Life Healthcare Group lifted its interim dividend by 10.5% to 21 cents a share in the six months to March 31, and it intends to continue growing its underlying asset base significantly in Southern Africa during the second half.
The group, which operates 64 healthcare facilities across South Africa and Botswana, plans to add 58 acute hospital beds and 24 acute rehabilitation beds, and it will start building the new 140-bed Life Paarl Valley Hospital in the Western Cape.
A new cath-lab and a new vascular lab will also be added to the acute business, as stated by CEO Peter Wharton-Hood in the results statement.
The group will continue to grow its diagnostics business, with further transactions expected to be completed in the second half, as well as the addition of two new PET-CT sites.
“The southern African business will look to drive occupancies to 70%, with paid patient days (PPD) growth expected to be 1.5%. The southern African business will continue to optimise its asset portfolio and focus on operational efficiencies,” he said.
Capital expenditure for the 2025 year is expected to be R2.3 billion. The R13.9bn Life Molecular Imaging (LMI) disposal to Lantheus Holdings is also expected to close in the second half.
In the six-month period under review, there has been robust activity growth, with paid patient days (PPDs) up by 2% and occupancy at 68.6%. Revenue from continuing operations increased by 8.1% to R12.1bn. Normalised earnings per share increased by 9.1% to 49 cents.
Earnings per share (continuing and discontinued operations) decreased to negative 155.2 cents from 242.8 positive cents in the first half of 2024, mainly due to the R2.8bn one-off gain in the first half of 2024 following the completion of the Alliance Medical Group disposal, and a R2.9bn fair value loss on the Piramal contingent consideration in the first half of 2025.
The group remains in a strong financial position. As of March 31, 2025, net debt to normalised EBITDA (earnings before interest, tax, depreciation, and amortisation) of 0.65 times is well within the covenant of 3.5 times. Cash from continuing operations was R2bn and represented 105.3% of normalised EBITDA from continuing operations.
The strong operating performance for the six-month period, with revenue up by 8.1%, was driven by “robust activity growth,” benefits from acquisitions concluded in the second half of 2024, and a tariff increase.
The acute hospitals delivered strong revenue growth in the period, with PPDs growing by 2% on a like-for-like basis. This translated into a higher occupancy of 68.3% compared to 66.2% in the prior period.
The acute hospitals had a strong second quarter, with occupancies over 71%, benefiting from the timing of the Easter and school holidays.
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