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Afrox Healthcare Limted - Audited results for the year ended 30 September 2002
Afrox Healthcare Limted
(Registration number 1985/001313/06)
(ISIN Number ZAE000022059)
(Share code : AHH)
("Ahealth")
A challenging year but AHealth shines through
Revenue up 26%
Operating profit up 37%
Earnings per share up 33% to 113,9 cents
Message to our shareholders
Dear shareholders
Performance
Afrox Healthcare`s (AHealth`s) financial results for the year ended 30 September
2002 demonstrate the group`s dedication to improved efficiencies and the
successful implementation of strategic initiatives.
Earnings were enhanced by AHealth`s increased stake in the Amahosp group,
Wilgers and the acquisitions of two small hospitals. e-Health initiatives
assisted in improved cash flow and cost-effective solutions. An organisation
restructuring and the implementation of a new operating model of national
hospital procurement added to efficiencies and reduced costs.
Highlights of the year included the commissioning of a R30 million cardiac unit
at Eugene Marais Hospital, a vascular unit at Kingsbury Hospital, and extended
oncology, bone marrow and renal dialysis units at Flora Clinic.
The group`s operating margins improved from 11,3 percent to 12,3 percent due to
attention to cost efficiencies and e-Health initiatives. Stringent management of
working capital has led to the growth in generated cash flow. Cash flow as a
percentage of operating profit was 114 percent which is above the targeted 110
percent.
Admissions, patient days and theatre cases increased from last year mainly due
to new acquisitions.
The trading conditions remain challenging due to the weakening exchange rate,
shortages in trained nursing staff and below inflation tariff increases. Despite
this the group performed well.
The group`s gearing and interest cover is negatively affected due to the debt
included in the acquisitions of Amahosp and Wilgers. Management has approved
plans to change the financing nature of the group that will have a positive
impact on both these ratios.
Audit report
The auditors, PricewaterhouseCoopers Inc., have issued their opinion on the
group`s financial statements for the year ended 30 September 2002. A copy of
their unqualified report is available for inspection at the company`s registered
office.
Accounting policies
The accounting policies at 30 September 2002 are consistent with those applied
at 30 September 2001, except for a change in accounting policy with regard to
retirement benefits and depreciation of owner-occupied buildings. These results
have been prepared in accordance with South African Statements of Generally
Accepted Accounting Practice including AC116 and AC135 which became applicable
for the first time this year. Comparative amounts have been appropriately
restated.
Prospects
Next year AHealth will experience pressure from tariff increases as
affordability affects members of medical schemes. AHealth has developed an
affordable healthcare delivery model that will be launched in 2003. Continued
growth should come from organic projects, selective acquisitions and new product
offerings. The directors have increased capital expenditure for the next
financial year by R100 million to R400 million.
Greg Sedgwick
(Chairman)
Michael Flemming
(Managing Director)
Johannesburg
30 October 2002
Audited results for the year ended 30 September 2002
Summarised Balance Sheet
2002 2001
R`000 Audited Audited
(Restated)
ASSETS
Non-current assets 1 578 612 1 140 160
Property plant and equipment 1 304 742 923 479
Other non-current assets 273 870 216 681
Current assets 845 012 627 409
Inventories 146 591 133 877
Trade and other receivables 685 258 489 635
Cash and cash equivalents 13 163 3 897
TOTAL ASSETS 2 423 624 1 767 569
EQUITY AND LIABILITIES
Capital and reserves 1 162 936 997 881
Minority interests 197 696 183 453
Non-current liabilities 290 807 60 773
Current liabilities 772 185 525 462
Current portion of borrowings 139 808 15 765
Provisions for liabilities and charges 95 109 75 502
Other current liabilities 537 268 434 195
TOTAL EQUITY AND LIABILITIES 2 423 624 1 767 569
Summarised Statement of changes in equity
2002 2001
R`000 Audited Audited
(Restated)
Opening capital and reserves 997 881 883 853
Change in accounting policy - (53 662)
Shares issued less expenses 3 354 745
Currency translation differences 2 363 578
Net profit 253 812 190 810
Dividends declared and paid (94 474) (24 443)
Closing capital and reserves 1 162 936 997 881
Summarised Income Statement
2002 2001
R`000 Audited % Audited
Change (Restated)
Revenue 3 886 036 26 3 087 485
Operating profit before finance cost 478 261 37 348 994
Finance cost (net) (69 635) (31 629)
Share of profits of associates 27 139 30 464
Profit before tax 435 765 25 347 829
Tax (138 084) (105 556)
Profit from ordinary activities 297 681 242 273
Minority interest (43 869) (51 463)
Net profit for the year 253 812 33 190 810
Adjustments for headline earnings
Goodwill written off 5 283 1 734
Profit on sale of fixed property (5 774) (2 985)
Headline earnings 253 321 34 189 559
Headline earnings per share (cents) 113,7 85,3
Earnings per share (cents) 113,9 85,8
Summarised Cash Flow Statement
2002 2001
R`000 Audited Audited
(Restated)
Cash generated from operations 544 626 433 904
Net finance cost and tax paid (202 409) (168 756)
Cash flow from operating activities 342 217 265 148
Acquisition of subsidiaries (231 249) (84 414)
Other investing activities (net) (3 771) 7 941
Purchase of property, plant and equipment (133 976) (103 225)
Cash flow from investing activities (368 996) (179 698)
Proceeds from share issue 3 354 745
Dividends paid (94 474) (52 097)
Other movement in financing activities 127 165 (105 830)
Cash flow from financing activities 36 045 (157 182)
Net increase/(decrease) in cash and
cash equivalents 9 266 (71 732)
Opening balance at beginning of the year 3 897 75 629
Closing balance at end of the year 13 163 3 897
Statistics and Ratios
2002 2001
Statistics
Weighted number of shares in issue (`000) 222 817 222 283
Total dividend per share (cents) 57,0 35,4
Ratios
Interest cover (times) 6,9 11,0
Gearing (%) 24,0 6,1
Return on capital employed (%) 30,6 30,4
Current ratio (:1) 1,1 1,2
Operating margin 12,3 11,3
This is a summarised commentary and results announcement. A full annual report
will be published on the Internet and a hard copy will be mailed to shareholders
on 20 November 2002.
The results can be viewed on the website:
www.afroxhealthcare.co.za
Stakeholder enquiries may be addressed per e-mail to:
mike.flemming@afrox.boc.com
Afrox Healthcare Limited
Company registration: 1985/001313/06
Registered office: Afrox House, 23 Webber Street, Selby, Johannesburg 2001. PO
Box 5404, Johannesburg 2000. Telephone (27 11) 490-0400.
Transfer Secretaries: Computershare Services Limited, 8th Floor, Anglo Building,
11 Diagonal Street, Johannesburg 2001.
PO Box 1053, Johannesburg 2000. Telephone (27 11) 370-5000.
Sponsor in South Africa: ENF Sponsors (Pty) Limited
Directors: GL Sedgwick* (Chairman), CMD Flemming (Managing Director),
RGCottrell, RK Lourey*, RL Hogben, R Mdori**, DMJ Ncube, CJPG van Zyl.
*Australian. ** French,
Company secretary: IM Matthee
Date: 30/10/2002 05:05:00 PM Produced by the JSE SENS Department
