Mediclinic eyes more acquisitions
PRIVATE hospital group Mediclinic International, which has steadily grown its foreign footprint, is still on the prowl for possible acquisitions, says CEO Danie Meintjes.
CAPE TOWN — Private hospital group Mediclinic International is still on the prowl for possible acquisitions, says CEO Danie Meintjes. This comes hard on the heels of the group’s announcement last month that it plans to combine with Al Noor to create the biggest private healthcare group in the United Arab Emirates (UAE).
“There is continued growth for demand for quality healthcare service. We will continue our scanning of the market to identify further opportunities to grow the business,” Mr Meintjes said yesterday on a conference call with investors, as the group released its results for the six months to September 30.
Diluted headline earnings per share rose 16.3 % to 210.2c compared to 180.8c in the corresponding period last year, driven by growing demand for private healthcare and the positive effect of the exchange rate on Mediclinic’s offshore earnings.
Mediclinic has steadily grown its foreign footprint since its 2007 acquisition of Switzerland’s biggest private healthcare group Hirslanden. It has established businesses in SA, Switzerland and the UAE. In the period under review, it bought a 29.9% stake in UK hospital group Spire. It is also proposing a reverse takeover of Al Noor. If the transaction gets the green light, it will give shareholders a majority stake in the combined business, which will list on the London Stock Exchange with a secondary listing on the JSE.
Sasfin equity analyst Alec Abraham said Mediclinic’s strategy was paying off. “For some time now, we’ve been quite positive about local companies that can truly add value to businesses offshore. It’s certainly going to be more profitable than remaining in this environment. It diversifies their exposure to various economies and regulatory risk, and provides earnings in hard currency.”
Medical scheme membership was under pressure, posing a risk to future growth in SA. “I think you are going to see more and more people who cannot afford medical scheme (cover), which is the lifeblood of private hospitals. There’s a storm coming,” he said.
Mediclinic reported that normalised revenue had risen 16% to R19.6bn compared to R16.8bn in the corresponding period last year, while earnings before interest, tax, depreciation and amortisation rose 16.7% to R3.85bn, compared to last year’s R3.32bn.
Its Swiss operation Hirslanden generated the biggest share of group profits, contributing R763m to normalised headline earnings, compared to R657m last year. Normalised revenue rose 19% to R10.31bn, up from R8.646bn. The Southern Africa business contributed R626m to normalised headline earnings, compared to R571m last year, and reported a 9% increase in normalised revenue to R6.76bn, up from R6.21bn last year.