Battling Advanced Health seeks empowerment partners
Day surgery group Advanced Health is courting potential black economic empowerment (BEE) partners, as it sought to bolster its chances of doing business with the government, CEO Carl Grillenberger said on Thursday.
“We are going to start talking to a BEE group interested in acquiring shares. The rationale is we are a South African company and would like to get patients from the state system. They will want to see a BEE grading for the company,” he said.
Advanced Health was in discussion with provincial health departments to provide procedures to state patients and in the longer term hoped to get state business under the banner of National Health Insurance, Grillenberger said.
Advanced Health, which has day hospitals in Australia and SA, listed on the JSE’s AltX in April 2014.
Despite Advanced Health’s continued losses, Grillenberger said he was optimistic the company would break even by early in 2019. Advanced Health reported a comprehensive loss of R25.4m for the six months to December 31, a slightly better performance than the R33.9m loss in the corresponding period the year before.
Group revenue rose 33% to R199.5m and headline losses per share fell 18.7% to 8.56c.
Advanced Health acquired two new hospitals in Australia during the period under review.
While its Australian operations reported a modest profit, the South African business continued to operate in the red despite an increase in patient numbers. The losses were attributable to the fact that it had commissioned a large number of facilities in a relatively short time and encountered stiff resistance from local players.
“The main problem in SA is it is a business competing with hospitals, which are putting pressure on doctors to do most of their work in [their facilities]. Doctors dare not tell patients they can get a better deal at a day facility,” said Grillenberger.
“The playing field is not level and that is something the Competition Commission is looking at,” he said, referring to the commission’s market inquiry, which is investigating barriers to effective competition in the private healthcare industry. It is expected to release its interim report at the end of April.