LHC: LIFE HEALTHCARE GROUP HOLDINGS LIMITED - Audited results ended 30 September 2015,

2015-11-13 07:05:00
LHC: LIFE HEALTHCARE GROUP HOLDINGS LIMITED - Audited results ended 30 September 2015, 
and declaration of scrip distribution and a cash dividend alternative
Audited results ended 30 September 2015, 
and declaration of scrip distribution and a cash dividend alternative
LIFE HEALTHCARE GROUP HOLDINGS LIMITED 
Registration number: 2003/002733/06 
Income tax number: 9387/307/15/1 ISIN:
ZAE000145892 
Share code: LHC
SUMMARISED AUDITED CONSOLIDATED RESULTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015, 
AND DECLARATION OF SCRIP DISTRIBUTION AND CASH DIVIDEND ALTERNATIVE
Paid patient days (PPDs)
+3%
Revenue
+12.3% to R14 647 million
Normalised EBITDA
+12.1% to R4 048 million
Final dividend of 86 cents per share, giving a total dividend of 154 cents per share
+9.2%
Headline earnings per share increased to 179.9 cents
+1.2%
Summarised consolidated statement of comprehensive income
for the year ended 30 September 2015
R'm                                                                                     30 September       %  30 September
                                                                                                2015  Change          2014
Revenue                                                                                       14 647    12.3        13 046
Other income                                                                                     129                   115
Operating expenses                                                                           (11 280)              (10 011)
Profit on disposal of a business                                                                   -                     2
Contingent consideration released                                                                 21                     -
Transaction costs                                                                                (15)                  (16)
Profit on disposal of investment in associate                                                      -                   957
Gain on bargain purchase                                                                           -                     1
Impairment of property, plant and equipment                                                        -                    (1)
Operating profit                                                                               3 502   (14.4)        4 093
Fair value gain on derivative financial instruments                                               29                    49
Finance income                                                                                    12                    22
Finance cost                                                                                    (445)                 (230)
Share of associates' and joint ventures' net  profit after tax                                    14                    39
Profit before tax                                                                              3 112                 3 973
Tax expense                                                                                     (884)                 (875)
Profit after tax                                                                               2 228   (28.1)        3 098
Other comprehensive income, net of tax
Items that may be reclassified subsequently  to profit or loss
Currency translation differences                                                                 158                    (1)
Items that will not be reclassified to profit or loss
Retirement benefit asset                                                                          (6)                   19
Post-retirement medical aid                                                                        1                     2
Total comprehensive income for the year                                                        2 381   (23.6)        3 118
Profit after tax attributable to:
Ordinary equity holders of the parent                                                          1 866   (32.7)        2 774
Non-controlling interest                                                                         362                   324
                                                                                               2 228   (28.1)        3 098
Total comprehensive income attributable to:
Ordinary equity holders of the parent                                                          2 010   (28.1)        2 796
Non-controlling interest                                                                         371                   322
                                                                                               2 381   (23.6)        3 118
Weighted average number of shares in issue (million)                                           1 037                 1 037
Earnings per share (cents)                                                                     179.9   (32.7)        267.5
Headline earnings per share (cents)                                                            179.9     1.2         177.8
Diluted earnings per share (cents)                                                             179.2   (32.8)        266.7
Diluted headline earnings per share (cents)                                                    179.2     1.1         177.3
Headline earnings (R'm)
Profit attributable to ordinary equity holders                                                 1 866                 2 774
Headline earnings adjustable items
Impairment of property, plant and equipment                                                        -                     1
Profit on disposal of a business                                                                   -                    (2)
Profit on disposal of investment in associate                                                      -                  (957)
Gain on bargain purchase                                                                           -                    (1)
Tax                                                                                                -                    29
Headline earnings                                                                              1 866     1.2         1 844
Summarised consolidated statement of financial position
as at 30 September 2015
R'm                                                                                             30 September  30 September
                                                                                                        2015          2014
ASSETS
Non-current assets                                                                                    13 164         9 700
Property, plant and equipment                                                                          7 101         5 901
Intangible assets                                                                                      2 964         2 318
Other non-current assets                                                                               3 099         1 481
Current assets                                                                                         2 771         2 113
Other current assets                                                                                   1 959         1 691
Cash and cash equivalents                                                                                812           422
TOTAL ASSETS                                                                                          15 935        11 813
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves                                                                                   5 168         4 792
Non-controlling interest                                                                               1 280         1 108
TOTAL EQUITY                                                                                           6 448         5 900
LIABILITIES
Non-current liabilities                                                                                5 873         2 909
Interest-bearing borrowings                                                                            5 263         2 344
Other non-current liabilities                                                                            610           565
Current liabilities                                                                                    3 614         3 004
Other current liabilities                                                                              2 133         1 842
Interest-bearing borrowings                                                                              924         1 007
Bank overdraft                                                                                           557           155
TOTAL LIABILITIES                                                                                      9 487         5 913
TOTAL EQUITY AND LIABILITIES                                                                          15 935        11 813
Summarised consolidated statement of changes in equity
for the year ended 30 September 2015
R'm                                                                                            Total         Non-    Total
                                                                                         capital and  controlling   equity
                                                                                            reserves     interest
Balance at 1 October 2014                                                                      4 792        1 108    5 900
Total comprehensive income for the year                                                        2 010          371    2 381
Profit for the year                                                                            1 866          362    2 228
Other comprehensive income                                                                       144            9      153
Gains on transactions with non-controlling interests                                               7           (7)       -
Increase in ownership interest in subsidiaries                                                   (36)           -      (36)
Distributions to shareholders                                                                 (1 522)        (192)  (1 714)
Life Healthcare Employee Share Trust charge                                                       28            -       28
Long-Term Incentive Scheme charge                                                                  8            -        8
Purchase of treasury shares                                                                     (120)           -     (120)
Profit on disposal of treasury shares                                                              1            -        1
Balance at 30 September 2015                                                                   5 168        1 280    6 448
Balance at 1 October 2013                                                                      4 525        1 081    5 606
Total comprehensive income for the year                                                        2 796          322    3 118
Profit for the year                                                                            2 774          324    3 098
Other comprehensive income                                                                        22           (2)      20
Gains on transactions with non-controlling interests                                               8           (8)       -
Non-controlling interest arising on business combination                                           -            6        6
Increase in ownership interest in subsidiaries                                                  (102)           -     (102)
Distributions to shareholders                                                                 (2 449)        (293)  (2 742)
Life Healthcare Employee Share Trust charge                                                       17            -       17
Long-Term Incentive Scheme charge                                                                 18            -       18
Purchase of Treasury shares                                                                      (21)           -      (21)
Balance at 30 September 2014                                                                   4 792        1 108    5 900
Summarised consolidated statement of cash flows
for the year ended 30 September 2015
R'm                                                                                     30 September       %  30 September
                                                                                                2015  Change          2014
Cash generated from operations                                                                 3 842     9.3         3 516
Tax paid                                                                                        (903)                 (980)
Net cash generated from operating activities                                                   2 939    15.9         2 536
Capital expenditure                                                                           (1 181)   22.8          (962)
Other                                                                                         (2 037)                  864
Net cash utilised in investing activities*                                                    (3 218)                  (98)
Interest-bearing borrowings raised                                                             4 268                 1 661
Interest-bearing borrowings repaid                                                            (1 860)                 (919)
Distributions to shareholders                                                                 (1 520)               (2 446)
Other                                                                                           (654)                 (562)
Net cash utilised in financing activities                                                        234                (2 266)
Net (decrease)/increase in cash and cash equivalents                                             (45)                  172
Cash and cash equivalents - beginning of the year                                                267                    64
Cash balances acquired through business combinations                                              20                    23
Effect of foreign currency movement                                                               13                     8
Cash and cash equivalents - end of the year                                                      255                   267
* The cash utilised in investing activities includes the acquisitions in Poland (R633 million), and the additional
shares in  Max Healthcare Institute Limited, India for R1.3 billion.
Segmental report
The Hospital segment comprises all the private hospitals in southern Africa, the Healthcare Services segment comprises Life
Esidimeni, Life Occupational Health and Careways Wellness. International comprises Poland while the Other segment comprises
Corporate.
There are no inter-segment revenue streams.
R'm                                                                                               Year ended    Year ended
                                                                                                30 September  30 September
                                                                                                        2015          2014
Operating segments
Revenue
Southern Africa
Hospitals                                                                                             13 133        12 007
Healthcare Services                                                                                      866           864
International
Hospitals                                                                                                648           175
Total                                                                                                 14 647        13 046
Profit before items detailed below
Southern Africa
Hospitals                                                                                              3 201         2 905
Healthcare Services                                                                                      157           135
Other                                                                                                    191           213
International
Hospitals                                                                                                 54             3
Operating profit before items detailed below                                                           3 603         3 256
Amortisation of intangible assets                                                                       (127)         (122)
Impairment of property, plant and equipment                                                                -            (1)
Profit on disposal of investment in associate                                                              -           957
Profit on disposal of a business                                                                           -             2
Gain on bargain purchase                                                                                   -             1
Retirement benefit asset                                                                                  20            15
Post-retirement medical aid                                                                                -             1
Transaction costs                                                                                        (15)          (16)
Contingent consideration released                                                                         21             -
Operating profit                                                                                       3 502         4 093
Fair value gain on derivative financial instruments                                                       29            49
Finance income                                                                                            12            22
Finance costs                                                                                           (445)         (230)
Share of associates' and joint ventures' net profit after tax                                             14            39
Profit before tax                                                                                      3 112         3 973
R'm                                                                                               Year ended    Year ended
                                                                                                30 September  30 September
                                                                                                        2015          2014
Operating profit before items detailed includes the segment's share  of shared services and rental costs. 
These costs are all at market  related rates.
Total assets before items below
Southern Africa                                                                                       10 710         9 160
International                                                                                          4 419         1 905
Total assets before items detailed below                                                              15 129        11 065
Deferred tax assets                                                                                      341           253
Current income tax asset                                                                                  36            49
Retirement benefit asset                                                                                 389           372
Post-retirement medical aid                                                                               17            18
Derivative financial instruments                                                                          23            56
Total assets per the balance sheet                                                                    15 935        11 813
Net debt
Southern Africa                                                                                        5 625         2 620
International                                                                                            307           464
                                                                                                       5 932         3 084
Liabilities are reviewed on a net debt basis, which comprises all interest-bearing borrowings and overdraft balances (net
cash on hand).
Acquisitions and disposals of investments
Changes in ownership interest in subsidiaries as a result of non-controlling interest transactions
The Group had marginal increases and decreases in its shareholdings in some of its subsidiary companies due to transactions 
with minority shareholders.
Increase in shareholding in Max Healthcare Institute Limited
The Group acquired additional shares in Max Healthcare Institute Limited (Max Healthcare) in November 2014  and now owns
46.25%. The transaction resulted in Life Healthcare equalising its shareholding with Max India  (Max equalisation). 
The remaining 7.5% is held by the International Finance Corporation (IFC). The additional amount invested was R1.3 billion. 
This was funded through the issue of preference shares in South Africa.
Business combinations
The Group acquired 100% of Genesis Clinic Saxonwold Proprietary Limited (Genesis) and the business of Careways Proprietary
Limited (Careways) in March 2015 and May 2015 respectively for a total of R78 million. These companies had no significant
contingent liabilities at the acquisition date.
The following presents the net impact on the consolidated information of the Group as if the business combination took 
place on 1 October 2014:
                                                                                                                      R'm
Revenue                                                                                                                81
Net profit                                                                                                              4
In June 2015, Scanmed Multimedis S.A. (Scanmed) acquired 49.93% in Carint, incorporated in Poland, for R66 million. The company
had no significant contingent liabilities at the acquisition date.
In October 2014, Scanmed acquired 100% of Sport Klinika, incorporated in Poland. The company had no significant contingent
liabilities at the acquisition date.
The following presents the impact on the consolidated information of the Group for the period:
                                                                                                                      R'm
Revenue                                                                                                                77
Net profit                                                                                                             10
Details of the net assets acquired and goodwill are as follows:
Total purchase consideration                                                                                         (211)
Cash portion                                                                                                         (211)
Non-cash portion                                                                                                        -
Fair value of net assets acquired                                                                                      75
Goodwill arising on acquisition                                                                                      (136)
The fair value of the assets and liabilities arising from the aquisition were as follows:
                           
                                                                                                                 Acquiree
                                                                                                               fair value
                                                                                                                      R'm
Inventories                                                                                                             1
Trade and other receivables                                                                                             6
Trade and other payables                                                                                               (7)
Cash and cash equivalents                                                                                              18
Current tax liability                                                                                                  (1)
Borrowings                                                                                                            (46)
Property, plant and equipment                                                                                          86
Intangible assets                                                                                                      25
Deferred tax                                                                                                           (7)
                                                                                                                       75
In November 2014, Scanmed acquired 100% of Kliniki Kardiologii Allenort, incorporated in Poland. The company had no
significant contingent liabilities at the acquisition date.
The following presents the impact on the consolidated information of the Group as if the business combination took place 
on 1 October 2014: 
                                                                                                                      R'm
Revenue                                                                                                               163
Net profit                                                                                                             16
Details of the net assets acquired and goodwill are as follows:
Total purchase consideration                                                                                         (443)
Cash portion                                                                                                         (338)
Contingent consideration                                                                                             (105)
Fair value of net assets acquired                                                                                     101
Goodwill arising on acquisition                                                                                      (342)
The contingent consideration is dependent on the business gaining additional contracts in the next nine months. The
contingent consideration is calculated by applying the same EBITDA multiple used on the acquisition date.
The fair value of the assets and liabilities arising from the aquisition were as follows:
                               
                                                                                                                 Acquiree
                                                                                                               fair value
                                                                                                                      R'm
Inventories                                                                                                             2
Trade and other receivables                                                                                            66
Trade and other payables                                                                                              (30)
Cash and cash equivalents                                                                                               1
Borrowings                                                                                                            (87)
Property, plant and equipment                                                                                         115
Intangible assets                                                                                                      53
Deferred tax                                                                                                          (19)
                                                                                                                      101
Basis of presentation and accounting policies
The summarised consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings 
Requirements for preliminary reports, and the requirements of the Companies Act 71 of 2008, applicable to summary financial 
statements. The Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts and 
the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial 
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting 
Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the consolidated financial statements from which the summary
consolidated financial statements were derived are in terms of IFRS and are consistent with those applied in the previous
consolidated annual financial statements, except for the adoption of the new and revised standards.
These financial results have been prepared under the supervision of PP van der Westhuizen CA(SA), the Chief Financial Officer 
of the Group.
Report of the independent auditor
This summarised report is extracted from audited information, but is not itself audited. The annual financial statements were 
audited by PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The audited annual financial statements and 
the auditor's report thereon are available for inspection at the Company's registered office.
The directors take full responsibility for the preparation of the preliminary report and that the financial information has
been correctly extracted from the underlying consolidated financial statements.
Commentary
Overview
The Group performed well, with revenue up 12.3% and EBITDA up 12.1%. Earnings were, however, impacted by the dilutive effect 
of the interest cost on the funding of the international acquisitions through debt raised in South Africa.
The southern African operations experienced good activity growth with an overall paid patient day (PPD) growth  of 3.0% and
an improved EBITDA margin of 28.3% (2014: 27.9%). The Group continued to deliver on its international expansion plans,
investing R1.3 billion in increasing its shareholding in Max Healthcare to 46.25% and investing a further R886 million
acquiring three businesses and providing funding in Poland via its subsidiary Scanmed. Revenue and EBITDA continued to show good 
growth in both the Polish and Indian operations.
The funding for the international investments was done via raising debt in South Africa. Primarily due to the continued ramp up 
of the facilities within Max Healthcare, the interest cost on the debt raised in South Africa is currently  significantly higher 
than the earnings from this investment, resulting in an earnings dilution. Earnings per share on a normalised basis, which excludes 
non-trading related items and the effect of disposed/closed businesses, increased by 5.2%. Headline earnings per share (HEPS) 
increased by 1.2%.
Operational review
Southern Africa
During the current year, the Group focused on the following in southern Africa:
Growing the acute business through adding additional beds at selected facilities where there is a demand for services:
- During the year an additional 253 beds (2014: 249) were added to the business. These additional beds comprise the acquisition 
  of the 14-bed Genesis Maternity Clinic in Saxonwold, Johannesburg, the brownfield expansions of 145 beds   across the country 
  and the 94-bed Life Hilton Private Hospital greenfield development in Hilton, KwaZulu-Natal.
- Activities, as measured by PPDs increased by 3.2% in the acute business driven largely by the increase in capacity due to
  additional beds and an increase in the length of stay resulting from higher acuity surgical cases and a faster growing
  medical case mix.
- Occupancies continue to remain high in the intensive and high care units (75.3%) (2014: 77%) and the overall weighted
  occupancy for the period was 71.9% (2014: 71.9%).
Recruiting and retaining more specialists to our facilities:
- The Group recruited a net 106 specialists across the country.
Training nurses and recruiting specialist nurses in India:
- The Group has 131 nurses from India currently working in South Africa with a further 225 nurses joining in the next 18
  months. The Group is currently training 1 165 nurses and 704 nurses graduated in 2015.
Improving the efficiency of the business:
- The margin in southern Africa improved from 27.9% in 2014 to 28.3%. This improvement is attributable to the case mix
  effect of increased medical cases compared to surgical cases, growth in the complementary services businesses, the impact
  of efficiency programmes as well as the effect of the continued improvement in operational leverage where 69% of hospital
  beds have a greater than 70% occupancy.
Expanding the complementary services business:
- The Group experienced a 4.5% growth in mental health PPDs but a decline in PPDs of 4.4% in the acute rehabilitation business.
- The decline in the acute rehabilitation business was largely due to doctor movements and as a result of greater
  competition from sub-acute units.
Improving quality outcomes:
- The Group continued to improve the quality metrics as evidenced by an improvement in clinical outcomes, hospital-associated 
  infection rates and patient experience in our facilities.
Poland
The focus in Poland for the year included:
Executing on the strategy of establishing a comprehensive countrywide network of facilities:
- In this regard, Scanmed acquired 100% of Sport Klinika, a 46-bed orthopaedic centre, 100% of six inpatient cardiology
  centres (Kliniki Kardiologii Allenort) and 49.93% of the Scanmed Carint cardiology business. The Scanmed Group now consists of 
  334 beds, seven inpatient cardiology centres and 28 medical centres.  The Group's total investment in the   business is now 
  R1.4 billion (2014: R510 million), with an EBITDA contribution of R91 million (2014: R16 million) and   earnings (excluding 
  transaction costs) of R14 million  (2014: Loss of R12 million).
Integrating the acquired businesses and improving EBITDA margins:
- The EBITDA margin in Scanmed expanded from 9.1% in 2014 to 14% in 2015. This expansion is a combination of the efficiency
  programmes as well as the impact of businesses acquired where the margins are higher than the base.
India 
Max Healthcare continues to grow its hospitals in line with the business plan. The business uses its own cash flows and local 
debt to fund these growth plans. The total investment from South Africa into Max Healthcare is R2.2 billion with the associated 
earnings of R5 million reflecting the growth phase of this business.
The focus in India for the year included:
The shareholding equalisation with Max India:
- In November 2014 the Group concluded the transaction for R1.3 billion and now owns 46.25%.
Growing the Indian operations through select acquisitions and brownfield and greenfield developments:
- Max Healthcare added nearly 400 operational beds through the acquisition of Pushpanjali Hospital  (renamed Max Vaishali Hospital) 
  with 340 beds, of which 260 beds are operational, and through the expansion of more operational beds in the Phase II hospitals. 
  Max Healthcare has 2 053 operational beds as at 30 September 2015.
Growing revenue and improving the EBITDA margin:
- Max Healthcare grew both net revenue and EBITDA for the 12-month period by 31%.
- The EBITDA margin remained stable at 9.9%.
Financial performance
Group revenue increased by 12.3% to R14 647 million (2014: R13 046 million) consisting mainly of an 8.8% increase in southern African 
revenue to R13 999 million (2014: R12 871 million) and R648 million (2014: R175 million), revenue contribution from Scanmed. 
The southern African Hospital division revenue increased by 9.4% to R13 133 million 
(2014: R12 007 million) driven by a 3% increase in PPDs and a higher revenue per PPD of 6.4%, made up of a 5.9% tariff increase 
and a 0.5% positive case mix impact. Healthcare Services revenue remained flat in the current year.
Normalised EBITDA* increased by 12.1% to R4 048 million (2014: R3 611 million). Normalised EBITDA on a continuing basis
increased by 12.5% to R4 048 million (2014: R3 597 million).
* Life Healthcare defines normalised EBITDA as operating profit plus depreciation, amortisation of intangible assets,
  impairment of property, plant and equipment as well as excluding profit/loss and fair value adjustments on disposal of
  businesses, fair value adjustments, transaction costs and surpluses/deficits on retirement benefits.
R'm                                                                                     30 September       %  30 September
                                                                                                2015  Change          2014
Normalised EBITDA 
Operating profit                                                                               3 502                 4 093
Profit on disposal of investment in associate                                                      -                  (957)
Contingent consideration released                                                                (21)                    -
Gain on bargain purchase                                                                           -                    (1)
Impairment of property, plant and equipment                                                        -                     1
Profit on disposal of business                                                                     -                    (2)
Depreciation on property, plant and equipment                                                    445                   355
Transaction costs                                                                                 15                    16
Amortisation of intangible assets                                                                127                   122
Retirement benefit asset                                                                         (20)                  (15)
Post-employment medical aid                                                                        -                    (1)
Normalised EBITDA                                                                              4 048    12.1         3 611
Discontinued operations*                                                                           -                   (14)
Normalised EBITDA - continued operations                                                       4 048    12.5         3 597
Southern Africa                                                                                3 957    10.5         3 581
Poland                                                                                            91                    16
* Discontinued operations are businesses that for comparative purposes are disclosed separately due to only being
  included for part of a period. The businesses were disposed/closed during the prior period and include Matikwana Hospital
  where the contract with the Government came to an end in March 2014.
Cash flow
The Group produced strong cash flows from operations of 95% of EBITDA (2014: 97%), however, the overall net cash outflow
position of the Group is negative, given the significance of the investing activities during the period, primarily associated 
with the investment opportunities of the Group. This net outflow was funded through raising of debt in South Africa.
Competition Commission Market Inquiry
Life Healthcare has made a detailed submission on the subject matter of the Inquiry and submitted a further response to the
public submissions as requested by the Panel. This is a large and complex inquiry and the Commission has now published a
revised timetable with public hearings occurring from February 2016 to May 2016, a provisional report to be published during 
August 2016 and the final report being published in December 2016.
Financial position
The Group still has a strong financial position. Net debt to normalised EBITDA as at 30 September 2015 was  1.49 times 
(2014: 0.84 times). The increase in debt is primarily due to the R1.3 billion investment into Max Healthcare in November 
2014 and the R886 million spent on acquisitions and funding in Poland. The bank covenant for net debt to EBITDA is 2.75 times.
The Group is exploring alternative funding opportunities to finance the international acquisitions and this includes the
introduction of a Scrip Distribution programme.
The Scrip Distribution, with the election to receive the Cash Dividend, allows the Group to utilise the cash saved through
the programme to support continued growth, affords shareholders the opportunity to increase their shareholding in the Group, 
and provides flexibility for those shareholders who would prefer to receive a Cash Dividend.
HEPS and normalised earnings per share
HEPS increased by 1.2% to 179.9 cps (2014: 177.8 cps). Earnings per share on a normalised basis, which excludes non-trading
related items listed below and the effect of disposed/closed businesses, increased by 5.2% to 177.4 cps (2014: 168.6 cps).
R'm                                                                                                     2015     %    2014
Normalised earnings
Profit attributable to ordinary equity holders                                                         1 866         2 774
Decrease in profits due to the impact of businesses disposed/closed^ (net of tax):                         -           (54)
Adjusted profit attributable to ordinary equity holders  from continued operations                     1 866         2 720
Profit on disposal of a business                                                                           -            (1)
Contingent consideration released                                                                        (21)            -
Profit on disposal of investment in associate                                                              -          (929)
Impairment of property, plant and equipment                                                                -             1
Retirement funds                                                                                         (15)          (11)
Retirement funds (included in employee benefits expense)                                                  (4)           (7)
Transaction costs                                                                                         15            16
Fair value gain on foreign exchange hedge contract                                                        (1)          (40)
Gain on bargain purchase                                                                                   -            (1)
Normalised earnings from continued operations                                                          1 840   5.3   1 748
Normalised EPS (cents) from continued operations                                                       177.4   5.2   168.6
Southern Africa Operations (cents)                                                                     194.1         176.8
International Operations (cents)                                                                         1.8          (2.2)
Funding costs (international acquisitions) (cents)                                                     (18.5)         (6.0)
^ Includes Matikwana Hospital and Joint Medical Holdings Limited.
Capital expenditure
During the current financial year, Life Healthcare invested R3 218 million (2014: R1 480 million) mainly comprising capital
projects of R1 181 million (2014: R962 million), R1.3 billion for the equalisation of Max Healthcare and  R633 million in
expanding the business of Scanmed. This investment in the Group's facilities ensures that the demand for services is met and 
the Group remains abreast of modern technology and standards.
Changes to board of directors
FA du Plessis retired from the board; audit; and the social, ethics and transformation committees with effect from  
28 January 2015 at the annual general meeting. GC Solomon and JK Netshitenzhe were respectively appointed  to the audit
committee and the social, ethics and transformation committee with effect from 29 January 2015.  MEK Nkeli was appointed 
to the board of directors as a non-executive director with effect from 1 October 2015.
Scrip Distribution and Cash Dividend alternative
1. Introduction
The board has declared a final distribution for the year ended 30 September 2015, by way of the issue of fully paid Life
Healthcare Group Holdings Limited ordinary shares of 0.0001 cent each (the Scrip Distribution) payable to ordinary
shareholders (Shareholders) recorded in the register of the Company at the close of business on the Record Date, being
Friday, 11 December 2015.
Shareholders will be entitled, in respect of all or part of their shareholding, to elect to receive a gross cash dividend 
of 86 cents per ordinary share in lieu of the Scrip Distribution, which will be paid only to those Shareholders who elect 
to receive the cash dividend, in respect of all or part of their shareholding, on or before 12:00 on Friday, 11 December 2015 
(the Cash Dividend). The Cash Dividend has been declared from income reserves. A dividend withholding tax of 15% will be 
applicable to all shareholders not exempt, therefrom after deduction of which the net Cash Dividend is 73.1 cents per share.
The new ordinary shares will, pursuant to the Scrip Distribution, be settled by way of capitalisation of the Company's
distributable retained profits.
The Company's total number of issued ordinary shares is 1 042 209 750 as at 12 November 2015. The Company's Income Tax
reference number is 9387/307/15/1.
2. Terms of the Scrip Distribution
The Scrip Distribution will be done at a 2.5% discount to the 15-day volume weighted average price (VWAP). The number of
Scrip Distribution shares to which each of the Shareholders will become entitled pursuant to the Scrip Distribution (to the
extent that such Shareholders have not elected to receive the Cash Dividend) will be determined by reference to such
Shareholder's ordinary shareholding in Life Healthcare Group Holdings Limited (at the close of business on the Record Date,
being Friday, 11 December 2015) in relation to the ratio that 86 cents multiplied by 1.025 bears to the VWAP of an ordinary
Life Healthcare Group Holdings Limited share traded on the JSE during the 15-day trading period ending on Thursday, 
26 November 2015. Where the application of this ratio gives rise to a fraction of an ordinary share, the number of shares will 
be rounded up to the nearest whole number if the fraction is 0.5 or more and rounded down to the nearest whole number if the 
fraction is less than 0.5.
Details of the ratio will be announced on the Stock Exchange News Service (SENS) of the JSE in accordance with the timetable below.
3. Circular and salient dates
A circular providing shareholders with full information on the Scrip Distribution and the Cash Dividend alternative,
including a Form of Election to elect to receive the Cash Dividend alternative will be posted to Shareholders on or about
Thursday, 19 November 2015. The salient dates of events thereafter are as follows:
Event                                                                                                                Date
Announcement released on SENS in respect of the ratio applicable to the Scrip Distribution, 
based on the 15-day volume weighted average price ending on Thursday, 26 November, by 11h00 on                    Friday,
                                                                                                         27 November 2015
Announcement published in the press of the ratio applicable to the Scrip Distribution, based on 
the 15-day volume weighted average price ending on Thursday, 26 November 2015 on                                  Monday,
                                                                                                         30 November 2015
Last day to trade in order to be eligible for the Scrip Distribution and the Cash Dividend 
alternative                                                                                                       Friday,
                                                                                                          4 December 2015
Ordinary shares trade "ex" the Scrip Distribution and the Cash Dividend alternative on                            Monday,
                                                                                                          7 December 2015
Listing and trading of maximum possible number of ordinary shares on the JSE in terms
of the Scrip distribution from the commencement of business on                                                    Monday,
                                                                                                          7 December 2015
Last day to elect to receive the Cash Dividend alternative instead of the Scrip Distribution, 
Forms of Election to reach the Transfer Secretaries by 12h00 on                                                   Friday,
                                                                                                         11 December 2015
Record Date in respect of the Scrip Distribution and the Cash Dividend alternative                                Friday,
                                                                                                         11 December 2015
Scrip Distribution shares issued to shareholders on the South African register and 
Scrip Distribution, certificates posted and Cash Dividend payments made, CSDP/broker 
accounts credited/updated, as applicable, on                                                                      Monday,
                                                                                                         14 December 2015
Announcement relating to the results of the Scrip Distribution and the Cash Dividend 
alternative released on SENS on                                                                                   Monday,
                                                                                                         14 December 2015
Announcement relating to the results of the Scrip Distribution and the Cash Dividend 
alternative published in the press on                                                                            Tuesday,
                                                                                                         15 December 2015
JSE listing of ordinary shares in respect of the Scrip Distribution adjusted to reflect the 
actual number of ordinary shares issued in terms of the Scrip Distribution at the commencement 
of business on or about                                                                                         Thursday,
                                                                                                         17 December 2015
All times provided are South African local times. The above dates and times are subject to change. Any change will be
announced on SENS.
Share certificates may not be dematerialised or rematerialised between Monday, 7 December 2015 and Friday,  
11 December 2015, both days inclusive.
Outlook
In southern Africa the Group will continue to focus on its growth objectives. The Group aims to add 210 beds in the 2016
financial year, being 108 acute hospital brownfield expansion beds and 102 mental health beds. The complementary services
business will also grow further through the addition of 50 renal stations and the addition of an oncology unit, while a
further unit is under construction and will become operational in the 2017 financial year. The pressure on costs will remain 
in light of the weakening exchange rate, wage expectations and other overhead costs. The Group will continue to focus on efficiency 
programmes to lessen the impact.
In Poland, the Group will continue to execute on its strategy of establishing a comprehensive network of facilities and will 
explore further acquisition opportunities, as well as the integration of the acquired businesses. The Group will also
continue to focus on improving margin through the driving of further efficiencies.
The Max Healthcare business will continue to focus on driving revenue through increasing the number of operational beds and
focus on improving operational efficiencies.
The Group is currently in the process of acquiring a business in Poland via Scanmed and Max Healthcare is in the process of
acquiring a hospital in Delhi. Both of these transactions are dependent on regulatory approval and the successful completion 
of due diligence processes. The expected conclusion of these transactions is before the end of December 2015.
The quality management programme of the Group is a comprehensive, consistently applied and measured programme which
benchmarks clinical interventions against international best practice with the aim of enhancing patient outcomes. In addition 
Life Healthcare recognises the shortage of healthcare skills and will continue to invest heavily in the training of doctors, 
nurses and pharmacists. The Competition Commission Market Inquiry into the healthcare sector will play an important role in 2016 
as the Commission looks to complete the Inquiry by December 2016.
Thanks
The contribution of the doctors, nurses and employees of Life Healthcare have greatly enhanced the quality of our
performance. We thank them for their contributions.
Approved by the board of directors on 12 November 2015 and signed on its behalf:
Mustaq Brey        Andre Meyer
Chairman           Chief Executive Officer
Executive directors:  
A Meyer (Chief Executive Officer), PP van der Westhuizen (Chief Financial Officer)
Non-executive directors:  
MA Brey (Chairman), PJ Golesworthy, ME Jacobs, LM Mojela, MEK Nkeli, JK Netshitenzhe, MP Ngatane, GC Solomon, RT Vice
Company secretary:  
F Patel
Registered Office:  
Oxford Manor, 21 Chaplin Road, Illovo Private Bag X13, Northlands 2116
Sponsors:  
Rand Merchant Bank, a division of FirstRand Bank Limited.
Note regarding forward-looking statements: The company advises investors that any forward-looking statements or projections
made by the company, including those made in this announcement, are subject to risk and uncertainties that may cause actual 
results to differ materially from those projected.
www.lifehealthcare.co.za
Date: 13/11/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Source: JSE News Service (SENS)

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