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LIFE HEALTHCARE GROUP HOLDINGS LIMITED - Condensed unaudited group interim results for the six months ended 31 March 2022 and cash dividend declaration

Release Date: 26/05/2022 07:05
Code(s): LHC     PDF:  
Wrap Text
Condensed unaudited group interim results for the six months ended 31 March 2022 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
Share code: LHC
("Life Healthcare" or "the Company" or "the Group")

CONDENSED UNAUDITED GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2022 AND
CASH DIVIDEND DECLARATION

Group highlights:
- Revenue from continuing operations: +4.2% to R13.5 billion
- Improved performance in SA with PPDs up 2.1% and theatre minutes up 11.3%
- Strong underlying growth in AMG with PET-CT and MRI scan volumes up 13.7% and 11.7% respectively
- Strong financial position with net debt to normalised EBITDA of 2.03 times
- Interim cash dividend declaration of 15.0 cents per share

                                                                          % chg
                                                        2022     2021   2022-21

Revenue from continuing operations^ (R'm)             13 544   13 004      4.2%

Normalised EBITDA* from continuing operations (R'm)    2 371    2 418     -1.9%

Weighted average number of shares (million)            1 452    1 454     -0.1%

Earnings per share (EPS) (cents)                        41.5     55.9    -25.8%

Headline earnings per share (HEPS) (cents)              41.4     47.4    -12.7%

Normalised earnings per share* (NEPS) (cents)           44.1     55.7    -20.8%

NEPS from continuing operations^ (cents)                44.1     52.8    -16.5%

Dividend per share (DPS) (cents)                        15.0        -       n/a

Life Healthcare had a good trading performance for the six-month period ended 31 March 2022 (H1-2022,
or the current period) driven by a strong performance in southern Africa and a good underlying business
performance in Alliance Medical Group (AMG).

Group revenue from continuing operations increased by 4.2% to R13.5 billion (H1-2021: R13.0 billion)
consisting of a 4.5% increase in southern African revenue to R9.5 billion (H1-2021: R9.1 billion), a 1.8%
increase in international revenue from continuing operations to R3.8 billion (H1-2021: R3.7 billion) and
R232 million revenue contribution from growth initiatives (H1-2021: R170 million).

Normalised EBITDA from continuing operations decreased by 1.9% to R2.4 billion (H1-2021: R2.4 billion).
This decline in normalised EBITDA was largely driven by our international operations which saw normalised
EBITDA decline by 13.3% to R806 million (H1-2021: R930 million) due to the ending of COVID-19-related
support services, while our southern African operations saw normalised EBITDA growth of 7.5% to R1.6
billion (H1-2021: R1.5 billion).

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. Scanmed was presented as a discontinued operation for the
period ended 31 March 2021 (H1-2021 or prior period). As a result, the prior period results have been re-
presented.

EPS, HEPS and NEPS
EPS from continuing operations decreased by 16.8% to 41.5 cents (H1-2021: 49.9 cents) while EPS from
continuing and discontinued operations decreased to 41.5 cents (H1-2021: 55.9 cents). This decline in EPS
can be attributed to two positive contributors during the H1-2021 period which have not recurred in the
current period, namely the disposal of Scanmed and the ending of some COVID-19-related support services
AMG provided in the UK and Italy. In addition, our operational investments into both AMG and LMI have
negatively impacted the margins for these businesses during the current period. The profit from Scanmed
of R87 million (net of tax) positively impacted earnings during the prior period, increasing EPS by 6.0 cents.

Financial position and liquidity
The Group is in a strong financial position with net debt to normalised EBITDA as at 31 March 2022 of 2.03
times compared to the 1.82 times reported at 30 September 2021 and 2.78 times reported at 31 March
2021.

Given the ongoing uncertainty around COVID-19 and the future impact that this may have on the Group,
Life Healthcare has kept in place some banking facilities that were put in place during 2020. The available
undrawn facilities as at 31 March 2022 amounted to R4.8 billion (down from R6.6 billion at the end of the
FY2021 period).

Distribution
The Board approved an interim gross cash dividend of 15.0 cents per ordinary share for the six months
ended 31 March 2022. The dividend has been declared from income reserves. The dividend 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 12.00000 cents per share.

The Company’s total number of issued ordinary shares is 1 467 349 162 as at 26 May 2022.

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, 13 June 2022

Shares trade ex the dividend                                        Tuesday, 14 June 2022

Record date                                                         Friday, 17 June 2022

Payment date                                                        Monday, 20 June 2022

Share certificates may not be dematerialised or rematerialised between Tuesday, 14 June 2022 and Friday, 17 June
2022, both days inclusive.

H2-2022 Outlook
Our people and infrastructure have been significantly tested over recent years and have shown their
resilience. We have learnt from these challenges, made structural changes and invested in infrastructure,
IT systems, talent and processes.

The diminishing disruptions from recent COVID-19 waves and signs of normality returning, have driven an
encouraging recovery in healthcare demand, which is reflected in these results. The continuation of these
trends would make us more optimistic on the outlook for our business.

For our southern African operations we currently anticipate that we should be able to deliver increased
activities, higher occupancies and improvement in normalised EBITDA margin for H2-2022.

International Governments’ drive to reduce diagnostic waiting lists is expected to increase the demand for
AMG’s services. Real evidence of increased demand for existing and new isotopes is encouraging for our
radiopharmacy business.

Changes to the board of directors
Shareholders are referred to the announcement in December 2021 and confirm that Ms Hess did not offer
herself for election as a director at the AGM held on 26 January 2022. Cindy was appointed to the Board
on 1 September 2021 and for the short period she served in the role, has made a valuable and meaningful
contribution.

* 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.
^ Reflects revenue and NEPS excluding Scanmed.

SHORT-FORM ANNOUNCEMENT
This short-form announcement is a summary of the information in the detailed interim results
announcement published on 26 May 2022 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/2022/JSE/ISSE/LHC/Interim22.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: 26 May 2022

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, Ms C Henry, 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: 26-05-2022 07:05:00
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