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Expansion brings South African Mediclinic to London

The healthcare provider has released its first financial results since joining the London markets via a reverse takeover
May 25, 2016

In the past 12 months South African healthcare provider Mediclinic (MDC) has made no secret of its desire to join the London Stock Exchange. After buying a 30 per cent stake in UK hospital operator Spire (SPI) in June last year, the group became a FTSE 100 constituent in February after completing a reverse takeover of London-listed Al Noor - the Dubai-based healthcare company.

IC TIP: Hold at 858p

Maiden results from the newly enlarged group have been restrained by £43m of one-off costs associated with the acquisition and restructuring. But all in all, the outlook is encouraging. Swiss operations - which make up 54 per cent of overall turnover - reported an 8 per cent revenue rise, helped in part by the strengthening of the Swiss franc.

Conversely, the weakening of the group's home currency held back revenue growth in South Africa: while group bed occupancy and revenue per bed were up, adjusted cash profits at constant currency fell 5 per cent. Al Noor operations contributed £5m of underlying earnings six weeks after the acquisition was completed and are expected to enhance the Middle East division's performance next year.

Broker Investec has placed its forecasts under review, but prior to these results expected 2017 adjusted pre-tax profits of £430m, giving EPS of 47p, up from £311m and 39.7p the prior year.

MEDICLINIC INTERNATIONAL (MDC)

ORD PRICE:858pMARKET VALUE:£6.33bn
TOUCH:857.5-858p12-MONTH HIGH:969pLOW: 575p
DIVIDEND YIELD:0.9%PE RATIO:29
NET ASSET VALUE:476*NET DEBT43%

Year to 31 MarTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2015**1.9826644.69.33
20162.1124529.67.90
% change+7-8-34-15

Ex-div: 16 Jun

Payment: 25 Jul

*Includes intangible assets of £1.93bn, or 261p a share

**Restated for change in reported currency