Ailing Advanced Health to sell hospitals


Ailing Advanced Health to sell hospitals

Published Date: 2020-09-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Ailing Advanced Health to sell hospitals

The day hospital group has put four SA businesses up for sale and received an offer for the others.

Advanced Health says its ability to continue as a going concern is dependent on it procuring funding for its operations. That's after it reported a R134 million full-year loss, taking its accumulated losses to R257 million.

The day hospital group has been restructuring its operations to simplify its structure, reduce operational and overhead costs and come up with the cash resources to ensure its continued solvency and liquidity. It said it had received various offers for four of its local subsidiaries, which it expected to dispose of within a year.

In addition to facilities held for sale, Advanced Health said it had received an offer of R170 million, excluding deferred consideration, for its seven remaining facilities in South Africa. It also had the ability to sell a portion of its shareholding in Presmed Australia, which operates four facilities. To bridge any short-term cash shortages until the restructuring was finalised, a shareholder had committed to provide it with an additional loan facility of R20 million.

Advanced Health said Covid-19 had impacted its day to day operations in SA and Australia as elective surgeries, its main business, were suspended. Mitigating measures were put in place, providing some relief - government grants and payment holidays were negotiated and temporary salary reductions were implemented.

Revenue declined 1.1% to R476 million for the year to end-June, with Covid-19 resulting in lost revenue of R24.4 million in SA and A$4 million at Presmed. Earnings before interest, tax, depreciation and amortisation more than tripled to R54.5 million. Its tax bill rose to R39.7 million after a R7.8 million credit last year. That left it with a R134 million loss for the year, impacted by Covid-19 in the final quarter of its financial year as well as the adoption of the new IFRS 16 accounting standard. Its headline loss per share increased to 49.42c.

Advanced Health's shares closed unchanged at 18c on Friday.

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