Does Advanced Health need a shot in the arm?
While the case for its day-hospital model is strong, the firm’s financial statements suggest it may need a cash injection
The day-hospital prescription written by Advanced Health would appear to be the antidote to rising medical costs in the private hospital sector.The company, in a presentation covering the interims to end-December, argues that private hospitals are the main drivers of health care in SA, but adds that 70% of procedures can be attended to at substantial savings in day hospitals.On paper, Advanced’s day-hospital model looks a healthy alternative to the (largely) default private hospital offering.On the financial statements, unfortunately, the proposition still looks weak and perhaps due for another injection of capital.The company raised R86m in a rights issue last August, though directors switched loans into equity as part of the exercise.Advanced is still burning through cash. The cash-flow statement shows a net cash outflow of R14m. This is, at least, a marked improvement on the previous interim period’s R22m outflow.The problem for Advanced is that its more mature Australian oper...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.