The introduction of a new outpatient tariff on hospitals in Switzerland has proven a problem for Mediclinic (MDC). The private healthcare provider (which makes 47 per cent of its revenues and adjusted cash profits in Switzerland) has been forced to take a £644m impairment on the value of the property and intangible assets of its Swiss business, sending it into an operating loss position of £288m. Not the ideal results for chief executive Danie Meintjies to take his leave.
But the outgoing boss can take comfort in the fact that the Middle East business – which was brought into the company via the reverse acquisition of Al Noor in 2016 – has begun to prove its worth at last. Revenue accelerated 12 per cent between the first and second half on a constant currency basis and is expected to keep growing thanks to the better than expected performance from new hospitals. Adjusted cash profit (EBITDA) margins also came in ahead of forecasts at 12.7 per cent, sending related profits up 9 per cent to AED397m (£81m) at constant currencies.
But the Middle East remains just a small part of Mediclinic’s portfolio and regulatory issues in both Switzerland and South Africa mean EBITDA is expected to fall to £498m in 2019, according to JP Morgan, with EPS flat at 30p.
| MEDICLINIC (MDC) | ||||
| ORD PRICE: | 621p | MARKET VALUE: | £ 4.58bn | |
| TOUCH: | 621-622p | 12-MONTH HIGH / LOW: | 864p | 495p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | NA | |
| NET ASSET VALUE: | 446p* | NET DEBT: | 50% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.98 | 266 | 44.6 | 9.3 |
| 2016 | 2.11 | 245 | 29.6 | 7.9 |
| 2017 | 2.75 | 307 | 31.0 | 7.9 |
| 2018 | 2.87 | -479 | -66.7 | 7.9 |
| % change | +4 | - | - | - |
| Ex-div: | 14 Jun | |||
| Payment: | 30 Jul | |||
| *Includes intangible assets of £5bn, or 678p a share | ||||
