DURBAN – Life Helthcare has set aside an amount of R2.6 billion for the financial year 2019 for its capital expenditure programme, with its Southern Africa operations expected to get a big bite of the pie with R1.2bn as capital expenditure.

Its other two operations, in Italy and Ireland, are expected to receive a combined R1.2bn, with Poland’s Scanmed receiving R77 million.

Group chief executive Dr Shrey Viranna said on Friday that South Africa had good growth prospects, despite experiencing low economic growth. “We are going to use our capital expenditure for maintenance and investments in countries that we operate in. South Africa remains one of our key markets and the challenges that country faces do not stop us from investing. There are challenges in all the regions we operate in and the UK can also be affected by Brexit.

“The group remains committed to its strategy of evolving its business model, such that 35percent of group revenue is now derived from outside the acute hospital business,” Dr Viranna said.

In Southern Africa, the group expected positive paid patient days to continue to grow conservatively with continued good growth in complementary and healthcare services.

However, the group said it would continue to take a cautious approach with regard to bed expansion by adding 80 greenfield mental health beds in the second quarter of 2019 to facilitate the growing demand in this business.

In the year to end September, the Southern Africa operations reported an 8.5 percent increase in revenue to R17.2bn, while revenue in hospitals and complementary services grew by 7.3 percent. Overall the group reported 12.9 percent increase in revenue to R23.5bn, with its UK subsidiary Alliance Medical Group, a star performer during the period, reporting revenue growth of 30.8percent to R5bn, while normalised earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 27.9 percent to R1.16bn.

Alliance Medical has footprints in the UK, Ireland, Spain, Northern Europe and Italy. The group's normalised Ebitda increased by 10.7 percent to R5.5bn, while headline earnings per share was up by 40.6 percent to 108.8 cents a share.

Earnings per share on a normalised basis increased by 17.4 percent to 110.2cents and the group declared 11.1 percent increase in dividends to 50c a share.

Life Healthcare shares gained 7.92 percent on the JSE on Friday to close at R26.42.

BUSINESS REPORT