Reviewed Condensed Consolidated Annual Financial Statements for the year ended 30 June 2021
ADVANCED HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/059246/06)
(“the Group” or “Advanced”)
ISIN Code: ZAE000189049 JSE Code: AVL
REVIEWED CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NATURE OF THE BUSINESS
Advanced is an important role player in day surgery across South Africa and Australia. Private
healthcare is currently in an exciting stage of development. Advanced is positioning itself within the
existing healthcare system, filling a gap in the market for day surgery.
In Australia, the day hospital industry remains a strong and viable business sector in the healthcare
system, with over 40% of the Australian population having private healthcare cover. Day hospitals
remain the competitive option for private patients compared to overnight hospitals, with Presmed
Australia (“PMA”) positioning itself well in this industry.
In South Africa, medical schemes are aligning themselves to the day hospital model, and we are
gradually seeing traction in them directing surgical procedures towards day hospitals as an alternative,
more cost-effective option.
IMPACT OF COVID-19
COVID 19 resulted in a change to the composition of cases in a more favorable direction within the
South African operations. Some of the short-stay cases that were traditionally performed at acute
facilities have been moved to day facilities, because of elective surgery being on hold for a longer
period in the acute facility to accommodate COVID 19 patients in available beds. Revenue per case is
indicative of this, which has increased by 24% year on year, whereas case numbers have increased by
only 2%. A further indicator of a change of case mix is that theatre minutes per case has increased
from 38 to 48 minutes.
Disciplines like Ear-Nose and Throat surgery and Ophthalmic surgery were negatively impacted by
COVID 19 due to the nature of the procedures. The contribution to total revenue and cases have not
completely returned to the same levels as pre-COVID 19, but contribution to total revenue has
recovered to 5% (previously 6%). In the first 9 months of the previous financial year, Ophthalmology
contributed 18% to total revenue and 14% to total cases. For the 12 months which ended 30 June
2021, it contributed 11% to total cases and 13% to total revenue.
Within the Australian operations, the impact of COVID 19 pandemic was also seen where in late March
2020, all non-urgent elective surgery was temporarily stopped by the Australian Government in an
attempt to control the COVID 19 pandemic. At the end of April, this was allowed to increase using a
staggered approach up to 75% by 30 June 2020, and back to 100% from July 2020. There was a catch
up in the backlog of elective surgery cases in the months of July 2020 which resulted in an increase in
revenue, after which elective surgery cases returned to normal levels.
Important factors that need to be taken into account, is the Australian Government’s intervention by
recognising the role private hospitals play in the economy of the country. In line with this, PMA
secured a funding viability agreement with the Australian Commonwealth Government and New
South Wales (NSW) Health to support the coordinated response to the public and private sectors
during the COVID 19 pandemic, which assisted the viability of the hospitals and its staff to ensure that
ongoing services were provided.
Proactive measures taken by the Australian Government with advice from leading health experts, as
well as a largely abiding population, has assisted in controlling the pandemic within Australia, with
limited impact on the supply chains and other business related issues. In order to ensure minimisation
of risk, PMA was pro-active in pre-ordering additional surgical and medical stock from suppliers to
safeguard that there would be limited effect in surgical operations taking place. Further planning has
been put in place with regular PMA management meetings to strategise ways to ensure ongoing
communications received from Australia Department of Health as to the preventative processes, are
followed in all its day hospitals. Part of this includes continuous communication with PMA surgeons
and strategic planning with its Medical Advisory and Audit Committees.
The Group made a profit of R24.4m (2020: loss of R94.1m) before tax and R0.6m (2020: loss R133.8m)
after tax. The results were driven by a strong performance of the Australia segment which contributed
R62.5m (2020: R14.4m) in profit after tax. South African operations continue to be in a loss situation,
however the losses after tax have been reduced by R84.7m when compared to the prior periods.
PMA produced excellent results in what has been a challenging year and reported a profit of
R62.5million (2020: R14.4million) in the current year. The profits increased by more than 100% when
compared to the prior year. The factors influencing the positive performance of PMA included the
ongoing support from specialists and an increase in surgeries as a result of the backlog of patients that
could not be operated in June 2020 as per government COVID-19 restrictions that were in place.
PMA increased their investment in Metwest by 19% in November 2020 resulting in a total
shareholding of 38%. PMA continues to be recognised as a key player within the industry, maintaining
its position as the premium standard setter within the day hospital market, through the successful
introduction of an In-House Ophthalmic Nurse Program, the Ophthalmologist Registrar Training
Program, affiliation with the University of Sydney as a Teaching Hospital group and the retention of
Chatswood Private Hospital as the only Australian private hospital member of the World Association
of Eye Hospitals.
Management continues its focus on marketing strategies aimed at growing patient numbers and
increasing earnings. South African operations reported losses of R47.7million (2020: R132.4) in the
current year. These losses were significantly lower than the losses that were reported for the same
period in the prior year. Harbour Bay in Simonstown had commenced its operations in February 2020,
in the 2021 financial year the entity traded for a full 12 months compared to the 5 months in the prior
year. Vergelegen was sold in April 2021.
In the prior year the directors of the Group decided to dispose of four subsidiaries. The assets and
liabilities attributable to these subsidiaries were classified as a disposal group as at 30 June 2020 and
presented separately in the statement of financial position as disposal was expected to occur within
12 months. One facility (Advanced Vergelegen Surgical Centre Proprietary Limited) was sold during
the year under review. Soweto Day Hospital Proprietary Limited is in the process of being liquidated
and is still classified as a disposal group. The results of Advanced Harbour Bay Surgical Centre
Proprietary Limited and Advanced East Rand Day hospital improved during the year under review and
the intention is no longer to sell these facilities. Accordingly, the assets and liabilities of these entities
were reclassified as they no longer form part of a disposal group.
FINANCIAL RESULTS HIGHLIGHTS
- Revenue increased to R680.7million (2020: R476.2million).
- EBITDA improved to R162.6million (2020: R54.5million).
- Taxation expense decreased to R23.8million (2020: R39.7million).
- Profit after tax for the year is reported at R0.6million (2020: (loss R133.8million).
- Basic loss per share from was reported at (5.21) cents (2020: (51.08) cents).
- Headline loss per share from was reported at (2.10) cents (2020: (49.42) cents).
Advanced Health draws attention to the fact that at 30 June 2021, the Group had accumulated losses
of R255.3 million (2020: R237.2 million) after a profit of R0.6 million (2020: loss of R133.8 million). The
Group’s current ratio is 1.1:1 (2020: 0.8:1).
The reviewed condensed consolidated financial statements have been prepared on the basis of
accounting policies applicable to a going concern. This basis presumes that funds will be available to
finance future operations and the realisation of assets and settlement of liabilities, contingent
obligations and commitments will occur in the ordinary course of business.
The ability of the Group to continue as a going concern is dependent on the continuous improvement
of operations, generation of positive cash flows and the ability of management to successfully manage
COVID 19 effects.
No dividend is proposed or recommended for the financial year ended 30 June 2021.
The contents of the short-form announcement are the responsibility of the Board of Directors of
Advanced Health Limited. The information in the short-form announcement is a summary of the full
announcement and accordingly does not contain full or complete details. The full announcement is
available for inspection at no charge, Monday to Friday, during office hours at the company’s
registered office, the office of the Designated Advisor and on the Company’s website on
http://www.advancedhealth.co.za/ from 27 August 2021. The full announcement is available on SENS
on 27 August 2021 at
https://senspdf.jse.co.za/documents/2021/jse/isse/AVL/YE2021AVL.pdf. The information in this
announcement has been extracted from the reviewed condensed consolidated financial results, but
the short-form announcement itself has not been reviewed by the Company’s auditors. Any
investment decisions by shareholders/investors should be based on the full announcement released
to the JSE and published on the Company’s website.
The reviewed condensed consolidated financial statements have been reviewed by the Group’s
Auditors, Mazars who have issued an unmodified review opinion with an emphasis of matter included
for material uncertainty of Going Concern (refer above). The review opinion is available for inspection
at the Company’s registered office and on the Company’s website http://www.advancedhealth.co.za/
Advanced Health Limited Registered Address:
(Incorporated in the Republic of South Africa) Building 2, Walker Creek Office Park
Registration number: 2013/059246/06 90 Florence Ribeiro Avenue
ISIN: ZAE000189049 JSE Code: AVL Muckleneuk
Postnet Suite 668, Private Bag X1
The Willows, 0041
Executive directors Non-Executive Directors
GJ van Emmenis (Chief Executive Officer) CA Grillenberger (Chairman)
MC Resnik# (Managing Director Australia) FA van Hoogstraten (Lead Independent)
D Goss-Ross (Alternate) PJ Jaffe #
S Chonco (Chief Financial Officer) CJPG van Zyl
Dr WT Mthembu
Dr J Oelofse
Dr KE Legodi
Company Secretary: M Janse van Rensburg
Transfer Secretaries: JSE Investor Services
Date of announcement: 27 August 2021
Grindrod Bank Limited
Date: 27-08-2021 05:30:00
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