Life Healthcare 2025 - Expansion And Innovation PAY Off With Strong Interim Performance

Source: Hilton Branch, Life Private Hospital.

“We are pleased with the solid financial results from our core operations, particularly the growth in normalised earnings per share. Our balance sheet remains strong, with net debt to normalised EBITDA at 0.65 times, well within our covenant requirement of 3.5 times.

"Cash generated from continuing operations was R2bn, representing 105.3% of normalised EBITDA, enabling us to confidently invest in strategic growth projects across both our acute hospitals and complementary services,” said Pieter van der Westhuizen, chief financial officer.

This strong financial foundation underpins Life Healthcare’s operational progress and its continued investment in meeting rising demand for high-quality healthcare across the region.

Operational performance highlights

During the first half of the financial year, Life Healthcare’s Southern African operations delivered solid growth, driven by increased patient activity and improved occupancy rates.

Paid patient days (PPDs) rose by 2.0% compared to the prior period, with overall occupancies advancing to 68.6%. Revenue from continuing operations increased by 8.1% to R12.1bn, supported by a favourable case mix and an annual tariff adjustment of 5.1%.

Hospital normalised EBITDA grew by 8.3%, underscoring the resilience and relevance of the Group’s core healthcare services in a dynamic healthcare environment.

Strong core earnings

From a financial perspective, normalised earnings per share (NEPS) from continuing operations increased by 9.1% to 49.0 cents reflecting the strength and stability of the underlying business.

Reported earnings per share (EPS) and headline earnings per share (HEPS) are negative for the period, primarily due to a R2.9bn fair-value loss on contingent consideration related to the pending LMI disposal and the absence of the R2.8bn once-off gain from the prior year disposal of Alliance Medical Group.

These are non-cash, once-off accounting items that do not impact cash flow or the operational trajectory of the core business. Pro-forma adjustments confirm the Group’s underlying performance remains robust.

The Board has declared an interim gross cash dividend of 21.0 cents per ordinary share, an increase of 10.5% compared to the prior period. The last date to trade cum dividend is Tuesday, 10 June 2025, with the record date on Friday, 13 June 2025, and payment on Tuesday, 17 June 2025.

Strategic development and outlook

Peter Wharton-Hood, chief executive officer, commented, “Our strong performance in the first half of the year underscores the ongoing demand for high-quality healthcare services across our markets and validates our growth strategy.

"The new hospital build project in Paarl marks a significant milestone in meeting future regional healthcare needs and exemplifies our commitment to expanding access and improving care delivery.”

For FY2025, the Group plans to grow its underlying asset base by adding 58 acute hospital beds, 24 acute rehabilitation beds, one cathlab, one vascular lab, alongside further expansion of the diagnostics business with two new PET-CT sites expected to be completed in H2-2025, as well as the completion of two imaging transactions. Capital expenditure for the year is expected to reach R2.3bn.

The Group continues to drive occupancy improvements, as well as focusing on operational efficiencies and asset optimisation. The business remains firmly on track to meet its 2025 outlook guidance.

The pending sale of LMI is progressing well and is expected to close in the second half of 2025, representing a key milestone in the Group’s portfolio optimisation strategy.

Looking ahead to the second half of the year, Life Healthcare will continue prioritising capital allocation, executing its growth initiatives, and delivering long-term value to stakeholders through a pipeline of expansion projects and innovative services.

Wharton-Hood expressed gratitude to the team members for their contribution to the Group’s strong results. “We sincerely thank our dedicated Life Healthcare employees, doctors, healthcare professionals, and the LMI team for their resilience, commitment, and unwavering support in exceptional care and advancing our strategic initiatives,” he said.