Mediclinic withholds dividend
Private hospital operator Mediclinic has decided against declaring an interim dividend as it waits for the August buyout from its biggest shareholder, Remgro, in a consortium with Switzerland’s MSC Mediterranean Shipping, to go through.
“Merger control approvals have been received in Namibia, Switzerland and Cyprus, with only SA approvals outstanding,” the company said on Wednesday in its results for the six months to end-September.
The buyout is expected to go through in the first quarter of 2023 after which Mediclinic shares will be delisted from the London, Johannesburg and Namibian stock exchanges.
The board approved the buyout of £3.7bn (R76bn) in August. The deal is one of an increasing number of initiatives by investment holding company Remgro, chaired by Johann Rupert, to reduce the discount between its share price and the underlying value of its companies.
Mediclinic’s board unanimously backed the £5.04 a share offer made by Remgro and unlikely bidder MSC. Remgro has 44.56% of Mediclinic and is looking for a 50-50 partnership with MSC.
The company, valued at R74.8bn on the JSE, runs a network of private hospitals in Switzerland, the Middle East and Southern Africa.
Mediclinic’s operations include 74 hospitals, five subacute hospitals, three mental health facilities, 21 day-case clinics and 23 outpatient clinics.
The Swiss operations include 17 hospitals and five day-case clinics, while its Southern Africa operations include 50 hospitals, three of which are in Namibia, and 14 day-case clinics.
The group has seven hospitals in the United Arab Emirates (UAE), two day-case clinics and 23 outpatient clinics.
In terms of its performance for the six months to endSeptember, group revenue is up 10% year on year to £1.73bn (R35.54bn).
The bulk of this (44.54%) was generated in Switzerland, followed by Southern Africa (28.37%) and the Middle East (27.09%).
Operating profit declined 8% to £119m while profit jumped by close to a quarter to £91m.
Mediclinic notes in its outlook that increasing macroeconomic uncertainty, inflationary pressures and the risk of further Covid-19 and other disruptions to staffing and scheduling “will likely impact the previously anticipated sequential increase in patient activity in Switzerland and Middle East, and limit the group’s ability to fully offset incremental cost increases in the two divisions”.