| Wed 30 Apr 2003, 10:08 | | Real Africa leaves AHealth seeking new partner |
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Medical group loses empowerment deal
Trade and Industry Editor
AFROX Healthcare (AHealth) is seeking a new empowerment deal, after the withdrawal of its initial empowerment investor Real Africa.
AHealth reported yesterday that Real Africa was planning to dispose of its 17% stake in the medical group in May, as part of an unbundling exercise.
"It is a concern to us that we are losing this empowerment partner," said AHealth CE Mike Flemming.
However, he noted that Real Africa would retain its holding in an AHealth subsidiary, Lifecare, which provides medical services to the state.
"There is no short-term solution (to the empowerment challenge), but this is very much on our agenda," said Flemming. "We have been approached by a number of players, but this would need board approval.
"It would be comfortable to me to have a partner similar to Real Africa."
Flemming also said that there was an alternative approach to empowerment through offering doctors an equity stake in some of AHealth's businesses.
The company yesterday reported interim results to March, for which there was an 18% boost in revenue to R2,2bn up from R1,8bn in the six months to March last year. Net profit rose 21% to R121m, and headline earnings a share rose 29% to 56,1c. Flemming said that about 7% of the increased revenue had been due to recent acquisitions.
There had also been a turnaround in AHealth's healthcare services, which include occupational healthcare and direct medicines. However, about 11% of the increase reflected pricing increases.
"Some is due to the high cost of imported drugs, although this has slowed because of the stronger rand," he said.
"I am confident that in the next six months, we will grow at least the same rate as in the past six months." He said that AHealth was hoping to conclude some small acquisitions.
AHealth announced an interim dividend of 27c, up from 18c a year ago.
In another development, the group announced that it had introduced more affordable healthcare products for low income groups who were not covered by medical aid. "These products offer a limited network of doctors and hospitals that will deliver quality private healthcare," said AHealth.
Flemming said that AHealth was addressing the problem of nurses leaving the profession through training initiatives, and by arranging for nurses to work for limited periods overseas, before bringing them back to SA. He said that AHealth could soon take over the management of some healthcare facilities abroad, although he would give no details of this. About R200m has been set aside for "maintenance and organic growth" in the 2003 financial year.
Apr 30 2003 06:47:42:000AM John Fraser Business Day 1st Edition
Wednesday
30 April 2003
