Wrap Text
Condensed unaudited group interim results for the six months ended 31 March 2023 and cash dividend declaration
LIFE HEALTHCARE GROUP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2003/002733/06
Income tax number: 9387/307/15/1
ISIN: ZAE000145892
JSE and A2X share code: LHC
("Life Healthcare" or "the Company" or "the Group")
LIFE HEALTHCARE FUNDING LIMITED
(Incorporated in the Republic of South Africa with limited liability)
(Registration number 2016/273566/06)
Bond company code: LHFI
(“Life Healthcare Funding”)
CONDENSED UNAUDITED GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2023 AND
CASH DIVIDEND DECLARATION
Group overview
Highlights:
- Group revenue grew 12.9% and normalised EBITDA* grew 13.5%
- Southern Africa (SA) revenue grew 11.6% driven by strong paid patient day (PPD) growth of 12.5%
- Alliance Medical Group (AMG) grew revenue 15.5% with good volumes in Ireland and northern Europe
- Acquisitions of TheraMed Nuclear (TheraMed) and Fresenius Medical Care’s southern African renal
business announced
- Normalised earnings per share* (NEPS) grew 1.1% to 44.6 cents
%
2023 2022 change
Group revenue (R'm) 15 290 13 544 12.9%
Group normalised EBITDA* (R'm) 2 690 2 371 13.5%
Weighted average number of shares (million) 1 443 1 452 -0.6%
Earnings per share (EPS) (cents) 37.9 41.5 -8.7%
Headline earnings per share (HEPS) (cents) 40.0 41.4 -3.4%
Normalised earnings per share* (NEPS) (cents) 44.6 44.1 1.1%
Dividend per share (DPS) (cents) 17.0 15.0 13.3%
Life Healthcare has delivered an excellent operating performance and achieved good traction in the
execution of our growth strategy for the six-month period to 31 March 2023 (H1-2023, or the current
period).
Group revenue increased by 12.9% to R15.3 billion (H1-2022: R13.5 billion) consisting of an 11.6% increase
in SA revenue to R10.6 billion (H1-2022: R9.5 billion) driven by strong hospital and complementary services
PPD growth of 12.5%, and a 15.5% increase in AMG revenue to R4.4 billion (H1-2022: R3.8 billion) driven
by strong growth in Ireland and northern Europe along with continued growth in the United Kingdom (UK)
and Italy. The Group’s growth initiatives delivered revenue growth of 24.6% to R289 million (H1-
2022: R232 million).
Group normalised EBITDA increased by 13.5% to R2.7 billion (H1-2022: R2.4 billion). The higher demand for
the Group’s hospitals and complementary services led to improved occupancy of our facilities and
increased operating leverage which drove normalised EBITDA growth of 13.5% to R1.8 billion (H1-2022:
R1.6 billion). AMG delivered normalised EBITDA growth of 10.8% which is commendable given the higher
headcount, salary inflation and increased energy and transport costs experienced across all of AMG’s
territories.
We are advancing our molecular imaging capability in southern Africa (SA) with the announcement on 17
March 2023 of the acquisition of the non-clinical imaging operations of TheraMed, a Gauteng-based nuclear
imaging business with three outpatient clinics, adding PET-CT and SPECT-CT capabilities to our SA imaging
business. This is in addition to the two cyclotrons the business is developing under a joint venture with
AXIM.
On 19 May 2023 we announced the acquisition of the assets and operations of 51 renal dialysis clinics in
southern Africa from Fresenius Medical Care. This transaction supplements the 34 renal dialysis clinics
within our complementary services business and significantly enhances our countrywide renal dialysis
footprint. This transaction is subject to approval by the Competition Commission.
EPS, HEPS and NEPS
EPS decreased by 8.7% to 37.9 cents (H1-2022: 41.5 cents) while HEPS decreased by 3.4% to 40.0 cents (H1-
2022: 41.4 cents). NEPS, which excludes non-trading related items, increased by 1.1% to 44.6 cents (H1-
2022: 44.1 cents). The presentation of normalised earnings metrics are non-IFRS measures.
Our EPS and HEPS metrics have been impacted by a number of non-trading items, including: an impairment
to goodwill of R33 million within AMG and an interest charge of R47 million following the settlement of a
VAT dispute with the tax authorities in South Africa.
Financial position and liquidity
The Group remains in a strong financial position with net debt to normalised EBITDA as at 31 March 2023
of 2.17 times compared to the 1.89 times reported at 30 September 2022. The available undrawn bank
facilities as at 31 March 2023 amounted to R3.8 billion.
Cash generated from operations was impacted by an IT hardware failure during March 2023 at a service
provider which hosts the Group’s billing administration system This issue has been resolved and should
lead to an improvement in cash generation for the remainder of the year.
Cash dividend
The board approved an interim gross cash dividend of 17.0 cents per ordinary share for the six months
ended 31 March 2023. The dividend has been declared from income reserves and is subject to South African
dividend withholding tax of 20%, which will be applicable to all shareholders not exempt therefrom, after
deduction of which the net cash dividend is 13.60000 cents per ordinary share.
The Company’s total number of issued ordinary shares is 1 467 349 162 as at 25 May 2023.
The Company’s income tax reference number is 9387/307/15/1.
In compliance with the requirements of the JSE, the following salient dates are applicable:
Last date to trade cum dividend Monday, 12 June 2023
Shares trade ex the dividend Tuesday, 13 June 2023
Record date Thursday, 15 June 2023
Payment date Monday, 19 June 2023
Share certificates may not be dematerialised or rematerialised between Tuesday, 13 June 2023 and
Thursday, 15 June 2023, both days inclusive.
Outlook
For the twelve months to 30 September 2023 (FY2023), the Group expects continued activity growth in all
the markets it operates.
For our SA operations, we currently anticipate continued volume growth in our core acute hospital
business, driven by the normalisation of admission rates and case mix, as well as introduction of new funder
network deals. For our hospitals and complementary services, we anticipate seeing c.10% PPD growth
for the full year, inclusive of the volumes from the new network deals. With the improved activity levels we
expect better operational leverage but we remain cautious of the impact of the energy crisis and inflation
pressures. We will conclude and integrate the acquisition of TheraMed during the remainder of FY2023.
For AMG we expect to see continued good growth in demand for our scanning services in the UK and Ireland
and we remain excited about the CDC rollout. We look forward to the outcome of Eisai/Biogen’s full FDA
drug filing for Leqembi™ in the USA in July 2023, following which we hope to hear late in 2023 whether the
drug will be reimbursed within the USA.
Receipt of unsolicited proposals to acquire the Group’s interest in AMG
With reference to the cautionary announcement last renewed on 26 April 2023 on SENS, the board of
directors of Life Healthcare (Board), through its advisers, continues to formally engage with the third parties
regarding their unsolicited proposals to acquire the Group’s interest in AMG (Proposals). The engagement
is centred around ascertaining the viability of the Proposals and as a consequence whether a sale of AMG,
if implemented, would be in the interests of all stakeholders. The Company will remain under cautionary
until further announcements are made.
Thanks
The Company’s ability to effectively respond to operational challenges, while continuing to provide quality
care to its patients, is largely due to the resilience, dedication and unwavering support of its employees,
doctors, and other healthcare professionals. Life Healthcare would like to thank them for their tireless work
and for the care they deliver.
* Life Healthcare defines normalised EBITDA as operating profit before depreciation on property, plant and
equipment, amortisation of intangible assets and non-trading related costs and income. Normalised EBITDA
and NEPS are non-IFRS measures.
SHORT-FORM ANNOUNCEMENT
This short-form announcement is a summary of the information in the detailed interim results
announcement published on 25 May 2023 and does not contain full or complete details. The full
announcement is available on Life Healthcare’s website (http://www.lifehealthcare.co.za) or can be downloaded
from https://senspdf.jse.co.za/documents/2023/JSE/ISSE/LHC/Interim23.pdf Any investment decision
should be based on consideration of the full announcement and shareholders and/or investors are
encouraged to review the full announcement.
The full announcement is also available, at no charge, for inspection at the registered office of Life
Healthcare and at the office of the sponsor, during office hours. Copies of the full announcement may also
be requested directly from the Company Secretary, Joshila Ranchhod (joshilar@life.co.za).
The contents of this short-form announcement are the responsibility of Life Healthcare’s board of directors.
Date: 25 May 2023
Executive directors: Mr PG Wharton-Hood (Group Chief Executive), Mr PP van der Westhuizen (Group Chief Financial Officer)
Non-executive directors: Dr VL Litlhakanyane (Chairman), Dr JE Bolger, Mr PJ Golesworthy, Ms CM Henry, Mr LE Holmqvist, Prof
ME Jacobs, Mr TP Moeketsi, Ms AM Mothupi, Mr JK Netshitenzhe, Adv M Sello, Mr GC Solomon and Mr F Tonelli
Company Secretary: Ms J Ranchhod
Registered Office: Building 2, Oxford Parks, 203 Oxford Road (cnr Eastwood and Oxford Roads), Dunkeld, 2196. Private Bag X13,
Northlands, 2116
Equity and Debt Sponsor: Rand Merchant Bank, a division of FirstRand Bank Limited. 1 Merchant Place, cnr Fredman Drive and
Rivonia Road, Sandton
Note regarding forward-looking statements: 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 Group's external auditors.
Date: 25-05-2023 07:05:00
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