Picture: ISTOCK
Picture: ISTOCK

Day hospital provider Advanced Health has warned shareholders that it expects its headline loss for the year to June to increase almost threefold as it experiences teething problems with its expansion strategy.

The group has 10 operational day hospitals in SA and four in Australia. The company said it expected to report a net after-tax loss of R48.176m compared with R18.3m for the year to June 2016. In a trading statement on Tuesday, Advanced Health said it expected to report a headline loss of R48.2m compared with the prior year loss of R17.7m.

Advanced Health blamed the poor performance on its slow growth strategy, but said it was starting to see increased numbers of patients treated in Australia and SA.

"The increases in losses are as anticipated and in accordance with the company rolling out its known strategy to become the leading provider of day hospitals in SA and Australia."

Mvunonala Holdings equity analyst Matthew Zunckel said that while this update was relatively in line with expectations, it reiterated that day hospitals had not yet gained traction in the healthcare market in SA. He said this was in spite of day hospitals being endorsed by medical aids.

"So, investors will need to realign their expectations in terms of when Advanced Health will start generating profits."

The company will publish its results on Wednesday.

gumedem@businesslive.co.za

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