LAST-MINUTE CHANGES
Costly UK rentals hit Netcare subsidiary
CEO Richard Friedland says PropCo at the last minute changed some of the conditions the company thought were settled
Netcare’s UK business, BMI Healthcare, remains in limbo due to costly rental agreements with the entity that houses its hospital properties. CEO Richard Friedland says talks over a rental deal have been "frustrating and disappointing" for the market. Some of the conditions it thought had been agreed to in November with PropCo, in which private equity gorilla KKR had a stake, were changed at the last minute, Friedland said on Monday. An agreement with its largest landlord had to be to shareholders’ benefit, he said. Netcare said operating profit in the UK slumped 55% to £6m for the six months to March. Profit margin narrowed to 5.2% from 7.2% previously. Netcare blamed the fall primarily on an increase in rental costs and the absence of a series of one-offs. But the hospital group is seeing no uptick in the UK’s private medical insurance market, with caseloads down 3.6% over the period. The National Health Service remains its biggest customer in the UK, with caseload up 8.5%, lifting...
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