Netcare to boost local infrastructure after UK exit

Netcare CEO Dr Richard Friedland (Supplied)
Netcare CEO Dr Richard Friedland (Supplied)

Private hospital group Netcare [JSE:NTC] says it has set aside R1.6bn on expansion projects in the country for 2019, with upgrades for Milpark Hospital and St Augustine's.

Capital expenditure of approximately R600m would include the expansion of Milpark with 100 beds, which is due to be commissioned in 2020, while Durban's St. Augustine's Hospital will benefit from a "multi-year expansion", the company said as it released its annual financial results.

Netcare Union and Netcare Clinton hospitals would be replaced by a new Netcare Alberton Hospital.

The overhaul of domestic infrastructure follows the company’s announcement in March to exit the UK and dispose of its controlling stake in General Healthcare Group (GHG), the UK's biggest private hospital group, due to tough trading conditions and higher rentals.

The company said after-tax results from discontinued operations amounted to a net loss of R467m, compared to R5 267m in 2017,  "comprising a loss of R472m incurred by UK’s BMI Healthcare."

BMI Healthcare is the subsidiary  of GHG, in which Netcare held a 56.9% stake.

According to the hospital group, acute patient day growth was expected to remain under pressure in the near term, with demand for mental health psychiatric care services forecast to remain strong. 

The demand for mental health services would also benefit the group's Competition Tribunal for its acquisition of Akeso Clinics, a national chain of healthcare facilities, which has been approved by the Competition Tribunal.

Headline earnings per share fell to 49.3c, from 109.9c in 2017.

"Our overarching policy with regard to capital management is to maintain a strong balance sheet while reducing the cost of capital with a safe level of debt and retaining an investment grade credit rating," said CEO Richard Friedland.

Netcare announced it has come up with a proposal for the private and public  health sector to train 50 000 nurses, in order to capacitate NHI and the health sector’s needs.   

The company also plans to invest in digitisation projects.

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