Netcare’s UK woes not as bad as investors feared
Netcare's share price rose 2% on Friday morning as the market sighed in relief that HEPS would fall only 60%
Investors in private hospital group Netcare appear to have been braced for its UK subsidiary, BMI Healthcare, to drag its headline earnings per share (HEPS) down more than 60%. The market reacted on Friday morning to a trading statement Netcare issued at 5.30pm on Thursday, saying it expected to report on Monday that its HEPS for its 2018 financial year would between 44c and 55c — at best half the prior year's R1.10 — by sending its share up 2.3% to R24.90. Problems in the UK have been a recurring theme in Netcare's results for the past few years. In its 2017 financial year results, Netcare booked a R1.7bn "onerous lease provision" for its UK subsidiary, which will be reversed in Monday's results statement. Part of the reason for the plunge in HEPS is this provision. Netcare said its HEPS also suffered from impairing debt it had underwritten for BMI. It changed BMI's accounting status to “discontinued operation” in the first half of its 2018 financial year, which translated into a R...
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