Wakefield Health Limited Investor presentation 16 September 2011 - - PowerPoint PPT Presentation

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Wakefield Health Limited Investor presentation 16 September 2011 - - PowerPoint PPT Presentation

Wakefield Health Limited Investor presentation 16 September 2011 PAGE 1 Important notice The information in this presentation, dated 16 September 2011 (Presentation), is an overview and does not contain all infor mation necessary to


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16 September 2011

Wakefield Health Limited

Investor presentation

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  • The information in this presentation, dated 16 September 2011 (“Presentation”), is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a non-

exhaustive summary of certain information relating to Wakefield Health Limited (“WFD”).

  • This presentation has been prepared in connection with a proposed fund raising to be undertaken by way of a placement of WFD shares to institutional investors.
  • This presentation is not an offer of WFD shares for subscription. The terms of any offer, if made, will be set out in a formal offer document. To the extent of any inconsistency between the offer document and this

Presentation, the offer document will prevail.

  • Any offer to participate in the placement, if made, will only be made to persons who are not, or who are not required to be treated as, members of the public in New Zealand for the purposes of the Securities Act
  • 1978. No person who is, or who is required to be treated as, a member of the public in New Zealand will be entitled to participate in the proposed placement.
  • Recipients have signed a Confidentiality Agreement in favour of WFD and use of this Presentation is subject in all respects to the terms and conditions of that Confidentiality Agreement, including the rules in

relation to insider trading in respect of WFD shares.

  • The information in this Presentation does not purport to be a complete description of WFD or the proposed fundraising. In making an investment decision, investors must rely on their own examination of WFD,

including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of shares.

  • The information contained in this Presentation has been prepared in good faith by, and is the sole responsibility of, WFD. No representation or warranty, express or implied, is made as to the fairness, accuracy,

adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation, or as to the reasonableness of any assumption any of which may change without notice. To the maximum extent permitted by law, WFD, its directors, officers, employees, agents and advisors (including Cameron Partners Limited and its affiliates and any of their respective directors, officers, employees, representatives or advisers) disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of WFD, its directors, officers, employees, agents and advisors (including Cameron Partners Limited and its affiliates and any of their respective directors, officers, employees, representatives or advisers)) for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in, or omitted from, this Presentation.

  • This Presentation is not a prospectus, investment statement or disclosure or offer document. This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, shares in the United States.

Shares may not be offered or sold in the United States unless the shares have been registered under the U.S. Securities Act of 1933, as amended (“US Securities Act”), or an exemption from registration is available.

  • Any prospective or pro forma financial information contained in this Presentation necessarily is based upon a number of estimates and assumptions that, while presented with numerical specificity and considered

reasonable by WFD, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of WFD, and upon estimates and assumptions with respect to future business decisions which are subject to change. The inclusion of any such information in the Presentation should not be regarded as a representation or warranty with respect to its accuracy

  • r the accuracy of the underlying estimates or assumptions or that WFD will achieve or is likely to achieve any particular results. Such information also assumes the success of WFD’s business strategies. The

success of the strategies is subject to uncertainties and contingencies beyond WFD’s control, and no assurance can be given that the strategies will be effective or that the anticipated benefits from the strategies will be realised in any particular period. Accordingly, there can be no assurance that such results will be realised and any variance from actual results may be material. Prospective investors are cautioned not to place undue reliance on any such information.

  • All information within this Presentation is current as at 7 September 2011. WFD will not be responsible for updating, or providing any updates, to this information following this date.
  • All dollar amounts are in NZ$ unless otherwise stated.

Important notice

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Overview

Executive summary 1. 2. 3. 4. About Wakefield Acquisitions Equity capital raising programme

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1. Executive summary

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WFD is seeking to raise new equity capital to partially fund the recent Norfolk and Endoscopy / Laparoscopy Auckland (EA/LA) acquisitions and maintain balance sheet capacity for future investment needs Placement

$11m

Top-up

$1m

SPP

$3m $15m

Executive summary | About Wakefield | Acquisitions | Capital raising

  • 1. Executive summary

The capital raise

Share purchase plan (SPP)

Structure Offered to non-placement

  • shareholders. Subscriptions beyond

$3m maximum permitted to the extent top-up is undersubscribed Price Lower of placement price or average end of day market price of WFD shares

  • n the NZSX over the SPP offer period

Record Date 5 October 2011

Placement

Structure

  • Offered to existing institutional / cornerstone

shareholders in proportion to current shareholdings (subject to 20% Takeovers Code limit)

  • Mechanism to enable placement shareholders

to subscribe for their full allocation at the completion of the SPP / top-up, subject to NZX rule 7.3.5, Takeovers Code and programme headroom

  • Under-subscriptions offered pro rata to

existing institutional / cornerstone shareholders, or new investors if there is a material shortfall Price

  • $4.85 per share

Top-up

Structure

  • Selected eligible shareholders.

Allocation based pro-rata on pre capital raise shareholding

  • Pricing and timing per SPP
  • $1m pool

New shares will not be entitled to receive the interim dividend for the half year ending 30 September 2011

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The capital will finance, in part, the acquisition of interests in two businesses Equity $15m $7m Debt $16m $24m

Sources Uses

  • 1. Executive summary

Use of funds

100% of Norfolk

  • Owns 60% of Grace Hospital in Tauranga
  • Modern and scalable facility, constructed in 2007
  • Only private hospital in the Tauranga / Whakatane

region

  • Exposure to favourable population demographics
  • Specialist providers of Endoscopy and Laparoscopic

surgical services

  • Operates from a modern, purpose built facility in

Epsom, Auckland

  • Strong brands and substantial market share in

target markets

  • Entry point for WFD into the Auckland market

30% of Endoscopy/ Laparoscopy Auckland

*Source: Capital IQ 7 September 2009. Based on $15m capital raised, share price of $5.10, acquisition costs as above and balance financed with debt. Net debt calculated using FY11 figures, and includes interest swap liability of $519k

Net debt / EV*

Pre-capital raise & acquisitions 16.3% Post-capital raise & acquisitions 25.6%

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 1. Executive summary

Investment highlights

Exposure to favourable long- term trends

  • An aging population is expected to boost demand for healthcare
  • Constrained public finances limit the ability of the public sector to provide hospital capacity
  • Development of new treatments only available privately and higher healthcare expectations

The proposed equity capital raise provides exposure to favourable long-term trends, at a discount to comparable peers

...through quality assets... ....at a discount to comparable peers... ...without liquidity challenges

  • Grace Hospital is modern, scalable and low maintenance, and has an excellent market position
  • Acquisition of EA / LA assets, providing exposure to a wealthy and growing Auckland market
  • Wakefield is the largest private hospital in central New Zealand
  • Redevelopment of Bowen hospital provides new facilities and increased capacity
  • Placement priced at 5.6x FY11 EBITDA, against an average of 8.3x, for selected comparable

peers

  • P/NTA of 1.0x
  • Twelve-month average daily volume of 4,978 shares makes it challenging to acquire material stakes
  • Provides an opportunity to acquire shares efficiently

Executive summary | About Wakefield | Acquisitions | Capital raising

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2. About Wakefield

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EA / LA (30% ownership)

Auckland based 2 Endoscopy rooms 1 operating theatre 10 beds High-volume, specialist producer of endoscopy and laparoscopic services

  • 2. About Wakefield

Facilities overview

Royston (100% ownership)

3 operating theatres Endoscopy suite Day surgery unit 31 beds including 3 patient suites Radiology service The only private surgical hospital in Hawkes Bay

Wakefield (100% ownership)

Wellington based 7 operating theatres 5 bed intensive care unit Endoscopy suite Cardiac catheter lab 71 beds Radiology services Tertiary level hospital

Bowen (100% ownership)

Wellington based 3 operating theatres 41 beds 2 bed high dependency unit Endoscopy suite Radiology service Currently undergoing major redevelopment

Grace (60% ownership)

Tauranga based 6 operating theatres 50 beds Day stay unit Minor procedures / endoscopy room Modern facility (built 2007) Bay of Plenty’s only private surgical hospital

Together Wakefield, Bowen and Royston treat ~15,000 patients annually through 145 beds, 13 theatres, 4 endoscopy procedure rooms and a cardiac catheter lab

Boulcott (12% ownership)

Based in Lower Hutt 3 operating theatres

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 2. About Wakefield

Business model

Theatre Medical equipment Nursing staff Other

WFD

Service fee ($)

Patient Surgeon / specialist

WFD provides surgical facilities and post-operative care. Its success is driven principally, by the following:

  • Ability to secure services of key surgeons
  • Admissions (driven by private insurance funded procedures,

privately funded elective procedures and ACC / DHB contracts)

  • Theatre hours
  • Bed nights
  • Price per procedure
  • Consumables usage
  • Operating expenses
  • Capital expenditure

WFD provides surgical facilities and post operative care. Its success is driven by WFD’s ability to manage yield per patient, capacity utilisation and control costs

Medical supplies

Bulk funding contract ($)

DHB / ACC bulk contracts DHB / ACC contracts

Service fee ($) Sub-contract fee ($)

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 2. About Wakefield

Strategy

WFD employs a three-tiered strategy to create shareholder value

1. Protect & grow existing business 2. Growth & diversification through M&A 3. Build capacity & capability for future growth

  • Continuing investment in consultant relationships
  • Promoting the company’s hospitals and the specialists that practise there
  • Maintaining investment in quality staff, equipment, facilities and services
  • Focussing on the quality of patient experience by continuing to enhance quality of the facilities
  • Value adding opportunities
  • Geographic diversification
  • Further consolidation of private hospital sector is desirable and inevitable
  • Entry into regions of population growth and favourable demographic profile
  • Private healthcare will have an increasing role in meeting New Zealand’s future medical needs
  • Develop the physical, human, and technological capabilities to ensure WFD is positioned to

meet these future opportunities, eg. Bowen redevelopment, ongoing development of Wakefield Hospital Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 2. About Wakefield

Financial performance

The GFC and other demand factors impacted top-line revenue growth and profitability. Pre-GFC, WFD expanded margins as it built economies of scale

Source: Capital IQ 7 September 2011. Revenue / admission figures provided by management *FY11 NPAT includes $4.3m one-off tax expense relating to changes in depreciation deductibility on buildings and tax rates

FY10 and FY11 were impacted by:

  • Reduced DHB and ACC

contracting

  • Decline in privately funded

elective surgery as a result of weak economic conditions

  • Reduction in insurance funded

procedures as patients ‘trade down’ health insurance policies

NZ$ million (to 31 March) FY06 FY07 FY08 FY09 FY10 FY11 Revenue 51 65 78 86 77 76 revenue growth 17.9% 25.7% 20.9% 10.4% (10.8)% (1.2)% revenue / admission ($) na na na 4,277 4,141 4,285 EBITDA 11 15 19 22 16 15 EBITDA margin 22.0% 22.8% 23.8% 25.7% 21.4% 19.5% NPAT 4 4 7 10 6 1* Total assets 101 104 111 124 127 124 Net debt 23 22 15 6 6 14 gearing (net debt to EV) 23.4% 15.7% 13.1% 4.6% 5.4% 16.9% Operating cash flow 8 10 13 19 13 12 EV/EBITDA 8.9x 9.5x 6.3x 6.1x 6.9x 5.6x PE 22.2x 30.4x 13.8x 12.5x 16.7x nm P/NTA 2.1x 2.5x 1.7x 1.8x 1.4x 1.1x Share price ($) 5.10 Market cap ($m). 72

Executive summary | About Wakefield | Acquisitions | Capital raising

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PAGE 13 5.8x 10.5x 9.4x 7.9x 5.6x Wakefield Health Ltd. Pulse Health Limited Ramsay Health Care Ltd. Primary Health Care Ltd. Abano Healthcare Group Ltd.

On a last twelve months EV/EBITDA basis, WFD appears attractively priced relative to selected Australasian comparable peers

Australia New Zealand

  • x

2.0x 4.0x 6.0x 8.0x 10.0x $1.00 $3.00 $5.00 $7.00 $9.00 $11.00 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11

Price is down & WFD is trading close to NTA

Share price (LHS) P/NTA (RHS) EV/EBITDA (RHS) 1.1x

  • 2. About Wakefield

Valuation analysis

WFD appears attractively priced in the context of its listed peer group, its share price history and NTA

WFD appears attractively priced:

  • The placement price implies a 5.6x FY11 EV/EBITDA multiple for WFD, against an average of 8.3x last twelve months EV/EBITDA for

selected Australasian comparable peers

  • It is also attractively priced in the context of its historic share price
  • WFD’s share price is currently 1.1x FY11 NTA ($5.10 per share at 7 Sep 2011)

Source: Capital IQ 7 September 2011. Based on last twelve months EBITDA Source: Capital IQ 7 September 2011 Abano does not own a material amount of land and buildings and has a proportion of minority shareholders in its investments

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 2. About Wakefield

Trading update & outlook

Since 31 March 2011…

  • Revenue for four months to 31 July 2011 was $27.0 million, up 1.8% on same period last year
  • EBITDA for four months to 31 July 2011 was $5.9 million, up 6.8% on same period last year (excluding one-off transaction costs

associated with the first attempted takeover of Norfolk in the prior year) Looking forward…

  • ACC outlook expected to remain stable
  • Uncertainty about timing and extent of increase in private demand
  • DHB work levels likely to remain volatile
  • Full year EBITDA expected to be moderated by an increase in insurance expense from 1 July 2011, and one-off transaction costs

associated with acquisitions

  • Norfolk and EA / LA expected to make an immediate positive contribution to net earnings (earnings to be accounted for as

associate earnings)

EBITDA is up 6.8% for the four months to 31 July 2011, and the acquisitions of Norfolk and EA/LA are expected to provide an immediate positive contribution to earnings

Executive summary | About Wakefield | Acquisitions | Capital raising

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Although health insurance cover has declined…

  • Health insurance is down 2.1% from its peak of 1.40 million

people covered in December 2008

  • However, the decline appears small in the context of prior-year

increases in policy uptake …pressure on public finances is expected to drive private healthcare growth in the long term…

  • Forecast deficits and rising public healthcare spending may be a

catalyst for increased private sector participation in the provision

  • f healthcare
  • 2. About Wakefield

Industry dynamics

Although present industry dynamics are challenging, long-term trends are expected to support future performance

Source: New Zealand Treasury Publication – Challenges & Choices: Modelling New Zealand’s Long-term Fiscal Position January 2010 (100)% 0% 100% 200% 300% 400% 500% 1950 1970 1990 2010

Public healthcare expenditure appears unsustainable

Health expenditure - cumulative % change GDP - cumulative % change 417% 133% 1.25m 1.27m 1.29m 1.31m 1.33m 1.35m 1.37m 1.39m 1.41m Mar-06 Dec-06 Sep-07 Jun-08 Mar-09 Dec-09 Sep-10

Health insurance cover

2.1% decline 3.0% increase Source: Health Funds Association

  • f New Zealand

Publication - Health Insurance Statistics June 2011

Executive summary | About Wakefield | Acquisitions | Capital raising

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…and an aging population is anticipated to support demand

  • The population aged over 65 is expected to increase ~115% from ~0.6m currently to ~1.3m by 2050 (Statistics New Zealand)
  • The costs of healthcare provision appear to rise sharply as patients age beyond 65 (New Zealand Treasury)
  • 2. About Wakefield

Industry dynamics

An aging population is expected to support demand for healthcare in the long term

0.0m 0.3m 0.5m 0.8m 1.0m 1.3m 1.5m 1950 1970 1990 2010 2030 2050

Population aged 65+

Forecast Source: Statistics New Zealand Report - Demographic aspects of New Zealand’s Aging Population March 2006 Source: New Zealand Treasury Publication – Challenges & Choices: Modelling New Zealand’s Long-term Fiscal Position January 2010 3,000 6,000 9,000 12,000 15,000

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5 25 45 65 85 Cost weight (2005/06 dollars)

Healthcare costs rise sharply with age

Male Female

Executive summary | About Wakefield | Acquisitions | Capital raising

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Regions exhibit varying exposure to underlying demographic trends

  • The chart illustrates projected

population growth and growth in

  • ver-65s
  • Auckland is expected to outperform

the national growth rates on both measures

  • Although the Bay of Plenty over-65s

growth rate is below the mean, its expected total population growth rate is higher than most other regions, and well above the population mean

  • 2. About Wakefield

Industry dynamics

The Auckland and Bay of Plenty regions are better positioned than most regions to capitalise on favourable demographic trends

Nelson Marlborough Mid Central Lakes Hutt Otago Hawkes Bay Southland Taranaki South Canterbury Wairarapa West Coast Tairawhiti Bay of Plenty Waitemata Auckland Counties Manakau Whanganui Northland Waikato Capital Coast Canterbury 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

  • 0.5

0.0 0.5 1.0 1.5 2.0

Annual % growth 2008–26 population 65+ Annual % growth 2008–26 total population

Mean New Zealand annual growth in 65+ Mean New Zealand annual population growth

Source: Ministry of Health presentation 19 November 2009

Manukau Bubble size represents population of DHB catchment area

Executive summary | About Wakefield | Acquisitions | Capital raising

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3. Acquisitions

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  • 3. Acquisitions

Norfolk - overview

Norfolk Southern Cross Southern Cross Hospitals Ltd Norfolk Ventures Ltd Norfolk Investments Ltd WFD

Acquire 100% 60% 40%

Key terms

  • $3.80 /share offer, valuing Norfolk at $24.2m. Declared unconditional on 18 August

2011 and closed 1 September 2011. WFD received 99.9% acceptances and has the

  • ption to enforce compulsory acquisition of the remaining 0.1%

Strategy behind acquisition

  • High quality and scarce opportunity – excellent market position
  • Since Royston merger, WFD has explored close to 10 acquisition opportunities
  • Opportunity to enter fast growth Tauranga region
  • Greater exposure to aging population
  • Provides opportunity to work with other committed sector investors

The acquisition will provide exposure to a quality facility, positioned for future growth

  • Grace was opened in August 2007. It is a modern, scalable and low-maintenance

facility

  • The hospital is based in Tauranga, and is expected to benefit from the region’s

growth, particularly its aging population. Grace is the only private surgical hospital in the Tauranga / Whakatane region

Southern Cross Health Trust Tauranga Partnership Ltd

100%

Grace hospital is a scarce and high quality opportunity. It is a modern and high quality facility that is uniquely positioned to capitalise on favourable demographic trends

Grace Hospital

100% 100%

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 3. Acquisitions

Norfolk - demographics

10,000 20,000 30,000 40,000 50,000 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 Population

Tauranga’s population is expected to grow

0–14 years 15–39 years 40–64 years 65+ Estimated Projected

Demographics in the Tauranga region support growth

  • The current population of Tauranga is approximately

114,300 which is the seventh largest centre in New Zealand

  • In the next 20 years, over 65s are expected to increase by
  • ver 70%

Tauranga exhibits the growing and aging population trend more strongly than most other New Zealand regions

Source: Statistics New Zealand data – Local Population Trends December 2010 Source: Statistics New Zealand data – Sub-national Population Estimates 30 June 2010

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 3. Acquisitions

Norfolk Southern Cross – financial performance (60% owned by Norfolk)

Source: Independent Advisor Report by Grant Samuel August 2011. Opex is net of other income

NZ$ 000 (to 30 June) FY11A Cash & equivalents 1,525 PPE 31,853 Term debt 13,608 Net assets 20,432 Norfolk Southern Cross NZ$ 000 (to 30 June) FY09A FY10A FY11A FY12B FY13F Patient numbers (#) 6,883 7,027 6,992 7,103 7,245

  • Avg. revenue / patient ($)

2,808 2,987 3,175 3,239 3,303 Revenue 19,327 20,992 22,202 23,004 23,933 revenue growth 8.6% 5.8% 3.6% 4.0% Gross profit 7,064 8,067 7,991 8,401 8,804 Opex 1,796 2,190 1,817 2,209 2,258 EBITDA 5,268 5,877 6,174 6,192 6,546 EBITDA margin 27.3% 28.0% 27.8% 26.9% 27.4% Depreciation 2,343 2,480 2,458 2,605 2,733 EBIT 2,925 3,397 3,716 3,587 3,813 Net interest expense 1,573 951 1,116 1,082 998 Share of profit / (loss) from Da Vinci Robot JV (39) (33) (40) nd nd NPBT 1,313 2,413 2,560 2,505 2,815 Capex 1,158 1,787 1,914 nd nd FCF 2,486 3,169 2,674 nd nd

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 3. Acquisitions

Norfolk Southern Cross – key metrics

WFD’s acquisition of Norfolk was priced at a lower historic EV/EBITDA multiple than selected precedent comparable transactions

On an EV/EBITDA basis, the Norfolk acquisition appears fairly priced

  • Based on a sample of selected Australasian transaction precedents, the average historic EV/EBITDA multiple has been 10.0x
  • WFD’s acquisition of Norfolk implies a 8.4x FY11 EV/EBITDA multiple, which is lower than selected precedent transactions

Source: Cameron Partners’ analysis based on data provided by the Grant Samuel Independent Advisor ‘s Report August 2011. Excludes cash held in Norfolk Source: Capital IQ 26 August 2011. Transaction screen for Australasian takeovers where the target owns and

  • perates private hospital(s). Transactions range from 2005 to 2011

11.1x 11.1x 10.3x 10.0x 9.6x 9.0x 8.8x Community Private Health Care / Pulse Health (12 Dec 07) 14 hospitals - Ramsay Health Care / Healthscope (5 Sep 05) Nova Health / Healthscope (30 Mar 05) Healthscope / TPG Capital; The Carlyle Group (13 May 10) Royston Hospital / Wakefield (13 Sep 05) Healthe Care / Archer Capital (1 Jun 11) Affinity Health / Ramsay Health Care (14 Apr 05)

Selected precedent EV/EBITDA transaction multiples

Average: 10.0x Target / Acquirer

Norfolk Southern Cross Historical Projected Year end 30 June FY11 FY12 FY13 EV/EBITDA 1.9x 1.9x 1.8x EV/EBIT 3.1x 3.2x 3.0x

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 3. Acquisitions

Endoscopy Auckland & Laparoscopy Auckland (EA / LA)

Key terms

  • $6.8 million purchase of 30% of Endoscopy Auckland Ltd and

Laparoscopy Auckland Ltd. Option to increase stake in these businesses up to 50% over the next five years (WFD holds call options and the vendor holds put options)

  • Put and call over 10% in three years time. Additional 10% in five

years time

  • Options are exercisable at 6x historic EBITDA (same terms as the
  • riginal 30%)

EA/LA have preeminent positions in the growing Auckland market

  • Complementary businesses that operate from the same site in Epsom,

Auckland

  • Endoscopy Auckland is the region’s premier endoscopy facility and New

Zealand’s busiest dedicated endoscopy unit

  • Laparoscopy Auckland is a specialised hospital dedicated to the

performance of laparoscopic general surgery and bariatric procedures

  • EA / LA are established businesses with strong performance track

records, and potential for further growth and development

The acquisition of EA/LA is consistent with WFD’s strategy of acquiring quality businesses exposed to favourable population trends

30% 50%

Integrated Hospitals Endoscopy Auckland Laparoscopy Auckland WFD Dunn Trust

20%

EA / LA NZ$ million (to 31 March) EBITDA FY11 3.8 Ownership acquired 30.0% Share of EBITDA 1.1 Acquisition cost (EA / LA hold no debt) 6.8 Implied multiple 6.0x

Executive summary | About Wakefield | Acquisitions | Capital raising

Source: EA/LA unaudited management accounts and Cameron Partners analysis

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  • 3. Acquisitions

Endoscopy Auckland & Laparoscopy Auckland (EA / LA)

NZ$000 (to 31 March 2011) EA LA Combined

Capex 349 11 360 EA / LA Balance sheet EA LA Combined NZ$000 (as at 31 March 2011)

Cash 1,125 721 1,846 PPE 945 207 1,152 Other assets 391 478 869 Total assets 2,461 1,406 3,867 Finance lease 481

  • 481

Other liabilities 786 503 1,289 Total liabilities 1,267 503 1,770 Equity 1,194 903 2,097

Executive summary | About Wakefield | Acquisitions | Capital raising

Source: EA/LA unaudited management accounts

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* Excludes deferred tax adjustment and swap revaluation. EPS based on $15m raised at $4.85 / share ** Pro forma EBITDA is indicative, since Norfolk and EA/ LA earnings are equity accounted, and therefore will not form part of financially reported EBITDA *** Source: Capital IQ 7 September 2011 **** Includes interest rate swap of ~$0.5m

  • 3. Acquisitions

Pro-forma financial statements: WFD group post-acquisitions

Pro forma WFD Group EV/EBITDA FY11 ($m)

WFD enterprise value*** 86.4 Value of Norfolk 24.2 Value of 30% EA / LA 6.8 Pro forma EV 117.4 WFD EBITDA (unaudited) 14.8 60% Norfolk Southern Cross EBITDA (FY11) 3.7 30% EA / LA EBITDA (FY11) 1.1 Pro forma EBITDA** 19.6 Pro forma EV / EBITDA 6.0x WFD Income statement to 31 March 2011 ($m) Unaudited Revenue 75.9 75.9 Expenses (61.1) (61.1) EBITDA 14.8 14.8 Depreciation and amortisation (6.6) (6.6) EBIT 8.2 8.2 Interest (0.7) (1.0) (1.7) Associate earnings 0.1 2.3 2.4 Profit before tax 7.6 8.9 Tax (2.5) (0.2) (2.7) Net profit (normalised*) 5.1 6.2 EPS (normalised*) 0.36 0.36 Acquisitions / capital raising Current Pro forma WFD Balance sheet as at 31 July 2011 ($m) Unaudited PPE 90.1 90.1 90.1 Investments 1.6 18.9 20.5 20.5 Goodwill 21.1 11.6 32.7 32.7 Other intangibles 1.7 1.7 1.7 Other assets 9.7 9.7 9.7 Total assets 124.2 154.7 154.7 Net debt**** 15.7 30.5 46.2 (15.0) 31.2 Other liabilities 18.9 18.9 18.9 Equity 89.6 89.6 15.0 104.6 Total liabilities & equity 124.2 154.7 154.7 Net debt / net debt + equity 14.9% 34.0% 23.0% Current Acquisitions Post acquisitions Capital raising Pro forma

Executive summary | About Wakefield | Acquisitions | Capital raising

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4. Equity capital raising programme

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  • 4. Equity capital raising programme

Objectives

Maintain prudent gearing

  • $15 million capital to part-finance the $24.2 million acquisition of Norfolk & $6.8 million

acquisition of EA / LA

  • Expect net gearing (net debt/ EV) of ~25.6% post-issue/acquisitions, which is an increase from

~16.3% pre-issue/acquisitions Opportunity for all shareholders to participate Timely execution

  • Placement and top-up allocation set in proportion to existing holdings
  • SPP provides an opportunity for minority shareholders to participate
  • Target completion early November

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 4. Equity capital raising programme

Placement terms

Key terms for the issue include the following:

  • Target $11 million
  • Offer to existing institutional shareholders and cornerstone

shareholders in proportion to current holdings subject to Takeovers Code 20% threshold

  • At the completion of the SPP and top-up, placement

participants will be offered the opportunity to complete their full subscription entitlement if scaled back, for legal reasons, prior to the SPP and top-up

  • Any shortfall in the placement pool will be offered to

placement participants on a pro-rata basis (based on original entitlements) or new institutional investors

  • Excludes FY12 interim dividend

Source: Capital IQ 7 September 2011. VWAP based on daily volume and closing price Normalised PE excludes deferred tax adjustment and swap revaluation.

NZ$ Current price Offer price Price 5.10 4.85 Discount to current price 4.9% Discount to VWAP 30 day VWAP 5.08 4.4% 60 day VWAP 5.14 5.6% 90 day VWAP 5.18 6.4% 180 day VWAP 5.26 7.8% Implied multiple (FY11) EV/EBITDA 5.6x EV/EBIT 10.1x PE (normalised)* 13.2x P/NTA 1.1x

Executive summary | About Wakefield | Acquisitions | Capital raising

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  • 4. Equity capital raising programme

SPP & top-up terms

Key terms for the issue include the following:

  • Limit of $4m for the SPP.
  • Maximum subscription per shareholder $15,000.
  • Over subscriptions scaled back.
  • Priced at lower of the placement price or the average end of day market price of WFD shares on the NZSX over the SPP offer

period

  • SPP/Top Up offer open date: 12 October 2011
  • SPP/Top Up offer closing date: 1 November 2011
  • Top-up pool of $1m (the amount raised under the SPP will be reduced dollar for dollar for any amount raised under the Top-Up
  • ffer).
  • Excludes FY12 interim dividend.

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  • 4. Equity capital raising programme

Key dates

Date Event 16-Sep 2011 Announcement of results of placement and SPP / top-up offer and interim dividend 5-Oct 2011 Interim dividend Record Date and SPP Record Date 6-Oct 2011 Placement: Settlement and allotment 12-Oct 2011 SPP / top-up: Open date 28 Oct 2011 Payment of interim dividend 1-Nov 2011 SPP / top-up: Close date 2-Nov 2011 SPP / top-up: Pricing and allotment date Executive summary | About Wakefield | Acquisitions | Capital raising