Life Healthcare Group Holdings Limited recently released its operational update and trading statement for the six-month period ending 31 March 2024. This article delves into the key highlights, financial performance, operational insights, and strategic moves of the company during this period.
Financial Performance Overview
The Group showcased robust growth in revenue, recording an impressive 7.0%-8.0% increase, primarily driven by strong activity growth in southern Africa and significant sales growth in Neuraceq doses. Despite this, the normalised EBITDA from continuing operations saw a slight decrease of 2.3%-3.3%.
Southern Africa Operations
The southern Africa operations of Life Healthcare witnessed positive momentum, with a 2.3% growth in Paid Patient Days (PPDs) in acute hospitals and complementary businesses. This growth was attributed to increased volumes from preferred network deals and the addition of ICU beds in certain facilities.
Occupancy Levels and Revenue Growth
The weighted average occupancy levels improved to 67.0%, showcasing an upward trend compared to the prior period. Revenue in the acute hospital business grew by 5.0%-6.0% year-on-year, driven by increased activity across various services.
| Metrics | H1-2024 | H1-2023 | Change |
|---|---|---|---|
| Revenue Growth | 5.0%-6.0% | – | – |
| Weighted Avg. Occupancy | 67.0% | 65.9% | +1.1% |
| PPD Growth | 2.7% | – | – |
| Revenue per PPD Growth | c.2.8% | – | – |
Complementary Services and Diagnostic Imaging
The Group’s complementary services witnessed revenue growth of 7.2%-8.2%, driven by strong activity growth in diagnostic imaging services and renal dialysis treatments. Diagnostic imaging services reported MRI/CT/PET-CT volumes growth of c.18% year-on-year.
Renal Dialysis Treatments and Healthcare Services
Renal dialysis treatments increased by 8.5% during H1-2024, with the Group’s integrated renal care product gaining traction among healthcare funders. Additionally, the healthcare services business grew revenue by 9.0%-10.0% year-on-year.
LMI Operations
Life Molecular Imaging (LMI) operations delivered excellent results, with revenue in USD increasing by 64.5%-65.5% to c.USD27 million. This growth was fuelled by a significant increase in sales of Neuraceq® within the United States.
Financial Impact and Trading Statement
The disposal of Alliance Medical Group (AMG) resulted in a once-off gain of R2.8 billion, positively impacting the Group’s earnings per share (EPS) metrics. The net interest cost also reduced significantly by 86% from 1 February 2024.
| EPS Metrics | H1-2024 | H1-2023 | % Change |
|---|---|---|---|
| Total EPS | 240.8-243.8 cents | 37.9 cents | +535.4%-543.3% |
| Normalised EPS (NEPS) | 42.9-44.9 cents | 40.7 cents | +5.4%-10.3% |
Conclusion
Life Healthcare Group Holdings Limited’s H1-2024 results reflect a mixed performance with strong revenue growth but a slight decrease in normalised EBITDA. The disposal of AMG and positive financial impacts are notable highlights, showcasing strategic moves to enhance shareholder value. The company’s focus on strengthening its southern Africa operations and leveraging growth opportunities in LMI bodes well for its future outlook.
