TIDMMDC
RNS Number : 3759X
Mediclinic International PLC
21 February 2017
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")
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
21 February 2017
TRADING UPDATE
Mediclinic International plc, the international
multi-disciplinary private healthcare group, provides the following
general trading update. A management conference call for analysts
and investors will take place today at 08:00 GMT. Dial in details
can be found at the end of this announcement.
Commenting today, Danie Meintjes, CEO, said:
"During the year we have seen a good trading performance from
our two largest platforms in Switzerland and Southern Africa in
line with full year expectations for the full year 2016/17. The
challenging environment in Abu Dhabi has unfortunately continued
into the second half of the year. We are taking many steps to build
the foundations for a successful, sustainable, long term business
in the Middle East, leveraging our excellent reputation and
operational performance in Dubai. One key step is the re-branding
of our Abu Dhabi facilities to Mediclinic and we expect this
project to be implemented during 2017/18."
In the Middle East, Mediclinic's established Dubai business
continues to perform well, including a strong ramp up in patient
activity at the newly opened Mediclinic City Hospital North Wing.
In Abu Dhabi, trading conditions remain challenging where patient
volumes and operating performance continue to be below expectations
and was particularly pronounced in January 2017.
As previously announced, the second half performance of the
Middle East was predicated on seasonality, realising integration
synergies, stabilising Thiqa patient volumes, filling doctor
vacancies and ramping up patient activity in new facilities. Whilst
we continue to make good progress in integrating the Al Noor and
Mediclinic operations and realising synergies, the second half has
been weaker in Abu Dhabi than anticipated and we now expect a
steeper revenue decline and a lower underlying EBITDA margin for
the Middle East for the full year 2016/17. The Group now expects
full year 2016/17 Middle East revenue to be in the range of
AED3,000m to AED3,200m with an underlying EBITDA margin of
approximately 10% to 11%.
On 1 July 2016, a 20% co-payment was introduced for all Thiqa
members using private facilities for inpatient and outpatient
services in Abu Dhabi, and as previously announced, this had an
immediate and significant impact on the Group's Thiqa patient
volumes. Whilst the patient volume mix has stabilised, absolute
Thiqa volumes are lower than previously expected.
As previously announced, in the twelve months leading up to the
Al Noor combination a significant number of doctors departed from
the business and this trend continued into the start of the current
financial year. During the year in Abu Dhabi, Mediclinic has
carried out clinical performance reviews and implemented a
strategic recruitment programme of doctors in order to attract the
most appropriate clinicians to fill the vacancies. The Group is
making good progress, leveraging off the experience of the Dubai
recruitment team, with some 90 new doctor appointments made in the
Middle East since April 2016 and a further 60 doctors currently in
the process of recruitment. Whilst building the foundations for a
sustainable, long term business in Abu Dhabi, the extended
recruitment process, combined with the necessary re-alignment of
certain business and operational practices, has resulted in a
further short term impact on patient and service volumes.
Following the delayed opening, Al Jowhara Hospital had its first
full month of trading in January 2017. The contribution the
hospital makes to the Group is expected to grow over the next
financial year.
Despite the current economic and trading environment, Mediclinic
has confidence in its long term Middle East growth strategy and
continues to focus on building a high quality, multi-disciplinary
clinical service offering in Abu Dhabi that emulates the Group's
market leading Dubai operation.
Significant progress has been made integrating the Al Noor and
Mediclinic operations into a single business unit. AED75m of
annualised cost synergies are expected to be realised during the
current financial year. Also during this current year, the Group
has incurred additional operating expenses and charges, in part due
to aligning Al Noor with Mediclinic's business practices. The Group
has identified further savings predominantly through further
administrative headcount efficiencies and will continue to evaluate
the current cost base across the Middle East, whilst remaining
focused on the future growth opportunities.
The Group also intends to re-brand the Al Noor facilities to
Mediclinic. This important strategic change reflects the ongoing
and future investment in the Group's Abu Dhabi facilities, services
and operating practices. As a result of this decision the Group is
currently reviewing the carrying value (AED140m) and amortisation
period of the Al Noor trade name. The review is expected to result
in additional charges in the current and subsequent reporting
periods, which will be excluded from underlying earnings.
The above financial information has not been reviewed or
reported on by Mediclinic's auditors. The financial results for the
review period will be published on or about Wednesday, 24 May
2017.
Analyst and investor conference call - 08:00 GMT, Tuesday 21
February 2017
UK: +44 (0)20 3139 4830
South Africa: +27 (0)21 672 4008
Participant PIN code: 32868828#
Conference call replay:
UK: +44 (0)20 3426 2807
Conference Number: 683682#
About Mediclinic International plc
Mediclinic is an international private healthcare group with
operating platforms in Southern Africa (South Africa and Namibia),
Switzerland and the United Arab Emirates. Its core purpose is to
enhance the quality of life of patients by providing acute care,
specialist-orientated, multi-disciplinary healthcare services.
Mediclinic also holds a 29.9% interest in Spire Healthcare Group
plc ("Spire"), a LSE listed and UK-based private healthcare
group.
During February 2016 the combination of the Company (previously
named Al Noor Hospitals Group plc), with operations mainly in Abu
Dhabi in the United Arab Emirates, and Mediclinic International
Limited was completed. Mediclinic International Limited was a South
African based international private healthcare group founded in
1983 and listed on the JSE, the South African stock exchange, since
1986, with operations in South Africa, Namibia, Switzerland and the
United Arab Emirates (mainly in Dubai). The Combination resulted in
the enlarged Mediclinic group, renamed Mediclinic International plc
comprising 73 hospitals and 43 clinics.
As at the end of the reporting period, Mediclinic Southern
Africa operates 49 hospitals and 2 day clinics throughout South
Africa and 3 hospitals in Namibia with more than 8 000 inpatient
beds in total; Hirslanden operates 16 private acute care facilities
and 4 clinics in Switzerland with more than 1 600 inpatient beds;
and Mediclinic Middle East operates 5 hospitals and 37 clinics with
more than 600 inpatient beds in the United Arab Emirates.
Mediclinic has a primary listing on the Main Market of the LSE,
with secondary listings on the JSE in South Africa and the NSX in
Namibia.
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
Debbie Scott/Brett Pollard
+44 (0)20 3727 1000
Registered address: 1st Floor, 40 Dukes Place, London, EC3A 7NH,
United Kingdom
Website: www.mediclinic.com
Corporate broker: Morgan Stanley & Co International plc
JSE sponsor: RAND MERCHANT BANK (A division of FirstRand Bank
Limited)
NSX sponsor: Simonis Storm Securities (Pty) Ltd
This information is provided by RNS
The company news service from the London Stock Exchange
END
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