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Life Healthcare warns on profits citing Alliance Medical deal costs
May 3, 2017 / 10:54 AM / 7 months ago

Life Healthcare warns on profits citing Alliance Medical deal costs

JOHANNESBURG, May 3 (Reuters) - Life Healthcare Group said on Wednesday it expected its earnings in the half-year to March 31 to be between 70 and 75 percent lower, citing costs related to the acquisition of Alliance Medical .

Life Healthcare said headline earnings per share, the most widely used profit measure in South Africa that excludes some one-off items, would be between 23.3 and 27.9 cents for the six-months to the end of March, compared to 93 cents a year earlier.

Core profit (EBITDA) for the company’s Southern Africa operations is expected to be between 1.5 to 2.5 percent below 2016 due to the lower trading and the impact of the loss of the Gauteng Mental Health contract, the company said in a statement.

“Headline earnings per share are below the comparative period last year primarily due to the impact of the acquisition of Alliance Medical and once off items related to the investment in Poland,” the company said.

The private healthcare provider launched a 9 billion rand ($673 million) rights issue to fund its acquisition of Britain’s Alliance Medical, expanding beyond its heavily regulated home market.

In January, the company scaled back its initial plan to raise 10.7 billion rand after shareholders raised concerns about its debt, financial flexibility and ability to keep paying dividends.

Shares in Life Healthcare were down 0.31 percent to 28.70 rand by 0954 GMT. ($1 = 13.3725 rand) (Reporting by Olwethu Boso. Editing by Jane Merriman)

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