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Monday, May 14, 2018

Departure from UK sends Netcare Group profit double

Private hospital group Netcare’s decision to exit the UK contributed a R4.2bn "profit on loss of control", helping its interim net profit nearly double to R3.6bn.
Picture: Netcare Group


Netcare reported on Monday morning that revenue from continuing operations for the six months to end-March grew
8.2% to R9.97bn.

It raised its interim dividend by 16% to 44c.
Netcare announced in March it intended selling its 57% of the UK’s largest private hospital group, BMI Healthcare, following a dispute with BMI’s largest landlord. Netcare is also selling its 57% share of a property company that owns six of BMI’s hospitals.

Besides the high rents, Netcare said it was leaving because of "the deterioration of the UK healthcare market, which is expected to remain constrained in the medium to longer term".
Netcare reported its South African hospitals and emergency services grew revenue by 9.3% to R9.64bn.

The group said this was due to patient day growth of 3.5% and an increase in net revenue per patient day of 5.1%.

That contrasted with the UK, where the inpatient and day caseload decreased by 3.5%.
"Full-week occupancy levels improved to 65% from 63.2%. Week-day occupancies for the same period were 70.8%, compared with 69% in the comparative period.
"The specialist base grew by a net 51 doctors, with strong support from surgical disciplines," the results statement said.
Netcare acquired psychiatric hospital group Akeso shortly before the end of the reporting period.
This adds a national network of 12 dedicated mental healthcare facilities, with 811 beds, the results statement said.

The group added no new beds to its existing hospitals during the reporting period.
"Twenty under-utilised beds were transferred to a hospital with higher demand and 10 under-utilised beds were converted to higher-demand disciplines during the period," the results statement said.
"The South African healthcare market has returned to growth and Netcare expects demand for private healthcare to remain resilient over the medium to longer term as a function of the ageing population, growing burden of disease and medical innovation.

"The growth in patient days experienced to date, excluding the Akeso facilities, is expected to continue into the second half of the financial year, albeit at a slower rate than the first half growth."

  • Businesslive2018

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