| Wed 14 Nov 2001, 0:00 | | Medi-clinic Corporation Limited - Results |
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MEDI-CLINIC CORPORATION LIMITED
Reg. No. 1983/010725/06
Share code: MDC
ISIN code: ZAE000004370
CONSOLIDATED INCOME STATEMENT
6 months to 6 months to Year to
30/09/2001 Increase 30/09/2000 31/03/2001
R'000 % R'000 R'000
Revenue 1 161 443 12 1 035 890 2 097 820
Operating income 239 896 12 214 185 439 773
Dividend received 4 327 4 037 8 074
Interest received 8 343 7 189 14 701
Income from associates 9 196 8 033 16 037
Exceptional items - - 222
Amortisation of goodwill (203) - (406)
Depreciation (36 924) (34 858) (76 393)
Interest paid (10 708) (14 233) (24 093)
Minority interests (12 731) (17 649) (29 559)
Net income before
taxation 201 196 166 704 348 356
Taxation 56 552 46 510 97 849
Attributable earnings 144 644 120 194 250 507
Headline earnings reconciliation:
Attributable earnings144 644 120 194 250 507
Amortisation of goodwill 203 - 406
Exceptional items - - (222)
Attributable headline
earnings 144 847 120 194 250 691
Headline earnings per
ordinary share - cents 41,4 20 34,4 71,8
Earnings per ordinary
share - cents 41,3 34,4 71,7
Capital distribution per
ordinary share - cents
Interim 7,80 20 6,50 6,50
Final - - 15,20
7,80 6,50 21,70
CONSOLIDATED BALANCE SHEET
30/09/2001 30/09/2000 31/03/2001
R'000 R'000 R'000
Assets
Non-current assets 1 490 152 1 392 131 1 431 647
Property, plant and
equipment 1 347 551 1 259 430 1 294 098
Intangible assets 9 910 7 088 10 428
Investments - unlisted95 171 87 038 91 153
Deferred taxation 37 520 38 575 35 968
Current assets 578 360 499 783 545 804
Cash and cash
equivalents 132 788 85 580 79 971
Other current assets 445 572 414 203 465 833
Total assets 2 068 512 1 891 914 1 977 451
Equity and liabilities
Share capital and
reserves 1 603 757 1 380 431 1 511 224
Minority interests 75 558 78 508 79 525
Interest-bearing debt 119 210 168 373 134 489
Interest-free debt 269 987 264 602 252 213
Total equity and
liabilities 2 068 512 1 891 914 1 977 451
Number of ordinary
shares ('000) 349 846 349 072 349 334
Weighted number of
ordinary shares ('000 349 846 349 072 349 334
Net asset value per
ordinary share - cents 458 395 433
Directors' valuation of
unlisted investments 95 171 87 906 91 153
STATEMENT OF CHANGES IN EQUITY
30/09/2001 30/09/2000 31/03/2001
R'000 R'000 R'000
Opening balance 1 511 224 1 282 663 1 282 663
Shares issued 988 263 743
Distributed to
shareholders (53 099) (22 689) (22 689)
Net income for the
period 144 644 120 194 250 507
1 603 757 1 380 431 1 511 224
CONSOLIDATED CASH FLOW STATEMENT
30/09/2001 30/09/2000 31/03/2001
R'000 R'000 R'000
Cash flow from operating
activities 166 479 114 410 219 578
Cash flow from
operations 296 959 239 310 407 500
Net interest paid (2 365) (7 044) (9 392)
Taxation paid (66 077) (64 891) (99 268)
Cash distributions
to minorities (8 939) (7 430) (11 038)
Capital distributions
to shareholders (53 099) (45 535) (68 224)
Cash flow from investment
activities (99 267) (67 693) (150 573)
Cash flow from financing
activities (14 395) (13 084) (40 981)
Net movement in cash and
cash equivalents 52 817 33 633 28 024
Opening balance of cash
and cash equivalents 79 971 51 947 51 947
Closing balance of cash
and cash equivalents 132 788 85 580 79 971
COMMENTARY
We are pleased to report that the group has maintained its consistent growth
pattern.
Turnover, which consists entirely of hospital fees levied, increased by 12%
to R1 161 million (2000: R1 036 million) for the six months under review,
while the operating income before interest, taxation, depreciation and
amortisation (EBITDA) was also 12% higher at R240 million (2000: R214
million). Headline earnings rose by 21% to R145 million (2000: R120 million)
resulting in an increase of 20% in headline earnings per ordinary share to
41,4 cents (2000: 34,4 cents). The proposed interim capital distribution per
ordinary share at 7,8 cents (2000: 6,5 cents) is 20% higher.
The group's EBITDA margin has remained constant at 20,7%.
During the past twelve months the interests of minority shareholders in
certain of the group's hospitals were acquired at a cost of about R20
million, which had a positive effect on the group's earnings.
The group has maintained its consistent growth pattern despite a difficult
trading environment. During the current review period turnover was
negatively influenced as one of the large medical schemes, Transmed, paid
hospital benefits only for admission to government hospitals in respect of
most of their pensioners. Nevertheless, patient admissions essentially
remained constant. The ageing medical aid population and technological
advances continue to result in patients with higher acuity levels, who
require more intensive treatment, being admitted to the group's hospitals.
The integration process following the acquisition of the Geneva and
Lamprecht Clinics in George on 1 April 2001 has been successfully completed.
Planning for the upgrading of the Lamprecht Clinic is proceeding well after
due consultation with supporting doctors. The project will commence soon.
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 considerably less than the growth rate in turnover. As a result
the net finance charges decreased from R7 million to R2,4 million. After
capital expenditure of R55 million as well as the investment in the George
hospitals and the acquisition of minority interests were financed with own
funds, interest-bearing debt was reduced from R134 million to R119 million.
The debt:equity ratio improved from 8% to 7%, while cash and cash
equivalents increased to R133 million (2000: R80 million). The group's
strong cash flow underlines the quality of its earnings.
Capital expenditure for the period under review was R55 million (2000: R76
million). Capital commitments (including amounts approved but not yet
contracted for) amounted to R135 million (2000: R133 million).
PROSPECTS
The group expects to continue its consistent growth pattern.
A full year has lapsed since the loss of the Transmed pensioners, referred
to previously, commenced. The year-on-year effect is now over and a new base
for future growth has been created.
The group will remain focused on adapting to the needs of the market,
thereby increasing the utilisation of its facilities. After a period of
relatively aggressive capital spending to improve facilities acquired with
take-overs, a slow down in capital expenditure is being experienced since
the process is mainly complete. This will have a positive effect on cash
flow. An amount of approximately R200 million was however still spent during
the past twelve months to expand business capacity. This includes the
acquisition of the George hospitals as well as the minority interests.
With effect from 1 November 2001, the group sold its interests in the
Queenstown Private Hospital (30 beds) to Afrox Healthcare. This will not
have a material effect on the earnings of the group.
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. An industry initiative has been launched between larger
funders and private hospital groups to establish this on a broader basis.
This initiative has the group's full support.
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. Although the initial implementation proved more
problematic than expected, new initiatives in this regard will be launched
during the first half of next year.
Affordability remains an issue which poses a risk to medical scheme
membership and consequently the utilisation of the group's facilities. The
experience is that inflation on pharmaceutical products consumes more and
more of the healthcare Rand. Positive economic growth, more cost efficient
utilisation of facilities and new business opportunities should, however,
compensate for a possible negative impact. The group, for example, remains
convinced that the management skills and expertise it has acquired can be
employed effectively abroad. Factors such as the risk reward profile and the
practical implications of such an investment will, however, always have to
be considered carefully.
ACCOUNTING POLICIES
The results have been prepared in accordance with South African Statements
of Generally Accepted Accounting Practice and the accounting policies used
in the previous year.
ISSUING OF SHARES
In accordance with the group's share option scheme, 511 900 ordinary shares
were issued to participating personnel during the period under review.
CAPITAL DISTRIBUTION TO SHAREHOLDERS
The Board of directors has declared a capital distribution of 7,8 cents per
ordinary share which will be paid out of share premium.
In compliance with the requirements of STRATE, the following dates are
applicable:
Last date to trade cum capital distribution Friday, 7 December 2001
Last date to register transfer of
certificated securities cum capital distribution
Friday, 7 December 2001
First date of trading ex capital
distribution Monday, 10 December 2001
Record date Friday, 14 December 2001
Payment date Tuesday, 18 December 2001
Share certificates may not be dematerialised / rematerialised from Monday, 3
December 2001 to Friday, 14 December 2001, both days inclusive.
Signed on behalf of the board of directors:
E DE LA H HERTZOG LJ ALBERTS
Chairman Managing Director
Stellenbosch, 14 November 2001
