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NETWORK HEALTHCARE HOLDINGS LIMITED - TRADING STATEMENT AND CAUTIONARY
ANNOUNCEMENT
Network Healthcare Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1996/008242/06)
("Netcare" or "the company")
JSE Share Code: NTC
ISIN number: ZAE000011953
TRADING STATEMENT AND CAUTIONARY ANNOUNCEMENT
Netcare anticipates that headline earnings per share (basic and diluted) for the
six months ended 31 March 2004 will be materially higher than the corresponding
reporting period of the previous year. In terms of the JSE Securities Exchange
SA Listings Requirements, "materially" is defined as being a change of between
10% and 30%.
Netcare"s interim results for the six months ended 31 March 2004 will be
released on SENS on or about Wednesday, 19 May 2004.
Shareholders should note that the following factors will have an impact on the
year-on-year growth in earnings:
- the core hospital and ancillary healthcare divisions have experienced
pleasing trading performances despite the industry challenges, seasonal trading
period and a lower inflationary environment;
- Netcare Healthcare UK has made significant strides in implementing the
first National Health Service ("NHS") contract relating to the provision of
ophthalmic medical procedures over a five-year period. The first procedures
under this contract were carried out in February 2004. The interim period
results will also include revenues from the completion of various other short-
term NHS contracts;
- the initial dilutive effect of the Group"s investment in Netpartner
Investments Limited on 30 September 2003;
- following the matters referred to in the 2003 annual financial results,
Traumanet ("Netcare 911") continued to generate trading losses for the six month
period ended 31 March 2004. The newly-appointed management team is implementing
stringent remedial actions and re-engineering the business, resulting in
restructuring costs, cancellation of forex-linked contracts and the
discontinuation of loss-making business units and products. Accordingly, a once-
off charge, expected to be in the region of R28 million, will be recorded
separately representing these restructuring costs, terminations and legacy
issues. The division is on track to break even during the 2005 financial year.
Netcare 911 continues to deliver a world class service to all South Africans
irrespective of their financial status; and
- since the release of the draft regulations applicable to single exit
pricing in respect of pharmaceuticals in January 2004, certain manufacturers
have already reduced their prices and rebates. As referred to previously, and
consistent with what has recently been reported in the press, Netcare is of the
view that the draft regulations will not be implemented in their current form.
The financial information on which this trading statement is based has not been
reviewed nor reported on by the company"s auditors and shareholders are
therefore advised to exercise caution when trading in the company"s shares until
Netcare"s interim results for the six months ended 31 March 2004 are published.
Sandton
22 April 2004
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 22/04/2004 02:11:32 PM Produced by the JSE SENS Department
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