| Tue 15 May 2001, 0:00 | | Medi-clinic Corporation Limited - Profit Announcem |
|
Reg. No. 1983/010725/06
Audited results of Medi-Clinic Corporation Limited and its subsidiaries for
the financial year ended 31 March 2001
HIGHLIGHTS
* Growth in hospital turnover: 13%
* Headline earnings per share growth: 17%
* Distribution per share up: 17%
CONSOLIDATED INCOME STATEMENT
2001 Increase 2000*
R'000 % R'000
Turnover 2 097 820 13 1 858 565
Operating income 439 773 14 384 178
Dividend received 8 074 7 186
Interest received 14 701 9 520
Income from associates 16 037 16 029
Exceptional items 222 5 146
Amortisation of goodwill (406) -
Depreciation (76 393) (65 273)
Interest paid (24 093) (32 669)
Minority interests (29 559) (22 866)
Net income before taxation 348 356 301 251
Taxation* 97 849 82 665
Attributable earnings* 250 507 218 586
Headline earnings reconciliation:
Attributable earnings* 250 507 218 586
Amortisation of goodwill 406 -
Exceptional items (222) (5 146)
Attributable headline earnings* 250 691 213 440
Headline earnings per ordinary
share - cents* 71,8 17 61,2
Earnings per ordinary
share - cents* 71,7 62,6
Capital distribution per ordinary
share - cents
Interim 6,50 5,45
Final 15,20 13,05
21,70 17 18,50
CONSOLIDATED BALANCE SHEET
2001 2000*
R'000 R'000
Assets
Non-current assets 1 431 647 1 337 698
Fixed assets 1 294 098 1 212 201
Intangible assets 10 428 7 402
Investments - unlisted 91 153 83 271
Deferred taxation* 35 968 34 824
Current assets 545 804 485 507
Cash and cash equivalents 79 971 51 947
Other current assets 465 833 433 560
Total assets 1 977 451 1 823 205
Equity and liabilities
Share capital and reserves 1 511 224 1 282 663
Minority interests 79 525 68 045
Interest-bearing debt 134 489 176 213
Interest-free debt 252 213 296 284
Total equity and liabilities 1 977 451 1 823 205
Number of ordinary shares (`000) 349 334 348 927
Weighted number of ordinary
shares (`000) 349 334 348 927
Net asset value per ordinary
share - cents 433 368
Directors' valuation of unlisted
investments 91 153 85 006
STATEMENT OF CHANGES IN EQUITY
2001 2000*
R'000 R'000
Opening balance as shown
previously 1 249 769 1 109 100
Adjustment due to policy changes* 32 894 22 953
Adjusted opening balance 1 282 663 1 132 053
Shares issued 743 461
Distributed to shareholders (22 689) (64 539)
Net income for the year 250 507 218 586
Premium on acquisition written off - (3 898)
1 511 224 1 282 663
CONSOLIDATED CASH FLOW STATEMENT
2001 2000
R'000 R'000
Cash flow from operating
activities 219 578 223 151
Cash flow from operations 407 500 382 547
Net interest paid (9 392) (23 149)
Taxation paid (99 268) (77 167)
Cash distributions to minorities (11 038) (3 296)
Capital distributions to
shareholders (68 224) (55 784)
Cash flow from investment
activities (150 573) (104 993)
Cash flow from financing
activities (40 981) (81 242)
Net movement in cash and cash
equivalents 28 024 36 916
Opening balance of cash and
cash equivalents 51 947 15 031
Closing balance of cash and
cash equivalents 79 971 51 947
* Refer to the note on Accounting Policies
COMMENTARY
We are pleased to report that the group has maintained its consistent growth
pattern.
Turnover, which comprises entirely of hospital fees levied, increased by 13%
to R2 098 million (2000: R1 858 million) for the year under review, while
the operating income before interest, taxation, depreciation and
amortisation (EBITDA) was 14% higher at R440 million (2000: R384 million).
Headline earnings rose by 18% to R251 million (2000: R213 million*)
resulting in an increase of 17% in headline earnings per ordinary share to
71,8 cents (2000: 61,2 cents*). The total capital distribution per ordinary
share at 21,7 cents (2000: 18,5 cents) is 17% more for the year.
The group's EBITDA margin, which remains the highest in the industry, has
improved to 21% (2000: 20,7%).
The group has maintained its consistent growth pattern despite a difficult
trading environment. The group's turnover was negatively influenced during
the second six months of the period under review as one of the large medical
schemes, Transmed, changed its rules to the effect that for most of their
pensioners hospital benefits are only paid for admission to government
hospitals. Nevertheless, patient admissions remained essentially constant on
an annual as well as on a half-year basis. The ageing medical aid population
and technological advances continue to result in patients with higher acuity
levels, who require more intensive treatment, being cared for in the group's
hospitals.
The group again experienced strong cash flow during the period under review.
As in the past, the group managed to limit the growth rate in working
capital to the growth rate in turnover. As a result the net finance charges
decreased from R23 million to R9 million. After capital expenditure of R159
million was financed with own funds, interest-bearing debt was reduced from
R176 million to R134 million. The debt:equity ratio improved from 13% to 8%,
while cash and cash equivalents increased to R80 million (2000: R52
million). The group's strong cash flow underlines the quality of its
earnings.
Capital expenditure for the period under review was R159 million (2000: R128
million). Capital commitments (including amounts approved but not yet
contracted for) amounted to R135 million (2000: R160 million).
PROSPECTS
The group expects to continue its consistent growth pattern.
All the conditions precedent in respect of the acquisition of the Geneva,
Lamprecht and Neuro Clinics in George have been fulfilled and 1 April 2001
has been set as the effective date. This transaction increases the bed
capacity of the group by 220 beds for the next accounting period. The
acquisition was financed with own funds. The process of integration and
rationalisation has already commenced. The supporting doctors have been
consulted regarding the upgrading and improvement of the Lamprecht Clinic.
The group will remain focused on adapting to the needs of the market,
thereby increasing the utilisation of its facilities. The newly expanded
cardiac and intensive care units at Bloemfontein Medi-Clinic, as well as a
complete, new cardiac unit at Vereeniging Medi-Clinic were recently
commissioned. Extensions to Nelspruit Medi-Clinic, Windhoek Medi-Clinic and
Stellenbosch Medi-Clinic have been completed while upgrades at Highveld Medi-
Clinic and Pietersburg Medi-Clinic have commenced. New projects at
Durbanville Medi-Clinic and Potchefstroom Medi-Clinic are in the planning
phase.
Progress has been made with the replanning of the group's emergency units in
consultation with supporting doctors and paramedics. Coupled with this, the
national emergency services network, ER24, is developing satisfactorily.
Initiatives concerning alternative remuneration structures and risk sharing
with certain funders have already been implemented and others continue to
receive attention.
The group's electronic business initiative distinguishes it as the pioneer
in this field. This internet based strategy will not only increase operating
efficiencies, but will also significantly enhance service levels to doctors,
patients and funders.
Affordability remains an issue which poses a risk to medical scheme
membership and consequently the utilisation of the group's facilities.
Positive economic growth, more cost efficient utilisation of facilities and
new business opportunities should, however, compensate for a possible
negative impact.
*Accounting policies
The results have been prepared in accordance with South African Statements
of Generally Accepted Accounting Practice. During the year under review the
group changed its accounting policy in respect of deferred taxation to
comply with the revised AC102, which resulted in deferred taxation assets
being raised in the balance sheet. Previously the group did not raise
deferred taxation assets. Accordingly the prior year taxation charge and
attributable income have been restated to incorporate the changed accounting
policy. The restated 31 March 2000 headline earnings per share increased by
2,9 cents per share from 58,3 cents per share to 61,2 cents per share. With
the exception of deferred taxation, the accounting policies used are
consistent with those applied in the previous year.
ANNUAL REPORT
The Annual Report containing comprehensive details of the group's results
and activities will be posted to shareholders at the end of June 2001.
STRATE
Medi-Clinic Corporation Limited is to commence trading within the STRATE
(Share Transaction Totally Electronic) environment from Monday, 10 September
2001. A notice to this effect will be posted together with the annual report
to shareholders.
ISSUING OF SHARES
In accordance with the group's share option scheme, 407 200 ordinary shares
were issued to participating personnel during the financial year.
CAPITAL DISTRIBUTION TO SHAREHOLDERS
The directors proposed a final capital distribution of 15,20 cents per
ordinary share, payable to share-holders registered as such in the books of
the company on 27 July 2001, subject to the approval of the shareholders at
the annual general meeting on 20 July 2001. The capital distribution will be
paid out of the share premium. Cheques will be posted on 3 August 2001.
Signed on behalf of the board of directors:
E DE LA H HERTZOG LJ ALBERTS
Chairman Managing Director
Stellenbosch, 15 May 2001
