2022 Annual General Meeting Statement and Trading Update
2022 Annual General Meeting Statement and Trading Update
Following the online shareholder engagement event on Thursday 14 July 2022, Mediclinic, the diversified international private healthcare services group, will today hold its 2022 Annual General Meeting (“AGM”) in London.
Guidance for the full year remains unchanged
During the first quarter of the financial year ended 31 March 2023 (“FY23”), the Group observed relatively low COVID-19 hospital admissions with patient mix continuing to normalise towards pre-pandemic levels. With pre-pandemic seasonality returning, patient volumes were also impacted in the quarter due to patients and staff contracting COVID-19. Notwithstanding the increased macro uncertainty since Mediclinic’s 2022 Full-Year Results, guidance for FY23 remains unchanged.
In April and June 2022, inpatient volumes were impacted by holidays and the ongoing effects of COVID-19-related disruptions. Additional staffing resources required to address COVID-19-related staff absenteeism and general nurse shortages in the market added to overall employee costs. Lower volumes and additional costs were partially offset by an encouraging insurance mix and average revenue per inpatient.
Bed days sold and patient case mix, including day case admissions, continued to normalise as COVID-19 hospital admissions remained low, which negatively impacted overall revenue per paid patient day. The impact on margins was limited as staffing requirements were adapted to meet the changing patient mix.
Patient activity in April 2022 was lower year-on-year due to the timing of Ramadan, but momentum built steadily in May and June. Patient case mix also continued to normalise, similar to the experience in Southern Africa. Record outpatient volumes in June preceded the quieter summer period in the Middle East with eased travel restrictions, marking the first time since the onset of the pandemic that seasonality is expected to return.
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 United Arab Emirates (“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; the impact of military conflicts, including the current events in the Ukraine; 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.
The following FY23 guidance statements set out in Mediclinic’s 2022 Full-Year Results (the “Profit Forecasts”) are classed as profit forecasts for the purposes of the City Code on Takeovers and Mergers:
“Expect increased client activity to drive further revenue growth, margin expansion and improved earnings”
“In the year ahead, we expect to benefit from a continued increase in client activity which will drive further improvement in our profitability and earnings.”
“In FY23, we expect a combination of volume growth and efficiency gains to continue to drive the Group towards pre-pandemic profitability, alongside a meaningful improvement in earnings.”
“The Group expects the positive momentum in revenue growth, margin improvement and earnings of FY22 to continue in FY23, driven by increased client activity supported by expected underlying economic growth in all three regions. Seasonal trends in patient activity levels, most notably in Switzerland and the Middle East, are expected to return, in the absence of any material new waves of COVID-19. Improving profitability and strong cash generation are expected to support continued deleveraging.
Switzerland expects to deliver modest FY23 revenue growth and EBITDA margin improvement to around 16%.
Southern Africa expects to deliver FY23 revenue growth in the mid-single digit percentage range and an EBITDA margin improvement, approaching 20%.
The Middle East expects to deliver FY23 revenue growth in the high-single digit percentage range and an EBITDA margin improvement approaching the mid-15% range.”
Basis of preparation
The Profit Forecasts are based on the Group’s current internal forecast for the remainder of the year ending 31 March 2023.
The basis of accounting used for the Profit Forecasts is consistent with the Group’s existing accounting policies, which are in accordance with U.K. adopted International Accounting Standards, IFRS as adopted by the EU and IFRS as issued by the IASB, were applied in the preparation of the Group’s financial statements for the year ending 31 March 2022 and are expected to be applied in the preparation of the Group’s financial statements for the year ending 31 March 2023. The divisional information has been prepared on the basis on local currencies in each of the relevant divisions, being South African rand in Southern Africa, Swiss franc in Switzerland and UAE dirham in the Middle East.
The Profit Forecasts have been prepared on the basis referred to above and subject to the principal assumptions set out below. The Profit Forecasts are inherently uncertain and there can be no guarantee that any of the factors referred to under ‘Principal Assumptions’ (Appendix I) will not occur and/or, if they do, their effect on the Group’s results of operations, financial condition or financial performance, may be material. The Profit Forecasts should therefore be read in this context and construed accordingly.
The Mediclinic Directors confirm that the Profit Forecasts remain valid and have been properly compiled on the basis of the principal assumptions stated above and that the basis of accounting used is consistent with Mediclinic’s accounting policies as set out above.
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 Middle East.
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 2022, Mediclinic comprised 74 hospitals, five subacute hospitals, two mental health facilities, 20 day case clinics and 22 outpatient clinics. The Swiss operations included 17 hospitals and four day case clinics with around 1 900 inpatient beds; Southern Africa operations included 50 hospitals (three of which in Namibia), five subacute hospitals, two mental health facilities and 14 day case clinics (four of which operated by Intercare) across South Africa, and around 8 650 inpatient beds; and the Middle East operated seven hospitals, two day case clinics and 22 outpatient clinics with around 1 000 inpatient beds in the UAE. In addition, under management contract the Middle East will open a 200-bed hospital in the Kingdom of Saudi Arabia in 2023.
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
+44 (0)20 3786 8181