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NETWORK HEALTHCARE HOLDINGS LIMITED - TRADING STATEMENT
NETWORK HEALTHCARE HOLDINGS LIMITED
(Registration number 1996/008242/06)
Code: NTC
ISIN number: ZAE000011953
(`Netcare` or `the Group`)
TRADING STATEMENT
Shareholders are advised that even though the circumstances giving rise to this
announcement do not warrant the publication of a trading statement in terms of
the JSE Securities Exchange SA Listings Requirements, it has been deemed
appropriate to provide the shareholders with the following information in
anticipation of the release of the Netcare results for the year ending 30
September 2004.
Following a preliminary analysis of the Group`s performance for the year ended
30 September 2004, shareholders are advised that notwithstanding satisfactory
growth and activity in the Netcare Group`s core hospital and ancillary
healthcare divisions, the results will be impacted by period-specific non
recurring items and prior year adjustments, which are detailed below:
Non recurring items
As recorded in the interim results for the six months ended 31 March 2004 and
subsequent presentations,
* Netcare 911 experienced a once off charge of R26.9 million due to
restructuring costs, cancellation of forex linked contracts and the
discontinuation of loss making business units and products; and
* The issue of 100 million Netcare shares to, and subsequent
reinvestment in, Netpartner Investments Limited on 30 September 2003
has had the predictable short-term dilutionary effect on headline
earnings per share of approximately 3% for the period;
Due to the volatility experienced in the politically sensitive Middle East, a
strategic decision was made to discontinue all operations in that region. The
Group has written off an amount of R22.7 million relating to associated costs
in this accounting period.
Since the introduction of the regulations applicable to single exit pricing on
pharmaceuticals which were implemented on 1 May, the Group has been impacted
negatively by a higher cost of drug purchases for the 4.5 months preceding
successful renegotiation of tariffs with the funders.
Prior year adjustments
In terms of AC 133 (Financial Instruments - Recognition and Measurement) and AC
103 (Accounting Policies, Changes in accounting estimates and errors), prior
year adjustments have been made for:
* Financial Assets relating to the Netcare Trust
* Supplier rebates
Despite the aggregate effect of the prior year adjustments and non recurring
items, the Group is nevertheless expected to record a positive growth in
headline earnings per share for the year of approximately 5% to 15%.
The financial information upon which this trading statement is based is in the
process of being reviewed and reported on by the company`s auditors.
Shareholders are advised that the results for the year ended 30 September 2004
are expected to be released on SENS on Wednesday, 17 November 2004.
Sandton
12 November 2004
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 12/11/2004 08:00:04 AM
Produced by the JSE SENS Department
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