Life Healthcare looks a lot healthier


Life Healthcare looks a lot healthier


Published Date: 2021-11-19 | Source: INCE|Community | Author: The Finance Ghost

Life Healthcare looks a lot healthier

As I've written several times before, the hospital groups really struggled in the pandemic. People cut back on elective surgeries, so utilisation rates for hospitals fell and the impact of operating leverage quickly hit the hospital groups in the wrong direction.

This year, things have been a lot better. The narrative in the hospital groups is positive and EBITDA margins are recovering as revenue increases.

Life Healthcare has released results for the year ended September 2021. With revenue from continuing operations up 12.7% and normalised EBITDA from continuing operations up 21.6%, the recovery is clear to see. Normalised EBITDA margin is now 18.8% vs. 17.4% in the prior year.

The international business (Alliance Medical) put in a particularly good performance, as revenue increased by 18.9% and overall imaging activities were above pre-Covid levels. In Southern Africa, revenue grew 10.3% and normalised EBITDA margin was 17.1%.

This period also saw the completion of the sale of Scanmed in Poland, with R681 million in net proceeds after tax and costs. The results from that business are presented as a discontinued operation in the current and prior periods.

The balance sheet is much stronger than it was a year ago. Net debt to normalised EBITDA was 1.82x at 30 September 2021 vs. 2.96x a year prior. The Scanmed disposal and generally improved trading conditions helped drive this result.

During the financial year, Life invested around R1.85 billion in capex of which R1.5 billion was maintenance capex and the rest was growth capex.

Headline earnings per share (HEPS) was 111.1 cents and a final cash dividend of 25 cents per ordinary share has been declared.

The share price is up nearly 38% this year.


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