| Wed 15 May 2002, 0:00 | | Medi-clinic Corporation Limited Profit Announcemen |
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Medi-Clinic Corporation Limited Profit Announcement
Medi-Clinic Corporation Limited
Registration No. 1983/010725/06
JSE CODE: MDC
ISIN No.: ZAE000004370
Profit announcement for the year ended 31 March 2002
Profit announcement for the year ended 31 March 2002
CONSOLIDATED INCOME STATEMENT
Year to Year to
31/03/02 Increase 31/03/01*
R`000 % R`000
Revenue 2 437 938 16 2 097 820
Operating income* 505 944 17 433 873
Dividend received 5 060 8 074
Interest received 19 929 14 701
Income from associates 18 129 16 037
Profit on sale of equipment 329 222
Amortisation of goodwill (1 089) (406)
Depreciation (70 849) (76 393)
Interest paid (17 121) (24 093)
Minority interests (27 976) (29 559)
Net income before taxation* 432 356 342 456
Taxation* 123 866 96 079
Attributable earnings* 308 490 246 377
Headline earnings reconciliation:
Attributable earnings* 308 490 246 377
Amortisation of goodwill 1 089 406
Profit on sale of equipment (329) (222)
Attributable headline earnings* 309 250 25 246 561
Headline earnings
per ordinary share - cents* 88,7 26 70,6
Earnings per ordinary share - cents* 88,5 70,5
Capital distribution
per ordinary share - cents
Interim 7,8 6,5
Final 19,5 15,2
27,3 26 21,7
CONSOLIDATED BALANCE SHEET
31/03/02 31/03/01*
R`000 R`000
Assets
Non-current assets 1 432 792 1 441 550
Property, plant and equipment 1 346 681 1 294 098
Intangible assets 17 835 10 428
Investments - unlisted 18 245 91 153
Deferred taxation* 50 031 45 871
Current assets 714 794 545 804
Cash and cash equivalents 208 447 79 971
Other current assets 506 347 465 833
Total assets 2 147 586 1 987 354
Equity and liabilities
Share capital and reserves* 1 660 270 1 488 117
Minority interests 74 708 79 525
Interest-bearing debt 57 937 134 489
Interest-free debt* 354 671 285 223
Total equity and liabilities 2 147 586 1 987 354
Number of ordinary shares (`000) 341 466 349 334
Weighted number of ordinary shares (`000) 348 761 349 334
Net asset value per ordinary share - cents 486 426
Directors` valuation of unlisted investments 105 856 91 153
STATEMENT OF CHANGES IN EQUITY
31/03/02 31/03/01*
R`000 R`000
Opening balance as shown previously 1 511 224 1 282 663
Adjustment due to policy changes* (23 107) (18 977)
Adjusted opening balance 1 488 117 1 263 686
Shares issued 1 437 743
Distributed to shareholders (80 387) (22 689)
Net income for the year* 308 490 246 377
Shares held in treasury (57 387) -
1 660 270 1 488 117
CONSOLIDATED CASH FLOW STATEMENT
31/03/02 31/03/01
R`000 R`000
Cash flow from operating activities 353 004 219 578
Cash flow from operations 537 801 407 500
Net interest received/(paid) 2 808 (9 392)
Dividends received 28 512 -
Taxation paid (123 056) (99 268)
Cash distributions to minorities (12 674) (11 038)
Capital distributions to shareholders (80 387) (68 224)
Cash flow from investment activities (95 861) (150 573)
Cash flow from financing activities (128 667) (40 981)
Net movement in cash and cash equivalents 128 476 28 024
Opening balance of cash and cash equivalents 79 971 51 947
Closing balance of cash and cash equivalents 208 447 79 971
Refer to the note on Accounting Policies
COMMENTARY
It is pleasing to report that the group has again been able to maintain its
consistent growth pattern.
The second half of the year under review produced stronger results than the
first half. Turnover, which consists entirely of hospital fees levied,
increased by 16% for the full year to R2 438 million
(2001: R2 098 million). Operating income before interest, taxation,
depreciation and amortisation (EBITDA) was 17% higher at R506 million (2001:
R434 million*). The group`s EBITDA margin improved slightly to 20,8% (2001:
20,7%*). Headline earnings rose by 25% to R309 million (2001: R247
million*) resulting in an increase of 26% in headline earnings per ordinary
share to 88,7 cents (2001: 70,6 cents*). The total capital distribution
per ordinary share at 27,3 cents (2001: 21,7 cents) is 26% more for the
year.
Capacity increased during the year as a result of the acquisition of the
Geneva (60 beds) and Lamprecht
(160 beds) Clinics in George on 1 April 2001. This was partially offset by
the sale of the group`s interest in the Queenstown Private Hospital (30
beds) with effect from 1 November 2001.
During the year the interests of minority shareholders in certain of the
group`s hospitals were acquired at a cost of approximately R22 million,
which had a positive effect on the group`s earnings.
The group acquired 9 million of its own shares on the JSE for about R60
million. These shares will be held in treasury and 399 700 shares have
already been utilised in terms of the group`s share option scheme. This
transaction did not have a material effect on earnings or earnings per
share.
The trading environment remained tight as the country as a whole experienced
limited economic growth and medical scheme membership remained virtually
constant. Although the length of stay of patients decreased marginally over
the last year, the group experienced an increase in admissions and theatre
cases. More facilities have also been established or converted to meet the
demands of patients with higher acuity levels and those who need more
sophisticated surgery as well as other forms of treatment.
The group continued to experience strong cash flow. As in the past, the
group managed to limit the growth rate in working capital to less than the
growth rate in turnover. As a result the finance charges decreased from R24
million to R17 million. In spite of capital expenditure of R148 million
(including the investment in the George hospitals as well as the acquisition
of the minority interests referred to), which was financed with own funds,
interest-bearing debt was reduced from R134 million to R58 million. The
debt:equity ratio improved from 9%* to 3%, while cash and cash equivalents
increased to R208 million (2001: R80 million).
Capital expenditure for the period under review was R148 million (2001:
R159 million). Capital commitments (including amounts approved but not yet
contracted for) amounted to R158 million
(2001: R135 million).
PROSPECTS
The group expects to continue its consistent growth pattern.
Focus will remain on adapting to the needs of the market, thereby increasing
the utilisation of facilities. The group will also endeavour to continue
expanding its facilities and services within its core competencies. If an
attractive opportunity arises in an overseas country, it will receive
serious attention.
Capital projects which have recently been completed or are nearing
completion and which should be income enhancing, are: the expanded cardiac
unit in Bloemfontein Medi-Clinic, the new cardiac unit in Vereeniging Medi-
Clinic, the upgrade of Highveld Medi-Clinic and the expansion at
Stellenbosch Medi-Clinic. Planning for the expansion of Durbanville Medi-
Clinic is in an advanced stage and this, together with upgrades at the
Lamprecht Clinic and Potchefstroom Medi-Clinic, will commence soon.
In addition to these projects, additional revenue will also be generated
through the improved facilities and services provided by the ER24 emergency
units of the group`s hospitals as well as the services provided by the newly
established Medi-Travel International Clinic in Cape Town. A further longer-
term aim of this initiative is to attract more patients from other countries
to the hospitals of the group.
The acute shortage of skilled nursing staff is regarded as a serious threat
to all hospitals in the country. The group has increased the amount spent
on the training of nursing staff (and certain other staff categories) to
3,5% of its payroll cost in the current budget. Nursing staff of the group
who have received training, have achieved excellent results in the SA
Nursing Council registered examinations.
Improved efficiencies by way of electronic interchange with funders, doctors
and patients are receiving ongoing attention and should lower administration
costs. The group is currently involved in negotiations regarding certain
public-private initiatives, but it should not have a major financial impact
over the short term. The hospitals of the group continue to receive
accreditation by COHSASA (the Council for Health Services Accreditation of
Southern Africa) in far bigger numbers and for longer periods than any other
group or provincial authority in the country.
Given acceptable economic growth in the country and a reasonable tariff
increase for the next year, the group remains optimistic about its prospects
for the year ahead.
*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 post-retirement medical
benefits to comply with the revised AC116, which resulted in a provision
being raised in the balance sheet for post-retirement medical benefits.
Accordingly the previous year`s operating profit, taxation charge, interest-
free debt and attributable income have been restated to incorporate the
changed accounting policy. The restated 31 March 2001 headline earnings per
share decreased by 1,2 cents per share from 71,8 cents per share to 70,6
cents per share. With the exception of post-retirement medical benefits,
the accounting policies used are consistent with those applied in the
previous year.
ISSUING OF SHARES
In accordance with the group`s share option scheme, 731 600 new ordinary
shares were issued to participating personnel during the financial year.
CAPITAL DISTRIBUTION TO SHAREHOLDERS
The Board of directors has declared a capital distribution of 19,5 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, 28 June 2002
First date of trading ex capital distribution Monday, 1 July 2002
Record date Friday, 5 July 2002
Payment date Monday, 8 July 2002
Share certificates may not be dematerialised/rematerialised from Monday, 24
June 2002 to Friday, 5 July 2002, both days inclusive.
Signed on behalf of the Board of directors:
E DE LA H HERTZOG LJ ALBERTS
Chairman Managing Director
Stellenbosch, 14 May 2002
Date: 15/05/2002 05:04:00 PM Produced by the SENS Department
