Interim financial results For the period ended 31 December 2019 - - PowerPoint PPT Presentation

Interim financial results

For the period ended 31 December 2019

Page 2

*excluding IFRS 16 impact

Number of cases Revenue EBITDA Profit /Loss after taxation Australia South Africa Group Total

24% 2% 14% 22% 2% 9% 28% 8% 60% 40% 10% >100% 40%

Page 3

*including IFRS 16 impact

Number of cases Revenue EBITDA Profit / Loss after taxation Australia South Africa Group Total

24% 2% 14% 22% 2% 9% 72% 8% 23% 49% 35% >100% >100%

Page 4

Exchange rate fluctuations

`

8.00 8.50 9.00 9.50 10.00 10.50 11.00 11.50 12.00 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Exchange rate Quarter

Exchange rate : ZAR to AUD

Average rate Closing rate Budget rate

As at 31 December 2019, the closing ZAR strengthened against the AUD closing rate compared to Q2 2020. The average ZAR rate for the period under review (Q2 2020) strengthened against the AUD compared to Q2 2019. Due to the continuous volatility of the currency markets, it is impossible to forecast the exchange rates.

Page 5

Number of cases per quarter

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Number of cases Quarter

Number of cases per quarter

Presmed Australia Advanced Health South Africa Total Cases AVL

The increase in patient numbers compared to the first half of 2019 is 2% and 24% for PMA and AHSA respectively.

Page 6

Right of use of asset Impact of adoption of IFRS 16 on the statement of financial position as at 31 December 2019 R’000 Assets Right of use of asset – cost 515 468 Right of use of asset – acc depreciation (17 966) Total assets 497 502 Right of use of asset was measured at the carrying value that would have resulted from IFRS 16 being applied, from the date of initial application.

Consolidated statement of financial position as at 31 December 2019 Dec'19 Dec'19 * Jun'19 Jun'18 Unaudited Unaudited Audited Audited R'000 R'000 R'000 R'000 Assets Non-current Assets 922,721 427,051 424,655 418,273 Property, plant and equipment 254,864 254,864 259,599 282,744 Right of use of asset 497,502

• Goodwill

29,544 29,544 29,669 30,185 Intangible assets 29,414 29,414 30,777 33,520 Operating lease asset

• 476

476 478 Other financial assets 28,958 28,958 28,285 10,586 Deferred taxation 82,439 83,795 75,849 60,760 Current Assets 93,230 96,912 106,544 96,709 Inventories 15,424 15,424 14,442 13,958 Trade and other receivables 24,971 24,971 37,763 33,393 Other financial assets 5,596 5,596 5,268 2,298 Operating lease asset

• 3,682

3,682 5,634 Current tax receivable 945 945 144 107 Cash and cash equivalents 46,294 46,294 45,245 41,319 Total Assets 1,015,951 523,963 531,199 514,982 *IFRS 16 impact excluded

Page 7

Consolidated statement of financial position as at 31 December 2019 Dec'19 Dec'19 * Jun'19 Jun'18 Unaudited Unaudited Audited Audited R'000 R'000 R'000 R'000 Equity and Liabilities Capital and reserves 140,810 137,254 145,818 193,831 Stated capital 221,956 221,956 221,956 221,956 Foreign currency translation reserve 31,397 31,330 32,108 34,363 Retained earnings (113,826) (117,315) (109,529) (64,368) Share based payment reserve 1,283 1,283 1,283 1,880 Non-controlling interest 56,533 56,533 64,142 53,459 Total Equity 197,343 193,787 209,960 247,290 Non-current Liabilities 719,303 238,706 216,531 170,084 Lease liability - IFRS 16 506,128

• Other financial liabilities

201,326 201,326 177,465 127,495 Lease obligations 10,703 10,703 12,428 19,497 Operating lease liability

• 25,531

25,531 22,101 Provisions 1,146 1,146 1,107 991 Current Liabilities 99,305 91,470 104,708 97,608 Lease liability - IFRS 16 10,368

• Other financial liabilities

23,665 23,665 22,706 18,239 Lease obligations 5,394 5,394 8,422 18,718 Trade and other payables 42,328 42,328 48,941 45,919 Provisions 7,908 7,908 7,661 7,366 Current tax liability 3,317 3,317 3,167 5,000 Operating lease liability

• 2,533

2,533 2,366 Bank Overdraft 6,325 6,325 11,278

• Total Equity and Liabilities

1,015,951 523,963 531,199 514,982 Notes to Statement of Financial Position Total number of shares in issue 287,988 287,988 287,988 221 615 Net asset value per share (cents) 68.52 67.29 72.91 83.65 Net tangible asset value per share (cents) 48.05 46.82 51.92 58.81 *IFRS 16 impact excluded

Impact of adoption of IFRS 16 on the statement of financial position as at 31 December 2019 Liabilities Lease liability - NCL (previously treated as

• perating lease – IAS 17)

Lease liability - CL (previously treated as

• perating lease – IAS 17)

506 128

10 368

Lease liability - NCL (previously treated as finance lease – IAS 17) Lease liability - CL (previously treated as finance lease – IAS 17) 10 703 5 394 Total lease liabilities 532 593 Lease liabilities were measured at the present value of the remaining lease payments discounted at the applicable borrowing rates in the different geographical locations. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right of use of asset in a similar economic environment.

Page 8

The increase in revenue is due to an increase in patient numbers by 14%. Revenue increased by 9% from R244.1 million to R265.5 million in the period under review. Gross profit percentage improved by 2% from 53% to 54%. Positive EBITDA of R38.2 million for the six months period under review. A marked improvement from both the comparative period and the last published results due to the adoption of IFRS 16 and better cost

• controls. Impact of IFRS 16 amounted to

R23.3 million. Excluding IFRS 16 impact, EBITDA for the Group improved to R14.9 million (2018: R4.6 million). The Group incurred a loss amounting to R23.1 million (2018: R15.5 million) for the 6 months under review. The adoption of IFRS 16 had a negative effect on the results reported for the 6 months period. Impact of IFRS 16 amounted to R13.8 million. Excluding IFRS 16 impact, the loss incurred by the Group amounted to R9.3 million which is a 40% improvement in losses from the comparative period.

• 8,842

• 13,452

• (13,452)

• (4.67)

• (4.67)

Page 9

Statement of cash flows for the period ended 31 December 2019 Dec'19 Dec'18 Jun'19 6 months 6 months Full year Unaudited Unaudited Reviewed R'000 R'000 R'000 Cash flows from operating activities Cash generated from / (used in) operations 43,897 16,796 15,577 Interest income 411 219 901 Finance costs (11,612) (8,720) (10,363) Tax paid (4,842) (4,200) (11,854) Net cash outflow from operating activities 27,854 4,095 (5,739) Cash flows from investing activities Acquisition of property, plant and equipment (11,094) (13,441) (15,814) Proceeds on the sale of property, plant and equipment

• 1,976

Proceeds on disposal of Coff Day Hospital

• 512

Acquisition of intangible assets (471) (159) (1,656) Financial assets advanced (1,190) (2,634) (16,882) Financial assets repaid

• Net cash outflow from investing activities

(12,755) (16,234) (31,864) Cash flows from financing activities Issue of shares 137 695 8,176 Dividends paid (5,862) (3,552) (8,346) Finance lease payments (3,644) (4,764) (21,464) Finance costs (24,209) (328) (596) Financial liabilities repaid (5,978) (2,298) (9,395) Financial liabilities raised 30,865 30,958 63,424 Net cash inflow from financing activities (8,691) 20,711 31,799 Net increase in cash and cash equivalents 6,408 8,572 (5,804) Cash at the beginning of period/year 33,967 41,319 41,319 Disposal of Coffs subsidiary

• (517)

Effect of foreign currency translation (406) (124) (1,031) Cash and cash equivalents at the end of the period/year 39,969 49,767 33,967

The Group has engaged less in investing activities and more emphasis was placed on cash generated from operations. Cash generated from operations has also been boosted by the fact that rental paid amounting to R23.3 million is now being treated as a financing activity unlike before where it was treated as an operating activity. Nevertheless, cash generated from

• perations

still remains positive. Advanced Health South Africa

• btained an overdraft facility

amounting to R15.0 million in December 2019 – as at 31 December 2019 an amount of R3.8 million had been utilised. The amount utilised for Presmed Australia’s

• verdraft

facility amounted to R2.5 million as at 31 December 2019. Page 10

Statement of changes in equity for the period ended 31 December 2019 Net Stated Share based Foreign Retained Non Total capital payment currency earnings / controlling equity reserve translation reserve (Accumulated loss) interest R'000 R'000 R'000 R'000 R'000 R'000 Balance as at 1 July 2017 137,378 4,016 28,898 (28,417) 43,507 185,382 (Loss)/Profit for the year

• (39,588)

3,343 (36,245) Other comprehensive income

• 5,465
• 1,035

6,500 Share based payment expense

• 1,501
• 1,501

Issue of shares - net 84,578

• 84,578

Change in interest of subsidiary

• 11,532

11,532 Transfer between reserves

• (3,637)
• 3,637
• Dividends declared
• (5,958)

(5,958) Balance as at 30 June 2018 221,956 1,880 34,363 (64,368) 53,459 247,290 (Loss)/Profit for the period

• (44,663)

6,682 (37,981) Other comprehensive loss

• (2,255)
• (1,345)

(3,600) Issue of shares

• 12,799

12,799 Transfer between reserves

• (903)
• 903
• Share based payment expense
• 306
• 306

Change in interest of subsidiary

• (1,401)

893 (508) Dividends declared

• (8,346)

(8,346) Balance as at 30 June 2019 221,956 1,283 32,108 (109,529) 64,142 209,960 Change in accounting policy - IFRS 16

• 17,214
• 17,214

Loss for the period

• (21,511)

(1,559) (23,070) Other comprehensive loss

• (711)
• (325)

(1,036) Issue of shares

• 137

137 Dividends declared

• (5,862)

(5,862) Balance as at 31 December 2019 221,956 1,283 31,397 (113,826) 56,533 197,343

The adjustment to accumulated loss amounting to R17.2 million relates to the reversal of the operating lease assets and liabilities and the deferred tax thereof recognised as at 30 June 2019 due to the adoption of IFRS 16.

Page 11

Segment report and ratios for the period ended 31 December 2019 Dec'19 Dec'19 * Dec'18 Jun'19 Segment information and ratios Unaudited Unaudited Unaudited Audited R'000 R'000 R'000 R'000 Revenue 265,466 265,466 244,079 481,677 South Africa 95,931 95,931 78,389 162,237 Australia 169,535 169,535 165,690 319,440 Interest income 411 411 219 901 South Africa 195 195 118 516 Australia 216 216 101 385 Interest expense 35,821 11,613 9,048 16,370 South Africa 28,767 9,717 7,182 12,784 Australia 6,839 1,681 1,538 2,990 Corporate 215 215 328 596 Depreciation and amortisation 34,978 16,824 17,131 34,477 South Africa 19,922 10,039 9,517 19,888 Australia 14,749 6,478 7,310 13,986 Corporate 307 307 304 603 (Loss)/Profit for the period/year (23,070) (9,345) (15,477) (37,981) South Africa (31,770) (21,137) (23,584) (45,984) Australia 10,261 13,353 8,344 9,907 Corporate * (1,561) (1,561) (237) (1,904) Segment assets 1,015,951 523,963 518,442 531,199 South Africa 574,279 281,906 269,298 280,853 Australia 432,591 232,976 239,166 241,194 Corporate 9,081 9,081 9,978 9,152 Segment liabilities 818,608 330,176 289,471 321,239 South Africa 531,967 246,152 188,766 221,166 Australia 282,454 79,837 92,321 94,439 Corporate 4,187 4,187 8,384 5,634 Ratios Quick ratio 0.78 0.89 0.88 0.85 Current ratio 0.94 1.06 1.02 0.99 Interest bearing debt less cash to equity 99% 101% 84% 58%

Page 12

Unaudited Dec 2019* Unaudited Dec 2018

0.89 1.06 101% 0.88 1.02 84%

Quick ratio Current ratio Net debt less cash to equity ratio

Current assets less inventories Current liabilities Current assets Current liabilities Interest bearing debt less cash Total equity

Unaudited Dec 2019

0.78 0.94 99%

* IFRS 16 adjustments excluded

Page 13

Page 14

Focus on arriving at our optimal level of functionality such as case mix; theatre times and procurement strategy. Becoming an active contributor to lower the cost of healthcare South Africa and in Australia. Participate in the mobility of highly skilled healthcare specialist by offering alternative venues for operation and increase the capacity of theatres mostly in SA. In a highly dominating hospital market AVL offer funders alternative options and assist funders not

• nly to be price takers in this market.

Members have more choice with a beneficial financial impact for them through their funders.

Page 15

Page 16

PMA sell 25.1% to private investment group for R 58.3 million. Harbour Bay opens its doors January 2020 for business and we’re looking forward to a busy year. Group revenue increased with 9% (Australia 2% and South Africa 22%). Move forward with the relationship with funders and focus on one or two centres of excellence.

Page 17

Increase the participation of funders in Advanced Health. Focus on cost-efficiencies in a economy with high unemployment and lack of growth. Attend to the influence that the big three hospital groups have over other role players in the value chain and compete with them. Find cooperation with other day hospitals in order to create a footprint for day hospital networks.

Page 18

Firm progress in growing utilisation: Increase in occupancy Strong revenue growth Discipline utilisation trends Working with various medical schemes to channel day procedures Core focus on marketing initiatives Refine the marketing strategy targeting: theatre optimisation improved surgery diversity nursing excellence and patient satisfaction wider referral base Public Private Partnership opportunities community outreaches and Corporate Social Investment

Page 19

27 Feb 2019

Strictly Private & Confidential

A leading healthcare company specialising in establishing and managing private day hospitals

PRESMED

AUSTRALIA

GROUP OF

DAY HOSPITALS

OVERVIEW OF PMA

• Presmed Australia (PMA) operates within the Private Day Hospital industry, specifically in NSW,

specialising in establishing and managing private day hospitals.

• PMA’s main surgery disciplines are Ophthalmic surgery, ENT, OMF and Plastic surgery.
• PMA Management are well experienced, ethical and highly respected in the day hospital

industry, with a reputation of achieving positive engagement with Doctors, stakeholders, Private Health Insurance funds and suppliers.

• PMA has over 130 specialist surgeons accredited at its 5 facilities, which are all state of the art,

with the latest medical equipment, instrumentation and specialist nursing staff.

• PMA’s business model is a well-respected and highly innovative concept within Australia, in

that PMA does not employ the Doctors, but rather partner together with key doctors, offering shareholding in the facilities in which they operate.

Page 21

PMA TIMELINE

PMA partnered with 5 Doctors and established CCDH in the Central Coast PMA manages the only Laser Vision Clinic on the Central Coast Presmed Australia (PMA) established in Sydney PMA established OSC in Chatswood PMA partnered with 4 ENT Surgeons and acquired SENT – an ENT specific day facility located in Chatswood PMA partnered with 4 Doctors and established MDS in Hornsby CPH awarded Associate Member to the WAEH, as the

• nly Private Hospital

in Australia PMA partnered with Doctor-owned day hospital METWEST in Blacktown PMA partnered with 7 Doctors and developed a 2nd theatre at OSC to house increased patient throughput PMA partnered with 5 Doctors and established ESC in Epping OSC and SENT merged as CPH – a new 6 theatre facility in Chatswood PMA Group approved as a Teaching Hospital through The University of Sydney CPH approved by RANZCO for Ophthalmic registrar training

1997 2000 2004 2010 2015 2016 2017 2018 2019

Page 22

16 surgeons Over 2,000 patients pa

2004

2

theatres

+ Laser Vision Clinic

CCDH

17 surgeons Over 4,000 patients pa

2010

6

theatres

+1 laser procedure room

CPH

90 surgeons Over 7,000 patients pa

2016

theatres

+1 procedure room

2

ESC

1 theatre

MDS

4 surgeons Over 2,000 patients pa

2017

PMA DAY HOSPITALS

1 theatre

METWEST

9 surgeons Over 1,500 patients pa

2019

Page 23

$16.1m

revenue

Last Year

This Year

$16.8m

revenue

CONSOLIDATED GROUP HIGHLIGHTS

for YTD 31 December 2019 Financial Management Accounts

$1.2m

NPBT

Last Year

This Year

$1.8m

NPBT

$2.0m

EBITDA

Last Year

This Year

$2.6m

EBITDA

8,300

patients

Last Year

This Year

8,500

patients Page 24

Pursuing investment

• pportunities

Ensuring cost control

• bjectives are met

Driving up patient numbers

Following the recent strategic investment acquisition in METWEST, Management have identified several

• ther
• pportunities

within the Australian day hospital industry and remain in communication with the

• wners of these day hospitals.

New surgeons to join existing surgeons practices driving patient throughput. Encouraging existing surgeons to consolidate surgery at multiple facilities towards our facilities. Management, with the support of our surgeons, continue the process of formulating the standardisation of surgical supplies and lenses to reduce

• ur consumable costs.

Continuing the Staff Development Program for nursing staff in order to improve clinical efficiencies.

STRATEGIC FOCUS

5 3 1

Health Fund Negotiations

2

Efficient cash collection

4

Utilise the strength of the Group to negotiate better Health Funds rates. Specialised surgery disciplines with higher rebates and greater profit margins. Strong focus on efficient cash collections to remain in place, being over 95% within 30 days.

STRATEGY IMPLEMENTATION

Page 25

SUMMARY OVERVIEW

PMA continues to focus on consistent organic growth with our existing facilities, both through surgical volumes and strong management processes to contain costs. Concurrently, the Group actively looks to grow and increase its portfolio in the Day Hospital Industry through investing in new profitable

• pportunities,

maximising shareholder value. Page 26

A leading healthcare company specialising in establishing and managing private day hospitals

810 Pacific Highway, Gordon, NSW 2072 02 9416 0414 info@presmed.com.au www.presmed.com.au

Page 27