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Condensed unaudited Group Interim Results for the six months ended 31 March 2021 and Trading Statement
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
Share code: LHC
("Life Healthcare" or "the Company" or "the Group")
CONDENSED UNAUDITED GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2021 AND
TRADING STATEMENT FOR THE 12 MONTHS ENDING 30 SEPTEMBER 2021
Group overview
Highlights:
- Revenue from continuing operations: +4.0% to R13.0 billion
- Normalised EBITDA from continuing operations: -14.3% to R2.4 billion
- Normalised earnings per share: +1.3% to 55.7 cents
- Strong financial position with available undrawn facilities of R6.4 billion
2021 % change 2020
Revenue from continuing operations (R'm) 13 004 4.0% 12 504
Normalised EBITDA* from continuing operations (R'm) 2 418 (14.3%) 2 822
Weighted average number of shares (million) 1 454 (0.1%) 1 455
Earnings per share (EPS) (cents) 55.9 4.1% 53.7
Headline earnings per share (HEPS) (cents) 47.4 (11.9%) 53.8
Normalised earnings per share (NEPS) (cents) 55.7 1.3% 55.0
NEPS from continuing operations^ (cents) 52.8 (2.4%) 54.1
Dividend per share (DPS) (cents) - -
Life Healthcare had a positive trading performance for the period ended 31 March 2021 (the current
period), particularly given the continuing impact of the COVID-19 pandemic (COVID-19, or the pandemic).
During the current period, the Group experienced the full impact of the second COVID-19 wave, whereas
the effect of the first COVID-19 wave in the six months ended 31 March-2020 was felt primarily in the
international business with the southern African business impacted for only a two week period in March
2020.
Group revenue increased by 4.0%, normalised EBITDA declined by 14.3% and the normalised EBITDA margin
declined to 18.6%. Alliance Medical Group (AMG) performed strongly with revenue growth of 27.2% and
normalised EBITDA growth of 48.8%, driven by a number of factors, including the impact of additional
COVID-19 solutions for the NHS, COVID-19 blood testing in Italy and a strong performance in Ireland. AMG
saw strong growth in volumes within our PET-CT centres in the UK towards the end of the current period.
The southern African business was impacted by a severe second COVID-19 wave during the current period
resulting in a decline in revenue of 3.4% and a decline in normalised EBITDA of 32.5%. The southern African
normalised EBITDA margin declined to 16.6% due to negative operating leverage resulting from both lower
activity levels and higher COVID-19 related operating costs.
The Group announced the sale of Scanmed S.A. (Scanmed) in Poland in November 2020 and this process
was finally concluded on 26 March 2021 and the net proceeds of R681 million were used to reduce debt.
Scanmed has been presented as a discontinued operation in the current and prior period results.
EPS, HEPS and NEPS
Earnings have been positively impacted (+6.0 cents) by the profit from the discontinued operation of R87
million (net of tax) thus reported EPS increased by 4.1% to 55.9 cents while EPS from continuing operations
decreased by 9.4% to 49.9 cps. Reported HEPS decreased by 11.9% to 47.4 cents and NEPS, which excludes
non-trading related items, increased by 1.3% to 55.7 cents. NEPS from continuing operations decreased by
2.4% to 52.8 cents.
Financial position and liquidity
The Group is in a strong financial position with net debt to normalised EBITDA as at 31 March 2021 at 2.78
times (H1-2020: 2.24 times and 2.96 times at 30 September 2020). The net debt to normalised EBITDA
position has improved due to the Scanmed disposal, improved trading across the Group, curtailed capital
expenditure and good working capital management. The Group has reverted to its previous bank covenants
of net debt to normalised EBITDA at a maximum of 3.5 times.
Given the ongoing uncertainty around COVID-19 and the future impact that this may have on the Group,
Life Healthcare has kept in place additional banking facilities that were put in place during 2020. The
available undrawn facilities as at 31 March 2021 amounted to R6.4 billion.
Distribution
The board of directors has decided, considering the uncertainty around the timing and magnitude of a
potential third COVID-19 wave, to continue to preserve cash and not to pay an interim dividend for the
current period. This position will be reviewed for the full year.
Outlook
Life Healthcare continues to adopt a cautious approach due to the ongoing impact of COVID-19, particularly
with regards to the southern African business and the uncertain impact a potential third COVID-19 wave
may have on the business. Despite this, Life Healthcare expects a continued positive performance for the
six months to 30 September 2021 (H2-2021) from AMG given the continuing demand for scans across the
business. In southern Africa, we anticipate continued growth in revenue and normalised EBITDA in H2-
2021 if the recent activity trends continue, but this would be subject to the timing and magnitude of a
potential third COVID-19 wave in the H2-2021 period.
Capex for FY2021 is expected to amount to R1.2 billion in southern Africa (down from prior guidance of
R1.5 billion) and R0.9 billion in AMG. The reduction in capex follows a review of certain projects in light of
the Group’s continued focus on cash preservation.
Changes to the board of directors and Company Secretary
Mr MA Brey retired from the board as a director and Chairman with effect from 27 January 2021. Dr VL
Litlhakanyane was appointed as the non-executive Chairman of the board from this date.
Ms A Parboosing stepped down as the Group Company Secretary as at 28 February 2021 to assume the
role of Chief People Officer within the Company. Ms J Ranchhod was appointed in the role with effect from
1 March 2021.
Trading statement for the 12 months ending 30 September 2021
Life Healthcare's results for the 12 months ending 30 September 2021 are expected to show an increase of
more than 100% in EPS from those reported for the financial year ended 30 September 2020 (EPS: -6.4
cents) to at least a positive EPS. This is primarily due to the impairment of R793 million (reducing EPS by
54.5 cents) recognised in FY2020 relating to Scanmed. A detailed trading statement will be released in early
November 2021. The forecast financial information on which this trading statement is based has not been
reviewed and reported on by the Group's external auditors.
* 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.
^ Reflects NEPS excluding Scanmed. NEPS is a non-IFRS measure.
SHORT-FORM ANNOUNCEMENT
This short-form announcement is a summary of the information in the detailed interim results
announcement published on 27 May 2021 and does not contain full or complete details. The full
announcement is available on Life Healthcare’s website (www.lifehealthcare.co.za) or can be downloaded
from https://senspdf.jse.co.za/documents/2021/JSE/ISSE/LHC/Interim21.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: 27 May 2021
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), Mr PJ Golesworthy, Prof ME Jacobs, Ms AM Mothupi, Mr JK
Netshitenzhe, Dr MP Ngatane, Adv M Sello, Mr GC Solomon and Mr RT Vice
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.
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: 27-05-2021 07:05:00
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