New Life Healthcare CEO Shrey Viranna has been tasked with expanding the wellness group abroad so its revenue is equally split between SA and its international portfolio by 2022.
The R42bn hospital owner and healthcare services provider grew its interim revenue by 17.5% to R11.3bn by end-March from R9.6bn a year earlier, results released on Friday showed. It increased its dividend by 8.6% to 38c per share.
The group expected its investment and revenue growth to come largely from complementary or allied services, which included mental health, renal dialysis and oncology, instead of acute hospital care, which faced pricing pressure, said Viranna.
Alec Abraham, the senior equity analyst at Sasfin, said Life Healthcare had made the right decision to diversify away from acute hospital care to allied services. “These are capital-light and margin-rich services, not under as severe regulatory pricing pressure as acute care is.”
Much of this growth would be in Southern Africa but Life would also achieve growth offshore in its Scanmed business, which saw demand for diagnostics services in Poland.
Headline earnings per share increased 116.5% to 53.7c, having been boosted by the improved performance of Life Healthcare’s businesses, the inclusion of Alliance Medical for six months and the nonrecurring effect of a number of one-off costs during the comparable period.
Southern African revenue increased by 9.7% to R8.4bn, compared with R7.6bn in the 2017 comparable period, with the Southern African hospitals’ and complementary services’ revenue increasing 7.9% to R7.8bn. Healthcare services’ revenue increased by 42.4% to R568m because of the return of 700 patients to the Esidimeni psychiatric hospitals and the acquisition of an occupational health and wellness business.
Asked if the government had paid ill-equipped nongovernmental organisations more money than it had paid Life Healthcare to look after these patients, Viranna said: “The Gauteng Department of Health would be best placed to respond to your question.”