| Wed 28 Apr 2004, 15:15 | | INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 |
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AFROX HEALTHCARE LIMITED - INTERIM RESULTS FOR THE 6 MONTHS ENDED 31
MARCH 2004
Afrox Healthcare Limited
(Incorporated in the Republic of South Africa)
Company registration: 1985/001313/06
ISIN: ZAE0000022059
Share code: AHH
AFROXHEALTHCARE
- Revenue 8,9%
- Operating profit 14,3%
- Headline earnings per share 12,3%
- Cash generated from operations 67,9%
message to shareholders
Dear shareholders
Performance
Afrox Healthcare continued to record steady growth in the six months
ended 31 March 2004. This was achieved by a focus on providing quality
services and control of costs. Operating profit increased by 14,3% to
R285,7 million, with revenue up 8,9% to R2,3 billion compared with the
same period in 2003.
Business review
The continued focus on quality services has sustained utilisation
levels through the hospital and services businesses. During the period
the shareholding in the Wilgeheuwel Hospital in Roodepoort was
increased from 28% to 72% and the new 124-bed Roseacres Clinic in
Germiston was opened.
The company, together with Care UK Plc, a company listed on the London
Stock Exchange, has entered into an agreement to render services to
the National Health Service (NHS) in the United Kingdom to address the
backlog of NHS patients.
There has been a continued investment in new technology and equipment
as well as the upgrading of nursing standards and skills. In addition,
an affordable, quality healthcare model, has been available since
January 2004, offering a comprehensive set of primary healthcare
services to the lower income market.
SAhealthcare legislation
The Government has recently approved the Pharmacy Act 90 that will
have an effect on pricing mechanisms in the pharmaceutical industry
and will impact, both positively and negatively, on all sectors of the
healthcare industry.
The Competition Commission has required hospitals, medical
professionals and funders to move away from any form of industry
regulated tariff. We successfully concluded independent tariff
negotiations with funders for the 2004 calendar year.
Accounting policies and REVIEW report
These results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting
policies for the six months ended 31 March 2004 are consistent with
those applied at 30 September 2003.
The auditors, PricewaterhouseCoopers Inc, have reviewed, but not
audited, the group"s financial results for the six months ended 31
March 2004. A copy of their unqualified review report is available for
inspection at the company"s registered office.
Change in ownership of Afrox Healthcare
The proposed scheme of arrangement in terms of Section 311 of the
Company"s Act, (Act 61 of 1973) as amended was approved by
shareholders on 26 February 2004 and sanctioned by the High Court on 6
April 2004. In terms of the scheme of arrangement Business Venture
Investments Number 790 (Pty)Limited (Bidco), will acquire the entire
issued share capital of Afrox Healthcare Limited. Bidco comprises a
BEE consortium and Medi-Clinic Corporation Limited (Medi-Clinic). The
BEE consortium comprises Brimstone Investment Corporation Limited,
Mvelaphanda Strategic Investments (Pty) Limited, and broad based
empowerment groupings. The approval by the Competition Tribunal is the
only outstanding condition precedent for the transaction.
In terms of the transaction no dividend is payable in respect of the
period to March 2004.
Acknowledgement
South Africa"s healthcare industry is challenging, highly competitive
and often fraught with difficulties. Afrox Healthcare employees have
demonstrated an admirable resilience, flexibility and openness to new
opportunities. The sale of Afrox Healthcare will close one highly
successful chapter in the history of the company, but it is the
quality of the people within the organisation that will ensure that
the newly empowered business forges ahead.
Afrox Healthcare is privileged to have the support of many of the best
doctors and specialists in the country. We thank them as well as our
nurses and employees who have built the company into a business with
an annual turnover of over R5 billion today.
Greg Sedgwick Michael Flemming
(Chairman) (Managing Director)
Johannesburg 28 April 2004
interim results for the six months ended 31 march 2004
Summarised Balance Sheet
Reviewed Unaudited Audited
31 March 31 March 30 September
R"000 2004 2003 2003
ASSETS
Non-current assets 1 899 338 1 697 939 1 774 187
Property, plant and equipment 1 503 165 1 402 845 1 422 159
Other non-current assets 396 173 295 094 352 028
Current assets 1 048 043 1 021 143 958 882
Inventories 144 499 148 397 144 335
Trade and other receivables 873 165 838 132 799 609
Cash and cash equivalents 30 379 34 614 14 938
TOTAL ASSETS 2 947 381 2 719 082 2 733 069
EQUITY AND LIABILITIES
Capital and reserves 1 400 448 1 211 239 1 335 721
Share capital and share premium 638 562 625 484 627 867
Retained earnings and reserves 761 886 585 755 707 854
Minority interest 210 547 178 960 205 712
Interest bearing borrowings 521 131 377 293 497 034
Current liabilities 815 255 951 590 694 602
Current portion of interest
bearing borrowings 39 043 323 747 (48 246)
Provisions for liabilities
and charges 118 911 80 360 139 819
Other current liabilities 657 301 547 483 603 029
TOTAL EQUITY AND LIABILITIES 2 947 381 2 719 082 2 733 069
Summarised Statement of changes in equity
Reviewed Unaudited Audited
31 March 31 March 30 September
R"000 2004 2003 2003
Opening balance for the period 1 335 721 1 162 936 1 162 936
AC133 opening adjustment -- 13 562 16 972
Restated opening balance 1 335 721 1 176 498 1 179 908
Shares issued less expenses 10 694 680 3 063
Currency translation differences
and other movement 597 (396) (1 155)
Derivative cash flow hedge
adjustment 332 333 (1 393)
Net profit 144 032 121 140 302 771
Dividend declared and paid (90 928) (87 016) (147 473)
1 400 448 1 211 239 1 335 721
Summarised income statement
Reviewed Unaudited
Six months Six months Audited
ended ended Year ended
31 March % 31 March 30 September
R"000 2004 Change 2003 2003
Revenue 2 343 426 8,9 2 151 909 4 474 829
Operating profit before
finance costs 285 757 14,3 250 033 571 196
Finance costs (38 957) (39 801) (88 699)
Share of profit of
associates 26 046 17 999 42 841
Profit before tax 272 846 19,5 228 231 525 338
Tax (98 920) (89 000) (162 370)
Profit from ordinary
activities 173 926 24,9 139 231 362 968
Minority interest (29 894) (18 091) (60 197)
Net profit for the period 144 032 18,9 121 140 302 771
Adjustments for headline
earnings:
Goodwill written off 4 465 4 167 7 669
Profit on sale of fixed
property and investments (5 550) -- (1 615)
Headline earnings 142 947 14,1 125 307 308 825
Earnings and headline
earnings per share
Headline earnings
per share (cents) 63,0 12,3 56,1 138,2
Diluted headline earnings
per share (cents) 61,9 13,8 54,4 134,3
Earnings per share (cents) 63,5 16,9 54,3 135,5
Diluted earnings per
share (cents) 62,4 18,6 52,6 131,7
Summarised Cash Flow Statement
Reviewed Unaudited
Six months Six months Audited
ended ended Year ended
31 March 31 March 30 September
R"000 2004 2003 2003
Cash generated from operations 354 241 210 992 733 484
Net finance cost and tax paid (151 158) (166 813) (302 208)
Net cash flow from operating
activities 203 083 44 179 431 276
Net acquisition of subsidiaries
and increase in associate
holdings (45 267) (28 050) (54 157)
Purchase of property, plant and
equipment, net (91 483) (145 188) (223 873)
Other investing cash flows, net 863 (1 103) 13 718
Net cash flow from investing
activities (135 887) (174 341) (264 312)
Dividends paid (90 792) (87 016) (147 473)
Issue of share capital 10 694 680 3 063
Other financing cash flows, net 28 343 237 949 (20 779)
Net cash flow from financing
activities (51 755) 151 613 (165 189)
Increase in cash and cash
equivalents 15 441 21 451 1 775
Opening balance at beginning
of the period 14 938 13 163 13 163
Closing balance at end
of the period 30 379 34 614 14 938
This is a summarised commentary and results announcement. The interim
report which complies with AC127 will be mailed to shareholders during
June 2004.
The results can be viewed on the website:
www.afroxhealthcare.co.za
Stakeholder enquiries may be addressed per e-mail to:
mike.flemming@newname.co.za
Afrox Healthcare Limited
(Incorporated in the Republic of South Africa)
Company registration: 1985/001313/06
ISIN: ZAE0000022059
Share code: AHH
Registered office: Afrox House, 23 Webber Street, Selby, Johannesburg
2001. PO Box 5404, Johannesburg 2000. Telephone (+27 11) 490-0400
Transfer Secretaries: Computershare Limited, PO Box 61051,
Marshalltown 2107. Telephone (+27 11) 370-5000.
Sponsor: Nedbank Capital
Directors: GLSedgwick* (Chairman), CMDFlemming (Managing Director),
RGCottrell, RK Lourey*, RLHogben, R Medori**, CJPG van Zyl.
*Australian ** French
Company secretary: MESanz
Date: 28/04/2004 03:05:33 PM Produced by the JSE SENS Department
