Life Healthcare business recovers
Private hospital group Life Healthcare has bounced back after the disruption caused by the coronavirus pandemic, with hospital admissions and occupancies returning to normal. “Our admissions are up 21%, and our occupancies are heading back to the realm of prepandemic,” said CEO Peter Wharton-Hood.
Private hospital group Life Healthcare has bounced back after the disruption caused by the coronavirus pandemic, with hospital admissions and occupancies returning to normal.
Life Healthcare’s core business comes from the 66 private hospitals it operates in Southern Africa. It also operates mental health and renal dialysis facilities, and owns Alliance Medical Group (AMG), a UK-based diagnostic and imaging company that provides services in the UK, Italy, Ireland and several other European countries.
“We have seen a return to normal operating activity in the second half of the year. Our admissions are up 21%, and our occupancies are heading back to the realm of prepandemic,” said Life Healthcare CEO Peter Wharton-Hood, as the company released its results for the year to September 30.
Bed occupancy rose to 64.5% in the second half of the year, not far off the prepandemic level of 69%, he said.
Life Healthcare has just 80 Covid-19 patients in its wards now, a fraction of the 2,100 admitted to its facilities at the peak of SA’s third wave in July 2021, he said. Surgical and medical admissions rose 15.7% compared with the year before, as the number of Covid-19 patients dwindled.
Life Healthcare reported a 4.9% increase in group revenue to R28.2bn, 70.8% of which came from its Southern Africa business. Growth in SA was driven by a 5.8% increase in paid patient days, a 4.25% tariff increase and revenue from its new imaging businesses, but was knocked by the reduction in Covid-19 patients, which had longer and more expensive stays than other patients. AMG reported a 2.8% increase in revenue to R7.86bn, with increased volumes offset by the end of Covid-19 contracts.
Despite the company’s strong operating performance, headline earnings per share fell 4.5% to 106.1c, as the results were affected by the end of short-term Covid-19 contracts between AMG and governments in the UK and Italy, and the disposal of Polish hospital business Scanmed in March 2021.
Normalised group earnings before interest, tax, depreciation and amortisation (ebitda), a key metric that strips out one-off items, fell 0.2% to R5.039bn.
Wharton-Hood said the company remains intent on expanding its radiology business in SA, despite resistance from the Radiological Society of SA. Life Healthcare acquired East Coast radiology in February and Eugene Marais Radiology in August, which together generated R94m in revenue in the period under review.
Life Healthcare declared a final dividend of 25c per share, bringing the total to 40c for the year, a 60% increase on the year before.
Despite the larger dividend and improved outlook, its share price fell the most in two years, down 7.34% to close at R16.91.
A RETURN ... OUR ADMISSIONS ARE UP 21%, AND OUR OCCUPANCIES ARE HEADING BACK TO THE REALM OF PREPANDEMIC