UK's Alliance gives Life Healthcare a lift


UK's Alliance gives Life Healthcare a lift

Published Date: 2018-05-02 | Source: Stephen Gunnion | Author: Stephen Gunnion

UK's Alliance gives Life Healthcare a lift

Alliance Medical has been included in Life's results for the full six-month period compared with just over four months last year

Life Healthcare expects a strong rise in first-half earnings and headline earnings a share following its acquisition of Alliance Medical Group in the UK a year and a half ago.

The private hospitals group says revenue for the six months to end-March will be as much as 18.5% higher at R11.4 billion, while normalised earnings before interest, tax, depreciation and amortisation will rise by up to 11.5% to R2.7 billion. Earnings per share (EPS) are expected to be up to 335% higher and headline EPS will rise by 110% to 121%.

The group said the increase in revenue was largely due to the inclusion of Alliance for the full six months, while in the comparative period it was included for just over four months. It said Alliance showed good revenue growth of between 7% and 9% over the period driven by sold growth in PET-CT (positron emission tomography-computed tomography) volumes. PET-CT is an imaging test that allows doctors to scan for diseases. Alliance was also given a boost by the acquisition of Life Radiopharmacy in Northern Europe and good performances from Italy and Ireland.

In Southern Africa, its operations are expected to deliver revenue growth of between 8% and 10% due to higher volumes in the acute hospital division with paid patient days increasing by 2% above last year.

Scanmed in Poland is expected to increase revenue by between 20% and 22% as a result of a business turnaround. The prior period also included a downward adjustment to the over-quota revenue of R17 million.

Life Healthcare is currently trading under a cautionary as it's negotiating the sale of its stake in Max Healthcare Institute in India to joint venture partner Max India.

Its shares rose 1.7% to close at R29.50 on Monday.

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