Printer Friendly Version View printer-friendly version
<< Back
Mediclinic Intnl plc - Trading Statement
RNS Number : 7477T
Mediclinic International plc
17 October 2017
 

Mediclinic International plc
(Incorporated in England and Wales)
Company Number: 08338604
LSE Share Code: MDC

JSE Share Code: MEI
NSX Share Code: MEP

ISIN: GB00B8HX8Z88

LEI: 2138002S5BSBIZTD5I60

("Mediclinic", the "Company" or the "Group")

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

17 October 2017

 

2017/18 Interim Trading Update

 

Mediclinic International plc, the international private healthcare group, provides the following trading update ahead of the publication of its results for the half year ended 30 September 2017 ("1H18") on 16 November 2017. The information on which this trading update is based represents the Group's latest financial estimates and has not been reviewed and reported on by Mediclinic's external auditors. All financial figures, unless explicitly stated, are underlying*.

 

Commenting today, Danie Meintjes, CEO, said:

"The Middle East business has started the financial year well following the positive operational and regulatory changes in Abu Dhabi. I am pleased that the investments made in our clinical services, personnel and facilities are driving the turnaround in Abu Dhabi. The Dubai operations continue to perform strongly, benefiting from growing patient numbers at the Mediclinic City Hospital's new North Wing. We expect the Middle East business to generate strong sequential and comparative revenue growth and underlying EBITDA margin expansion in the second half of the financial year.

 

"In Switzerland and Southern Africa, patient volumes in the first half of the year were down on the prior year period, impacted by the timing of the Easter holiday period. The management teams in both platforms have implemented the appropriate cost savings programmes and productivity initiatives that will help margins during the second half of the year.

 

"During the first half of the year we announced a number of selective acquisitions and investments as we look at further growth opportunities across the continuum of healthcare. In Switzerland, we acquired the 115-bed Linde Private Hospital in Biel; in Southern Africa, we have agreed to invest in the Intercare group which is focused on primary and sub-acute care."

 

Hirslanden - Switzerland

In Switzerland, 1H18 revenue was up 0.1% to CHF0.8 billion (1H17: CHF0.8 billion) with bed days sold and inpatient admissions down 1.9% and 1.3% respectively, impacted by the timing of the Easter period and a subdued market during the summer months. Revenue per bed day remained broadly flat. Hirslanden's outpatient revenues, which represents some 19% of the overall platform revenues, continued to grow during the first half of the year, up 6.0%. The acquisition of the Linde Private Hospital ("Linde") in Biel was completed at the end of June 2017 and the hospital contributed some CHF15m to Hirslanden's revenues during 1H18. Hirslanden expects modest revenue growth for the full year.

 

The underlying EBITDA margin for 1H18 is around 17.4% (1H17: 18.6%). The margin reflects lower patient volumes and an ongoing insurance mix change, partially offset by cost-management programmes and efficiency savings. The underlying EBITDA margin in the second half of the year will reflect the seasonal benefit of the winter period while the full year margin will be impacted by the TARMED outpatient tariff reductions from 1 January 2018, outmigration of care, two Easter holiday periods, costs relating to the Hirslanden 2020 strategic programme and the Linde acquisition.

 

Mediclinic Southern Africa

In Southern Africa, 1H18 revenue was up 4.1% to ZAR7.6 billion (1H17: ZAR7.3 billion) with inpatient bed days decreasing by 3.3% and revenue per bed day increasing by 7.7%. These results were delivered against a continued weak macro-economic environment in South Africa. In addition, during the first half of the year, the impact of Easter and other public and school holidays meant there were nine fewer ordinary working days in South Africa than in the prior year period. Revenue growth for the full year is now expected to be around 4%.

 

Despite the pressure on volumes, the underlying EBITDA margin for 1H18 is expected to be around 21.0% (1H17: 20.7%), resulting from a strong focus on cost-management and efficiencies. Full year margin expectations remain in line with previous guidance, broadly stable on the prior year, at around 21%.

 

Mediclinic Middle East

In line with guidance, 1H18 revenue in the Middle East business was down 4.7% to AED1.5 billion (1H17: AED1.5 billion). After adjusting for the sale of non-core assets, revenue was down 0.6%. Inpatient and outpatient volumes were down 2% and 15% respectively in 1H18, impacted by the business and operational alignment initiatives that took place in Abu Dhabi during the prior year. The Dubai business continues to perform very well.

 

Actions taken are having a positive effect on the business and are laying the foundation for sustainable growth. Doctor vacancies have normalised and the focus has shifted to supporting doctors to grow their patient activity. Since the Thiqa (health insurance for UAE Nationals) co-payment requirement in Abu Dhabi was removed in April 2017, we continue to see an improving trend in Thiqa patient activity. 1H18 Thiqa inpatient and outpatient volumes increased by 40% and 15% respectively compared to 1H17. The removal of the Thiqa co-payment has enabled the business to accelerate its strategy of shifting activity away from Basic, towards Enhanced and Thiqa patients thereby improving the quality of revenue. We expect to see the positive momentum in higher margin business continue to grow in the second half, supported by the seasonality benefit in the UAE following the end of the quieter summer period. Guidance remains unchanged for a modest improvement in revenue for the full year.

 

The underlying EBITDA margin for 1H18 is in line with lower guidance at around 8.5% (1H17: 11.0%). Strong underlying EBITDA growth is expected in the Middle East during the second half of the year. Guidance for the Middle East platform remains unchanged with the expectation of a gradual improvement in underlying EBITDA margin over time.

 

The investment projects at the two main Abu Dhabi hospitals, Mediclinic Airport Road Hospital and Mediclinic Al Noor Hospital (previously Khalifa Street Hospital), are underway and will enhance the clinical service offering and patient experience at both key facilities. The new build Mediclinic Parkview Hospital in Dubai is progressing well and on track for completion in the fourth quarter of the next financial year. The Western Region Hospital project has also been initiated and the project planning is currently underway.

 

Spire Healthcare Group

Mediclinic has a 29.9% investment in Spire Healthcare Group plc ("Spire"). The investment in Spire is accounted for on an equity basis recognising the reported profit of £8.9m for Spire's financial half year ended 30 June 2017 (6 months ended 30 June 2016: £35.7m). Spire made a provision amounting to £27.6m for the potential cost of a settlement relating to civil litigation in relation to surgeon Ian Paterson, which is before taking account of any potential further recoveries from insurers. Mediclinic's 1H18 equity accounted share of profit from Spire was £1.1m (1H17: £9.8m) after adjusting for the amortisation of intangible assets recognised in the notional purchase price allocation of the equity investment.

 

Group

At the Group level, in constant currency, 1H18 revenue was flat and underlying EBITDA was down around 5.0%. However, after the translation effect of foreign currency movements, 1H18 revenue was up 9.5% at GBP1.4bn (1H17: GBP1.3bn) and underlying EBITDA was up 5.0% at GBP231m (1H17: GBP220m). Underlying earnings per share is expected to be around 11.5 pence (1H17: 12.8 pence). The average foreign exchange rates for 1H18 were GBP/CHF 1.26, GBP/ZAR 17.08 and GBP/AED 4.75 (1H17: 1.34, 20.00 and 5.05 respectively).

 

In October 2017, the Group agreed the terms for the refinancing of Hirslanden's secured long-term bank loans. The new facilities will reduce the cost of debt on a like for like basis by 25bps and extend the maturity profile to at least 2023.

 

 

* The Group uses underlying income statement reporting as non-IFRS measures in evaluating performance and as a method to provide shareholders with clear and consistent reporting. The Group's non-IFRS measures are intended to remove from reported earnings volatility associated with defined one-off incomes and charges.

 

Cautionary Statement

This announcement contains certain forward-looking statements relating to the business of the Company and its subsidiaries (collectively, the "Group"), including with respect to the progress, timing and completion of the Group's development, the Group's ability to treat, attract, and retain patients and customers, its ability to engage consultants and general practitioners and to operate its business and increase referrals, the integration of prior acquisitions, the Group's estimates for future performance and its estimates regarding anticipated operating results, future revenue, capital requirements, shareholder structure and financing. In addition, even if the Group's actual results or development are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of the Group's results or developments in the future. In some cases, you can identify forward-looking statements by words such as "could," "should," "may," "expects," "aims," "targets," "anticipates," "believes," "intends," "estimates," or similar words. These forward-looking statements are based largely on the Group's current expectations as of the date of this announcement and are subject to a number of known and unknown risks and uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by these forward-looking statements. In particular, the Group's expectations could be affected by, among other things, uncertainties involved in the integration of acquisitions or new developments, changes in legislation or the regulatory regime governing healthcare in Switzerland, South Africa, Namibia and the UAE and poor performance by healthcare practitioners who practice at our facilities, unexpected regulatory actions or suspensions, competition in general, the impact of global economic changes, and the Group's ability to obtain or maintain accreditation or approval for its facilities or service lines. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements made in this announcement will in fact be realised and no representation or warranty is given as to the completeness or accuracy of the forward-looking statements contained in this announcement.

 

The Group is providing the information in this announcement as of this date, and we disclaim any intention to, and make no undertaking to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

About Mediclinic International plc

Mediclinic is an international private healthcare group with operating platforms in Southern Africa (South Africa and Namibia), Switzerland and the United Arab Emirates. Its core purpose is to enhance the quality of life of patients by providing acute care, specialist-orientated, multi-disciplinary healthcare services. Mediclinic also holds a 29.9% interest in Spire Healthcare Group plc, a LSE listed and UK-based private healthcare group.

 

Mediclinic comprises 75 hospitals and 29 clinics. Mediclinic Southern Africa operates 49 hospitals and 2 day clinics throughout South Africa and 3 hospitals in Namibia with more than 8 000 inpatient beds in total; Hirslanden operates 17 private acute care facilities and 4 clinics in Switzerland with more than 1 700 inpatient beds; and Mediclinic Middle East operates 6 hospitals and 23 clinics with more than 700 inpatient beds in the United Arab Emirates.

 

The platforms' contributions to Group revenue for the financial year ended 31 March 2017 were 48% by Hirslanden, 28% by Mediclinic Southern Africa and 24% by Mediclinic Middle East.

 

During February 2016, the combination of the Company (previously named Al Noor Hospitals Group plc), with operations mainly in Abu Dhabi in the United Arab Emirates, and Mediclinic International Limited was completed. Mediclinic International Limited was a South African based international private healthcare group founded in 1983 and listed on the JSE, the South African stock exchange, since 1986, with operations in South Africa, Namibia, Switzerland and the United Arab Emirates (mainly in Dubai). The combination resulted in the renaming of the enlarged group to Mediclinic International plc.

 

Mediclinic has a primary listing on the Main Market of the LSE in the United Kingdom, with secondary listings on the JSE in South Africa and the NSX in Namibia.

 

For further information, please contact:

 

Investor Relations, Mediclinic International plc

James Arnold, Head of Investor Relations

ir@mediclinic.com

+44 (0)20 3786 8181

 

Media queries

FTI Consulting

Brett Pollard/Debbie Scott - UK

+44 (0)20 3727 1000

Frank Ford - South Africa

+27 (0)21 487 9000

 

Inside information

The information contained in this announcement is inside information. If you have any queries on this, then please contact Victoria Dalby at Capita Company Secretarial Services Limited, the corporate Company Secretary for Mediclinic and the person responsible for arranging the release of this announcement, at 6th Floor, 65 Gresham Street, London EC2V 7NQ or +44 (0)20 7954 9600.

 

Registered address: 6th Floor, 65 Gresham Street, London, EC2V 7NQ, United Kingdom

Website: www.mediclinic.com

Corporate broker: Morgan Stanley & Co International plc

JSE sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)

NSX sponsor: Simonis Storm Securities (Pty) Ltd


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
TSTFMMMGNVNGNZM

IMPORTANT DISCLAIMER

ACCESS TO THIS AREA OF THE WEBSITE MAY BE RESTRICTED UNDER SECURITIES LAWS, RULES OR REGULATIONS IN CERTAIN JURISDICTIONS. THIS NOTICE REQUIRES YOU TO CONFIRM CERTAIN MATTERS (INCLUDING THAT YOU ARE NOT RESIDENT OR PHYSICALLY PRESENT IN SUCH A JURISDICTION), BEFORE YOU MAY OBTAIN ACCESS TO THE INFORMATION ON THIS AREA OF THE WEBSITE. THESE MATERIALS ARE NOT DIRECTED AT OR TO BE ACCESSED BY, OR DISTRIBUTED OR DISSEMINATED TO, DIRECTLY OR INDIRECTLY, PERSONS RESIDENT OR PHYSICALLY LOCATED IN ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS, RULES OR REGULATIONS OF THAT JURISDICTION OR WOULD RESULT IN A REQUIREMENT TO COMPLY WITH CONSENT OR OTHER FORMALITY WHICH MEDICLINIC REGARDS AS UNDULY ONEROUS.

Combination of Mediclinic International Limited ("Mediclinic") and Al Noor Hospitals Group plc ("Al Noor") (the "Combination")

Access to the website

You are attempting to enter the part of the website that is designated for the publication of documents and information in connection with the Combination.

If you would like to view this part of the website, please read this notice carefully. This notice applies to all persons who view this part of the website and, depending on where you are located, may affect your rights or responsibilities. Mediclinic reserves the right to amend or update this notice at any time and you should, therefore, read it in full each time you visit the site. In addition, the contents of this part of the website may be amended at any time, in whole or in part, at the sole discretion of Mediclinic.

This part of the website contains electronic versions of materials relating to the Combination. The materials you are seeking to access are made available in good faith and for information purposes only and are subject to the terms and conditions set out below. Any person seeking to access this part of the website represents and warrants to Mediclinic that they are doing so for information purposes only.

To allow you to view information about the Combination, you must read this notice and then click "I ACCEPT". If you are unable to agree, you should click "I DECLINE" and you will not be able to view information about the Combination.

The Combination would be made by means of a scheme document to be published by Mediclinic which would contain the full terms and conditions of such Combination, including details on how it may be accepted. Any decision made in relation to the Combination should be made solely and only on the basis of the information provided in any such document.

Overseas jurisdictions

Viewing the materials you are seeking to access may be restricted under securities laws in certain jurisdictions. All persons who wish to view this part of the website must first satisfy themselves that they are not subject to any local requirements which prohibit or restrict them from doing so and should inform themselves about, and observe, any legal or regulatory requirements applicable in their jurisdiction.

These materials are not directed at or intended to be accessible by persons resident in any jurisdiction if to do so would constitute a violation of the relevant laws or regulations of that jurisdiction.

YOU SHOULD NOT, DIRECTLY OR INDIRECTLY, DOWNLOAD, MAIL, FORWARD, DISTRIBUTE, SEND OR SHARE THE INFORMATION OR DOCUMENTS CONTAINED ON THIS PART OF THE WEBSITE TO ANY PERSON. IN PARTICULAR, YOU SHOULD NOT, DIRECTLY OR INDIRECTLY, MAIL, FORWARD, DISTRIBUTE OR SEND THE INFORMATION OR DOCUMENTS CONTAINED THEREIN TO ANY JURISDICTION WHERE IT WOULD BE UNLAWFUL TO DO SO. MEDICLINIC AND ITS ADVISERS DO NOT ASSUME ANY LIABILITY FOR ANY VIOLATION BY ANY PERSON OF ANY OF THESE RESTRICTIONS.

It is your responsibility to satisfy yourself as to the full observance of any relevant laws and regulatory requirements. If you are in any doubt, you should click on “I DECLINE” below and exit this webpage.

Cautionary Note Regarding Forward-Looking Statements

This part of the website and the information contained in it may contain certain forward-looking statements with respect to the financial condition, results of operations and businesses of Mediclinic and the Mediclinic Group (being Mediclinic and its subsidiaries and subsidiary undertakings) and Al Noor and the Al Noor Group (being Al Noor and its subsidiaries and subsidiary undertakings) following the Combination. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Mediclinic and the Mediclinic Group to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions, including as to future potential cost savings, synergies, earnings, cash flow and prospects. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project", "risks", "seek", "should", "target", "will" and similar terms and phrases. There are a number of factors that could affect the future operations of Mediclinic and the Mediclinic Group and Al Noor and the Al Noor Group post Combination and could cause those results to differ materially from those expressed in the forward-looking statements included in this part of the website. All forward-looking statements contained in this part of the website are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as at the specified date of the relevant document within which the statement is contained. None of Mediclinic, the Mediclinic Group, Al Noor or the Al Noor Group undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this part of the website.

Responsibility

In relation to any Combination-related materials accessible on this area of the website please note any statement of responsibility contained therein.

The documents included in this part of the website issued or published by Mediclinic speak only at the specified date of the relevant document and Mediclinic has, and accepts, no responsibility or duty to update or revise such documents.

In relation to any such announcements or other Combination-related materials issued or published by Al Noor, or which relate to Al Noor and the Al Noor Group, that are accessible on this website, the only responsibility accepted by Mediclinic and its directors is for the correctness and fairness of its reproduction.

Neither the directors of Mediclinic, nor Mediclinic, nor any of their affiliated companies, have reviewed, and no such person is or shall be responsible for or accepts any liability in respect of, any information contained on any other website which may be linked to or from this part of the website.

Other

If you are in any doubt about the contents of this part of the website or the action you should take, you should seek your own financial advice from an appropriately authorised independent financial adviser.

This notice shall be governed by and construed in accordance with English law.

CONFIRMATION OF UNDERSTANDING AND ACCEPTANCE

If you are not able to give these confirmations, you should click on “I DECLINE” below and exit the webpage.