ON THE SPOT:
Counting the costs as investments in the Middle East drag on Mediclinic’s profit
Mediclinic has hardly been a safe-as-houses investment since muscling out rival bidder NMC to secure a £1.4bn reverse takeover of Abu Dhabi’s Al Noor in 2015, becoming Mediclinic International in the process. While Al Noor was touted as an earnings-neutral investment in the first year, it has proved a drag on profit and "gradual recovery" is now the message from management. Business Day spoke to CEO Danie Meintjes. Was your due diligence thorough enough? What I would have preferred – but it was not permissible and it was not possible at that time due to the circumstances — was to do a deep due diligence at operational level as well. If we knew more, would we still have done the transaction? Undoubtedly yes, but maybe at a lower price. Margins in the Middle East are 11%, in Southern Africa 21% and in Switzerland 20%. Will they ever reach the level of your other businesses? Two answers: we’ve told the market that in Dubai we are happy with the margins, we said there’s no reason why th...
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