TIDMMDC
RNS Number : 6557V
Mediclinic International plc
16 April 2021
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
("Mediclinic" , the " Company ", or the "Group" )
16 April 2021
FY21 Trading Update
Mediclinic, the diversified international private healthcare
services group, provides the following trading update ahead of the
publication of the Group's results for the financial year ended 31
March 2021 ("FY21"), currently scheduled for 26 May 2021. The
information on which this update is based represents the Group's
latest financial estimates and has not been reviewed and reported
on by Mediclinic's external auditors. All financial figures, unless
explicitly stated, are adjusted(1) to eliminate volatility arising
from defined one-off items of income and expense.
Summary
-- Robust operating performance; FY21 revenue declined c.3.0%, reflecting significant impact
of initial COVID-19-related lockdowns and restrictions
-- 2H21 year-on-year revenue growth of c.1.0% drove improvement in margins as the Group adapted
to subsequent waves of the pandemic and restrictions relaxed
-- Second half delivered improved liquidity and net debt, demonstrating the Group's financial
resilience
-- Expect to deliver year-on-year growth in revenue and EBITDA across all divisions in FY22
Commenting today, Dr Ronnie van der Merwe, Group Chief Executive
Officer, said:
"Mediclinic has been unwavering in its support of and
collaboration with relevant health authorities throughout COVID-19.
We continue to effectively navigate the challenges and
uncertainties of the pandemic through the tireless efforts of our
medical professionals and employees, who we sincerely thank. We are
proud to be supporting government-led vaccination programmes in all
three divisions, and are pleased that priority is given to
healthcare workers which critically protects our front-line
colleagues and the quality of care Mediclinic's patients
receive.
"Despite the more severe second wave of the pandemic placing
even greater demand on our healthcare facilities and people, we
have adapted well through agility and resilience to deliver a solid
second half performance with revenue growth of around 1.0%.
"We are well positioned to deliver growth in revenue and EBITDA
across all three divisions in FY22 despite further waves of the
pandemic expected in the coming months, especially in Switzerland
and Southern Africa. Throughout the pandemic we have continued to
execute on our strategy, accelerating our innovation and digital
transformation initiatives and launching numerous new partnerships
and collaborations. These, alongside our focus on expanding
Mediclinic's integrated services across the continuum of care,
support long-term sustainable growth across the Group."
COVID-19 update
As previously reported, performance in the first half of the
year was significantly impacted in April 2020 by the sudden onset
of COVID-19-related lockdown measures and non-urgent elective
procedure restrictions . From May 2020 onwards, the moderation of
restrictions resulted in a strong rebound in operating performance
in Switzerland and the United Arab Emirates ("UAE"). Southern
Africa experienced a more gradual recovery during the second
quarter of the financial year as it exited the first wave.
In the second half of the financial year, the Group adapted
quickly and implemented lessons learnt from the first wave of the
pandemic across all three divisions. Performance was further
supported by less restrictive lockdown measures, greater
operational flexibility to treat COVID-19 and non-COVID-19
patients, and counter-seasonal demand in Southern Africa and the
UAE during December 2020.
In the fourth quarter, activity levels were again impacted by
the second wave of the pandemic, restricting capacity available to
treat non-COVID-19 patients. Having reached the peak of the second
wave, the Group entered a transition period where COVID-19 patient
volumes declined which gradually allowed normal operating practices
to resume. Similar to the trend in the first half of the year, this
resulted in encouraging momentum building in non-COVID-19 patient
activity towards the end of the period.
Financial performance
The Group delivered a robust operating performance during the
year. While FY21 Group revenue was down around 3.0%, stronger
demand in 2H21 delivered revenue growth of around 1.0%.
As previously reported, an escalation in personal protective
equipment usage, consumables pricing and staffing requirements due
to isolation and quarantine regulations gave rise to an increase in
operating costs. This, together with a decline in revenues on a
largely fixed employee cost base, offset by operating efficiencies
as the Group adapted to the pandemic, delivered an EBITDA margin
for the Group of around 14.0% (FY20: 17.5%). Stronger demand in the
second half of the year supported an improved margin trend. Total
capital expenditure for the period is expected to be around GBP150m
(FY20: GBP192m), the majority of which was invested during the
second half of the year. FY21 depreciation will be less than
expected.
The Group's FY21 cash conversion (2) of around 75% (FY20: 109%)
increased during the second half of the year (1H21: 42%), driven by
Hirslanden and Mediclinic Middle East. The Group's cash conversion
target remains at 90-100%.
The Group continued to demonstrate ongoing operational and
financial resilience. C ash and available facilities increased
during the second half of the year, to around GBP670m at the end of
March 2021 (1H21: GBP661m). Net debt reduced to around GBP2 200m at
year end (FY20: GBP2 325m), after an optional CHF50m debt repayment
at Hirslanden in November 2020. The initial covenant test waivers
remain in place at Mediclinic Southern Africa and Mediclinic Middle
East. In addition to successfully refinancing its CHF145m bond on
more favourable terms, Hirslanden has prudently engaged with its
lending banks to further extend the covenants test waivers by 12
months, with the first tests now to be performed at the end of
September 2022.
Outlook
With the ongoing pandemic and the differing pace of global
vaccine roll-outs causing continuing uncertainty, Mediclinic
remains cautious as to the full impact of COVID-19 on near-term
operating performance. The divisions were expected to return the
Group to pre-pandemic levels in FY22 at varied speeds of recovery.
However, with parts of Europe likely to experience a third wave of
the pandemic, the pace of recovery at Hirslanden will potentially
be more moderate than previously anticipated. This notwithstanding,
the Group expects to deliver growth in revenue and EBITDA across
all three divisions during FY22.
Further details on FY21 performance, current trading and outlook
will be provided with the full-year results.
Financial performance
Note: All movements are approximate and relative to the prior
year period. These represent the latest financial estimates and
have not been reviewed and reported on by Mediclinic's external
auditors.
1H21 2H21 FY21
Group (GBP)
Revenue movement (6.9%) 1.0% (3.0%)
--------------- --------------- ---------------
EBITDA margin 12.1% 16.0% 14.0%
(1H20: 16.6%) (2H20: 18.4%) (FY20: 17.5%)
--------------- --------------- ---------------
Hirslanden (CHF)
Revenue movement (2.0%) 0.0% (1.0%)
--------------- --------------- ---------------
EBITDA margin 13.7% 16.0% 15.0%
(1H20: 16.2%) (2H20: 17.7%) (FY20: 17.0%)
--------------- --------------- ---------------
Movement in inpatient
admissions (1.0%) 0.8% (0.1%)
--------------- --------------- ---------------
GBP/CHF average FX
rate 1.19 1.22 1.21
(FY20: 1.25)
--------------- --------------- ---------------
Mediclinic Southern Africa (ZAR)
Revenue movement (18.7%) 1.0% (9.0%)
--------------- --------------- ---------------
EBITDA margin 8.2% 19.0% 14.0%
(1H20: 20.8%) (2H20: 20.7%) (FY20: 20.8%)
--------------- --------------- ---------------
Movement in paid patient
days (25.0%) (5.2%) (15.3%)
--------------- --------------- ---------------
GBP/ZAR average FX
rate 22.04 20.61 21.30
(FY20: 18.76)
--------------- --------------- ---------------
Mediclinic Middle East (AED)
Revenue movement 8.9% 9.0% 9.0%
--------------- --------------- ---------------
EBITDA margin 12.7% 13.0% 13.0%
(1H20: 12.6%) (2H20: 17.3%) (FY20: 15.1%)
--------------- --------------- ---------------
Movement in inpatient
admissions and day
cases (3.3%) (1.1%) (2.1%)
--------------- --------------- ---------------
Movement in outpatient
cases (14.4%) (4.7%) (9.3%)
--------------- --------------- ---------------
GBP/AED average FX
rate 4.65 4.95 4.80
(FY20: 4.67)
--------------- --------------- ---------------
(1) 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
Group's non-IFRS measures are intended to remove from reported
earnings volatility associated with defined one-off incomes and
charges which were previously referred to as underlying.
(2) Measures conversion of adjusted EBITDA into cash generated
from operations.
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
healthcare 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 UAE; poor performance by
healthcare practitioners who practise at its facilities; unexpected
regulatory actions or suspensions; competition in general; the
impact of global economic changes; the impact of pandemics,
including COVID-19; 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 makes no
undertaking to, publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
About Mediclinic International plc
Mediclinic is a diversified international private healthcare
services group, established in South Africa in 1983, with divisions
in Switzerland, Southern Africa (South Africa and Namibia) and the
UAE.
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.
Mediclinic 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 31 March 2021, Mediclinic comprised 72 hospitals, eight
sub-acute and specialised hospitals, 18 day case clinics and 18
outpatient clinics. Hirslanden operated 17 hospitals and four day
case clinics in Switzerland with more than 1 900 inpatient beds;
Mediclinic Southern Africa operations included 48 hospitals (three
of which in Namibia), eight sub-acute and specialised hospitals and
12 day case clinics (four of which operated by Intercare) across
South Africa, and around 8 600 inpatient beds; and Mediclinic
Middle East operated seven hospitals, two day case clinics and 18
outpatient clinics with more than 900 inpatient beds in the UAE. In
addition, under management contracts, Mediclinic Middle East
operates one hospital in Abu Dhabi and will open a 200-bed hospital
in the Kingdom of Saudi Arabia in mid-2022.
The Company's primary listing is on the London Stock Exchange
("LSE") in the United Kingdom, with secondary listings on the JSE
in South Africa and the Namibian Stock Exchange in Namibia.
Mediclinic also holds a 29.9% interest in Spire Healthcare Group
plc, a leading private healthcare group based in the United Kingdom
and listed on the LSE.
For further information, please contact:
Investor Relations, Mediclinic International plc
James Arnold, Head of Investor Relations
ir@mediclinic.com
+44 (0)20 3786 8181
Media queries
FTI Consulting
Ben Atwell/Ciara Martin - UK
+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
Corporate broker : Morgan Stanley & Co International plc and
UBS Investment Bank
JSE sponsor (South Africa): Rand Merchant Bank (A division of
FirstRand Bank Limited)
NSX sponsor (Namibia): Simonis Storm Securities (Pty) Ltd
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