LIFE HEALTHCARE Integrated report 2021

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Seven-year performance review

Group Statement of comprehensive income

CAGR
since
2014 
% 		 2021 
R'm 		 2020 
R'm 		 2019 
R'm 		 2018
R'm 		 2017 
R'm 		 2016 
R'm 		 2015 
R'm 		 2014 
R'm 
Revenue  10.9  26 885  23 851  25 672  23 488  20 797  16 404  14 647  13 046 
Normalised EBITDA1  4.9  5 051  4 155  5 727  5 535  5 001  4 314  4 048  3 611 
Operating profit  (0.8) 2 980  2 121  3 944  3 848  3 620  3 660  3 496  3 150 
Net finance cost  16.4  (622) (793) (998) (962) (1 229) (502) (404) (215)
Share of associate net profit after tax  (6.2) 25  14  18  (105) (15) 8  14  39 
Profit before tax  (6.9) 2 409  1 393  3 706  2 837  1 934  2 864  3 112  3 973 
Profit for the year from continuing operations  1 767  837  2 871  1 914  1 119  1 970  2 228  3 098 
Profit from discontinued operation  87  (799) –  –  –  –  –  – 
Profit for the year  (7.1) 1 854  38  2 871  1 914  1 119  1 970  2 228  3 098 
Ordinary equity holders of the parent  (6.3) 1 754  (93) 2 569  1 575  814  1 616  1 866  2 774 
Non-controlling interest  (15.5) 100  131  302  339  305  354  362  324 
Normalised EBITDA1  4.9  5 051  4 155  5 727  5 535  5 001  4 314  4 048  3 611 
Operating profit  (0.8) 2 980  2 121  3 944  3 848  3 620  3 660  3 496  3 150 
Depreciation on property, plant and equipment  1 571  1 476  1 236  1 133  971  530  445  355 
Amortisation on intangible assets  533  590  586  537  439  147  127  122 
Severance payments  –  –  –  51  –  –  –  – 
Retirement benefit asset and post-employment medical aid income  (33) (32) (39) (34) (29) (23) (20) (16)
1 Normalised EBITDA – operating profit before depreciation on property, plant and equipment, amortisation of intangible assets and non-trading related costs or income.

Group statement of financial position

2021
R’m		 2020
R’m		 2019
R’m		 2018
R’m		 2017
R’m		 2016
R’m		 2015
R’m
ASSETS
Non-current assets
Property, plant and equipment 14 695 15 361 12 929 12 243 11 131 7 752 7 101
Intangible assets 16 383 18 238 16 969 17 084 16 281 3 196 2 964
Investment in associates and joint ventures 62 65 53 35 2 976 2 548 2 311
Employee benefit assets 418 379 448 401 399 433 394
Other non-current assets 1 809 1 285 1 189 795 672 466 382
Total non-current assets 33 367 35 328 31 588 30 558 31 459 14 395 13 152
Current assets
Cash and cash equivalents 2 672 2 279 1 544 1 494 1 176 604 812
Trade and other receivables 4 041 4 046 3 923 3 761 3 602 2 133 1 640
Inventories 653 873 379 360 357 318 271
Other current assets 48 179 132 128 45 47 48
Asset classified as held for sale – – – 2 841 – – –
Total current assets 7 414 7 377 5 978 8 584 5 180 3 102 2 771
Total assets 40 781 42 705 37 566 39 142 36 639 17 497 15 923
EQUITY AND LIABILITIES
Capital and reserves 18 066 17 058 16 188 14 916 14 380 5 486 5 168
Non-controlling interest 1 105 1 220 1 303 1 286 1 171 1 312 1 280
Total shareholders' equity 19 171 18 278 17 491 16 202 15 551 6 798 6 448
Non-current liabilities
Interest-bearing borrowings 10 914 12 034 9 399 12 870 7 786 5 469 5 263
Derivative financial instruments – – – 6 749 – –
Deferred tax liabilities 1 730 1 450 1 371 1 226 1 203 547 520
Other non-current liabilities 1 079 1 051 862 662 253 95 69
Total non-current liabilities 13 723 14 535 11 632 14 764 9 991 6 111 5 852
Current liabilities
Bank overdraft 325 2 181 867 488 450 1 030 557
Trade and other payables 5 443 5 327 4 799 4 409 4 113 2 217 2 125
Interest-bearing borrowings 1 811 2 180 2 596 3 086 6 301 1 312 924
Other current liabilities 308 204 181 193 233 29 17
Total current liabilities 7 887 9 892 8 443 8 176 11 097 4 588 3 623
Total equity and liabilities 40 781 42 705 37 566 39 142 36 639 17 497 15 923

Group statement of cash flows

2021 
R'm 		 2020 
R'm 		 2019 
R'm 		 2018 
R'm 		 2017 
R'm 		 2015 
R'm 		 2014 
R'm 
Cash operating profit  5 306  4 532  5 886  5 707  5 302  4 556  4 213 
Changes in working capital  381  30  41  (204) (639) (520) (356)
Cash generated from operations  5 687  4 562  5 927  5 503  4 663  4 036  3 857 
Transaction costs paid  (35) (17) (147) (38) (210) (12) (15)
Interest received  169  93  60  40  162  12  12 
Tax paid  (714) (597) (1 185) (1 065) (891) (981) (903)
Net cash from operating activities  5 107  4 041  4 655  4 440  3 724  3 055  2 951 
Net cash utilised in investing activities – investments to expand  (2 071) (2 007) (2 329) (3 375) (11 957) (2 025) (3 198)
Net cash generated from investing activities - disposals  573  –  4 395  61  73  15  – 
Net cash (utilised in)/generated from investing activities – other  63  13  (295) (50) (1) 14  – 
Net cash (utilised in)/generated from financing activities  (1 255) (2 778) (6 765) (826) 9 298  (1 677) 222 
Net increase/(decrease) in cash and cash equivalents  2 417  (731) (339) 250  1 137  (618) (25)
Cash and cash equivalents – beginning of the year  98  677  1 006  726  (426) 255  267 
Effect of foreign exchange rate movements  (168) 152  10  30  15  (63) 13 
Cash and cash equivalents – end of the year  2 347  98  677  1 006  726  (426) 255 

BUSINESS PERFORMANCE AND METRICS

2021
R’m		 2020
R’m		 2019
R’m		 2018
R’m		 2017
R’m		 2015
R’m		 2014
R’m
Number of registered beds1 9 177 9 151 9 136 9 055 8 983 8 768 8 647
Paid patient days2 1 915 924 1 914 159 2 269 756 2 251 600 2 226 337 2 265 653 2 177 833
Occupancy (%)2, 3 58.6 58.0 69.7 69.7 70.0 72.5 71.9
Length of stay2 4.42 4.08 3.76 3.72 3.71 3.68 3.63
Number of scans 1 768 031 1 557 635 1 710 542 1 361 531 1 324 507
Number of machines
    MRI 150 150 155 133
    CT 65 63 51 41
    PET-CT 53 52 48 41
    Cyclotron locations 11 11 9 9
Financial ratios
Normalised EBITDA margin (%) 18.8 17.4 22.3 23.6 24.0 26.3 27.6
Tax rate excluding secondary tax on companies (%) 23.0 97.3 22.5 32.5 42.1 31.2 28.4
Effective tax rate (%) 26.7 93.5 22.5 32.5 42.1 31.2 28.3
Debtors' days 48 54 49 51 55 41 36
Quick ratio (:1) 1.22 0.96 1.02 1.13 1.08 0.95 1.03
Current ratio (:1) 0.98 0.84 0.90 1.06 1.01 0.85 0.93
Gearing (%) 40.5 47.3 42.4 50.4 48.3 53.5 51.1
Total debt (R'm) 12 725 14 214 11 995 15 956 14 087 6 781 6 187
Net debt (R'm) 10 378 14 116 11 318 14 950 13 361 7 207 5 932
Net debt: normalised EBITDA 1.82 2.96 1.96 2.73 2.55 1.67 1.49
Interest cover 11.0 5.8 5.6 6.4 4.2 8.2 9.7
Return on Net Assets (RONA) (%) 13.1 0.3 23.3 16.4 10.4 25.9 32.3
1 Life St Vincent's and Life Carstenview opened during October 2016 and January 2017 respectively. Life Hilton Private Hospital opened in September 2015 and Genesis Maternity Clinic was acquired in March 2015. In March 2014 Life Sandton Surgical Centre closed. Life St Joseph's, Life Piet Retief and Life Poortview opened in November 2011, December 2011 and May 2012 respectively. Life Grey Monument management agreement concluded during October 2011 and Life Birchmed was disposed of in March 2012. Life acquired the majority shareholding in Middelburg Hospital in August 2011. Life Beacon Bay Hospital and Life Orthopaedic Hospital opened in November 2009. Life also acquired Life Bay View Hospital in Mossel Bay in June 2010.
2 Metrics for South African operations.
3 Occupancy is measured based on the weighted number of available beds during the period and takes acquisitions and expansions during the year on a proportionate basis into account.

SHAREHOLDER RETURNS

2021 
R'm 		 2020 
R'm 		 2019 
R'm 		 2018 
R'm 		 2017 
R'm 		 2015 
R'm 		 2014 
R'm 
Earnings per share (cents) 120.6  (6.4) 176.4  108.6  62.2  144.1  167.3 
Diluted earnings per share (cents) 120.3  (6.4) 175.5  108.1  62.0  143.7  166.7 
Headline earnings per share (cents) 111.1  48.7  88.7  108.8  77.4  179.1  167.3 
Diluted headline earnings per share (cents) 110.7  48.5  88.2  108.3  77.2  178.5  166.7 
Normalised earnings per share - NEPS (cents) 112.7  61.00  116.4  110.2  93.9  169.4  165.0 
Normalised earnings per share excluding amortisation (cents) 139.8  92.10  148.1  139.3  120.6  178.8  173.2 
Weighted average number of shares in issue ('m) 1 454  1 455  1 456  1 451  1 310  1 121  1 115 
Weighted average number of shares for diluted earnings per share ('m) 1 458  1 460  1 464  1 457  1 314  1 125  1 119 
Total number of shares in issue ('m) 1 467  1 467  1 467  1 467  1 449  1 058  1 042 
Distributions per share (cents) 25.0  0  93  88.0  80.0  165.0  154.0 
Net asset value per share (cents) 1 231.2  1 162.5  1 103.5  1 016.8  992.4  518.5  495.9 
Normalised earnings   1 640  888  1 695  1 598  1 230  1 899  1 840 
Profit attributable to ordinary equity holders  1 754  (93) 2 569  1 575  814  1 616  1 866 
   Adjustments (net of tax): 
   Loss/(gain) on remeasuring of fair value of equity interest before business combination  –  –  –  –  (4) 23  – 
   Profit on disposal of businesses  (45) 839  (1 418) –  –  –  – 
   Profit on disposal of property, plant and equipment  10  3  -  (30) 37  (1) – 
   Impairments  14  5  140  34  167  370  – 
   Gain on derecognition of lease assets
and liabilities 		 –  (50) –  (71) –  –  – 
   Retirement funds  (24) (23) (28) (24) (21) (16) (15)
   Retirement fund (included in employee benefit expenses) –  –  –  –  –  (3) (4)
   Transaction costs  3  8  148  38  267  12  15 
   Fair value gain on foreign exchange hedge  –  –  292  (17) (7) –  (1)
   Contingent consideration released  62  66  42  18  (43) (109) (21)
   Other  (134) 133  (50) 75  20  7  – 

MARKET INDICATORS

 2021   2020   2019   2018   2017   2016   2015 
Market price –high (R) per share 25.75 26.00 28.89 30.52 39.02 40.48 46.67
Market price – low (R) per share 15.19 15.44 21.12 23.00 23.05 29.53 34.32
Market price – year-end (R) per share 22.79 17.06 22.68 24.56 23.70 37.87 35.00
Market capitalisation – year-end (R'm) 33 133 24 817 33 279 36 030 34 341 40 066 36 477
Number of shares traded ('m) 1 461 1 220 1 055 1 241 1 326 1 047 870
Value of shares traded (R'm) 28 030 24 460 26 288 32 510 39 142 38 433 34 755
Price-earnings ratio (Year-end price/NEPS) 20.22 27.97 19.48 22.29 25.24 22.36 21.21

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