Life Healthcare reports 12.9% increase in half-year revenue

Life Healthcare, a leading healthcare provider, has reported a 12.9% increase in group revenue during their latest financial period. However, despite this positive news, the headline earnings per share fell by 3.4% following an impairment to goodwill due to a VAT dispute settlement with tax authorities in South Africa. In a recent interview with CNBC Africa, Peter Wharton-Hood, the Group CEO at Life Healthcare, shed light on the operating environment, drivers for growth, cost perspective, and future growth prospects for the company. Wharton-Hood acknowledged the challenges faced during the last six months, including extended load shedding and floods in certain provinces, which impacted their 24/7 hospital network. Despite these difficulties, the team displayed resilience and achieved positive outcomes, with the South African team weathering the storms and the international team experiencing significant growth in volumes. Domestically, the increase in paid patient days by 12.5% was attributed to the normalization of hospital services post-COVID and strategic network deals with medical funders. Internationally, volumes in their Irish operations surged by nearly 17%, driven by the deployment of community diagnostic centers in the UK. From a cost perspective, inflationary pressures were more pronounced internationally, especially in the UK and Europe, leading to tariff adjustments. However, domestically, the inflationary environment was in line with expectations. Despite the economic challenges in Europe, Wharton-Hood remains optimistic, highlighting that healthcare policy and government spending on healthcare significantly impact their European volumes. Looking ahead, Life Healthcare anticipates growth from domestic network deals and increased volumes in South Africa. They aim to restore occupancy levels in acute hospitals to pre-COVID levels and project a 6-8% growth in international volumes, driven by tariff increases and strategic deployments. Wharton-Hood emphasized the importance of government spending on healthcare and advocated for policies that prioritize citizens' health and well-being. Regarding the National Health Initiative in South Africa, Life Healthcare supports improving accessibility and affordability of healthcare but emphasizes the need for discussions around capacity, staffing, and infrastructure upgrades rather than just financial considerations. The private sector, according to Wharton-Hood, has a critical role to play in the successful implementation of the National Health Initiative.