Tamar Kahn
25 November 2008
Cape Town — Netcare, SA's biggest private hospital group, said yesterday it did not expect recession in the UK to crimp future growth. The group said increased business from the National Health Service (NHS) would offset a slight dip in the number of patients willing to pay for private healthcare.
Netcare derives more than half its revenue from its UK business, including 58 hospitals in the General Healthcare Group stable and a division that provides services to the state- funded NHS.
"This is unfortunately one of those sectors where people continue to get ill and require healthcare irrespective of the economy," CEO Richard Friedland said in an interview.
Friedland said Netcare expected to see increased business from the NHS as the UK treasury was unlikely to be able to sustain the kind of growth in funding it had provided in recent years.
UK government funding for the NHS had risen from £44bn in 1997 to £110bn this year, he said.
Netcare's annual results for the year to September, released yesterday, showed group revenue climbed 17% to R21,7bn, up from R18,6bn the previous year, with the UK business contributing 52%.
Growth both offshore and in SA was driven by organic growth and acquisitions.
However, earnings before interest, amortisation and tax fell slightly to 21,2%, down from 21,7% the previous year, a result of "sub-optimal" tariff levels in SA, underwriting costs in its South African primary care business, non recurring costs in SA and the UK totalling R132m.
In the year under review, Netcare acquired seven Nuffield hospitals in the UK, and a 61% stake in the Oxford Clinic, which specialises in musculoskeletal disorders.
It also bought the Woodlands Hospital in Darlington last month, just after the end of its financial year.
On the home front, Friedland described the past year as "one of the toughest in Netcare's history" in a presentation to analysts broadcast on Summit TV.
In January Netcare was forced by the government to change its tariff structure and had its proposed fee hikes capped below inflation.
Regulatory pressure reached a peak in September when former health minister Manto Tshabalala-Msimang announced controversial plans to introduce new controls on private healthcare prices, spelt out in the National Health Amendment Bill.
Despite Tshabalala-Msimang's determination to see the bill passed by P arliament it was not considered by MPs, and observers now say it is unlikely to be tackled by legislators until late next year - if at all.
Be the first to Write a Comment!
Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
