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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mediclinic International Plc | LSE:MDC | London | Ordinary Share | GB00B8HX8Z88 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 501.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMMDC
RNS Number : 3416T
Mediclinic International plc
14 November 2019
Mediclinic International plc
(Incorporated in England and Wales)
Company Number: 08338604
LSE Share Code: MDC
JSE Share Code: MEI
NSX Share Code: MEP
ISIN: GB00B8HX8Z88
LEI: 2138002S5BSBIZTD5I60
South African income tax number: 9432434182
("Mediclinic", or the "Company", or the "Group")
14 November 2019
MEDICLINIC INTERNATIONAL PLC - 2020 half-year RESULTS AND DECLARATION OF INTERIM CASH DIVID
Hot Features
Premium
Revenue growth across all three divisions
EBITDA margins in line with expectations
Improved cash flow generation
Continued focus on operational performance and execution
Interim dividend maintained at 3.20 pence per share
Reiterating full-year guidance
Mediclinic announces its results for the six months ended 30 September 2019 (the "period" or "1H20"). The Group adopted the new IFRS 16 leasing standard on 1 April 2019 and comparative information was not restated. For comparative purposes, the 1H20 results are also presented on a pre-IFRS 16 basis. The section on 'Earnings Reconciliations' in the Financial Review of this announcement provides a detailed reconciliation and comparison between IFRS 16 and pre-IFRS 16 financial results for the period under review.
Dr Ronnie van der Merwe, CEO of Mediclinic, today commented:
"The Group delivered a solid first-half financial performance with all three divisions growing revenue, EBITDA and patient volumes. The operating performance was complemented by strong cash conversion.
I am pleased with the progress we have made in adapting the business to current healthcare trends and changing regulatory environments, especially at Hirslanden in Switzerland.
At all three divisions, we continue to supplement our core acute care business through expansion across the healthcare continuum. The growth initiatives we are investing in as a Group, or collaborating on with partners, include day case clinics, primary care facilities, sub-acute hospitals, radiology, precision medicine, IVF and digital healthcare solutions.
In pursuit of our purpose to enhance the quality of life, we work relentlessly to ensure we deliver cost-effective, quality care and outstanding client experiences. We operate in an industry sustained by the continued global demand for healthcare services and I am confident in our ability, as a market leader, to deliver innovative solutions, growth and consequently value to all our stakeholders.
The Group is currently trading in line with expectations and we are reiterating our full-year guidance."
Details of the 1H20 results investor and analyst audio webcast and conference call are available at the end of this report or on the Group's website at www.mediclinic.com.
Group results are subject to movements in foreign currency exchange rates. Refer to the Financial Review section for exchange rates used to convert the divisions' results and financial position to pound sterling.
Group financial RESULTS SUMMARY
Pre-IFRS
16
Pre-IFRS Pre-IFRS
IFRS 16 1H20 1H20 16 1H19 16
GBP'm GBP'm GBP'm % variance(5)
----------------------------- -------- --------
Revenue(1) 1 515 1 515 1 390 9%
EBITDA(2) 252 222 213 4%
Adjusted EBITDA(2) 252 222 213 4%
Operating profit 149 142 39 264%
Adjusted operating profit(2) 144 137 137 0%
Earnings / (loss)(3) 109 112 (168) 167%
Adjusted earnings(2&3) 73 76 76 0%
Earnings / (loss) per share
(pence) 14.8 15.2 (22.8) 167%
Adjusted earnings per share
(pence)(2) 9.9 10.3 10.3 0%
Interim dividend per share
(pence) 3.20 3.20 3.20 0%
Net debt(4) 1 775 1 775 1 717 3%
Cash conversion 98% 98% 69%
1 An income statement reclassification has increased Mediclinic
Southern Africa 1H19 revenue and cost of sales by GBP3m.
Refer to note 2 in the condensed consolidated financial statements.
2 The Group uses adjusted income statement reporting as non-IFRS
measures in evaluating performance and to provide consistent
and comparable reporting. Refer to the section on 'Earnings
Reconciliations' in the Financial Review of this announcement
which includes a reconciliation between IFRS 16 and pre-IFRS
16 results.
3 Reported earnings refers to profit / (loss) attributable
to equity holders.
4 Net debt reflects borrowings incurred and therefore excludes
the IFRS 16 lease liabilities. The comparative for net debt
reflects the balance at 31 March 2019.
5 The percentage variances are calculated in unrounded pound
sterling values and not in millions.
PRE-IFRS 16: Group financial SUMMARY
-- Revenue up 9% to GBP1 515m; up 6% in constant currency, reflecting
growth across all three divisions
-- Adjusted EBITDA up 4% at GBP222m; up 3% in constant currency
terms, reflecting adjusted EBITDA margins in line with expectations
for all three divisions
-- Adjusted operating profit flat at GBP137m, reflecting increased
depreciation charges associated with infrastructure and technology
investments; reported operating profit up 264% to GBP142m, reflecting
prior year period non-cash Hirslanden impairment charges of GBP98m
-- Reported earnings of GBP112m (1H19: loss of GBP168m), reflecting
prior year period non-cash impairment charges on the equity investment
in Spire of GBP164m
-- Net debt at GBP1 775m reflects borrowings incurred; leverage
ratio flat on FY19 at 3.5x
-- Adjusted earnings per share flat at 10.3 pence
-- Improved cash conversion at 98% of adjusted EBITDA (1H19: 69%)
Group strategic overview
The global demand for quality healthcare services remains unwavering. An ageing population, the growing disease burden and digitalisation of healthcare are creating further opportunities for expansion and evolution across the healthcare continuum.
In line with its purpose to enhance the quality of life, the Group's strategic focus is to provide cost-effective, quality care and outstanding client experiences across the healthcare continuum. By doing so, Mediclinic will deliver value across its operations and realise its vision to be the partner of choice who people trust for all their healthcare needs. The Group's depth of experience, increasingly diversified footprint, scale and unified focus enable it to extract synergies, cost-efficiencies and deliver value to all stakeholders.
The Group's corporate strategy provides a framework within which the Company is able to quickly adapt to market needs; sustain a diverse, performance-driven and collaborative culture that engages talent and leverages scale, knowledge and skills; and position itself to grow sustainably.
Mediclinic has a philosophy of taking long-term growth decisions that support its core business and future positioning. The Group is actively focused on building innovative care delivery models to ensure that appropriate and affordable care settings are developed in line with industry trends and regulatory requirements.
The Group maintains a strategy of responsible leverage, largely using its asset base to secure cost-efficient borrowings. While property ownership drives operational and financial benefits, the approach to this remains flexible, reflecting the business needs of the Group. Leverage at the end of the period was at 3.5x and the Group maintains sufficient financing flexibility to fund continued investment in the business and incremental growth. With the expected increase in free cash flow over the coming years, the Group will have further flexibility in its allocation of capital, delivering growth while maintaining its approach to responsible leverage.
GROUP FINANCIAL PERFORMANCE
The Group adopted the new IFRS 16 standard, which requires operating leases to be accounted for on balance sheet, from 1 April 2019, using the simplified approach. Consequently, comparative information was not restated. For comparative purposes, the 1H20 results are also presented on a pre-IFRS 16 basis. The section on 'Earnings Reconciliations' in the Financial Review of this announcement provides a detailed reconciliation and comparison between IFRS 16 and pre-IFRS 16 financial results for the period under review.
PRE-IFRS 16 basis
Adjusted results
The Group's 1H20 revenue was GBP1 515m (1H19: GBP1 390m) and adjusted EBITDA was GBP222m (1H19: GBP213m), up 9% and 4% respectively. In constant currency terms, 1H20 revenue was up 6% and adjusted EBITDA was up 3%. The Group's adjusted EBITDA margin was 14.7% (1H19: 15.3%), in line with expectations.
Adjusted depreciation and amortisation were up 12% to GBP85m (1H19: GBP76m) in line with the continued investment to support growth and to enhance patient experience and clinical quality.
Adjusted operating profit was flat at GBP137m (1H19: GBP137m).
Adjusted net finance costs increased by 7% to GBP29m (1H19: GBP27m) mainly due to the discontinued capitalisation of borrowing costs following the opening of Mediclinic Parkview Hospital. Adjusted taxation was GBP23m (1H19: GBP26m) with an adjusted effective tax rate for the period of 21.7% (1H19: 23.4%), which reduced due to lower statutory tax rates in Switzerland.
Adjusted non-controlling interests increased by 11% to GBP11m (1H19: GBP10m), reflecting the increased minority interest following the Clinique La Colline and Clinique des Grangettes combination on 1 October 2018, offset by the expansion of the new Mediclinic Stellenbosch.
Both adjusted earnings and adjusted earnings per share were flat at GBP76m (1H19: GBP76m) and 10.3 pence (1H19: 10.3 pence) respectively. The interim dividend per share is maintained at 3.20 pence (1H19: 3.20 pence), with the Group applying its full-year dividend policy of 25% to 35% of adjusted earnings per share.
Cash flow conversion at 98% (1H19: 69%) was driven by improved cash collections across all three divisions.
Reported results
Reported 1H20 revenue was up 9% to GBP1 515m (1H19: GBP1 390m) and EBITDA was up 4% to GBP222m (1H19: GBP213m), both up 6% and 3% respectively in constant currency terms.
Depreciation and amortisation increased by 12% to GBP85m (1H19: GBP76m).
Operating profit increased by 264% to GBP142m (1H19: GBP39m) mainly due to prior period impairment charges on Hirslanden properties of GBP43m and trade names of GBP55m. A reversal of an impairment of GBP5m was recognised on Swiss properties following the completion of the sale of the small 28-bed Klinik Belair hospital in October 2019.
Net finance costs increased by 7% to GBP29m (1H19: GBP27m).
The Group's effective tax rate for the period under review was (10%) (1H19: (6%)), mainly due to the reduction in Hirslanden's deferred tax liabilities of GBP35m resulting from lower statutory tax rates in Switzerland.
The reported earnings were GBP112m (1H19: loss of GBP168m). In the prior period, the equity accounted investment in Spire was impaired by GBP164m.
IFRS 16 basis
The effect of the adoption of IFRS 16 on the income statement is as follows:
-- EBITDA increased by GBP30m; -- Depreciation charge increased by GBP23m; -- Operating profit increased by GBP7m; -- Finance costs increased by GBP11m; and -- Profit for the period decreased by GBP3m.
Adjusted results
The Group's 1H20 adjusted EBITDA was GBP252m; adjusted operating profit was GBP144m; adjusted earnings was GBP73m; and adjusted earnings per share was 9.9 pence.
Reported results
The Group's 1H20 EBITDA was GBP252m; operating profit was GBP149m; earnings was GBP109m; and earnings per share was 14.8 pence.
Mediclinic's 29.9% investment in Spire Healthcare Group plc ("Spire") is equity accounted. For the six months ended 30 June 2019, Spire reported a profit after tax of GBP7.1m (30 June 2018 pre-IFRS16: GBP8.2m). Mediclinic's 1H20 equity accounted income amounted to GBP2.1m (1H19: GBP1.8m).
OPERATIonal results
Relevant financials in the following operational results section of the announcement are presented on a pre-IFRS 16 basis unless otherwise stated.
Hirslanden
-- Revenue up 5% to CHF871m
-- Adjusted pre-IFRS16 EBITDA up 3% to CHF121m
-- Adjusted pre-IFRS16 EBITDA margin of 13.9% (1H19: 14.3%)
-- First half performance in line with expectations, supported
by contribution from Clinique des Grangettes
-- Hirslanden has made good progress in growing across the
healthcare continuum and adapting the business to the regulatory
changes affecting the Swiss healthcare system
-- Hirslanden has continued to implement its day case clinic
strategy which focusses on a more efficient, lower cost
service delivery model; attracted additional clinical professionals;
delivered ongoing cost management and efficiency savings;
and also advanced the Hirslanden 2020 strategic project
-- Hirslanden announced important collaboration agreements
with the cantonal hospitals in Geneva and Baselland and
are in advanced discussions with Medbase, the Swiss primary
healthcare specialist and part of the Migros Group, towards
establishing a framework to develop across the healthcare
continuum
Southern Africa
-- Revenue up 7% to ZAR8 578m
-- Adjusted pre-IFRS16 EBITDA up 2% to ZAR1 720m
-- Adjusted pre-IFRS16 EBITDA margin of 20.1% (1H19: 21.0%)
-- Mediclinic Southern Africa's EBITDA margin reflects decisions
taken to invest in initiatives to enhance clinical standards
and to expand across the healthcare continuum
-- Successfully opened the new Mediclinic Stellenbosch day
case clinic in June 2019; six additional day case clinics
expected to open during FY20-22, taking the division's total
day case clinics to 15
-- Reflecting on outcomes from NHI and HMI, Mediclinic fully
supports the principles of Universal Health Care and greater
collaboration across the public and private sectors; the
-- affordability of healthcare needs to be further addressed
through a more efficient, transparent and sustainable delivery
system
Improving the value proposition and enhancing patient experience
remain key focus areas
Middle East
-- Revenue up 8% to AED1 616m
-- Adjusted pre-IFRS16 EBITDA up 10% to AED155m
-- Adjusted pre-IFRS16 EBITDA margin of 9.6% (1H19: 9.4%)
-- Contributing to the division's growth was the continued
ramp-up at the new Mediclinic Parkview Hospital in Dubai
and the continued gradual improvement in the Abu Dhabi business
where Mediclinic Airport Road Hospital delivered a strong
performance
-- Continued to make good operational progress - recently opening
the newly renovated ground and mezzanine floors at Mediclinic
Al Noor Hospital and on track to deliver the new Comprehensive
Cancer Centre at Mediclinic Airport Road in mid-2020
HIRSLANDEN
Variance
1H20 1H19 %
--------------------------------------- ------
Inpatient admissions (000s) 52 49 5.0%
Movement in inpatient revenue per
admission (2.2%) (2.8%)
Revenue (CHF'm) 871 826 5%
Adjusted EBITDA (CHF'm) 141 118
Adjusted EBITDA margin 16.2% 14.3%
Adjusted pre-IFRS 16 EBITDA (CHF'm) 121 118 3%
Adjusted pre-IFRS 16 EBITDA margin 13.9% 14.3%
Expansion capex (CHF'm) 10 14 (29%)
Maintenance capex (CHF'm) 15 18 (17%)
Adjusted EBITDA converted to cash 86% 51%
Average GBP/CHF exchange rate 1.25 1.31 (5%)
Revenue (GBP'm) 696 631 10%
Adjusted EBITDA (GBP'm) 113 90
Adjusted pre-IFRS 16 EBITDA (GBP'm) 97 90 8%
Financial review
At the end of the reporting period, Hirslanden operated 18 hospitals, two day case clinics and three outpatient clinics with a total of 1 916 inpatient beds and 10 388 employees (8 262 full-time equivalents). It is the largest private acute care hospital group in Switzerland servicing approximately one third of inpatients treated in Swiss private hospitals. Hirslanden accounted for 46% of the Group's revenues (1H19: 45%) and 44% of its adjusted pre-IFRS 16 EBITDA (1H19: 42%).
Hirslanden continued to make good progress in growing across the healthcare continuum and adapting the business to the regulatory changes affecting the Swiss healthcare system. Performance during the first six months of the financial year, which incorporates the impact of identified clinical treatments transferring from an inpatient to a lower outpatient tariff ("outmigration"), was in line with expectations. The outmigration process has gradually occurred across Swiss cantons over the past two years, with official national implementation effective from 1 January 2019. In line with the Group's strategic intent, Hirslanden has continued to implement a day case clinic strategy which focusses on moving towards a more efficient, lower cost service delivery model. The division furthermore has continued to attract additional clinical professionals; delivered ongoing cost management and efficiency savings; and advanced the Hirslanden 2020 strategic project.
Including the contribution from the Clinique des Grangettes acquisition in October 2018, first-half revenue increased 5% to CHF871m (1H19: CHF826m). Inpatient revenue was up 3% and admissions up 5.0%. Outpatient and day case revenue, which contributed some 21% (1H19: 19%) to total revenue in the period, was up 16% reflecting the relatively high proportion of outpatient and day case activity conducted by Clinique des Grangettes in addition to cases gained through outmigration. The general insurance mix was broadly stable at 49.2% (1H19: 49.4%) supported by the supplementary insurance contribution from Clinique des Grangettes. Inpatient revenue per case was down 2.2% as a result of a lower insurance and acuity mix at certain hospitals. Average occupancy was down in the period to 65.0% (1H19: 68.1%) due to a decline in the average length of stay from 4.6 to 4.4 days.
The revenue contribution in 1H20 from Clinique des Grangettes (consolidated from 1 October 2018) was CHF55m (1H19: nil) and the hospital contributed 5.5% growth in Hirslanden inpatient admissions during the period.
Despite the significant effect of outmigration, adjusted EBITDA was up 3% to CHF121m (1H19: CHF118m) and the adjusted EBITDA margin was broadly stable at 13.9% (1H19: 14.3%), supported by the acquisition of Clinique des Grangettes, a strong focus on operational performance and ongoing cost management initiatives.
Adjusted depreciation and amortisation decreased marginally by 2% to CHF60m (1H19: CHF61m). Adjusted operating profit increased by 5% to CHF61m (1H19: CHF58m).
Adjusted net finance costs increased by 2% to CHF26m (1H19: CHF25m).
In May 2019, the Swiss public voted to adopt the Federal Act on Tax Reform and AHV Financing ("TRAF"), confirming the reform of corporate taxation in Switzerland. Due to this reform, several cantons decreased their tax rates. For the current financial year ("FY20"), Hirslanden's forecast weighted statutory tax rate has been reduced to 16.8% (1H19: 18.5%).
Hirslanden contributed GBP30m to the Group's adjusted earnings (representing 39%) compared to GBP27m (representing 35%) in the prior year period.
Hirslanden converted 86% (1H19: 51%) of adjusted IFRS 16 EBITDA into cash generated from operations. The prior year period reflected an increase in trade receivables largely caused by the new HIT2020 billing system implementation in Zurich.
During the period, Hirslanden reduced its secured debt facilities by a total of CHF86m. Of the payments, CHF50m was the annual repayment and CHF36m was an optional repayment. Hirslanden expects to make an additional optional repayment in the second half of the year, further reducing the division's gross debt.
In October 2019, Hirslanden completed the sale of the small 28-bed Klinik Belair hospital for a total consideration of CHF14m. As a result, in 1H20, Hirslanden recognised a reversal of the impairment charge in relation to the Klinik Belair property of GBP5m which is excluded from adjusted earnings.
Adapting and growing across the healthcare continuum
Hirslanden continues to make good progress in adapting its business model to address the current healthcare trends and regulatory changes in the inpatient and outpatient environments in Switzerland. Through ongoing constructive engagement with insurers, regulators and other major healthcare providers in Switzerland, Hirslanden continues to demonstrate the benefit of its strategic focus on delivering improved value through integrated healthcare provision, offering care and services through the most appropriate settings and delivery models, while maintaining excellent clinical standards and patient experience.
The execution of Hirslanden's day case clinic strategy is progressing well. This strategy, which focusses on a conveniently located, more efficient, lower cost service delivery model, is fully operational at two Hirslanden locations - Bellaria in Zurich and St. Anna im Bahnhof at the train station in Lucerne. The division is confident in the strategy to establish further day case clinics over the coming years in order to attain a leading market position in this growing area of healthcare delivery and recently appointed an experienced day case clinic manager to the business. Hirslanden expects to add an additional standalone day case clinic around the end of the current financial year and plans another two in FY21. Where a standalone day case clinic is not currently planned, the hospitals have already initiated in-house day case solutions which seek to achieve more efficient, lower cost delivery models compared to the normal inpatient process.
In line with the Group's vision of being the partner of choice that people trust for all their healthcare needs, Hirslanden has recently announced two important collaborations with public healthcare providers in Switzerland. In Geneva, the university hospital ("HUG") and Hirslanden have agreed to create the largest public-private partnership day case clinic for outpatient surgery in Switzerland. The partnership reflects the desire to respond in a coordinated and efficient manner to the increasing demand in the area of outpatient surgery. Hirslanden was specifically chosen by HUG due to its knowledge and expertise in delivering cost-efficient, high-quality care in the day case clinic environment. In the canton of Baselland, Hirslanden and the Kantonspital Baselland ("KSBL") have agreed to form a joint venture to establish a centre of excellence and research and teaching facility for musculoskeletal patient care. This will provide excellent medical care for inpatients and outpatients across the northwestern region of Switzerland.
Further to the public initiatives announced, the division is in advanced discussions with Medbase, the Swiss primary healthcare specialist and part of the Migros Group (Switzerland's largest retail company), to create a framework from which to develop across the healthcare continuum. This is aimed at leveraging Hirslanden's acute care and day surgery expertise with Medbase's primary care representation per region across Switzerland.
To support Hirslanden's drive for improved medium-term operational efficiencies and cost management, the division is advancing the Hirslanden 2020 strategic project. In FY20, this project is in the final year of peak operating and capital investment spend. The division is already benefiting from the initial HIT2020 phased information communication technology rollout element of the project, with the introduction of mass invoicing, automated recording and processing of doctors' invoices; and enhanced capacity planning to increase hospital utilisation and staff efficiencies. The division is furthermore benefiting from Group procurement and cost management initiatives. The strategic collaboration with German healthcare provider Sana is enabling Hirslanden to leverage Sana's scale and purchasing power to secure lower product pricing. In addition, to benefit further from this collaboration, Hirslanden is refining its product portfolio management to leverage volume discount arrangements.
Disciplined investment sustaining a leading market position
In 1H20, Hirslanden invested CHF10m (down 29% on 1H19) in expansion capital projects and new equipment and CHF15m (down 17% on 1H19) on the replacement of existing equipment and upgrade projects. During the period, Hirslanden continued to invest in the HIT2020 project to standardise IT and systems across the division, completing the rollout at Klinik Stephanshorn and preparing for project delivery at Andreas Klinik.
Capital discipline remains a key focus of the Group and there will be an ongoing review of maintenance and expansion capital expenditure at Hirslanden during this period of regulatory change, while ensuring clinical standards and the quality of patient care remain appropriate. In FY20, Hirslanden's capex guidance remains unchanged at CHF92m. The division expects to invest CHF43m and CHF49m on expansion and maintenance capex respectively which includes ongoing investment in the Hirslanden 2020 strategic project and growth initiatives across the healthcare continuum.
MEDICLINIC SOUTHERN AFRICA
Variance
1H20 1H19 * %
---------------------------------------- ------
Movement in bed days sold 2.7% 0.5%
Movement in revenue per bed day sold 4.2% 4.4%
Revenue (ZAR'm) 8 578 8 013 7%
Adjusted EBITDA (ZAR'm) 1 785 1 684
Adjusted EBITDA margin 20.8% 21.0%
Adjusted pre-IFRS 16 EBITDA (ZAR'm) 1 720 1 684 2%
Adjusted pre-IFRS 16 EBITDA margin 20.1% 21.0%
Expansion capex (ZAR'm) 256 176 45%
Maintenance capex (ZAR'm) 354 348 2%
Adjusted EBITDA converted to cash 106% 79%
Average GBP/ZAR exchange rate 18.28 17.71 3%
Revenue (GBP'm) 469 452 4%
Adjusted EBITDA (GBP'm) 97 95
Adjusted pre-IFRS 16 EBITDA (GBP'm) 94 95 (1%)
* An income statement reclassification has increased 1H19 revenue and cost of sales by R55m. Refer to note 2 in the condensed consolidated financial statements.
Financial review
At the end of the period, Mediclinic Southern Africa (including South Africa and Namibia) operated 53 hospitals, five sub-acute hospitals and nine day case clinics with a total of 8 597 beds and 15 884 employees (19 658 full-time equivalents). Mediclinic Southern Africa is the third largest private healthcare provider in Southern Africa by number of licenced beds. Mediclinic Southern Africa accounted for 31% of the Group's revenues (1H19: 33%) and 42% of its adjusted pre-IFRS16 EBITDA (1H19: 45%).
Revenue in Southern Africa increased by 7% to ZAR8 578m (1H19: ZAR8 013m). Bed days sold increased by 2.7% in line with expectations, and average revenue per bed day increased by 4.2%. The average length of stay was flat while the occupancy rate was 69.8% (1H19: 71.2%), reflecting the ramp-up stage of the Intercare Group ("Intercare").
The revenue contribution in 1H20 from the majority investment in Intercare, consisting of four day case clinics, four sub-acute hospitals and one specialist hospital, effective since 1 December 2018, was around ZAR105m (1H19: nil). As expected, Intercare accounted for the majority of growth in the division's inpatient bed days sold during the period at 2.4%.
Adjusted EBITDA increased by 2% to ZAR1 720m (1H19: ZAR1 684m) with the adjusted EBITDA margin in line with expectations at 20.1% (1H19: 21.0%). The margin reflects decisions to further enhance clinical standards and to expand across the healthcare continuum with the Intercare acquisition and new Mediclinic Stellenbosch hospital and day case clinic both incorporating lease hold properties and rental charges.
Depreciation and amortisation increased by 15% to ZAR302m (1H19: ZAR263m) mainly due to increased spend on hospital infrastructure upgrades and medical equipment. Operating profit decreased by 1% to ZAR1 418m (1H19: ZAR1 436m).
Net finance costs decreased by 4% to ZAR241m (1H19: ZAR252m) due to increased capitalisation on the cost of qualifying assets as well as interest received on cash balances. Mediclinic Southern Africa contributed GBP36m to the Group's adjusted earnings (representing 47%), compared to GBP37m (representing 49%) in the comparative period.
The division converted 106% (1H19: 79%) of adjusted IFRS 16 EBITDA into cash generated from operations, mainly due to improved collections.
Investing to support continued long-term growth
Mediclinic Southern Africa invested ZAR256m (up 45% on 1H19) on expansion capital projects and new equipment and ZAR354m (up 2% on 1H19) on the replacement of existing equipment and upgrade projects. The total number of licenced beds increased marginally to 8 597 (FY19: 8 517). This comprised existing hospital expansion work completed in 1H20 at Mediclinic Vergelegen and the Wits Donald Gordon Medical Centre, in addition to the re-location at Mediclinic Stellenbosch of the existing business and a new day case clinic. In conjunction with the opening of Mediclinic Stellenbosch, Mediclinic Winelands Orthopaedic Hospital opened in August 2019. The hospital is situated at the previous Mediclinic Stellenbosch site and will focus on delivering specialist medical care in the disciplines of orthopaedic surgery and rheumatology. The hospital has entered into a partnership with the Institute of Orthopaedics and Rheumatology to deliver exceptional outcomes to the Winelands and greater Cape Town community.
In FY20, Mediclinic Southern Africa capex guidance remains broadly unchanged at around ZAR1 250m, investing around ZAR550m and ZAR700m on expansion and maintenance capex respectively. Major hospital upgrades are ongoing at Mediclinic Constantiaberg, Mediclinic Legae, Mediclinic Medforum, Mediclinic Paarl, Mediclinic Vereeniging and Mediclinic Vergelegen. In the second half of the year, one additional day case clinic is due to be opened at Mediclinic Nelspruit.
The division's day case clinic rollout is premised on co-locating the facilities with the main hospitals to adapt to the outmigration of care trend. While admissions had previously been impacted by declining day cases, a reversal of this trend in 1H20, excluding Intercare, gives the division further confidence in its strategy to invest across the healthcare continuum. Mediclinic plans to open a further five day case clinics through to FY22 at Mediclinic Winelands, Mediclinic Cape Gate, Mediclinic Pietermaritzburg, Mediclinic Bloemfontein and Mediclinic Panorama, which will add an additional 11 operating theatres to the Southern African operations.
The proposed acquisition of a controlling shareholding in Matlosana Medical Health Services (Pty) Ltd, based in Klerksdorp in the North West Province of South Africa, was prohibited by the Competition Tribunal in January 2019. Mediclinic appealed against this decision and the case was heard by the Competition Appeal Court in October 2019. A final decision is expected in the coming months.
Regulatory update
The Competition Commission concluded its inquiry into the private healthcare sector in South Africa on 30 September 2019. The report has now been handed over to be tabled in parliament for discussion. The report contains various findings and recommendations. It remains to be seen to what extent these will translate into future healthcare policy and legislative actions. With respect to hospitals, Mediclinic welcomes the inquiry's final stance that divestiture of hospitals and/or moratoria on new licences for the three leading hospital groups are not warranted. Mediclinic is also pleased with the recommendation that facilities continue with their current tariff negotiation framework. These proposals are largely aligned with the analyses submitted to the inquiry by Mediclinic and its legal and economic experts. Although Mediclinic disagreed with certain key findings, many of the inquiry's proposals will enable greater efficiency, transparency and sustainability of the private healthcare sector. Mediclinic will continue to monitor the debate concerning the report, as well as its implications for future healthcare policy and regulation.
The South African Government continues to explore the introduction of a National Health Insurance system. On 8 August 2019, a revised National Health Insurance Bill ("NHI Bill") was published for comment by interested stakeholders. The NHI Bill will now be discussed and debated within the various forums of the legislative process before it is enacted. The current NHI Bill follows the release of an earlier version of the document in June 2018. Mediclinic submitted comprehensive comments on the aforementioned version and will provide a further submission on the current NHI Bill. The NHI Bill incorporates amendments to the Medical Schemes Act, No. 131 of 1998, which are aimed at amending the functioning of the medical schemes and member benefits. Mediclinic will also submit comments detailed thereon. Mediclinic continues to seek counsel from legal, economic and actuarial experts to understand the potential impact of the NHI Bill and the extent to which the proposals are legally sound. Mediclinic has also requested the opportunity to make an oral presentation to the legislature regarding its views on the NHI Bill. Mediclinic fully supports the principle of Universal Health Care ("UHC") and improving access and affordability of healthcare to all South Africans. The NHI Bill is the first of numerous pieces of legislation which will be required to introduce the NHI system and Mediclinic will continue to contribute constructively toward achieving the UHC principle. Mediclinic believes that an enhanced healthcare system can be achieved through greater collaboration across the public and private sectors to find common solutions that leverage existing expertise and capacity.
MEDICLINIC MIDDLE EAST
Variance
1H20 1H19 %
--------------------------------------- -----
Movement in inpatient admissions 9.2% 3.1%
Outpatient cases (000s) 1 421 1 347 5.5%
Revenue (AED'm)(1) 1 616 1 495 8%
Adjusted EBITDA (AED'm) 204 141
Adjusted EBITDA margin 12.6% 9.4%
Adjusted pre-IFRS 16 EBITDA (AED'm) 155 141 10%
Adjusted pre-IFRS 16 EBITDA margin 9.6% 9.4%
Expansion capex (AED'm) 44 256 (83%)
Maintenance capex (AED'm) 22 26 (15%)
Adjusted EBITDA converted to cash 109% 78%
Average GBP/AED exchange rate 4.62 4.89 (5%)
Revenue (GBP'm) 350 307 14%
Adjusted EBITDA (GBP'm) 44 29
Adjusted pre-IFRS 16 EBITDA (GBP'm) 33 29 14%
(1) The Group adopted the new IFRS 15 accounting standard (Revenue
from Contracts with Customers) from 1 April 2018. IFRS 15
has implications for Mediclinic Middle East where disallowances
are classified to revenue. In the current period, AED47m
was recognised as part of revenue (decreasing the revenue
recognised) (1H19: AED40m). The increase largely relates
to growth at the new Mediclinic Parkview Hospital.
Financial review
Mediclinic Middle East, at the end of the reporting period, operated seven hospitals, two day case clinics and 19 outpatient clinics with a total of 926 beds and 6 570 employees (6 570 full-time equivalents). Mediclinic Middle East is one of the leading private healthcare providers in the United Arab Emirates ("UAE") with the majority of its operations in Dubai and Abu Dhabi (including Al Ain). Mediclinic Middle East accounted for 23% of the Group's revenues (1H19: 22%) and 15% of its adjusted pre-IFRS16 EBITDA (1H19: 14%).
The UAE remains a long-term growth market for the provision of high-quality private healthcare services, driven by an ageing local population facing an increased prevalence of lifestyle-related medical conditions and an expatriate market. The regulatory environment is maturing with an increasing focus on quality and clinical outcome measures and the introduction of Diagnostic Related Groups ("DRG") in Dubai and Health Information Exchanges ("HIE") and Centres of Excellence ("CoE") in both Dubai and Abu Dhabi. Despite the weaker macroeconomic environment and sustained competitive landscape, Mediclinic has confidence in its Middle East growth strategy. This strategy builds on Mediclinic Middle East's leading market position, strong brand reputation, sustainable delivery of internationally recognised healthcare services and its employer of choice status. It also includes the ramp-up of new hospitals; the integration of new investments and clinical service offerings; expansion and upgrades to existing facilities; and further regional growth opportunities across the healthcare continuum.
1H20 revenue was up 8% to AED1 616m (1H19: 1 495m). In Dubai, revenue growth of 11% was supported by the continued strong ramp-up of the new Mediclinic Parkview Hospital. In Abu Dhabi, revenue growth of 4% was supported by the excellent performance at Mediclinic Airport Road Hospital. Across the division, inpatient admissions were up 9.2%, while outpatient cases were up 5.5%.
During the seasonally quieter first half of the year, adjusted EBITDA increased by 10% to AED155m (1H19: AED141m) with the adjusted EBITDA margin increasing to 9.6% (1H19: 9.4%).
Adjusted depreciation and amortisation increased by 25% to AED91m (1H19: AED73m), as expected, mainly due to the commissioning of Mediclinic Parkview Hospital. Operating profit decreased by 3% to AED64m (1H19: AED66m).
Net finance costs increased by 133% to AED21m (1H19: AED9m), as expected, mainly due to the discontinued capitalisation of borrowing costs following the opening of Mediclinic Parkview Hospital. The division contributed GBP9m to the Group's adjusted earnings (representing 12%) compared to GBP12m (representing 16%) in the prior period.
The division converted 109% (1H19: 78%) of adjusted IFRS 16 EBITDA into cash generated from operations, mainly due to improved collections.
Investing for sustainable long-term growth
Supported by continued business and operational improvements in Abu Dhabi and the ramp-up benefits from investments into new facilities, expansions and upgrades, Mediclinic Middle East is expected over time to sustainably deliver an increase in revenue and gradual improvement in EBITDA margins, towards a 20% target. However, the current macro environment in the UAE and below-inflation regulated tariff increases in 2018, 2019 and likely again in 2020, are impacting the pace of revenue growth and margin expansion.
In Dubai, the new Mediclinic Parkview Hospital is rapidly growing its market share, performing very strongly in the first half of the year. The hospital, the Group's largest ever greenfield construction project by value, was completed in two and a half years, ahead of schedule, and within the AED680m original budget. Since opening in September 2018, the ramp-up of the hospital's patient volumes has exceeded expectations. The current success of the hospital is attributed to Mediclinic's strong brand and reputation in Dubai; the detailed planning and preparation for its opening, including the recruitment of doctors and medical staff; and, the hospital's strategic location serving the population expansion that has occurred to the south of Dubai. The hospital furthermore established services and specialities in high demand from the surrounding population, such as a comprehensive maternity unit, Level III neonatal intensive care, 24/7 paediatrics, and accident and emergency care. Mediclinic has signed a Memorandum of Understanding with the Dubai Health Authority ("DHA") to provide healthcare services to visitors and exhibitors during the Dubai Expo 2020 event, which is in close proximity to Mediclinic Parkview Hospital.
At the division's flagship Mediclinic City Hospital, renowned across the region for its complex tertiary care, Comprehensive Cancer Centre and highly specialised medicine, performance has been impacted by the opening of the new Mediclinic Parkview Hospital. This is largely as a result of additional independent doctors that set up practices at the new hospital. Mediclinic City Hospital has already initiated several plans to address the impact, including the on-boarding of new doctors.
In Abu Dhabi, revenue growth in the first half of the year benefited from the investments made to enhance the business and operational performance over recent years. The main contributor to the growth was Mediclinic Airport Road Hospital where inpatient and outpatient volumes were up 15% and 10% respectively during the first half of the year. In addition, the hospital benefited from the introduction of medical oncology, improved dialysis services, a growing reputation among clinical professionals, and the recruitment of some leading Emirati doctors. Construction of the new Comprehensive Cancer Centre and expansion plans remain on track and are expected to be completed mid-2020.
The Mediclinic Al Noor Hospital project furthermore supports the continued growth in Abu Dhabi. In November 2019, the major renovation of the ground and mezzanine floor at the hospital was completed, significantly enhancing one of Mediclinic's busiest hospitals with a new main entrance, lobby, reception, accident and emergency unit, pharmacy, outpatient clinic, treatment rooms, paediatrics department and internal medicine department.
In 1H20, Mediclinic Middle East invested AED44m (down 83% on 1H19, which included capex associated with the new Mediclinic Parkview Hospital) on expansion and AED22m (down 15% on 1H19) on maintenance capex. Expansion capex in the period largely related to the projects at Mediclinic Airport Road Hospital and Mediclinic Al Noor Hospital and the Electronic Health Record ("EHR"). The EHR is being systematically rolled out across Mediclinic Middle East during FY20 and FY21 and successfully went live during FY19 at Mediclinic Parkview Hospital and Mediclinic Ibn Battuta, with a further three clinics having gone live in Dubai in 1H20. Rollout in Abu Dhabi began in August 2019 and it is anticipated that the project will be completed across the division in early 2021. The EHR is expected to deliver seamless care and improved service quality for patients, as well as improved administration efficiency for the division. Also during the first half of the year, Mediclinic Springs was opened in Dubai. This is Mediclinic Middle East's first dedicated paediatric clinic, strategically located in Dubai's Springs community, providing in-demand, dedicated paediatric services to families in the surrounding communities and serves as an extension to the well-established Mediclinic Meadows clinic.
For FY20, Mediclinic Middle East capex guidance is around AED290m, comprising AED70m of maintenance and AED220m of expansion capex. In addition, during 1H20, the division acquired properties relating to existing clinics for a total of around AED50m.
Regulatory update
The division continues to maintain an active dialogue with government authorities on regulatory changes within the UAE healthcare sector. Preparations are ongoing for the implementation of DRGs for inpatient procedures in Dubai which are now expected in early 2020. Mediclinic continues to test the systems through a shadow billing process which has been operating since July 2018. The Dubai Health Authority DHA is following a collaborative approach in the design and implementation of the DRGs and, in addition to sharing and discussing the test version of the DRG methodology with the market, it also shared hospital- level results and impact studies. Currently, it is expected that the DRGs will have a neutral impact on the division's inpatient revenue, as prescribed by the DHA. Additional qualified medical practitioners have been appointed as case managers to ensure an effective change-over. Training has been carried out in the division's Abu Dhabi facilities where DRGs have been in operation since 2011.
The Abu Dhabi Department of Health ("DoH"), through industry engagement, has recently introduced the concept of CoE to improve the quality of care in the Emirate. Mediclinic Middle East was able to demonstrate its readiness for the initiative through its successful programmes already established in Dubai which include the Comprehensive Cancer Centre and Comprehensive Stroke and Neuroscience Centre at Mediclinic City Hospital. Mediclinic Middle East will establish CoEs at its two largest hospitals in Abu Dhabi. At Mediclinic Airport Road, a Comprehensive Cancer Centre and paediatric CoE will be established. A paediatric CoE will also be established at Mediclinic Al Noor Hospital. The Abu Dhabi DoH is also preparing for the implementation of the next phase of the Jawda initiative, being the introduction of a hospital star-rating system based on an extensive list of quality and experience measures with the first reports anticipated to be published at the end of the calendar year.
HIEs are expected to be established in Dubai and Abu Dhabi. Testing of the integration between Mediclinic's EHR system and the Abu Dhabi HIE has been successfully conducted and the division remains on track to go live with the initial integration before the end of 2019. The Dubai HIE initiative has also been launched with further testing and integration expected in 2020.
In November 2019, the Joint Commission International ("JCI") re-accreditation process for all Middle East's hospitals and clinics was completed. This is the first division-wide JCI process that Mediclinic Middle East has carried out and underlines its focus to provide high-quality healthcare services in the UAE.
SPIRE HEALTHCARE GROUP
Mediclinic has a 29.9% investment in Spire.
For the six months to 30 June 2019, Spire delivered a 3% increase in revenue and 2% decrease in EBITDA. Inpatient and day case admissions declined by 1.3% while average revenue per case increased by 4.6%. Outpatient revenue grew by 4.5%. The IFRS 16 earnings per share decreased by 10% to 1.8 pence (30 June 2018 pre-IFRS 16: 2.0 pence).
Mediclinic's investment in Spire is equity accounted. Spire's IFRS 16 reported profit after tax was GBP7.1m for the six months ended 30 June 2019 (30 June 2018 pre-IFRS 16: GBP8.2m). The 1H20 income from associate was GBP2.1m (1H19 pre-IFRS 16: GBP1.8m).
OUTLOOK
The Group reiterates the following unchanged pre-IFRS 16 FY20 guidance on an adjusted basis:
-- Hirslanden: In FY20, Hirslanden expects modest revenue growth
from an increase in average bed capacity for the year, reflecting
the continued integration of Clinique des Grangettes. Under the
current regulatory environment, Hirslanden will be impacted by
a further nine months' comparative effect in FY20 from the national
outmigration care programme that was implemented from 1 January
2019. The anticipated cost management and efficiency savings are
likely to be more than offset by reductions in tariffs and the
operational effects of outmigration, with the FY20 EBITDA margin
expected to be around 15%. Over the medium-term, assuming no further
regulatory changes are implemented, the operating performance
is expected to be supported by benefits from the Hirslanden 2020
strategic project and structural efficiencies being implemented
in the division.
-- Mediclinic Southern Africa: In FY20, Mediclinic Southern Africa
expects volume growth of around 1% reflecting the additional capacity
from the Intercare day case clinics that were consolidated from
December 2018. In line with the Group's strategic objectives and
a continued focus on improving clinical quality and patient experience,
further investment will be made in employees and information communication
technology during FY20. This, together with the expected lower
margin contribution from Intercare and the ramp-up of the new
Mediclinic Stellenbosch facility, is anticipated to result in
an EBITDA margin of around 20%.
-- Mediclinic Middle East: In FY20, Mediclinic Middle East is expected
to deliver revenue growth of around 10% supported by the continued
ramp-up of the new Mediclinic Parkview Hospital. A gradual improvement
in the EBITDA margin is expected in FY20 to around 14% incorporating
the ramp-up of the Mediclinic Parkview Hospital and investment
in the hospital expansion and new Comprehensive Cancer Centre
at Mediclinic Airport Road Hospital, which is scheduled to open
mid-2020. The division continues to target an EBITDA margin of
around 20%.
-- The Group's capital expenditure budget, in constant currency,
for FY20 is expected to decrease by 14% to GBP200m (FY19: GBP232m).
This comprises GBP70m in Hirslanden (FY19: GBP72m), GBP70m in
Mediclinic Southern Africa (FY19: GBP65m), GBP60m in Mediclinic
Middle East (FY19: GBP94m) and GBPnil (FY19: GBP1m) in Corporate.
The decrease largely results from the conclusion in FY19 of the
major new Mediclinic Parkview Hospital project in the UAE and
continued focus on capital allocation in Switzerland to reflect
the current regulatory environment. Average FY19 exchange rates
used: CHF 1.30; ZAR 18.01; and AED 4.82.
The Group adopted the new IFRS 16 accounting standard (addressing the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors) from 1 April 2019 and comparatives have not been restated. The EBITDA margin guidance for FY20 under IFRS 16 is set out below, which remains unchanged since the May 2019 Full-Year Results:
-- Hirslanden: around 17% -- Mediclinic Southern Africa: around 21% -- Mediclinic Middle East: around 16.5%
BOARD CHANGES
The following changes to the Board and its Committees have occurred and been announced since the financial year-end:
Mr Desmond Smith retired as an independent non-executive Director and Senior Independent Director at the conclusion of the 2019 Annual General Meeting ("AGM") on 24 July 2019, as planned. Mr Smith was succeeded as Senior Independent Director, Chairperson of the Audit and Risk Committee and member of the Nomination Committee from that date by Mr Alan Grieve.
Mr Tom Singer was appointed as an independent non-executive Director and member of the Audit and Risk Committee with effect from 24 July 2019.
Dr Edwin Hertzog indicated his intention to retire as Chairman with effect from the conclusion of the 2020 AGM. A search for Dr Hertzog's successor as Chairman has been initiated and the Board will provide an update as appropriate.
The Company would furthermore like to announce the appointment of Mr Singer as an additional member of the Remuneration Committee with effect from 13 November 2019.
FINANCIAL REVIEW
ADJUSTED non-IFRS financial measures
The Group uses adjusted income statement reporting as non-IFRS measures in evaluating performance and as a method to provide shareholders with clear and consistent reporting. The adjusted measures are intended to remove volatility associated with certain types of exceptional income and charges from reported earnings. Historically, EBITDA and adjusted EBITDA were disclosed as supplemental non-IFRS financial performance measures because they are regarded as useful metrics to analyse the performance of the business from period to period. Measures like adjusted EBITDA are also used by analysts and investors in assessing performance.
The rationale for using non-IFRS measures:
-- it tracks the adjusted operational performance of the Group
and its operating segments by separating out exceptional
items;
-- it is used by management for budgeting, planning and monthly
financial reporting;
-- it is used by management in presentations and discussions
with investment analysts; and
-- it is used by the Directors in evaluating management's performance
and in setting management incentives.
The Group's policy is to adjust, inter alia, the following types of significant income and charges from the reported IFRS measures to present adjusted results:
-- cost associated with major restructuring programmes;
-- profit/loss on sale of assets and transaction costs incurred
during acquisitions;
-- past service cost charges / credits in relation to pension
fund conversion rate changes;
-- accelerated amortisation charges;
-- mark-to-market fair value gains / losses, relating to ineffective
interest rate swaps;
-- impairment charges and reversal of impairment charges;
-- insurance proceeds; and
-- tax impact of the above items, prior year period tax adjustments
and significant tax rate changes.
EBITDA is defined as operating profit before depreciation and amortisation and impairments of non-financial assets, 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 adjusted measures used by the Group are not necessarily comparable with those used by other entities.
The Group has consistently applied this definition of adjusted measures as it has reported on its financial performance in the past as the Directors believe this additional information is important to allow shareholders to better understand the Group's trading performance for the reporting period. It is the Group's intention to continue to consistently apply this definition in the future.
Group financial performance
The Group adopted the new leasing standard IFRS 16 on 1 April 2019 using the simplified approach. Consequently, comparative information was not restated. On an IFRS 16 basis, the Group's 1H20 revenue was GBP1 515m, adjusted EBITDA GBP252m, adjusted operating profit GBP144m, adjusted earnings GBP73m and adjusted earnings per share 9.9 pence.
Pre-IFRS 16
On a pre-IFRS 16 basis, the Group's revenue increased by 9% to GBP1 515m (1H19: GBP1 390m) and EBITDA was up 4% to GBP222m (1H19: GBP213m). The adjusted EBITDA margin declined from 15.3% to 14.7%.
Depreciation and amortisation was up 12% to GBP85m (1H19: GBP76m) in line with expectations and due to the continued investment to support growth and to enhance patient experience and clinical quality.
The Group recorded an operating profit of GBP142m in 1H20 (1H19: GBP39m). Adjusted operating profit was flat at GBP137m (1H19: GBP137m).
Operating profit included an exceptional impairment reversal of GBP5m relating to Swiss properties.
Prior period operating profit was adjusted for the following exceptional items:
-- recognition of an impairment charge to Hirslanden properties of
GBP43m; and
-- recognition of an impairment charge to the Hirslanden trade name
and Linde trade name of GBP55m.
Net finance costs are up by 7% at GBP29m (1H19: GBP27m) mainly due to the discontinued capitalisation of borrowing costs following the opening of Mediclinic Parkview Hospital.
The Group's reported effective tax rate of (10%) (1H19: (6%)) is significantly skewed by the reduction of Swiss property deferred tax liabilities of GBP35m resulting from corporate tax reforms in Switzerland. Adjusted taxation was GBP23m (1H19: GBP26m) with an adjusted effective tax rate for the period of 21.7% (1H19: 23.4%).
The Group recorded earnings attributable to equity holders of GBP112m in 1H20 (1H19: loss of GBP168m). Adjusted earnings were flat at GBP76m (1H19: GBP76m). Adjusted earnings per share was flat at 10.3 pence (1H19: 10.3 pence). The prior period reported loss was adjusted for an exceptional impairment charge on the equity investment in Spire of GBP164m (in addition to the Hirslanden impairment charges).
The tables on the next pages show the reconciliation from reported to adjusted results on an IFRS 16 and on a pre-IFRS 16 basis and the table thereafter shows the adjustments required to reconcile between these two bases.
Earnings reconciliations
IFRS 16 1H20 EARNINGS RECONCILIATION
Mediclinic Mediclinic
Southern Middle
Total Hirslanden Africa East Spire Corporate
30 SEPTEMBER 2019 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
------------------------------ ---------- ---------- ---------- ------
Revenue 1 515 696 469 350 -- --
Operating profit/(loss) 149 56 78 17 -- (2)
Profit/(loss) attributable
to equity holders* 109 65 36 7 2 (1)
Reconciliations
Operating profit/(loss) 149 56 78 17 -- (2)
Add back:
- Other gains and losses -- -- -- -- -- --
- Depreciation and
amortisation 108 62 19 27 -- --
- Reversal of impairment
of properties (5) (5) -- -- -- --
------ ---------- ---------- ---------- ------ ---------
EBITDA 252 113 97 44 -- (2)
No adjustments -- -- -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted EBITDA 252 113 97 44 -- (2)
------ ---------- ---------- ---------- ------ ---------
Operating profit/(loss) 149 56 78 17 -- (2)
- Reversal of impairment
of properties (5) (5) -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted operating
profit/(loss) 144 51 78 17 -- (2)
------ ---------- ---------- ---------- ------ ---------
Profit/(loss) attributable
to equity holders* 109 65 36 7 2 (1)
Exceptional items
- Reversal of impairment
of properties (5) (5) -- -- -- --
- Tax rate changes
** (32) (32) -- -- -- --
- Tax on exceptional
items 1 1 -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted earnings 73 29 36 7 2 (1)
------ ---------- ---------- ---------- ------ ---------
Weighted average number
of shares (millions) 737.2
Adjusted earnings per
share (pence) 9.9
* Profit attributable to equity holders in Hirslanden and Corporate is shown after the elimination of intercompany loan interest of GBP8m.
** Tax rates changes of GBP35m is shown after taking non-controlling interest of GBP3m into consideration.
Earnings reconciliations (continued)
PRE-IFRS 16 1H20 EARNINGS RECONCILIATION
Mediclinic Mediclinic
Southern Middle
Total Hirslanden Africa East Spire Corporate
30 SEPTEMBER 2019 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
--------------------------------- ---------- ---------- ---------- ------
Revenue 1 515 696 469 350 -- --
Operating profit/(loss) 142 54 77 13 -- (2)
Profit/(loss) attributable
to equity holders* 112 66 36 9 2 (1)
Reconciliations
Operating profit/(loss) 142 54 77 13 -- (2)
Add back:
Other gains and losses -- -- -- -- -- --
Depreciation and amortisation 85 48 17 20 -- --
Reversal of impairment
of properties (5) (5) -- -- -- --
------ ---------- ---------- ---------- ------ ---------
EBITDA 222 97 94 33 -- (2)
No adjustments -- -- -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted EBITDA 222 97 94 33 -- (2)
------ ---------- ---------- ---------- ------ ---------
Operating profit/(loss) 142 54 77 13 -- (2)
- Reversal of impairment
of properties (5) (5) -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted operating
profit/(loss) 137 49 77 13 -- (2)
------ ---------- ---------- ---------- ------ ---------
Profit/(loss) attributable
to equity holders* 112 66 36 9 2 (1)
Exceptional items
- Reversal of impairment
of properties (5) (5) -- -- -- --
- Tax rate changes
** (32) (32) -- -- -- --
- Tax on exceptional
items 1 1 -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted earnings 76 30 36 9 2 (1)
------ ---------- ---------- ---------- ------ ---------
Weighted average number
of shares (millions) 737.2
Adjusted earnings per
share (pence) 10.3
* Profit attributable to equity holders in Hirslanden and Corporate is shown after the elimination of intercompany loan interest of GBP8m.
** Tax rates changes of GBP35m is shown after taking non-controlling interest of GBP3m into consideration.
IFRS 16 / PRE-IFRS 16 adjustments
Mediclinic Mediclinic
Southern Middle
Total Hirslanden Africa East Spire Corporate
30 SEPTEMBER 2019 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
--------------------------------- ---------- ---------- ---------- ------
Revenue -- -- -- -- -- --
Operating profit/(loss) (7) (2) (1) (4) -- --
Profit/(loss) attributable
to equity holders* 3 1 -- 2 -- --
Reconciliations
Operating profit/(loss) (7) (2) (1) (4) -- --
Add back:
Other gains and losses -- -- -- -- -- --
Depreciation and amortisation (23) (14) (2) (7) -- --
Reversal of impairment
of properties -- -- -- -- -- --
------ ---------- ---------- ---------- ------ ---------
EBITDA (30) (16) (3) (11) -- --
No adjustments
------ ---------- ---------- ---------- ------ ---------
Adjusted EBITDA (30) (16) (3) (11) -- --
------ ---------- ---------- ---------- ------ ---------
Operating profit/(loss) (7) (2) (1) (4) -- --
- Reversal of impairment
of properties --
- Impairment of intangible
assets --
------ ---------- ---------- ---------- ------ ---------
Adjusted operating
profit/(loss) (7) (2) (1) (4) -- --
------ ---------- ---------- ---------- ------ ---------
Profit/(loss) attributable
to equity holders* 3 1 -- 2 -- --
Exceptional items
- Reversal of impairment
of properties -- --
- Impairment of intangible
assets --
- Impairment of associate --
- Tax rate changes --
- Tax on exceptional
items --
------ ---------- ---------- ---------- ------ ---------
Adjusted earnings 3 1 -- 2 -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted earnings per
share (pence) 0.4
Earnings reconciliations (continued)
PRE-IFRS 16 1H19 EARNINGS RECONCILIATION
Mediclinic Mediclinic
Southern Middle
Total Hirslanden Africa East Spire Corporate
30 SEPTEMBER 2018 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
------------------------------ ---------- ---------- ---------- ------
Revenue 1 390 631 452 307 -- --
Operating profit/(loss) 39 (54) 81 14 -- (2)
(Loss)/profit attributable
to equity holders* (168) (53) 37 12 (162) (2)
Reconciliations
Operating profit/(loss) 39 (54) 81 14 -- (2)
Add back:
- Other gains and losses -- -- (1) -- -- 1
- Depreciation and
amortisation 76 46 15 15 -- --
- Impairment of properties 43 43 -- -- -- --
- Impairment of intangible
assets 55 55 -- -- -- --
------ ---------- ---------- ---------- ------ ---------
EBITDA 213 90 95 29 -- (1)
No adjustments -- -- -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted EBITDA 213 90 95 29 -- (1)
------ ---------- ---------- ---------- ------ ---------
Operating profit/(loss) 39 (54) 81 14 -- (2)
- Impairment of properties 43 43 -- -- -- --
- Impairment of intangible
assets 55 55 -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted operating
profit/(loss) 137 44 81 14 -- (2)
------ ---------- ---------- ---------- ------ ---------
(Loss)/profit attributable
to equity holders* (168) (53) 37 12 (162) (2)
Exceptional items
- Impairment of properties 43 43 -- -- -- --
- Impairment of intangible
assets 55 55 -- -- -- --
- Impairment of associate 164 -- -- -- 164 --
- Tax on exceptional
items (18) (18) -- -- -- --
------ ---------- ---------- ---------- ------ ---------
Adjusted earnings 76 27 37 12 2 (2)
------ ---------- ---------- ---------- ------ ---------
Weighted average number
of shares (millions) 737.2
Adjusted earnings per
share (pence) 10.3
* Profit attributable to equity holders in Hirslanden and Corporate is shown after the elimination of intercompany loan interest of GBP8m.
IFRS 16 LEASES
The Group adopted the new IFRS 16 Leases standard effective on 1 April 2019. Since the Group has applied the simplified approach on adoption, comparative figures were not restated.
The effect of the adoption of IFRS 16 on the income statement is as follows:
-- EBITDA increased by GBP30m; -- Depreciation charge increased by GBP23m; -- Operating profit increased by GBP7m; -- Finance costs increased by GBP11m; and -- Profit for the period decreased by GBP3m.
The effect of the adoption of IFRS 16 on the statement of financial position:
-- Opening retained earnings decreased by GBP37m; -- Right of use asset of GBP640m booked on 1 April 2019; and -- Lease liability of GBP665m booked on 1 April 2019.
Reconciliation of adjusted IFRS 16 and pre-IFRS 16 numbers per division.
Mediclinic
Southern Mediclinic Pre-IFRS
IFRS 16 Hirslanden Africa Middle East 16
IFRS 16 TABLE GBPm GBPm GBPm GBPm GBPm
-------------------------- ---------- ---------- ------------
Adjusted EBITDA 252 (16) (3) (11) 222
Adjusted depreciation and
amortisation 108 (14) (2) (7) 85
Adjusted operating profit 144 (2) (1) (4) 137
Adjusted finance cost 45 (3) (2) (6) 34
Adjusted earnings 73 1 -- 2 76
Refer to notes 8 and 15 in the condensed consolidated financial statements for more information.
Foreign exchange rates
Although the Group reports its results in pound sterling, the divisional profits are generated in Swiss franc, South African rand and UAE dirham. Consequently, movements in exchange rates affected the reported earnings and reported balances in the statement of financial position. The resulting currency translation difference, which is the amount by which the Group's interest in the equity of the divisions increased because of spot rate movements, amounted to GBP176m (1H19: increase of GBP169m) and was credited (1H19: credited) to the statement of other comprehensive income. The main reason for the increase was the strengthening of the period-end Swiss franc and UAE dirham rates in particular against pound sterling.
Foreign exchange rate sensitivity:
-- The impact of a 10% change in the GBP/CHF exchange rate
for a sustained period of six months is that reported profit
for the period would increase/decrease by GBP3m (1H19: increase/decrease
by GBP3m) due to exposure to the GBP/CHF exchange rate.
-- The impact of a 10% change in the GBP/ZAR exchange rate
for a sustained period of six months is that reported profit
for the period would increase/decrease by GBP4m (1H19: increase/decrease
by GBP4m) due to exposure to the GBP/ZAR exchange rate.
-- The impact of a 10% change in the GBP/AED exchange rate
for a sustained period of six months is that reported profit
for the period would increase/decrease by GBP1m (1H19: increase/decrease
by GBP1m) due to exposure to the GBP/AED exchange rate.
During the reporting period, the average and closing exchange rates were as follows:
1H20 1H19 Variance%
----------------------- -----
Average rates
Swiss franc 1.25 1.31 (5%)
South African rand 18.28 17.71 3%
UAE dirham 4.62 4.89 (5%)
1H20 FY19 Variance%
----------------------- -----
Period end rates
Swiss franc 1.23 1.30 (5%)
South African rand 18.64 18.90 (1%)
UAE dirham 4.51 4.79 (6%)
Cash flow
The Group converted 98% (1H19 pre-IFRS16: 69%) of adjusted IFRS 16 EBITDA into cash generated from operations.
1H20 1H19
GBP'm GBP'm
-----------------------------------
Cash from operations (a) 248 146
Adjusted EBITDA (b) 252 213
Cash conversion ((a)/(b) x 100) 98% 69%
Interest-bearing borrowings
Interest-bearing borrowings increased from GBP1 982m at 31 March 2019 to GBP2 006m at 30 September 2019 mainly due to the weakening of the pound sterling exchange rate against the Swiss franc and the UAE dirham, offset by Swiss bank loan amortisation.
1H20 FY19
GBP'm GBP'm
-----------------------------------
Borrowings 2 006 1 982
Less: cash and cash equivalents (231) (265)
------ ------
Net debt 1 775 1 717
------ ------
Total equity 3 449 3 266
Debt-to-equity capital ratio 51.5% 52.6%
Assets
Property, equipment and vehicles increased from GBP3 524m as at 31 March 2019 to GBP4 386m at 30 September 2019, mainly due to the inclusion of right of use assets of GBP681m at 30 September 2019 since the adoption of IFRS 16 Leases standard. Intangible assets increased from GBP1 586m to GBP1 652m at 30 September 2019. Due to the continued investment to support growth and to enhance patient experience and clinical quality, the abovementioned non-current assets included an increase of GBP79m on capital projects and fixed asset additions.
Furthermore, the change in the closing exchange rate increased the closing balances of property, equipment and vehicles and intangible assets.
1H20 1H19
GBP'm GBP'm
---------------------------------------------
Pre-IFRS 16 depreciation and amortisation 85 76
Depreciation on right of use assets 23 n/a
------ ------
IFRS 16 depreciation and amortisation 108 76
------ ------
In line with the continued investment to support growth and to enhance patient experience and clinical quality, the pre-IFRS 16 depreciation and amortisation charge increased by 12% to GBP85m.
Hirslanden pension plan
Hirslanden provides defined contribution pension plans in terms of Swiss legislation to employees, the assets of which are held in separate trustee-administered funds. These plans are funded by payments from employees and Hirslanden, taking into account the recommendations of independent qualified actuaries. Because of the strict definition of defined contribution plans in IAS 19 these plans are classified as defined benefit plans since the funds are obliged to take some investment and longevity risk in terms of Swiss legislation.
The IAS 19 pension liability was valued by the actuaries at the end of the period and amounted to a liability of GBP88m (31 March 2019: a liability of GBP52m), included under "Retirement benefit obligations" in the Group's statement of financial position. The increase in the pension liability was largely due to the decrease of the discount rate from 0.45% to -0.05% due to the reduction in Swiss benchmark rates as well as changes in actuarial assumptions.
FINANCE COSTS
Pre-IFRS 16 net finance costs are up by 7% at GBP29m (1H19: GBP27m) mainly due to the discontinued capitalisation of borrowing costs following the opening of Mediclinic Parkview Hospital.
1H20 1H19
GBP'm GBP'm
---------------------------------
Pre-IFRS 16 net finance costs 29 27
Interest on lease liabilities 11 n/a
------ ------
IFRS 16 net finance costs 40 27
------ ------
Income tax
The Group's effective tax rate for the period under review was (10%) (1H19: (6%)), mainly due to the reduction in Hirslanden's deferred tax liabilities resulting from corporate tax reforms in Switzerland. Hirslanden's expected weighted statutory tax rate for FY20 reduced by 1.7% to 16.8% mainly due to the reduction in Swiss statutory tax rates.
Excluding the one-off Swiss tax rate changes and exceptional non-deductible expenses in the prior period, the adjusted effective tax rate would be 21.7% (1H19: 23.4%) for the period ended 30 September 2019.
Adjusted income tax was calculated as follows:
1H20 1H19
GBP'm GBP'm
----------------------------------------------
Income tax (credit) / expense (11) 8
Swiss tax rate changes 35 -
Tax impact of exceptional items (1) 18
------ ------
- (Reversal of impairment) / impairment of
properties (1) 7
- Impairment of trade names - 11
Adjusted income tax expense 23 26
------ ------
DIVID policy and dividend declaration
The Group's dividend policy is to target a pay-out ratio of between 25% and 35% of full-year adjusted earnings. The Board may revise the policy at its discretion.
The Board declared an interim dividend from retained earnings of 3.20 pence per ordinary share for the six months ended 30 September 2019. Shareholders on the South African register will be paid the ZAR cash equivalent of 60.83200 cents (48.6656 cents net of dividend withholding tax) per share. A dividend withholding tax of 20% will be applicable to all shareholders on the South African register who are not exempt therefrom. The ZAR cash equivalent has been calculated using the following exchange rate: GBP1: ZAR19.01, being the 5-day average GBP/ZAR exchange rate (Bloomberg) on Friday, 8 November 2019 at 3:00pm GMT.
The interim dividend will be paid on Tuesday, 17 December 2019 to all ordinary shareholders who are on the register of members at the close of business on the record date of Friday, 6 December 2019.
The salient dates for the dividend will be as follows:
Dividend announcement date Thursday, 14 November 2019 Last date to trade cum dividend Tuesday, 3 December 2019 (SA register) First date of trading ex-dividend Wednesday, 4 December 2019 (SA register) First date of trading ex-dividend Thursday, 5 December 2019 (UK register) Record date Friday, 6 December 2019 Payment date Tuesday, 17 December 2019
Share certificates may not be dematerialised or rematerialised within Strate from Wednesday, 4 December 2019 to Friday, 6 December 2019, both dates inclusive. No transfers between the UK and SA registers may take place from Thursday, 14 November 2019 to Friday, 6 December 2019, both days inclusive.
Tax treatment for shareholders on the South African register
South African tax resident shareholders on the South African register:
In terms of the Company's Dividend Access Trust structure, the following South African tax resident shareholders on the South African register will receive a component of the dividend from the Dividend Access Trust and therefore regarded as a local South African dividend, with the remaining component being received from the Company and therefore regarded as a foreign non-South African dividend. For purposes of South African dividend withholding tax, the entire dividend of 60.83200 cents per share is taxable at a rate of 20%, unless an applicable exemption applies:
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.
The component of the dividend payable by the Dividend Access Trust and by the Company will be announced on the JSE's Stock Exchange News Service and on the LSE's Regulatory News Service as soon as possible after the record date, 6 December 2019, of the dividend.
Non-South African tax resident shareholders on the South African register:
Non-South African tax resident shareholders on the South African register will be paid the dividend by the Company in the usual way and not through the Dividend Access Trust. The entire dividend of 60.83200 cents per share payable to such shareholders will therefore be regarded as a foreign dividend and exempt from South African dividend withholding tax, provided that the relevant exemption forms have been completed and submitted as prescribed.
PRINCIPAL RISKS
The Board is ultimately accountable for the Group's risk management process and system of internal control. The executive management and the Board have reviewed the principal risks and mitigating factors, and consider that they remain the same as described on pages 55 to 59 of the Group's Annual Report and Financial Statements for the year ended 31 March 2019 (a copy of which is available on the Group's website at www.mediclinic.com), and are appropriate for the remaining six months period to 31 March 2020.
These risks relate to adverse changes in legislation
* Regulatory and compliance risks and regulations impacting on the Group or the
failure to comply with legislation and regulations
which may result in losses, fines, penalties or
damage to reputation. The risks include healthcare
reform by regulators aimed at reducing the cost
of healthcare, broadening the access to quality
healthcare and increasing the monitoring of quality
standards by regulators.
Information systems security risk and cyber risk
* Information systems security and cyber risk relate to the unauthorised access to information
systems through external or internal attack or
unauthorised breach resulting in the unavailability
of systems, failure of data integrity and data
confidentiality breaches.
These risks relate to increased financial exposure
* Business investment and acquisition risks relating to major strategic business investments
and acquisitions. The risk includes the sensitivity
of the assumptions made when capital is allocated
and the effective implementation of major investment
decisions.
The Group plans to adapt to the evolving regulatory,
* Business project risks industry and market environment. These risks refer
to issues or occurrences that may potentially
interfere with successful completion of projects,
including timeliness, cost and quality.
These risks relate to the downturn in the general
* Economic and business environment risks economic and business environments impacting on
the affordability of healthcare for funders and
self-paying patients. The business environment
risks include the potential negative impact on
tariffs and fees resulting from the shift of the
relative positioning away from healthcare service
providers toward funders. Changes in the political,
economic and business environment in the United
Kingdom could have an indirect impact on the carrying
value of the Group's equity accounted investment
in Spire.
These risks relate to the uncertainty created
* Competition risks by the existence of competitors or the emergence
of new competitors with their own strategies.
The risk includes the outmigration of care, partly
driven by further technological developments,
and the development of alternative care models.
These risks relate to all clinical risks associated
* Clinical risks with the provision of clinical care resulting
in undesirable clinical outcomes. Clinical risks
at the Group's facilities are managed daily. High-priority
clinical risk areas include patient safety culture,
adverse obstetric outcomes, medication errors,
surgical and procedural adverse events and multidrug
resistant organisms. Such risks may also result
in damage to Mediclinic's reputation and impact
on brand equity. Brand equity refers to the commercial
value derived from the consumer perception of
the Group's brand names rather than the services
provided under those brand names.
Disruptive innovation and digitalisation risks
* Disruptive innovation and digitalisation risks include the disintermediation and erosion of the
Mediclinic business model due to the impact of
technological development. It refers to the extent
and speed that new technologies (and combinations
thereof) change and transform industries and to
what extent an organisation is able to exploit
these opportunities and also being able to respond
and innovate, while managing associated risks.
The availability and support of admitting medical
* Availability, recruitment and retention of skilled practitioners, whether independent or employed,
resources and medical practitioners are critical to the Group's services. There is
a shortage of skilled labour, particularly a shortage
of qualified and experienced nursing staff in
Southern Africa.
These risks relate to the cost, terms and availability
* Availability and cost of capital risks (Including of capital to finance strategic expansion opportunities
financing and liquidity risks) and/or the refinancing or restructuring of existing
debt affected by prevailing capital market conditions.
Operational risk refers to diverse types of operational
* Operational and credit risks events with a potential for financial loss, operational
interruptions or reputational damage. Credit risk
is the risk of loss due to a funder's inability
to pay the outstanding balance owing, default
by banks and/or other deposit-taking institutions,
or the inability to recover outstanding amounts
due from patients.
These risks refer to the quality of service and
* Quality and stability of operational services risks the stability of the operations. It includes:
* incidents of poor service or where operational
management fail to respond effectively to complaints;
* operational interruptions which refer to any
disruption of the facility and may include the threat
of disrupted electricity or water supply; and
* fire and allied perils causing damage or business
interruption.
DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors confirm that these condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the consolidation, and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed consolidated financial information and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The maintenance and integrity of the Mediclinic International plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that might have occurred to the condensed consolidated financial information since they were initially presented on the website.
The names and functions of the Company's Directors are listed on the Company's website.
By order of the Board.
13 November 2019
Cautionary statement
This announcement contains certain forward-looking statements relating to the business of the Company and its subsidiaries, including with respect to the progress, timing and completion of the Group's development; the Group's ability to treat, attract and retain patients and clients; its ability to engage consultants and general practitioners and to operate its business and increase referrals; the integration of prior acquisitions; the Group's estimates for future performance and its estimates regarding anticipated operating results; future revenue; capital requirements; shareholder structure; and financing. In addition, even if the Group's actual results or development are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of the Group's results or developments in the future. In some cases, forward-looking statements can be identified by words such as "could", "should", "may", "expects", "aims", "targets", "anticipates", "believes", "intends", "estimates", or similar. These forward-looking statements are based largely on the Group's current expectations as of the date of this announcement and are subject to a number of known and unknown risks and uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by these
forward-looking statements. In particular, the Group's expectations could be affected by, among other things, uncertainties involved in the integration of acquisitions or new developments; changes in legislation or the regulatory regime governing healthcare in Switzerland, South Africa, Namibia and the United Arab Emirates; poor performance by healthcare practitioners who practise at its facilities; unexpected regulatory actions or suspensions; competition in general; the impact of global economic changes; and the Group's ability to obtain or maintain accreditation or approval for its facilities or service lines. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements made in this announcement will in fact be realised and no representation or warranty is given as to the completeness or accuracy of the forward-looking statements contained in this announcement.
The Group is providing the information in this announcement as of this date, and disclaims any intention to, and make no undertaking to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Independent review report TO MEDICLINIC INTERNATIONAL PLC
Report on the condensed consolidated financial information
Our conclusion
We have reviewed Mediclinic International plc's condensed consolidated financial information (the "interim financial statements") in the interim results announcement of Mediclinic International plc for the six month period ended 30 September 2019. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the condensed consolidated statement of financial position
at 30 September 2019;
-- the condensed consolidated income statement and condensed
consolidated statement of comprehensive income for the period
then ended;
-- the condensed consolidated statement of cash flows for the
period then ended;
-- the condensed consolidated statement of changes in equity
for the period then ended; and
-- the explanatory notes to the condensed consolidated financial
information.
The interim financial statements included in the interim results announcement have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim results announcement, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim results announcement in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the interim results announcement based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim results announcement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
13 November 2019
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 September 2019
30 Sep 2019 31 Mar 2019*
(Unaudited) (Audited)
Notes GBP'm GBP'm
---------------------------------------------- ----- ------------
ASSETS
Non-current assets 6 272 5 336
Property, equipment and vehicles 4 4 386 3 524
Intangible assets 5 1 652 1 586
Equity-accounted investments 6 193 193
Other investments and loans 10 10
Deferred income tax assets 31 23
------------ ------------
Current assets 1 075 1 091
Inventories 93 88
Trade and other receivables 729 732
Other investments and loans 1 1
Current income tax assets 5 1
Cash and cash equivalents 231 265
Assets classified as held-for-sale 14 16 4
------------ ------------
Total assets 7 347 6 427
------------ ------------
EQUITY
Capital and reserves
Share capital 74 74
Share premium reserve 690 690
Retained earnings 4 778 4 769
Other reserves (2 211) (2 382)
------------ ------------
Attributable to equity holders of the
Company 3 331 3 151
Non-controlling interests 118 115
------------ ------------
Total equity 3 449 3 266
------------ ------------
LIABILITIES
Non-current liabilities 3 312 2 577
Borrowings 7 1 925 1 895
Lease liabilities 8 661 --
Deferred income tax liabilities 411 424
Retirement benefit obligations 9 182 138
Provisions 33 29
Derivative financial instruments 99 91
Cash-settled share-based payment liabilities 1 --
------------ ------------
Current liabilities 586 584
Trade and other payables 428 462
Borrowings 7 81 87
Lease liabilities 8 45 --
Provisions 14 15
Retirement benefit obligations 9 13 11
Derivative financial instruments 1 --
Current income tax liabilities 1 8
Liabilities classified as held-for-sale 14 3 1
------------ ------------
Total liabilities 3 898 3 161
------------ ------------
Total equity and liabilities 7 347 6 427
------------ ------------
* Refer to note 2 for explanation of purchase price allocation adjustment.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 September 2019
(Re-presented)*
30 Sep 2019 30 Sep 2018
(Unaudited) (Unaudited)
Notes GBP'm GBP'm
------------------------------------------------- ----- ------------
Revenue 1 515 1 390
Cost of sales (975) (875)
Administration and other operating expenses (391) (476)
------------------------------------------------- ----- ------------ ---------------
Reversal of impairment / (impairment)
of properties 4 5 (43)
Impairment of intangible assets 5 -- (55)
Other administration and operating expenses (396) (378)
------------------------------------------------- ----- ------------ ---------------
Other gains and losses ** -- --
------------ ---------------
Operating profit 149 39
Finance income 5 4
Finance cost 10 (45) (31)
Share of net profit of equity accounted
investments 2 2
Impairment of equity accounted investment -- (164)
------------ ---------------
Profit/(loss) before tax 111 (150)
Income tax credit / (expense) 11 11 (8)
------------ ---------------
Profit/(loss) for the period 122 (158)
------------ ---------------
Attributable to:
Equity holders of the Company 109 (168)
Non-controlling interests 13 10
------------ ---------------
122 (158)
------------ ---------------
Profit/(loss) per ordinary share attributable
to the equity holders of the Company
- pence
Basic 12 14.8 (22.8)
Diluted 12 14.8 (22.8)
* Refer to note 2
** Less than GBP0.5 million
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2019
(Re-presented)*
30 Sep 2019 30 Sep 2018
(Unaudited) (Unaudited)
GBP'm GBP'm
--------------------------------------------- --- ------------
Profit/(loss) for the period 122 (158)
Other comprehensive income/(loss)
Items that may be reclassified to the
income statement 174 171
Currency translation differences 176 169
Fair value adjustment - cash flow hedges (2) 2
------------ ---------------
Items that may not be reclassified to
the income statement (25) 20
Remeasurements of retirement benefit
obligations (25) 20
------------
Other comprehensive income, net of tax 149 191
------------ ---------------
Total comprehensive income for the period 271 33
------------ ---------------
Attributable to:
Equity holders of the Company 255 32
Non-controlling interests 16 1
------------ ---------------
271 33
------------ ---------------
* Refer to note 2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2019
Attributable
Foreign to equity
Capital Share Reverse Share-based currency holders
Share redemption premium acquisition Treasury payment translation Hedging Retained of the Non-controlling Total
capital reserve reserve reserve shares reserve reserve reserve earnings Company interests equity
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
----------------- ------- ---------- ------- ----------- -------- ----------- ----------- ------- ------------
Balance at 1
April
2019 (audited) 74 6 690 (3 014) -- -- 628 (2) 4 769 3 151 115 3 266
IFRS 16
transition
adjustment -- -- -- -- -- -- -- -- (37) (37) -- (37)
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Restated at 1
April
2019 (unaudited) 74 6 690 (3 014) -- -- 628 (2) 4 732 3 114 115 3 229
(Loss)/profit
for
the period -- -- -- -- -- -- -- -- 109 109 13 122
Other
comprehensive
income/(loss)
for
the period -- -- -- -- -- -- 173 (2) (25) 146 3 149
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Total
comprehensive
income/(loss)
for
the period -- -- -- -- -- -- 173 (2) 84 255 16 271
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Non-controlling
shareholders
acquired -- -- -- -- -- -- -- -- (3) (3) 2 (1)
Dividends paid -- -- -- -- -- -- -- -- (35) (35) (15) (50)
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Balance at 30
September
2019 (unaudited) 74 6 690 (3 014) -- -- 801 (4) 4 778 3 331 118 3 449
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2018
Attributable
Foreign to equity
Capital Share Reverse Share-based currency holders
Share redemption premium acquisition Treasury payment translation Hedging Retained of the Non-controlling Total
capital reserve reserve reserve shares reserve reserve reserve earnings Company interests equity
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
----------------- ------- ---------- ------- ----------- -------- ----------- ----------- ------- ------------
Balance at 1
April
2018 (audited) 74 6 690 (3 014) (1) 1 468 5 5 057 3 286 87 3 373
IFRS 9
transition
adjustment -- -- -- -- -- -- -- -- (2) (2) -- (2)
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Restated at 1
April
2018 (unaudited) 74 6 690 (3 014) (1) 1 468 5 5 055 3 284 87 3 371
(Loss)/profit
for
the period -- -- -- -- -- -- -- -- (168) (168) 10 (158)
Other
comprehensive
(loss)/income
for
the period -- -- -- -- -- -- 178 2 20 200 (9) 191
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Total
comprehensive
(loss)/income
for
the period -- -- -- -- -- -- 178 2 (148) 32 1 33
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Transfer to
other
reserves -- -- -- -- -- -- 7 (7) -- -- -- --
Non-controlling
shareholders
acquired -- -- -- -- -- -- -- -- -- -- 2 2
Settlement of
Forfeitable
Share Plan -- -- -- -- 1 (1) -- -- -- -- -- --
Dividends paid -- -- -- -- -- -- -- -- (35) (35) (7) (42)
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
Balance at 30
September
2018 (unaudited) 74 6 690 (3 014) -- -- 653 -- 4 872 3 281 83 3 364
------- ---------- ------- ----------- -------- ----------- ----------- ------- -------- ------------ --------------- ------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2019
30 Sep 2019 30 Sep 2018
(Unaudited) (Unaudited)
GBP'm GBP'm
Notes Inflow/(outflow) Inflow/(outflow)
------------------------------------------------ ----- -----------------
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 248 146
Interest received 5 4
Interest paid (38) (39)
Tax paid (35) (30)
----------------- -----------------
Net cash generated from operating activities 180 81
CASH FLOW FROM INVESTMENT ACTIVITIES (73) (131)
Investment to maintain operations (34) (47)
Investment to expand operations (42) (72)
Acquisition of subsidiaries 13 -- (13)
Dividends received from equity-accounted
investment 3 3
Acquisition of other investments and
loans -- (2)
----------------- -----------------
Net cash generated / (utilised) before
financing activities 107 (50)
CASH FLOW FROM FINANCING ACTIVITIES (148) 36
Distributions to non-controlling interests (15) (7)
Distributions to shareholders 17 (35) (35)
Transaction with non-controlling interest (1) 2
Proceeds from borrowings -- 110
Repayment of borrowings (72) (31)
Refinancing transaction costs (1) (3)
Repayment of lease liabilities (24) --
----------------- -----------------
Net decrease in cash and cash equivalents (41) (14)
Opening balance of cash and cash equivalents 265 261
Exchange rate fluctuations on foreign
cash 9 (5)
----------------- -----------------
Closing balance of cash and cash equivalents 233 242
----------------- -----------------
Cash and cash equivalents 231 242
Cash and cash equivalents classified 2 --
as assets held for sale
----------------- -----------------
233 242
----------------- -----------------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION
1. GENERAL INFORMATION
Mediclinic is an international private hospital group with
operations in Switzerland, Southern Africa (South Africa and
Namibia) and the United Arab Emirates. Its core purpose is
to enhance the quality of life. Mediclinic also holds a 29.9%
interest in Spire Healthcare Group plc, a LSE-listed and UK-based
private hospital group.
The Company is a public limited company, with a primary listing
on the LSE and secondary listings on the JSE and the NSX and
incorporated and domiciled in the UK (registered number: 08338604).
The address of its registered office is 6(th) Floor, 65 Gresham
Street, London, EC2V 7NQ, United Kingdom.
The condensed consolidated financial information for the six
months ended 30 September 2019 was approved by the Board on
13 November 2019.
2. BASIS OF PREPARATION
The condensed consolidated interim financial information is
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 results announcement has been prepared applying consistent
accounting policies to those applied by the Group in the 31
March 2019 financial year, except for the estimation of income
tax in accordance with IAS 34 at 30 September 2019 and subject
to the adoption of IFRS 16 at 1 April 2019. The Group has
prepared the condensed consolidated interim financial information
on a going concern basis. The condensed consolidated financial
statements 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 2019. The
condensed consolidated interim financial information has been
reviewed, not audited.
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. Statutory accounts for the year
ended 31 March 2019 were approved by the Board of Directors
on 22 May 2019 and delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified,
did not draw attention to any matters by way of emphasis and
did not contain statements under sections 498(2) or (3) of
the Companies Act 2006.
The Group has adopted IFRS 16 from 1 April 2019. Refer to
note 15 for a description of the changes in accounting policies.
The preparation of interim financial statements requires management
to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts
of assets and liabilities, income and expense. Actual results
might differ from these estimates. In preparing these condensed
interim financial statements, the significant judgements made
by management in applying the group's accounting policies
and the key sources of estimation uncertainty were the same
as those that applied to the consolidated financial statements
for the year ended 31 March 2019, with the exception of the
following new critical judgement in determining lease terms
under IFRS 16:
In determining the lease term, management considers all facts
and circumstances that create an economic incentive to exercise
an extension option. Extension options are only included in
the lease term if the lease is reasonably certain to be extended.
Potential future cash outflows have not been included in the
lease liability for certain lease contracts, because it is
not reasonably certain that the leases will be extended. The
assessment is reviewed if a significant event or a significant
change in circumstances occurs which affects this assessment
and that is within the control of the lessee.
Functional and presentation currency
The condensed consolidated financial statements are presented
in pounds sterling, 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 Swiss franc, South African rand 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.
Income statement reclassification
The income statement for the period ended 30 September 2018
has been re-presented to reclassify certain costs of the Southern
African segment that were previously shown as a reduction
of revenue. The impact of the reclassification was an increase
in revenue and cost of sales of GBP3m. The reclassification
had no impact on reported cash, profits or net assets.
Finalisation of purchase price allocation (PPA)
In accordance with IFRS 3, the statement of financial position
at 31 March 2019 has been adjusted as a result of the finalisation
of Intercare Hospital Group's PPA.
Previously Restated
31 Mar 2019 Adjustment 31 Mar 2019
GBP'm GBP'm GBP'm
----------------------------------- ----------
Trade and other payables 464 (2) 462
Intangible assets 1 587 (1) 1 586
Deferred income tax liabilities 423 1 424
3. SEGMENTAL REPORT
The reportable segments are identified as follows: Switzerland, Southern Africa, Middle East and additional segments are shown for the United Kingdom and Corporate.
Reportable operating segments Other
Southern Middle United
Period ended 30 September Total Switzerland Africa East Kingdom Corporate
2019 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
------------------------------ ------ ------------- ---------- -------- ---------
Revenue 1 515 696 469 350 -- --
------ ------------- ---------- ------ -------- ---------
EBITDA 252 113 97 44 -- (2)
------ ------------- ---------- ------ -------- ---------
EBITDA before management
fee 252 116 100 46 -- (10)
Management fees included
in EBITDA -- (3) (3) (2) -- 8
------ ------------- ---------- ------ -------- ---------
Depreciation and amortisation (108) (62) (19) (27) -- --
Reversal of impairment
of properties 5 5 -- -- -- --
------ ------------- ---------- ------ -------- ---------
Operating profit/(loss) 149 56 78 17 -- (2)
Income from associate 2 -- -- -- 2 --
Finance income 5 -- 4 -- -- 1
Finance cost (excluding
intersegment loan interest) (45) (15) (20) (10) -- --
------ ------------- ---------- ------ -------- ---------
Total finance cost (45) (24) (20) (10) -- 9
Elimination of intersegment
loan interest -- 9 -- -- -- (9)
------ ------------- ---------- ------ -------- ---------
Taxation 11 30 (19) -- -- --
------ ------------- ---------- ------ -------- ---------
Segment result 122 71 43 7 2 (1)
------ ------------- ---------- ------ -------- ---------
At 30 September 2019
Investments in associates 189 2 3 4 180 --
Investments in joint ventures 4 -- 4 -- -- --
Capital expenditure 79 20 33 26 -- --
Total segment assets 7 347 4 039 766 2 300 180 62
Total segment liabilities
(excluding intersegment
loan) 3 898 2 649 642 688 -- (81)
------ ------------- ---------- ------ -------- ---------
Total liabilities from
reportable segment 4 801 3 552 642 688 -- (81)
Elimination of intersegment
loan (903) (903) -- -- -- --
------ ------------- ---------- ------ -------- ---------
3. SEGMENTAL REPORT (continued)
Reportable operating segments Other
Southern Middle United
Period ended 30 September Total Switzerland Africa* East Kingdom Corporate
2018 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
------------------------------- ------ ------------- ---------- -------- ---------
Revenue 1 390 631 452 307 -- --
------ ------------- ---------- ------ -------- ---------
EBITDA 213 90 95 29 -- (1)
------ ------------- ---------- ------ -------- ---------
EBITDA before management
fee 213 93 98 30 -- (8)
Management fees included
in EBITDA -- (3) (3) (1) -- 7
------ ------------- ---------- ------ -------- ---------
Other gains and losses -- -- 1 -- -- (1)
Depreciation and amortisation (76) (46) (15) (15) -- --
Impairment of properties (43) (43) -- -- -- --
Impairment of intangible
assets (55) (55) -- -- -- --
------ ------------- ---------- ------ -------- ---------
Operating profit/(loss) 39 (54) 81 14 -- (2)
Income from associate 2 -- -- -- 2 --
Impairment of associate (164) -- -- -- (164) --
Finance income 4 -- 4 -- -- --
Finance cost (excluding
intersegment loan interest) (31) (11) (18) (2) -- --
------ ------------- ---------- ------ -------- ---------
Total finance cost (31) (19) (18) (2) -- 8
Elimination of intersegment
loan interest -- 8 -- -- -- (8)
------ ------------- ---------- ------ -------- ---------
Taxation (8) 12 (20) -- -- --
------ ------------- ---------- ------ -------- ---------
Segment result (158) (53) 47 12 (162) (2)
------ ------------- ---------- ------ -------- ---------
At 31 March 2019
Investments in associates 189 2 3 4 180 --
Investments in joint ventures 4 -- 4 -- -- --
Capital expenditure 232 72 65 94 -- 1
Total segment assets 6 427 3 532 708 1 965 182 40
Total segment liabilities
(excluding intersegment
loan) 3 161 2 182 592 385 -- 2
------ ------------- ---------- ------ -------- ---------
Total liabilities from
reportable segment 4 059 3 080 592 385 -- 2
Elimination of intersegment
loan (898) (898) -- -- -- --
------ ------------- ---------- ------ -------- ---------
* Refer to note 2
4. PROPERTY, EQUIPMENT AND VEHICLES
30 Sep 2019 31 Mar 2019
GBP'm GBP'm
------------------------------------
Land - cost 941 889
Buildings 2 311 2 200
Capital expenditure in progress 111 81
Right-of-use assets (see note 8) 681 --
Equipment 296 311
Furniture and vehicles 46 43
----------- -----------
4 386 3 524
----------- -----------
Cash generating unit (CGU) impairment indicators
Property, equipment and vehicles are considered for impairment
if impairment indicators are identified at an individual CGU
level. A CGU is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets. The Group defines
CGUs as combined inter-dependent hospitals and/or clinics or
as individual hospitals depending on the geographical location
or the degree of integration. The impairment assessment is performed
at CGU level and any impairment charge that arises would be
allocated to the CGU's goodwill first, followed by other assets
(such as property, equipment and vehicles and other intangible
assets).
Impairment assessment
At 30 September 2019, the Group performed a review of impairment
indicators of all the CGUs and concluded that no impairment
was required. At 30 September 2018 and 31 March 2019, Swiss
property, equipment and vehicles were impaired by GBP43m and
GBP143m respectively.
Reversal of impairment
During the period, Klinik Belair was classified as a disposal
group held for sale and a reversal of previously recognised
impairment charges in respect of properties of GBP5m was recognised
given that the expected disposal proceeds exceeded the carrying
value after impairment charges booked in the prior period. Refer
to note 14.
Swiss CGUs
After accounting for impairments in the prior period, some CGUs
within Hirslanden have limited head room and remain sensitive
to reasonably possible changes in key assumptions in the fair
value less cost to sell calculations. As a result, any increase
in the discount rate or decreases in the short-term cash flow
projections or long-term growth rates could give rise to further
material impairment charges in future periods.
Any impairment determined at a CGU level under IAS 36 will include
an assessment of the recoverable amount of Hirslanden's owned
properties, which are subject to a third party valuation at
least annually. This valuation applies a consistent methodology
across key assumptions to determine the rental charges based
on appropriate and market-related metrics, which is discounted
using a market-related discount rate to determine the value
of the properties. Therefore, there is a risk that this valuation
could materially change in future periods.
5. INTANGIBLE ASSETS
30 Sep 2019 31 Mar 2019
GBP'm GBP'm
-------------------------------
Goodwill 1 538 1 450
Trade names 45 53
Computer software 69 60
Favourable lease contracts* -- 23
----------- -----------
1 652 1 586
----------- -----------
* Relates to favourable lease contracts on buildings. The
leases are characterised by fixed annual rent with no annual
rent escalations for majority of the contract. This was reclassified
on 1 April 2019 on adoption of IFRS16 to right of use assets
within property, equipment and vehicles.
Impairment testing of goodwill and trade names
Although no impairment indicators were identified at 30 September
2019 in respect of the Middle East goodwill, the balance remains
sensitive to any increase in the discount rate or decreases
in the short-term cash flow projections or long-term growth
rate which could give rise to material impairment charges
in future periods due to the reduced headroom to the current
carrying value.
At 30 September 2018, the Hirslanden and Linde trade names
were fully impaired by GBP55m.
6. EQUITY ACCOUNTED INVESTMENTS
30 Sep 2019 31 Mar 2019
GBP'm GBP'm
-------------------------------
Investment in associates 189 189
Investment in joint venture 4 4
----------- -----------
193 193
----------- -----------
31 Mar
30 Sep 2019 2019
GBP'm GBP'm
-----------------------------------------------------
Listed investment 180 180
Unlisted investments 9 9
----------- ------
189 189
----------- ------
Reconciliation of carrying value at the beginning
and end of the period
Opening balance 189 352
IFRS 9 transition adjustment -- (2)
IFRS 16 transition adjustment * -- --
Additional investment in unlisted associate -- 4
Share of net profit of associated companies 2 3
Impairment of listed associate -- (164)
Dividends received from associated companies (3) (4)
Exchange rate differences 1 --
----------- ------
189 189
----------- ------
* As a result of prior period impairment charges, no adjustment was required to the carrying value of the investment in Spire on adoption of IFRS 16. The transition adjustment resulted in a decrease of the Group's share of Spire's net assets on adoption of IFRS 16 by GBP22m together with a consequential transitional adjustment to reduce the group's impairment provision in Spire by the same amount. Accordingly, the Group's carrying amount of its investment in associates was not impacted on the transition to IFRS 16.
Set out below are details of the associate which is material
to the Group:
Country of incorporation
and place of business % ownership
---------------------------------------------
Spire Healthcare Group plc (Spire) United Kingdom 29.9%
Spire is listed on the London Stock Exchange. It does not publish quarterly financial information and has a December year-end. The investment in associate was equity accounted for the 6 months to 30 June 2019 (31 March 2019: 12 months to 31 December 2018).
At 30 September 2019, the market value of the investment in Spire was GBP134m, which was below the carrying value. Consequently, the Group performed an impairment test by updating the inputs applied in the value in use calculation performed at 31 March 2019. The impairment test was prepared based on the Group's expectations of Spire's future trading performance and considered external sources of information, including recent investor analyst valuations and target prices published since the half year results announcement by Spire in September 2019.
Expectations of cash flows in the short- and medium-term were broadly in line with those at 31 March 2019. There was no material change in inputs related to the discount rate or the long-term growth rate from 31 March 2019. The carrying value of the investment of GBP180m remains sensitive to any reasonable changes in key assumptions which could result in material impairment charges in future periods.
7. BORROWINGS
30 Sep 2019 31 Mar 2019
GBP'm GBP'm
--------------------------
Bank loans 1 713 1 703
Preference shares 98 96
Listed bonds 192 181
Other liabilities 3 2
----------- -----------
2 006 1 982
----------- -----------
Non-current borrowings 1 925 1 895
Current borrowings 81 87
----------- -----------
Total borrowings 2 006 1 982
----------- -----------
30 Sep 31 Mar
2019 30 Sep 2019 2019 31 Mar 2019
GBP'm GBP'm GBP'm GBP'm
Non-current Current Non-current Current
----------- ---------------------------------- ------------ ----------- ------------
Swiss operations
(denominated in Swiss franc)
These loans bear interest
at variable rates linked
to the 3M LIBOR plus 1.25%.
Secured The remaining balances
bank loan are repayable by 30 September
one 2025. 1 083 66 1 066 77
These loans were acquired
as part of the Linde acquisition
and bear interest at a
fixed rate of 1.12%. CHF0.5m
is repayable on 30 June
and 31 December every year.
Secured The remaining balances
bank loan are repayable during May
two 2023. 16 1 14 1
This fixed interest mortgage
loan was acquired as part
of the Linde acquisition
and bears interest at 0.9%
Secured compounded quarterly. The
bank loan loan is repayable by December
three 2023. 8 -- 8 --
Secured These loans did bear interest
bank loan at rates linked to the
four 3M LIBOR plus 1.4%. -- -- 12 --
The listed bonds consist
of CHF145m 1.625% and CHF90m
2% Swiss franc bonds. The
bonds are repayable on
Listed 25 February 2021 and 25
bonds February 2025 respectively. 192 -- 181 --
These liabilities bear
interest at variable rates
ranging between 1% and
12% and are repayable in
Secured equal monthly payments
long term in periods ranging from
finance 1-7 years. 2 1 1 1
Balance carried forward 1 301 68 1 282 79
7. BORROWINGS (continued)
30 Sep 31 Mar
2019 30 Sep 2019 2019 31 Mar 2019
GBP'm GBP'm GBP'm GBP'm
Non-current Current Non-current Current
----------- ------------------------------- ------------ ----------- ------------
Balance carried forward 1 301 68 1 282 79
Southern African operations
(denominated in South African
rand)
The loan bears interest
at the 3M JIBAR variable
rate plus a margin of 1.49%
Secured compounded quarterly and
bank loan is repayable on 26 September
one 2022. 138 1 136 1
The loan bears interest
at the 3M JIBAR variable
rate plus a margin of 1.59%
Secured compounded quarterly and
bank loan is repayable on 26 September
two 2023. 192 1 189 1
These loans bear interest
at variable rates linked
to the prime overdraft
Secured rate and are repayable
bank loan in periods ranging between
five one and twelve years. 3 2 6 1
Dividends are payable monthly
at a rate of 72% of 3M
JIBAR plus a margin of
1.65%. The outstanding
Preference balance will be redeemed
shares on 26 September 2022. 97 1 95 1
Middle East operations
(denominated in UAE dirham)
The loan bears interest
at variable rates linked
to the 3M LIBOR and a margin
Secured of 1.85% with five-year
bank loan amortising terms, expiring
one in August 2023. 194 8 187 4
------------ ----------- ------------ -----------
1 925 81 1 895 87
------------ ----------- ------------ -----------
8. LEASES
This note provides information for leases where the Group is the lessee. Refer to note 15 for a detailed explanation of the impact of the adoption of IFRS 16 Leases on the Group's financial statements.
Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
30 Sep 2019
GBP'm
--------------------------------------------
Right-of-use assets
Buildings 680
Equipment 1
-----------
681
-----------
Right-of-use assets by operating segment
Switzerland 402
Southern Africa 36
Middle East 243
-----------
681
-----------
30 Sep 2019
GBP'm
---------------------------------
Lease liabilities
Switzerland 405
Southern Africa 46
Middle East 255
-----------
706
-----------
- Non-current lease liabilities 661
- Current lease liabilities 45
-----------
706
-----------
8. LEASES (continued)
Amounts recognised in the income statement
The income statement shows the following amounts relating
to leases:
30 Sep 2019
GBP'm
----------------------------------------------
Depreciation charge of right-of-use assets
Buildings 23
-----------
23
-----------
Interest expense on lease liabilities (refer
to note 10) 11
Expense relating to short-term leases and
leases of low-value assets 4
Expense relating to variable lease payments --
not included in lease liabilities
The total cash outflow for leases was GBP31m.
9. RETIREMENT BENEFIT OBLIGATIONS
The assumptions underlying the valuation of the Swiss pension benefit
obligation were reassessed during the period and the discount rate was
adjusted to -0.05% (FY19: 0.45%) due to the reduction in Swiss benchmark
rates. Consequently, the net Swiss pension benefit obligation increased
from GBP52m at 31 March 2019 to GBP88m at 30 September 2019.
10. FINANCE COSTS
30 Sep 2019 30 Sep 2018
GBP'm GBP'm
------------------------------------------------
Interest expenses 31 24
Interest on lease liabilities 11 --
Amortisation of capitalised financing costs 1 4
Preference share dividend 3 7
Less: amounts included in cost of qualifying
assets (1) (4)
----------- -----------
45 31
----------- -----------
11. Income tax expense
30 Sep 2019 30 Sep 2018
GBP'm GBP'm
-------------------------------
Current tax
Current year 23 24
Previous year -- --
Deferred tax (34) (16)
----------- -----------
Taxation (credit) / expense (11) 8
----------- -----------
Composition
UK tax -- --
Foreign tax (11) 8
----------- -----------
(11) 8
----------- -----------
The tax charge for the period has been calculated using an
estimate of the effective annual rate of tax for the full
year by operating division. This rate has been applied to
the pre-tax profits for the six months ended 30 September
2019, with adjustments made for non-recurring items in the
period. The effective tax rate on the profit before tax was
(10%) (1H19: (6%)).
The following significant item affecting the effective tax
rate for the current period was identified:
- Corporate tax reforms in Switzerland led to the reduction
in deferred tax liabilities amounting to GBP35m and a corresponding
reduction to the tax charge.
The following significant items affecting the effective tax
rate for the prior period were identified:
- Impairment of the listed associate of GBP164m was not deductible
for tax purposes. The tax effect amounted to GBP31m (decrease
of 21% in effective tax rate); and
- The impairment of the properties (GBP43m) and the impairment
of trade names (GBP55m) in Switzerland led to the release
of deferred tax liabilities of GBP7m and GBP11m respectively.
The impact on the effective tax rate was minimal.
If the abovementioned significant items were excluded from
the effective tax rate calculation, the adjusted effective
tax rate would be 21.7% (1H19: 23.4%).
12. EARNINGS PER ORDINARY SHARE
30 Sep 2019 30 Sep 2018
GBP'm GBP'm
-------------------------------------------------------
Profit/(loss) per ordinary share (pence)
Basic (pence) 14.8 (22.8)
Diluted (pence) 14.8 (22.8)
Earnings reconciliation
Profit/(loss) attributable to equity holders
of the Company 109 (168)
Adjusted for:
No adjustments -- --
----------- -----------
Profit/(loss) for basic and diluted earnings
per share 109 (168)
----------- -----------
Number of shares reconciliation
Weighted average number of ordinary shares
in issue for basic earnings per share
Number of ordinary shares in issue at the beginning 737 243 737 243
of the year 810 810
Weighted average number of treasury shares (32 330) (66 664)
----------- -----------
Mpilo Trusts (32 330) (32 330)
Forfeitable Share Plan -- (34 334)
----------- -----------
737 211 737 177
480 146
----------- -----------
Weighted average number of ordinary shares
in issue for diluted earnings per share
Weighted average number of ordinary shares 737 211 737 177
in issue 480 146
Weighted average number of treasury shares
held not yet released from treasury stock 32 330 66 664
----------- -----------
Mpilo Trusts 32 330 32 330
Forfeitable Share Plan -- 34 334
----------- -----------
737 243 737 243
810 810
----------- -----------
12. EARNINGS PER ORDINARY SHARE (continued)
Headline earnings per ordinary share
The Group is required to calculate headline earnings per share
(HEPS) in accordance with the JSE Ltd (JSE) Listings Requirements,
determined by reference to the South African Institute of
Chartered Accountants' circular 04/2018 (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:
30 Sep 2019 30 Sep 2018
GBP'm GBP'm
--------------------------------------------------------
Headline earnings per share
Profit/(loss) for basic and diluted earnings
per share 109 (168)
Adjustments
Impairment of equity accounted investment -- 164
(Reversal of impairment) / impairment of properties
and intangible assets (4) 80
(Profit) / loss on disposal of subsidiaries -- (1)
Associate's impairment of property, plant and
equipment -- 4
----------- -----------
Headline earnings 105 79
----------- -----------
HEPS (pence) 14.2 10.7
Diluted HEPS (pence) 14.2 10.7
13. BUSINESS COMBINATIONS
The following business combinations occurred during the period:
30 Sep 2019 30 Sep 2018
GBP'm GBP'm
------------------------------------------
Cash flow on acquisition:
City Centre Clinics Deira and Me'aisem -- (7)
Welkom Medical Centre -- (6)
------------ -----------
-- (13)
------------------------------------------------------- -----------
14. disposal groups held for sale
During the 2020 financial year, management decided to sell
Klinik Belair Hospital within the Switzerland segment. In
the prior year, management decided to sell Al Musafah Speciality
Clinics within the Mediclinic Middle East segment.
30 Sep 2019 31 Mar 2019
GBP'm GBP'm
----------------------------------------------------
Analysis of assets and liabilities held-for-sale
Assets
Property, equipment and vehicles 9 1
Inventories 1 --
Trade and other receivables 4 3
Cash and cash equivalents 2 --
----------- -----------
Total assets 16 4
----------- -----------
Liabilities
Retirement benefit obligations 1 1
Deferred income tax liabilities 1 --
Trade and other payables 1 --
----------- -----------
Total liabilities 3 1
----------- -----------
15 CHANGES IN ACCOUNTING POLICIES
The Group adopted IFRS 16 retrospectively from 1 April 2019,
but has not restated comparatives for the 2019 reporting
period as permitted under the specific transition provisions
in the standard. The reclassifications and adjustments arising
from the new leasing rules are therefore recognised in the
opening statement of financial position on 1 April 2019.
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been classified
as operating leases under the principles of IAS 17 Leases.
These liabilities were measured at the present value of the
remaining lease payments, discounted using the lessee's incremental
borrowing rate at 1 April 2019. The weighted average incremental
borrowing rates applied to the lease liabilities on 1 April
2019 were as follows for each division:
-- Switzerland: 0.8% to 2.0%
-- Southern Africa: 8.7% to 9.8%
-- Middle East: 4.2% to 4.5%
A number of transition options are available to lessees under
IFRS 16. The Group applied the modified retrospective approach
where two options are available on a lease-by-lease basis:
-- The lease liability is measured at the present value of the
remaining lease payments over the period of the lease at
the incremental borrowing rate measured at 1 April 2019.
The right-of-use asset is measured retrospectively as if
IFRS 16 had always been applied with an adjustment to retained
earnings.
-- The lease liability is measured at the present value of the
remaining lease payments over the period of the lease at
the incremental borrowing rate measured at 1 April 2019.
The right-of-use asset is measured at an amount equal to
the lease liability with no adjustment to retained earnings.
As allowed under IFRS 16, the two options above were applied
on a lease-by-lease basis. For the larger leases of the Group,
the right-of-use assets were measured retrospectively with
an adjustment to retained earnings. For other leases, a more
simplistic approach was taken where the right-of-use assets
were determined to be equal to their respective lease liabilities.
In applying IFRS 16 for the first time, the Group has used
the following practical expedients as permitted by the standard:
-- Applying a single discount rate to a portfolio of leases
with reasonably similar characteristics;
-- Accounting for operating leases with a remaining lease term
of less than 12 months at 1 April 2019 as short-term leases;
-- Excluding initial direct costs for the measurement of the
right-of-use asset at the date of initial application; and
-- Using hindsight in determining the lease term where the contract
contains options to extend or terminate the lease.
The Group has also elected not to reassess whether a contract
is, or contains, a lease at the date of initial application.
Instead, for contracts entered into before the transition
date, the Group relied on its assessment made applying IAS
17 and Interpretation 4 Determining whether an Arrangement
contains a Lease.
15. CHANGES IN ACCOUNTING POLICIES (continued)
Measurement of lease liabilities
1 Apr 2019
GBP'm
-----------------------------------------------------
Operating lease commitments disclosed at 31 March
2019 754
Operating lease commitment for contracts commencing
after date of initial application (45)
----------
709
----------
Discounted using the lessee's incremental borrowing
rate on 1 April 2019 515
Short-term and low value leases not recognised as
a liability (7)
Adjustments as a result of different treatment of
extension and termination options 154
Lease liability for contracts commencing on 1 April
2019 3
Lease liability recognised as at 1 April 2019 665
----------
Non-current lease liabilities 618
Current lease liabilities 47
----------
665
Lease liability by segment:
Switzerland 394
Southern Africa 26
Middle East 245
----------
665
----------
Measurement of right-of-use assets
For certain identified leases, the associated right-of-use
assets were measured on a retrospective basis as if the new
rules had always been applied. Other right-of-use assets were
measured at an amount equal to the lease liability.
Adjustments recognised in the statement of financial position
on 1 April 2019
1 Apr 2019
GBP'm
--------------------------------------------------
Right-of-use assets (under property, equipment
and vehicles) 640
Less: Favourable lease contract reclassification (23)
----------
Right-of-use assets (under property, equipment
and vehicles) 617
Deferred tax assets 2
Prepayments (under trade and other receivables) (2)
Other payables (under trade and other payables) 8
Borrowings 3
Lease liabilities (665)
Impact on retained earnings (37)
----------
16. COMMITMENTS
30 Sep 2019 31 Mar 2019
GBP'm GBP'm
-----------------------
Capital commitments
Switzerland 48 31
Southern Africa 219 199
Middle East 73 35
----------- -----------
340 265
----------- -----------
These commitments will be financed from Group operating cash
flows and borrowings.
17. DIVIDS
30 Sept
Dividend per 30 Sept 2019 2018
Date paid/payable share (pence) GBP'm GBP'm
----------------------------- ------------------ -------------- ------------
Dividends declared
Period ended 30 September
2019
17 December
Interim dividend 2019 3.20 24
Period ended 30 September
2018
18 December
Interim dividend 2018 3.20 24
Dividends paid
Dividends paid during
the period 35 35
Under IFRS, dividends are only recognised in the financial statements when authorised by the Board of Directors (for interim dividends) or when authorised by the shareholders (for final dividends). The aggregate amount of the proposed dividend expected to be paid on 17 December 2019 from retained earnings has not been recognised as a liability at 30 September 2019.
18. 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,
put/call agreements and forward contracts. These financial
instruments 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 equity instruments at fair value through
profit or loss (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.
The Group has a put agreement (grouped as Level 3) to acquire
the remaining 40% interest in the combined company of Clinique
des Grangettes and Clinique La Colline. The options are exercisable
from September 2022 and the consideration on exercise will
be determined based on the profitability of Clinique des Grangettes
and Clinique La Colline at that time. The exercise price is
formula based.
The liability is adjusted at each period for changes in the
estimated performance and increased through finance charges
up to the redemption amount that is payable at the date at
which the option first becomes exercisable. In the event that
the option expires unexercised, the liability is derecognised
with a corresponding adjustment to equity. The changes in
the fair value of the liability will impact the income statement.
30 Sep 2019 31 Mar 2019
Redemption liability (written put option) GBP'm GBP'm
-----------------------------------------------
Opening balance 94 --
Derivative entered into as part of business
combination -- 88
Fair value adjustment -- --
----------- -----------
Exchange differences 6 6
----------- -----------
100 94
----------- -----------
19. RELATED PARTIES
There are no significant changes to the related party transactions
for the six months ended 30 September 2019 compared to those
disclosed in the Group's annual financial statements for the
year ended 31 March 2019.
20. SHARE-BASED PAYMENTS
During the six months ended 30 September 2019, the Group made
further grants under its existing long-term incentive plan
awards ("LTIP") as follows:
On 19 June 2019, the Group granted Ronnie van der Merwe and
Jurgens Myburgh 373 437 and 206 456 phantom shares respectively.
On the same date, 1 530 012 phantom shares were granted to
other senior management. The vesting of these shares is subject
to continued employment and is conditional upon achievement
of performance targets, measured over a three-year period.
The performance conditions for the year under review constitute
a combination of: absolute total shareholder return ("TSR")
(40% weighting) and adjusted earnings per share (60% weighting).
For awards to vest, the Remuneration Committee must be satisfied
that appropriate return on invested capital (ROIC) have been
achieved in order to allow the full vesting of LTIP Awards.
For the six months ended 30 September 2019, the total cost
recognised in the income statement for the LTIP awards was
GBP0.6m (1H19: GBP0.6m).
21. EVENTS AFTER THE REPORTING DATE
Klinik Belair in Schaffhausen was sold with effect from 1
October 2019 for a purchase consideration of GBP12m.
Except for the disposal of Klinik Belair, the Directors are
not aware of any other matter or circumstance arising since
the end of the financial period that would significantly affect
the operations of the Group or the results of its operations.
ABOUT MEDICLINIC INTERNATIONAL PLC
Mediclinic is a diversified international private healthcare services group, established in South Africa in 1983, with current operating divisions in Switzerland, Southern Africa (South Africa and Namibia) and the United Arab Emirates. Mediclinic also holds a 29.9% interest in Spire Healthcare Group plc, an LSE-listed and UK-based private healthcare group.
The Group's core purpose is to enhance the quality of life. Its vision is to be the partner of choice that people trust for all their healthcare needs.
The Group is focused on providing specialist-orientated, multi-disciplinary services across the continuum of care in such a way that the Group will be regarded as the most respected and trusted provider of healthcare services by patients, medical practitioners, funders and regulators of healthcare in each of its markets.
At 30 September 2019, Mediclinic comprised 78 hospitals, five sub-acute hospitals, 13 day case clinics and 22 outpatient clinics. Hirslanden operated 18 hospitals, two day case clinics and three outpatient clinics in Switzerland with more than 1 900 inpatient beds; Mediclinic Southern Africa operations included 53 hospitals (three of which in Namibia), five sub-acute hospitals and nine day case clinics (four of which operated by Intercare) across South Africa, and more than 8 500 inpatient beds; and Mediclinic Middle East operated seven hospitals, two day case clinics and 19 outpatient clinics with more than 900 inpatient beds in the United Arab Emirates.
The Company's primary listing is on the London Stock Exchange ("LSE") in the United Kingdom, with secondary listings on the JSE Ltd in South Africa and the Namibian Stock Exchange ("NSX") in Namibia.
audio WEBCAST AND CONFERENCE CALL DETAILS
In conjunction with these results, Mediclinic is hosting an audio webcast and conference call. A replay facility will be available on the website shortly after the presentation.
09:00 GMT/11:00 SAST
Audio webcast: https://edge.media-server.com/mmc/p/zyeen9bn
To access the call, please dial the appropriate number below 5-10 minutes before the start of the event using the conference confirmation code below.
UK: +44 (0)20 7192 8000
SA: +27 (0)10 500 7996
CH: +41 (0)315 800 059
UAE toll-free: 8000 3570 3493
US: +1 631 5107 495
Confirmation code: 3697226
CONTACT INFORMATION
Investor queries
James Arnold, Head of Investor Relations, Mediclinic International plc
+44 (0)20 3786 8181
ir@mediclinic.com
Media queries
FTI Consulting
Brett Pollard/Ciara Martin - United Kingdom
+44 (0)20 3727 1000
Sherryn Schooling - South Africa
+27 (0)21 487 9000
Registered address: 6(th) Floor, 65 Gresham Street, London, EC2V 7NQ, United Kingdom
Website: www.mediclinic.com
Joint corporate brokers: Morgan Stanley & Co International plc and UBS Investment Bank
JSE sponsor (South Africa): Rand Merchant Bank (A division of FirstRand Bank Ltd)
NSX sponsor (Namibia): Simonis Storm Securities (Pty) Ltd
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR KMMMMNFFGLZM
(END) Dow Jones Newswires
November 14, 2019 02:00 ET (07:00 GMT)
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