Life Healthcare revenue up 12.7% on robust growth

Life Healthcare Group has reported a 12.7 per cent increase in revenue and a 58.9 per cent jump in headline earnings per share from continuing operations. This growth has been boosted by a R2.8 billion once-off gain following the sale of its UK radiology business Alliance Medical Group. The company has also increased the dividend declared by 14.6 per cent and declared a special dividend of 70c per share, bringing total distributions for the year to R10.6 billion. This includes the R8.8 billion special dividend paid in April. CEO Peter Wharton-Hood discussed the company's performance and future plans in an interview with CNBC Africa. The company is focused on striking the right balance between returning value to shareholders and reinvesting in the business for future growth. On the topic of growth projects, Life Healthcare plans to add 79 beds to existing hospital complexes due to high occupancy rates, particularly in the ICU space. Additionally, the company is venturing into building a new hospital in the Western Cape to meet the growing demand for healthcare services in the region. Wharton-Hood highlighted the migration of people to the Western Cape and large-scale residential developments as factors that will drive the need for hospital care in the area. The South African business experienced strong growth in the 2024 financial year, driven by a solid second half of the year. Wharton-Hood attributed this growth to an increase in medical cases and a strategy that led to a 1.6% rise in paid patient days. Looking ahead to the 2025 financial year, the company plans to sustain this momentum by focusing on expanding its nuclear medicine and imaging businesses. In particular, Life Healthcare aims to strengthen its position in the nuclear medicine sector by building cyclotrons for isotope production and expanding PET-CT imaging sites across the country. The company expects continued growth in Neuraseq doses and is optimistic about the prospects for its LMI business. The recent out-licensing of the RM2 product for detecting prostate cancer is seen as a strategic move to drive growth in the sector. When discussing the current healthcare landscape in Southern Africa, Wharton-Hood highlighted the challenge of a stable number of medical aid insured patients, coupled with an aging population and increasing disease burden. He emphasized the importance of expanding mental health capabilities and services to meet the rising demand in this area. In terms of future growth, Wharton-Hood expressed optimism about potential collaboration between private healthcare providers and the government to address the need for increased capacity in the healthcare system. Overall, Life Healthcare's strong financial performance and strategic growth plans position the company for continued success in the healthcare sector.