Shareholders receive huge payout as the company drives strong annual earnings growth
26 November 2024 - 08:15
UPDATED 26 November 2024 - 22:44
byJacqueline Mackenzie and Tamar Kahn
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Buoyed by a strong performance in its core private hospital business and a surge in sales of its tracer drug NeuraCeq, Life Healthcare on Tuesday declared a special dividend of 70c a share on top of a final dividend of 31c for the year to September 30.
That takes the total payout to shareholders to R10.6bn for the year, including an interim dividend of 19c and a special dividend of R6 in April after the sale of its Alliance Medical Group (AMG) in January.
“If we don’t believe we have use for funds we return them to shareholders,” Life Healthcare CEO Peter Wharton-Hood said in a presentation to investors.
Life Healthcare operates 71 healthcare facilities in Southern Africa, including 48 acute hospitals, nine mental health facilities, and seven acute rehabilitation units. It operates cyclotrons, PET-CT scanners, and imaging sites as well as renal dialysis and oncology units.
On the international front, its Life Molecular Imaging (LMI) pharmaceutical business develops novel PET tracer drugs, which are used in brain imaging for the management of diseases such as Alzheimer’s.
For more on this and the company's financial performance, Business Day TV spoke to Life Healthcare CEO, Peter Wharton-Hood.
Revenue from continuing operations was up 12.7% year on year to R25.5bn, driven by robust growth in Southern Africa and an increase in the number of NeuraCeq doses sold. Headline earnings per share were up 73.4% to 152.9c and were 58.9% higher for continuing operations at 139c.
Group normalised earnings before interest, tax, depreciation and amortisation from continuing operations increased 19.9%.
Life concluded the sale of AMG in January and received R10.2bn in net cash proceeds after the settlement of offshore debt and transaction costs. It returned R8.8bn of those proceeds to shareholders in April.
Southern African operations grew revenue 7.7% to R23.67bn amid robust demand, which led to higher use of the group’s hospitals and complementary services. Paid patient days grew 1.2% and occupancies rose to 69% from 68.2% a year ago.
LMI grew revenue 181% to R1.845bn, driven by sales of NeuraSeq and the sublicensing of its RM2 product for R665m.
“LMI is the star of the show,” Wharton-Hood said.
NeuraSeq sales rose after approval from US health insurers to cover the Alzheimer’s treatment Leqembi and amyloid diagnostic testing, which includes the use of NeuraCeq and rival products. Commercial sales of NeuraCeq more than doubled year on year, while clinical trial sales rose 14% in the period under review.
Looking to 2025, the group said the Southern African business would keep growing its underlying asset base, adding 55 acute hospital beds, 24 acute rehabilitation beds and starting construction of a 140-bed acute hospital near Paarl that would be Life Healthcare’s first greenfield hospital in nine years. The area is underserved by private hospitals and the group anticipates strong demand from the migration of older, wealthier people to the Western Cape, coupled with a large residential development in the area, Wharton Hood said.
The group said it would keep growing its imaging business with further transactions expected to be completed in the 2025 financial year, along with further expansion of its nuclear medicine business.
Capex for 2025 was expected to be R2.6bn, it said.
Update: November 26 2024 This story contains additional information and comment.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Life Healthcare hands investors a R10bn windfall
Shareholders receive huge payout as the company drives strong annual earnings growth
Buoyed by a strong performance in its core private hospital business and a surge in sales of its tracer drug NeuraCeq, Life Healthcare on Tuesday declared a special dividend of 70c a share on top of a final dividend of 31c for the year to September 30.
That takes the total payout to shareholders to R10.6bn for the year, including an interim dividend of 19c and a special dividend of R6 in April after the sale of its Alliance Medical Group (AMG) in January.
“If we don’t believe we have use for funds we return them to shareholders,” Life Healthcare CEO Peter Wharton-Hood said in a presentation to investors.
Life Healthcare operates 71 healthcare facilities in Southern Africa, including 48 acute hospitals, nine mental health facilities, and seven acute rehabilitation units. It operates cyclotrons, PET-CT scanners, and imaging sites as well as renal dialysis and oncology units.
On the international front, its Life Molecular Imaging (LMI) pharmaceutical business develops novel PET tracer drugs, which are used in brain imaging for the management of diseases such as Alzheimer’s.
For more on this and the company's financial performance, Business Day TV spoke to Life Healthcare CEO, Peter Wharton-Hood.
Revenue from continuing operations was up 12.7% year on year to R25.5bn, driven by robust growth in Southern Africa and an increase in the number of NeuraCeq doses sold. Headline earnings per share were up 73.4% to 152.9c and were 58.9% higher for continuing operations at 139c.
Group normalised earnings before interest, tax, depreciation and amortisation from continuing operations increased 19.9%.
Life concluded the sale of AMG in January and received R10.2bn in net cash proceeds after the settlement of offshore debt and transaction costs. It returned R8.8bn of those proceeds to shareholders in April.
Southern African operations grew revenue 7.7% to R23.67bn amid robust demand, which led to higher use of the group’s hospitals and complementary services. Paid patient days grew 1.2% and occupancies rose to 69% from 68.2% a year ago.
LMI grew revenue 181% to R1.845bn, driven by sales of NeuraSeq and the sublicensing of its RM2 product for R665m.
“LMI is the star of the show,” Wharton-Hood said.
NeuraSeq sales rose after approval from US health insurers to cover the Alzheimer’s treatment Leqembi and amyloid diagnostic testing, which includes the use of NeuraCeq and rival products. Commercial sales of NeuraCeq more than doubled year on year, while clinical trial sales rose 14% in the period under review.
Looking to 2025, the group said the Southern African business would keep growing its underlying asset base, adding 55 acute hospital beds, 24 acute rehabilitation beds and starting construction of a 140-bed acute hospital near Paarl that would be Life Healthcare’s first greenfield hospital in nine years. The area is underserved by private hospitals and the group anticipates strong demand from the migration of older, wealthier people to the Western Cape, coupled with a large residential development in the area, Wharton Hood said.
The group said it would keep growing its imaging business with further transactions expected to be completed in the 2025 financial year, along with further expansion of its nuclear medicine business.
Capex for 2025 was expected to be R2.6bn, it said.
Update: November 26 2024
This story contains additional information and comment.
mackenziej@arena.africa
kahnt@businesslive.co.za
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