What’s behind Life Healthcare’s troubles in the UK
Group’s interim earnings plummet on Alliance Medical acquisition
Life Healthcare’s expansion into the UK significantly lowered the hospital group’s earnings for the six months to March. Its interim results showed on Friday that establishing a sizeable international healthcare presence negatively affected earnings per share. Earnings per share dropped 85.3% to 13.7c, and headline earnings per share declined 71.3% to 26.7c. Life Healthcare said group earnings were affected by one-off items related to the R14.3bn Alliance Medical acquisition including the transaction’s costs of R254m and acquisition funding costs of R382m. It paid the debt with two bridging facilities and R8.8bn it had raised in a rights issue. Sanlam Investment Management equities head Patrice Rassou said most hospital groups had a deliberate strategy to venture outside SA in search of larger markets. Gryphon Equity analyst Casparus Treurnicht said the offshore move by Life Healthcare indicated that management expected little growth in the South African region. The company defended...
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