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RNS

Final Results

Released 07:00 24-May-2017

RNS Number : 0335G
Mediclinic International plc
24 May 2017
 

9950122714

 

Group financial results

·

·

·

·

·

·

·

OPERATING PERFORMANCE

·

·

·

Group financial SUMMARY

£m

2017

2016

Variance %

Revenue

2 749

2 107

30%

EBITDA(1)

509

382

33%

Underlying EBITDA(1)

501

428

17%

Operating profit

362

288

26%

Earnings(2)

229

177

29%

Underlying earnings(1)

220

219

-

Earnings per share (pence)

31.0

29.6

5%

Underlying earnings per share (pence)(1)

29.8

36.7

(19%)

Total dividend per share (pence) (3)

7.90

7.90

-

Net debt

1 669

1 536

9%

 

www.mediclinic.com.


2017

2016

Variance %

Movement in bed days sold

(0.7%)

3.4%


Movement in revenue per bed day sold

3.0%

1.9%


Inpatients (000's)

100

99

1.7%





Revenue (CHFm)

1 704

1 657

3%

Underlying Revenue (CHFm)

1 704

1 647

3%

Underlying EBITDA (CHFm)

340

325

5%

Underlying EBITDA margin

20.0%

19.7%


Expansion capex (CHFm)

74

68

9%

Maintenance capex (CHFm)

89

76

17%

Underlying EBITDA converted to cash

101%

88%


Average GBP/CHF exchange rate

1.29

1.47

(12%)





Revenue (£m)

1 321

1 130

17%

Underlying revenue (£m)

1 321

1 123

18%

Underlying EBITDA (£m)

264

221

19%

There were a number of regulatory developments in Switzerland during the year. In April 2017, the Zurich Cantonal Parliament voted not to approve the proposed VVG levy. As part of a Cantonal budget review and cost savings initiative, the Canton had proposed a levy to be introduced based on the proportion of privately insured patients treated in listed hospitals. This complex matter went through an extended legislative process and Hirslanden engaged with the relevant public authorities to raise concerns regarding the process, equality and the impact the proposed levy would have had on the business. Hirslanden


2017

2016

Variance %

Movement in bed days sold

0.8%

2.9%


Movement in revenue per bed day sold

5.8%

6.3%


Admissions ('000s)

579

575

0.6%





Revenue (ZARm)

14 367

13 450

7%

Underlying EBITDA (ZARm)

3 049

2 877

6%

Underlying EBITDA margin

21.2%

21.4%


Expansion capex (ZARm)

790

758

4%

Maintenance capex (ZARm)

515

317

62%

Underlying EBITDA converted to cash

104%

109%


Average GBP/ZAR exchange rate

18.41

20.73

(11%)





Revenue (£m)

780

649

20%

Underlying EBITDA (£m)

165

139

19%

 

 

MEDICLINIC MIDDLE EAST


2017

2016

Variance %

Inpatients ('000s) (1)

69

73

(4.8%)

Outpatients ('000s) (1)

3 173

3 514

(9.7%)

Movement in bed days sold(1)

(6.2%)

n/a






Revenue (AEDm)

3 109

1 802

72%

Underlying EBITDA (AEDm)

364

384

(5%)

Underlying EBITDA margin

11.7%

21.3%


Expansion capex (AEDm)

188

171

10%

Maintenance capex (AEDm)

57

32

78%

Underlying EBITDA converted to cash

120%

99%


Average GBP/AED exchange rate

4.80

5.54

(13%)





Revenue (£m)

648

328

98%

Underlying EBITDA (£m)

76

70

9%

 

 

 

SPIRE HEALTHCARE GROUP

 

·

·

·

·

·

FINANCIAL REVIEW

·

·

·

·

restructuring costs;

·

profit/loss on sale of significant assets;

·

past service cost charges / credits in relation to pension fund conversion rate changes;

·

significant prior year tax and deferred tax adjustments;

·

accelerated IFRS 2 charges;

·

accelerated amortisation charges;

·

mark-to-market fair value gains / losses, relating to ineffective interest rate swaps;

·

significant impairment charges;

·

significant insurance proceeds; and

·

significant transaction costs incurred during acquisitions.

EBITDA is defined as operating profit before depreciation and amortisation, excluding other gains and losses.

Non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS.  The underlying measures used by the Group are not necessarily comparable with those used by other entities.



 

Total

Switzerland

Southern Africa

Middle East

United Kingdom

Corporate

£m

£m

£m

£m

£m

£m


2 749

362

229




362


2

145

509



(13)

5

501


229


(13)

5

(13)

(1)

7

 

6

220

 

29.8

*Profit attributable to equity holders in Switzerland is shown after the elimination of intercompany loan interest of £16m.

 

 

Total

Switzerland

Southern Africa

Middle East

United Kingdom

Corporate

£m

£m

£m

£m

£m

£m


2 107

288

177



2 107

(7)

2 100


288


1

93

382



41

10

(7)

2

428


177


41

10

(7)

2

(8)

1

3

219

 

36.7

*Profit attributable to equity holders in Switzerland is shown after the elimination of intercompany loan interest of £17m.

·

 

·

·

·

·

·

·

·

 

During the period under review, the average and closing exchange rates were the following:


2017

 Variance %

2016

Average rates:




    GBP/CHF

1.29

(12%)

1.47

    GBP/AED

4.80

(13%)

5.54

    GBP/ZAR

18.41

(11%)

20.73





Period end rates:




    GBP/CHF

1.25

(9%)

1.38

    GBP/AED

4.59

(13%)

5.28

    GBP/ZAR

16.74

(21%)

21.21

Interest-bearing borrowings increased from £1 841m at 31 March 2016 to £2 030m at 31 March 2017. This increase is mainly as a result of the change in the closing exchange rates, offset by a loan amortisation payment. During the reporting period, the bridge facility was repaid using additional financing facilities in South Africa and the Middle East.

 


2017

£m


2016

£m

Interest-bearing

2 030


1 841

Less: cash and cash equivalents

(361)


(305)

Net debt

1 669


1 536

Total equity

4 164


3 570

Debt-to-equity capital ratio

0.4


0.4

 

·

·

·

·

 

DIVIDEND policy and PROPOSED dividend

1.

in the case of shares held in certificated form, who are registered on the South African register with an address in South Africa (other than PLC Nominees Proprietary Limited (or any successor entity through which shares held in dematerialised form are held)); and

 

2.

in the case of shares held in dematerialised form, in respect of whom the South African transfer secretaries of the Company have determined, in good faith and by reference to the information provided to them by the eligible shareholders and/or their brokers and/or central securities depository participants, that such eligible shareholders are either (i) tax resident in South Africa or (ii) have an address in South Africa and have not expressly indicated that they are not tax resident in South Africa as at the dividend record date.

·

·

who resigned as a director of the Company on 21 February 2017

·

·

 

 

Danie Meintjes

Jurgens Myburgh

Chief Executive Officer

Chief Financial Officer

 

23 May 2017

 

 

Cautionary statement



CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 March 2017


Notes

2017

£m

2016

£m

ASSETS




Non-current assets


6 353

5 618

Property, equipment and vehicles


3 703

3 199

Intangible assets


2 156

1 941

Equity accounted investments

4

465

455

Other investments and loans


8

6

Derivative financial instruments


-

1

Deferred income tax assets


21

16

Current assets


1 069

931

Inventories


90

75

Trade and other receivables


591

547

Other investments and loans


16

-

Current income tax assets


2

2

Derivative financial instruments


-

2

Cash and cash equivalents


361

305

Assets classified as held for sale

6

9

-

Total assets


7 422

6 549

EQUITY




Share capital


74

74

Share premium reserve


690

690

Treasury shares


(2)

(2)

Retained earnings


5 525

5 320

Other reserves


(2 201)

(2 573)

Attributable to equity holders of the Company


4 086

3 509

Non-controlling interests


78

61

Total equity


4 164

3 570

LIABILITIES




Non-current liabilities


2 668

2 192

Borrowings

5

1 961

1 524

Deferred income tax liabilities


527

446

Retirement benefit obligations


154

179

Provisions


23

24

Derivative financial instruments


2

19

Cash-settled share-based payment liability


1

-

Current liabilities


590

787

Trade and other payables


472

431

Borrowings

5

69

317

Provisions


22

19

Retirement benefit obligations


10

9

Derivative financial instruments


7

1

Current income tax liabilities


8

10

Liabilities classified as held for sale

6

2

-

Total liabilities


3 258

2 979

Total equity and liabilities


7 422

6 549

 



 

CONDENSED CONSOLIDATED INCOME STATEMENT

for the year ended 31 March 2017


Notes

2017

£m

2016

£m

Revenue


2 749

2 107

Cost of sales


(1 696)

(1 264)

Administration and other operating expenses


(689)

(554)

Other gains and losses


(2)

(1)

Operating profit


362

288

Finance income


7

9

Finance cost

7

(74)

(58)

Share of net profit of equity accounted investments


12

6

Profit before tax


307

245

Income tax expense

8

(64)

(55)

Profit for the period


243

190


Attributable to:

Equity holders of the Company


229

177

Non-controlling interests


14

13



243

190





Earnings per ordinary share attributable to the equity holders of the Company - pence




Basic

9

31.0

29.6

Diluted

9

31.0

29.5

 

 



 

CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

for the year ended 31 March 2017



2017

£m

2016

£m

Profit for the year


243

190


Other comprehensive income

Items that may be reclassified to the income statement

Currency translation differences


388

92

Fair value adjustment - cash flow hedges


-

2



388

94

Items that may not be reclassified to the income statement

Remeasurements of retirement benefit obligations


34

(56)


Other comprehensive income, net of tax


422

38


Total comprehensive income for the year


665

228


Attributable to:

Equity holders of the Company


635

224

Non-controlling interests


30

4



665

228

 

 



 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2017


Share

capital

£m

 

 

Capital

redemp-tion

reserve

£m

 

Share premium

reserve

 

£m

 

 

Reverse

acqui-sition

reserve

£m

 

Treasury

shares

£m

Share-based

payment

reserve

£m

Foreign

currency

trans-

lation

reserve

£m

Hedging

reserve

£m

Retained

earnings

£m

Share-

holders'

equity

£m

 Non-

control-ling

interests

£m

Total

equity

£m

Balance at 1 April 2015

994

-

-

-

(22)

14

306

2

485

1 779

61

1 840

Profit for the year

-

-

-

-

-

-

-

-

177

177

13

190

Other comprehensive income/(loss) for the year

-

-

-

-

-

-

101

2

(56)

47

(9)

38

Total comprehensive income for the year

-

-

-

-

-

-

101

2

121

224

4

228

Shares issued (August 2015)

479

-

-

-

-

-

-

-

-

479

-

479

Share issue costs (August 2015)

(4)

-

-

-

-

-

-

-

-

(4)

-

(4)

Reverse acquisition

(1 402)

6

4 862

(3 014)

-

-

-

-

(6)

446

-

446

Share subscription (February 2016)

7

-

593

-

-

-

-

-

-

600

-

600

Reduction of share premium

-

-

(4 765)

-

-

-

-

-

4 765

-

-

-

Utilised by Mpilo Trusts

-

-

-

-

21

-

-

-

-

21

-

21

Treasury shares purchased (Forfeitable Share Plan)

-

-

-

-

(1)

-

-

-

-

(1)

-

(1)

Share-based payment expense

-

-

-

-

-

10

-

-

-

10

-

10

Transactions with non-controlling shareholders

-

-

-

-

-

-

-

-

3

3

3

6

Dividends paid

-

-

-

-

-

-

-

-

(48)

(48)

(7)

(55)

Balance at 31 March 2016

74

6

690

(3 014)

(2)

24

407

4

5 320

3 509

61

3 570

 

 



 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

for the year ended 31 March 2017

 


Share

capital

£m

 

 

Capital

redemp-tion

reserve

£m

 

Share premium

reserve

 

£m

 

 

Reverse

acqui-sition

reserve

£m

 

Treasury

shares

£m

Share-based

payment

reserve

£m

Foreign

currency

trans-

lation

reserve

£m

Hedging

reserve

£m

Retained

earnings

£m

Share-

holders'

equity

£m

 Non-

control-ling

interests

£m

Total

equity

£m

Balance at 1 April 2016

74

6

690

(3 014)

(2)

24

407

4

5 320

3 509

61

3 570

Profit for the year

-

-

-

-

-

-

-

-

229

229

14

243

Other comprehensive income for the year

-

-

-

-

-

-

372

-

34

406

16

422

Total comprehensive income for the year

-

-

-

-

-

-

372

-

263

635

30

665

Transactions with non-controlling shareholders

-

-

-

-

-

-

-

-

4

4

(4)

-

Dividends paid

-

-

-

-

-

-

-

-

(62)

(62)

(9)

(71)

Balance at 31 March 2017

74

6

690

(3 014)

(2)

24

779

4

5 525

4 086

78

4 164

 

 



 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 March 2017


Notes

2017

£m

Inflow/(Outflow)

2016

£m

Inflow/(Outflow)

Cash flow from operating activities

Cash received from customers


2 735

2 078

Cash paid to suppliers and employees


(2 226)

(1 667)

Cash generated from operations


509

411

Interest received


7

9

Interest paid


(77)

(55)

Tax paid


(45)

(45)

Net cash generated from operating activities


394

320


Cash flow from investment activities


(218)

(1 549)

Investment to maintain operations


(109)

(72)

Investment to expand operations


(140)

(114)

Business combinations - Al Noor acquisition


-

(17)

Al Noor Hospitals Group plc shares repurchased


-

(530)

Special dividend to existing Al Noor Hospitals Group plc shareholders


-

(383)

Proceeds on disposal of property, equipment and vehicles


-

1

Disposal of subsidiaries

10

44

-

Acquisition of investment in associate


(1)

(446)

Dividends received from equity accounted investment


4

2

Proceeds from money market fund


-

10

Acquisition of other investment and loans


(16)

-

Net cash generated / (utilised) before financing activities


176

(1 229)


Cash flow from financing activities


(169)

1 242

Proceeds of shares issued


-

479

Share issue costs


-

(4)

Share subscription


-

600

Distributions to non-controlling interests


(9)

(7)

Distributions to shareholders


(62)

(48)

Proceeds from borrowings


247

302

Repayment of borrowings


(327)

(85)

Refinancing transaction costs


(3)

(6)

Settlement of Al Noor Hospitals Group plc share options scheme


-

(2)

Shares purchased (Forfeitable Share Plan)


-

(1)

Proceeds from disposal of treasury shares


-

12

Acquisition of non-controlling interest


(15)

(2)

Proceeds on disposal of non-controlling interest


-

4


Net increase in cash and cash equivalents


7

13

Opening balance of cash and cash equivalents


305

265

Exchange rate fluctuations on foreign cash


49

27

Closing balance of cash and cash equivalents


361

305





 

 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.

GENERAL INFORMATION

 

Mediclinic International plc is a private hospital group with operating platforms in Southern Africa (South Africa and Namibia), Switzerland and the United Arab Emirates with an equity investment in the UK. Its core purpose is to enhance the quality of life of patients by providing cost-effective acute care specialised hospital services.

 

The Company is a public limited company, with a primary listing on the London Stock Exchange and secondary listings on the Johannesburg Stock Exchange and the Namibian Stock Exchange and incorporated and domiciled in the UK (registered number: 08338604). The address of its registered office is 40 Dukes Place, London, EC3A 7NH, United Kingdom.

 

The condensed consolidated financial statements for the year ended 31 March 2017 was approved by the Board on 23 May 2017.

 

2.

BASIS OF PREPARATION

 

The condensed consolidated financial statements included in the results announcement for the year ended 31 March 2017 have been extracted from the full Annual Report which was approved by the Board of Directors on 23 May 2017. The condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU'), the Companies Act 2006 and Article 4 of the EU IAS Regulations.

 

The auditor's report on those consolidated financial statements was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report, and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. This results announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The Annual Report for the year ended 31 March 2017 will be delivered to the Registrar of Companies following the Company's annual general meeting to be held on 25 July 2017.

 

The Group has prepared the condensed consolidated financial statements on a going concern basis. The condensed consolidated financial information has been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and with IAS 34 Interim Financial Reporting, as adopted by the EU. They do not include all the information required for full annual financial statements and should be read in conjunction with information contained in the Group's Annual Report and Financial Statements for the year ended 31 March 2017.

 

The condensed consolidated financial statements included in this preliminary announcement do not itself contain sufficient information to comply with IFRS. The Company will publish full financial statements that comply with IFRS in June 2017.

 

This preliminary results announcement has been prepared applying consistent accounting policies to those applied by the Group in the comparative period. The Group has prepared the consolidated financial statements on a going concern basis.

 

 

Functional and presentation currency

 

The condensed consolidated financial statements are presented in pound, rounded to the nearest million. The functional currency of the majority of the Group's entities, and the currencies of the primary economic environments in which they operate, is the South African rand, Swiss franc and United Arab Emirates dirham. The United Arab Emirates dirham is pegged against the United States dollar at a rate of 3.6725 per US Dollar.

 

 

 

3.

SEGMENTAL REPORT




The reportable operating segments are identified as follows: Mediclinic Switzerland, Mediclinic Southern Africa, Mediclinic Middle East and additional reporting segments are shown for the United Kingdom and Corporate.

 

Year ended 31 March 2017

Switzerland

£m

Southern Africa

£m

Middle

East

£m

United

Kingdom

£m

Corporate

£m

Total

£m


Revenue

1 321

 780

 648

-

-

 2 749

EBITDA

277

165

 71

-

(4)

509


EBITDA before management fee

279

170

74

-

(14)

509

Management fees included in EBITDA

(2)

(5)

(3)

-

10

-

Other gains and losses

-

-

1

-

(3)

(2)

Depreciation and amortisation

(76)

(25)

(44)

-

-

(145)

Operating profit

 201

 140

 28

-

(7)

 362

Income from associate

-

-

-

12

-

12

Finance income

-

7

-

-

-

7

Finance cost (excluding intersegment loan interest)

(28)

(33)

(7)

-

(6)

(74)

Total finance cost

(44)

(33)

(7)

-

10

(74)

Elimination of intersegment loan interest

16

-

-

-

(16)

-

Taxation

(32)

(32)

-

-

-

(64)

Segment result

141

82

21

12

(13)

243


At 31 March 2017

Investments in associates

2

-

-

459

-

461

Investments in joint venture

-

4

-

-

-

4

Capital expenditure

128

70

51

-

-

249

Total segment assets

4 258

676

1 987

459

42

7 422

Total segment liabilities (excluding intersegment loan)

2 235

650

372

-

1

3 258

Total liabilities from reportable segment

3 140

650

372

-

1

4 163

Elimination of intersegment loan

(905)

-

-

-

-

(905)








 

 

3.

SEGMENTAL REPORT (continued)




Year ended 31 March 2016

Switzerland

£m

Southern

Africa

£m

Middle

East

£m

United

Kingdom

£m

Corporate

£m

Total

£m


Revenue

1 130

 649

 328

-

-

2 107

EBITDA

229

129

68

-

(44)

382


EBITDA before management fee

230

133

70

-

(51)

382

Management fees included in EBITDA

(1)

(4)

(2)

-

7

-

Other gains and losses

-

-

-

-

(1)

(1)

Depreciation and amortisation

(63)

(20)

(10)

-

-

(93)

Operating profit

166

109

 58

-

(45)

288

Income from associate

-

-

-

6

-

6

Finance income

1

8

-

-

-

9

Finance cost (excluding intersegment loan interest)

(29)

(21)

(2)

-

(6)

(58)

Total finance cost

(46)

(21)

(2)

-

11

(58)

Elimination of intersegment loan interest

17

-

-

-

(17)

-

Taxation

(24)

(31)

-

-

-

(55)

Segment result

114

65

56

6

(51)

190


At 31 March 2016

Investments in associates

1

-

-

451

-

452

Investments in joint venture

-

3

-

-

-

3

Capital expenditure

98

52

36

-

-

186

Total segment assets

3 809

485

1 800

451

4

6 549

Total segment liabilities (excluding intersegment loan)

2 094

370

243

-

272

2 979

Total liabilities from reportable segment

2 940

370

243

-

272

3 825

Elimination of intersegment loan

(846)

-

-

-

-

(846)




 

 

4.

EQUITY ACCOUNTED INVESTMENTS


2017

£m

2016

£m


Investment in associates

461

452


Investment in joint venture

4

3



465

455


Investment in associates:


Listed investments

459

451


Unlisted investments

2

1



461

452




Reconciliation of carrying value at the beginning and end of the period


Opening balance

452

1


Total cost of equity investment

-

447


Additional investment in unlisted associate

1

-


Share of net profit of associated companies

12

6


Dividends received from associated companies

(4)

(2)



461

452




Set out below are details of the associate which is material to the Group:






Name of entity

Country of incorporation and place of business

% ownership


Spire Healthcare Group plc

United Kingdom

29.9%




Spire Healthcare Group plc is listed on the London Stock Exchange. It does not issue publicly available quarterly financial information and has a December year-end.  The associate was acquired on 24 August 2015. The investment in associate was equity accounted for the 12 months to 31 December 2016 (2016: 4 months to 31 December 2015). No significant events occurred since 1 January 2017 to the reporting date.

 

During the current year the notional purchase price allocation was finalised and non-contractual relationships with consultants (NCRC) was identified as the only significant intangible asset. The fair value of the NCRC was determined as £225m and the remaining useful life was assessed as 22 years. The Group's 29.9% portion therefore amounts to £68m. The NCRC intangible asset will be amortised over its useful life and the carrying value is included within the purchase adjustment figure. The amortisation charge for the current period is £4m (2016: £nil).

 

 

5.

Borrowings



2017

£m

2016

£m


Bank loans

1 642

1 581


Preference shares

199

90


Listed bonds

189

170



2 030

1 841






Non-current borrowings

1 961

1 524


Current borrowings

69

317


Total borrowings

2 030

1 841

 



2017

Non current

£m

2017

Current

£m

2016

Non current

£m

2016

Current

£m

Southern Africa operations (denominated in South African Rand)

Secured bank loan one

The loan bears interest at the 3 month JIBAR variable rate plus a margin of 1.51% (2016: 1.51%) compounded quarterly, and is repayable on 3 June 2019.

176

1

139

1

Secured bank loan two*

The loan bears interest at the 3 month JIBAR variable rate plus a margin of 1.69% and is repayable on 3 June 2019.

72

-

-

-

Secured bank loan three

The loan bears interest at the 3 month JIBAR variable rate plus a margin of 1.06% (2016: 1.06%) compounded quarterly. £7m was repaid on 1 September 2016 and the remaining amount will be repaid on 9 October 2017.

-

7

5

5

Secured bank loan four

The loan bears interest at the 3 month JIBAR variable rate plus a margin of 1.51% (2016: 1.51%) compounded quarterly, and is repayable on 3 June 2019.

30

-

9

-

Secured bank loan five

These loans bear interest at variable rates linked to the prime overdraft rate and are repayable in periods ranging between one and twelve years.

4

1

4

1

Preference shares

Dividends are payable monthly at a rate of 69% of prime interest rate (10.5%) (2016: 10.5%). £6m shares was redeemed on 1 September 2016 and the balance will be redeemed on 3 June 2019.

108

1

85

5

Preference shares*

Dividends are payable semi-annually at a rate of 73% of the prime interest rate (10.5%) (2016: 10.5%). The amount is repayable on 29 June 2020.

90

-

-

-

Middle East operations (denominated in UAE dirham)

Secured bank loan one*

The loan bears interest at variable rates linked to the 3M LIBOR and a margin of 2.75% (2016: 2%) with respective 4-year and 5-year amortising terms, expiring in June 2020 and May 2021. 

154

19

50

3

Swiss operations (denominated in Swiss franc)

Secured bank loan one

These loans bear interest at variable rates linked to the 3M LIBOR plus 1.5% and 2.85% (2016: 3M LIBOR plus 1.5% and 2.85%) and is repayable by 31 July 2020. The non-current portion includes capitalised financing costs of £22m (2016: £26m).

1 138

40

1 062

36

Listed bonds

The listed bonds consist of CHF145m 1.625% and CHF90m 2% Swiss franc bonds. The bonds are repayable on 25 February 2021 and 25 February 2025 respectively.

189

-

170

-

United Kingdom operations (denominated in pound)

Secured bank loan one*

The loan bears interest at variable rates linked to LIBOR with a minimum base rate of 1% plus 3.75%.

-

-

-

266



1 961

69

1 524

317







 

* During the period, the bridge facility of £266m in the United Kingdom was repaid. In South Africa, the Group entered a new long term bank loan of £71m (ZAR1.2 billion) and issued redeemable preference shares of £90m (ZAR1.5 billion) which are classified as a financial liability. In the Middle East, the Group entered a new long term bank loan of £181m (AED831m). Other than these transactions and foreign currency movements on translation of local currency borrowings to pound, there is no significant change in the Group's borrowings.

 

6.

DISPOSAL GROUP HELD FOR SALE

 

Before the end of the financial year, management decided to sell the following clinics within the Mediclinic Middle East segment: Mediclinic Beach Road Clinic, Mediclinic Corniche Medical Centre, Lookwow Oneday Surgery and Pharmacy, Al Noor Sanaiya Clinic and Pharmacy, Al Noor ICAD Clinic and Pharmacy, Al Noor International Medical Centre (Sharjah), Al Noor Hamdan Street Pharmacy, Al Madar Ajman Clinic and Pharmacy and Al Madar Diagnostic Centre-Al Ain. Accordingly, assets and liabilities of these are disclosed as held for sale, as the classification requirements of IFRS5 have been met at 31 March 2017.

 




Property, equipment and vehicles

8



Inventories

1



Assets

9







Trade and other payables

(1)



Retirement benefit obligations

(1)



Liabilities

(2)


 

 

 

7.

FINANCE COST



2017

£m

2016

£m


Interest expense

58

44


Interest rate swaps

11

11


Amortisation of capitalised financing costs

7

5


Fair value gains on ineffective cash flow hedges

(13)

(8)


Preference share dividend

12

6


Less: amounts included in the cost of qualifying assets

(1)

-



74

58

 

8.

Income tax expense


Current tax


Current year

46

41


Previous year

(3)

1


Deferred tax

21

13


Taxation per income statement

64

55




Composition




UK tax

-

-


Foreign tax

64

55



64

55


Reconciliation of rate of taxation:




UK statutory rate of taxation

20%

20%


Adjusted for:




Capital gains taxed at different rates

-

0.1%


Benefits of tax incentives

(0.2)%

(0.2%)


Share of net profit of equity accounted investments

(0.8)%

(0.5%)


Non-deductible expenses*

1.8%

5.6%


Non-controlling interests' share of profit before tax

(0.3)%

(0.3)%


Effect of different tax rates**

0.7%

(3.9)%


Income tax rate changes

-

(0.2)%


Non-recognition of tax losses in current year

0.9%

1.8%


Recognition of tax losses relating to prior years***

(0.5)%

(0.4)%


Prior year adjustment

(0.8)%

0.4%


Effective tax rate

20.8%

22.4%




*The impact of the following non-deductible expenses on the tax rate in the prior year was an increase of 4.2% (£10m):

  - Transaction costs in relation to the Al Noor transaction were not deductible for tax purposes as these costs were

    capital in nature. The tax effect of this amounted £8m which resulted in an increase in the effective tax rate.

  - Non-deductible accelerated IFRS 2 charges increased the tax charge by £2m.

**The effect of different tax rates is mainly because of profit earned from South Africa which is subject to an income tax rate of 28%, reduced by profit earned from the UAE which is not subject to income tax. Compared to the comparative period, the effect of different tax rates increased mainly due the proportional higher contribution by the Southern Africa operating segment and lower proportional contribution from the UAE.

***A deferred tax asset of approximately £3m was recognised in respect of previously unrecognised assessed tax losses in South Africa due to improvements in local profitability.




The income tax liability includes an amount of approximately £3m (2016: £8m) relating to unresolved tax matters. The range of possible outcomes relating to this liability is not considered to be material.

 

 

9.

EARNINGS PER ORDINARY SHARE




2017

£m

2016

£m


Earnings per ordinary share (pence)


Basic (pence)

31.0

29.6


Diluted (pence)

31.0

29.5





2017

Number

2016

Number


Weighted average number of ordinary shares in issue for basic

earnings per share



 


Number of ordinary shares in issue at the beginning of the year

737 243 810

542 473 328

 


Al Noor Hospitals Group plc shares prior to reverse acquisition

-

14 688 077

 


Al Noor Hospitals Group plc shares repurchased

-

(8 000 842)

 


Weighted average number of ordinary shares issued during the year

(August 2015)

-

41 742 562

 


Weighted average number of ordinary shares issued during the year

(February 2016)

-

9 063 634

 


Adjustment for equity raising - Rights Offer (August 2015)

(IAS 33 para 26)

-

5 239 773

 


Weighted average number of treasury shares

(303 656)

(6 764 447)

 


BEE shareholder

(31 238)

(521 142)

 


Mpilo Trusts

(33 128)

(5 995 653)

 


Forfeitable Share Plan

(239 290)

(247 652)

 



736 940 154

598 442 085

 




Weighted average number of ordinary shares in issue for diluted earnings per share




Weighted average number of ordinary shares in issue

736 940 154

598 442 085


Weighted average number of treasury shares not yet released from

treasury stock

303 656

768 793


BEE shareholder

31 238

521 141


Mpilo Trusts

33 128

-


Forfeitable Share Plan

239 290

247 652



737 243 810

599 210 878



 


Headline earnings per ordinary share


The Group is required to calculate headline earnings per share (HEPS) in accordance with the JSE Limited (JSE) Listing Requirements, determined by reference to the South African Institute of Chartered Accountants' circular 2/2015 (Revised) 'Headline Earnings'. The table below sets out a reconciliation of basic EPS and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used measure of earnings in South Africa. The table below reconciles the profit for the financial year attributable to equity holders of the parent to headline earnings and summarises the calculation of basic HEPS:






2017

£m

2016

£m






Profit for the financial period attributable to equity holders of the parent

229

177




Adjustments*

-

-


Headline earnings

229

177


*Adjustments to headline earnings are less than £1m.

 


Headline earnings per share (pence)

31.0

29.6


Diluted headline earnings per share (pence)

31.0

29.5



10.

CASH FLOW ON DISPOSAL OF SUBSIDIARY


The Group disposed of the following companies that were part of the Middle East segment: Rochester Wellness LLC, Emirates American Company for Medical Services LLC, Abu Dhabi Medical Services LLC and National Medical Services LLC.




2017

£m




Cash flow on

disposal



Analysis of assets and liabilities over which control was lost:


Property, equipment and vehicles

10



Goodwill

33



Trade and other receivables

10



Cash and cash equivalents

3



Retirement benefit obligations

(1)



Trade and other payables

(4)



Net assets and liabilities

51







Consideration received in cash

47



Consideration receivable

1



Other non-cash items

3



Total consideration

51







Net gain / (loss)

-

 




 


Net cash inflow

44

 

 

11.

FINANCIAL INSTRUMENTS


Financial instruments that are measured at fair value in the statement of financial position, are classified using a fair value hierarchy that reflects the significance of the inputs used in the valuation. The fair value hierarchy has the following levels:

·   Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities

·   Level 2 - Input (other than quoted prices included within Level 1) that is observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

·   Level 3 - Input for the asset or liability that is not based on observable market data (unobservable input).

 

Derivative financial instruments comprise interest rate swaps and are measured at the present value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates. Based on the degree to which the fair values are observable, the interest rate swaps are grouped as Level 2.

 

The fair value for available-for-sale assets (part of other investments and loans) is based on appropriate valuation methodologies being discounted cash flow or actual net asset value of the investment. These assets are grouped as Level 2.

 

12.

RELATED PARTIES


There are no significant changes to the related party transactions other than those disclosed in note 33 of the Group's annual financial statements for the year ended 31 March 2017.

 

13.

EVENTS AFTER THE REPORTING DATE


The directors are not aware of any matter or circumstance arising since the end of the financial year that would significantly affect the operations of the Group or the results of its operations.

 

 

 

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 74 hospitals and 37 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 16 private acute care facilities and 4 clinics in Switzerland with more than 1 600 inpatient beds; and Mediclinic Middle East operates 6 hospitals and 31 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, with secondary listings on the JSE in South Africa and the NSX in Namibia.

 

PRESENTATION WEBCAST AND CONFERENCE CALL DETAILS

 

In conjunction with these results Mediclinic is conducting a London investor and analyst presentation at The Lincoln Centre, 18 Lincoln's Inn Fields, London, WC2A 3ED.

 

09:00 BST /10:00 SAST - Webcast and conference call

 

To join the live video webcast, or view the replay, please use the following link:

https://secure.emincote.com/client/mediclinic/mediclinic009/

 

To access the call please dial the appropriate number below shortly before the start of the event and ask for the Mediclinic International plc conference call. A replay facility will be available on the website shortly after the presentation. The telephone numbers are:

 

UK: 020 305 98125

SA: 031 819 7008

UAE toll-free: 800 035 702413

Other: +44 20 3059 8125

 

For further information, please contact:

 

Mediclinic International plc

James Arnold, Head of Investor Relations

+44 (0)20 3786 8180

ir@mediclinic.com 

 

FTI Consulting

Deborah Scott/Brett Pollard

+44 (0)20 3727 1000

 

Registered address: 1st Floor, 40 Dukes Place, London, EC3A 7NH, United Kingdom

Website: www.mediclinic.com

Corporate broker: Morgan Stanley & Co International plc

JSE sponsor (South Africa): Rand Merchant Bank (A division of FirstRand Bank Limited)

NSX sponsor (Namibia): Simonis Storm Securities (Pty) Ltd


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Final Results - RNS