additional imaging transactions and PET-CT sites
Drive:
' Improving occupancies to 70%
Optimise:
' Focus on operational efficiencies and embedding the FMC renal business
' Expanding the roll-out of the renal dialysis integrated care programme
Capex spend for H2-FY2025 is expected to approximate R1.2 billion.
(1) On a like-for-like basis as it excludes PPDs of facility sold in the current period.
Update on proposed disposal of LMI
The proposed disposal of LMI is on track and is expected to be completed during H2-FY2025, with shareholders having overwhelmingly
approved the transaction on 2 April 2025. The impact of the transaction does cause some accounting anomalies where the associated
liabilities need to be recognised in this reporting period but the profit on disposal will only be accounted for in the reporting period in which
the transaction closes.
Further details of the expected impact of the proposed disposal on the H1-FY2025 results are provided in the trading statement below.
Trading statement
In terms of paragraph 3.4 (b) of the JSE Limited Listings Requirements, a listed company is required to publish a trading statement as soon
as it is satisfied to a reasonable degree of certainty that the financial results for the period to be reported upon next will differ by at least
20% from those of the previous corresponding period.
The table below summarises our expected earnings for the current period and the significant impact of the adjustments to the LMI
associated liabilities.
NEPS, which excludes non-trading related items, provides the actual performance of the southern African underlying business and
therefore excludes discontinued operations as well as the adjustments to the LMI associated liabilities included as part of continuing
operations.
Earnings per share H1-FY2025 Once-off items H1-FY2025 H1-FY2024 % change % change Notes
(cents) (expected) in H1-FY2025 proforma (reported) H1-FY2025 H1-FY2025
(note 2) (expected) (expected) vs proforma
(note 3) H1-FY2024 (expected) vs
H1-FY2024
From continuing and
discontinued
operations
EPS -140.2 to -169.3 224.0 +54.7 to +83.8 242.8 >-100 -65.5 to -77.5 1, 2
HEPS -150.9 to -158.7 224.0 +65.3 to +73.1 65.2 >-100 +0.2 to +12.1 1, 2
From continuing
operations
EPS -147.0 to -153.2 203.0 +49.8 to +56.0 51.4* >-100 -3.2 to +8.9 2
HEPS -148.0 to -154.2 203.0 +48.8 to +55.0 51.4* >-100 -5.0 to +7.1 2
NEPS +45.0 to +50.4 - +45.0 to +50.4 44.9* +0.2 to +12.3 +0.2 to +12.3 2
*Restated in terms of IFRS 5 as LMI is disclosed as a discontinued operation
1. Sale of AMG
' The sale of AMG was concluded in H1-FY2024 and a R2.8 billion profit on disposal was recognised as part of profit from discontinued
operations.
' This once-off gain, in isolation, equated to 195.7 cents per share in H1-FY2024.
' This gain mainly impacted earnings per share (EPS) from continuing and discontinued operations.
' R3.2 billion (included as part of the R2.8 billion profit on disposal) related to an exchange gain which was excluded from headline
earnings per share (HEPS) from continuing and discontinued operations.
' The above had no impact on EPS, HEPS or NEPS from continuing operations.
2. Proposed sale of LMI
The proposed disposal of LMI is expected to be completed in H2-FY2025.
The profit on disposal of the sale will only be recognised on completion of the transaction, expected in H2-FY2025. However, there were
adjustments to the liabilities relating to LMI as described below.
Transaction costs of c. R75 million were recognised in H1-FY2025, which will only impact on EPS and HEPS from continuing and
discontinued operations.
2.1 Piramal contingent consideration
' A contingent consideration payable exists relating to an amount payable to the previous owners of LMI, Piramal Enterprises Limited
(Piramal).
' The Piramal contingent consideration is a pre-existing liability, measured at fair value, and will therefore be accounted for as part of
continuing operations.
' The fair value adjustment is estimated to be R2.9 billion. This loss will have a substantial impact on the current period's earnings.
' This fair value loss, in isolation, equates to a reduction of c. 203 cents per share.
' This loss will impact EPS and HEPS from continuing and discontinued operations. Furthermore, due to the pre-existing nature of the
Piramal liability, which will remain with the Group, the loss will also impact EPS and HEPS from continuing operations. The fair value
loss is excluded from NEPS.
2.2 LMI management incentive scheme
' LMI's senior management team participates in a management incentive scheme.
' In accordance with the terms of the LMI Management Scheme, an estimated payment of $18 million will be payable to LMI
management from the Upfront Payment post Completion.
' The additional employee charge is estimated to be R303 million.
' This charge, in isolation, equates to a reduction of c. 21 cents per share.
' This charge will impact only EPS and HEPS from continuing and discontinued operations.
3. Pro forma information
To provide a more meaningful assessment of the Group's performance for the period, pro forma information has been included in this
announcement. The H1-FY2025 pro forma (expected) numbers are derived from deducting the fair value loss relating to the Piramal
contingent consideration and the LMI management incentive scheme charge from the H1-FY2025 unaudited results.
The directors are responsible for the pro forma financial information, as detailed in paragraphs 8.15 to 8.34 of the Listings Requirements
of the JSE Limited and the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 (applicable criteria).
The pro forma information does not constitute financial information fairly presented in accordance with IFRS Accounting Standards as
issued by the International Accounting Standards Board.
The pro forma information has been prepared for illustrative purposes only and, because of its nature, may not fairly present the Group's
financial position, changes in equity, results of operations and cash flows. The underlying information used in the preparation of the pro
forma financial information has been prepared using the accounting policies in place for the period ended 31 March 2025.
The Group's H1-FY2025 results are still in the process of being finalised. Life Healthcare expects to release its results for the six months to
31 March 2025 on or about 22 May 2025.
This trading update and trading statement is the responsibility of the directors and is based on financial information which represents the
Group's latest financial estimates and has not been reviewed, or reported on, by Life Healthcare's external auditors.
For further information, please email:
Investor.Relations@lifehealthcare.co.za
Dunkeld
10 April 2025
Equity Sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
Debt Sponsor
Questco Corporate Advisory
Date: 10-04-2025 07:05:00
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