Netcare exits UK and expands in South Africa

 

Netcare reported a marginal 8.4% increase in revenue for the year ended 30 September 2018, but said it would pay a special dividend of 40 cents per share to investors on top of a final dividend of 60 cent per share.
In addition, the company has earmarked R1.6bn for expansion projects in South Africa, including capital expenditure of R600m.

CEO Richard Friedland said the company had reviewed its capital structure and distribution policy following its decision to dispose of its interest in General Healthcare Group (GHG) at the end of March. This includes a 56.9% stake in BMI Healthcare and a 56.9% interest in GHG PropCo 2, which owns six BMI hospitals.

GHG’s operations were deconsolidated from the accounts on 28 March, leaving Netcare with a purely South African portfolio. Group revenue from continuing operations was R20,717m (2017: R:19,144m), while normalised EBITDA increased 5.9% to R4,209m. Group profit after tax came in at R4,744m against a loss of R2,729m in 2017 – a turnaround which Netcare attributed to its exit from the UK.

Commenting on the results, Friedland said: 'Our 2018 financial year has been characterised by significant changes to the Group’s operational profile. We recently secured the approval of the Competition Tribunal for the acquisition of Akeso, a national network of 12 dedicated mental healthcare facilities, currently comprising 834 beds, which is being successfully integrated into Netcare and has been consolidated into the Group’s results.  With regard to the UK, we made a strategic decision to exit this market and to pursue the disposal of our interests.'

Netcare said its disposal plan for GHG continues although no transaction has yet been concluded.

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