Netcare grows profit

2011-11-14 10:47

Hospital group Netcare grew its profit by 21% for the year ended September 30, according to its results released today.

Headline earnings per share (HEPS) – a measure of profit which strips out certain items – increased by 21.2% to 117 cents, the company said in a statement.

“The group’s focus on operational efficiency was reflected in an improved performance from the South African businesses and enhanced working capital management in both SA and the UK,” Netcare said.

The group has operations in South Africa and the United Kingdom.

The weaker economic environment and a strong rand relative to the UK pound, impacted the group’s strong performance in South Africa, it said.

“In their respective local currencies, revenue grew in both South Africa and the UK. On a constant currency basis, group revenue rose 5.3% compared to the prior year,” Netcare said.

Group operating profit was impacted by lower profits in the UK and currency conversion, with the operating margin declining from 16.5% to 15.9%.

Cash generated from operations was R5.572 million – up from R4.934 million last year – and “was underpinned by a stringent focus on optimising working capital”.

Netcare said it would make a meaningful contribution to the soon-to-be-introduced National Health Insurance.

“Netcare embraces the renewed focus on universal health access through the National Health Insurance (NHI) reform policy published in August 2011 and stands ready to make a meaningful contribution,” it said.

“In preparation for NHI, all Netcare’s 55 hospitals will be benchmarked against the National Department of Health’s core standards by February 2012.”

Netcare said it was confident that demand would be sustained for private healthcare services at primary and tertiary levels over the medium and long term.

However, it expected a difficult year ahead.

“With global economic uncertainty persisting, budgetary and structural uncertainties in the NHS and the impact of austerity measures on the UK economy, the next 12 months are anticipated to remain very challenging for GHG [General Healthcare Group – the UK operation].”

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