UK exit boosts Netcare’s profit. The private hospitals group has declared a special dividend of 40c per share

following a detailed review of its portfolio, capital structure and capital

requirements.

Netcare has declared a special dividend of 40c per share following its

decision to exit its business in the UK. The private hospitals group has also

been buying back its own shares after a detailed review of its portfolio,

capital structure and capital requirements.

In March, it announced it was exiting the UK due to declining business from

the National Health Service and after it failed to conclude a commercially

viable rent reduction transaction for its BMI Healthcare subsidiary.

Reporting results for the year to end-September, Netcare said revenue from

continuing operations rose 8.4% to 20.7 rand billion in the year to end-September

and normalised operating profit increased by 4.7% to 3.49 rand billion. The

results include Akeso clinics, a network of 12 mental healthcare facilities

bought earlier in the year, while BMI has been deconsolidated and classified

as a discontinued operation.

The group swung to a profit of 4.74 rand billion from a 2.73 rand billion loss. That

included a 4.2 rand billion non-cash profit on the deconsolidation of BMI and a

1.32 rand billion impairment against the carrying value of the UK group's debt.

Adjusted headline earnings per share from continuing operations grew by 0.6%

to 171.6c. On top of the special dividend, it's raised its final dividend by

5.3% to 60c per share.

Netcare said patient days grew by 5.9% over the period, which comprises 1.7%

growth in acute hospital days, as well as the contribution from Akeso in the

second half. It doesn't expect to commission any new acute beds in the year

ahead, while 52 beds will be converted to higher demand disciplines.

Based on the performance of patient days over the last quarter of FY2018,

acute patient day growth is expected to remain under pressure in the near

term, while demand for mental health is expected to remain strong, further

benefiting from the inclusion of Akeso for a full 12 months," Netcare said.

Its shares gained 3.7% to 25.70 rand yesterday.

Netcare annual results: '5.9% increase in normalised Group EBITDA to

R4 209 million, '5.9% increase in patient days, '0.6% increase in adjusted

HEPS from continuing operations to 171.6 cents,'17.8% increase in cash

generated from SA operations to R4 305 million.

-- MoneyMarketingSA (@MMMagza) November 19, 2018