Mediclinic Intnl plc - 2020 Full-Year Trading Update
Company Number: 08338604
LSE Share Code: MDC
JSE Share Code: MEI
NSX Share Code: MEP
("Mediclinic", the "Company", or the "Group")
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
2020 Full-Year Trading Update
· Mediclinic is playing a vital role in combating the COVID-19 pandemic
· The Group is prepared for the crisis leveraging its expertise across operating divisions; focused on supporting its people, patients and local health authorities
· Group FY20 trading broadly in line with expectations despite the impact from
· Strong financial position and liquidity entering the pandemic; taken prudent and appropriate decisions to preserve liquidity including suspending all non-essential capital expenditure and the Group dividend; debt covenant test waivers agreed in all divisions
Details of a conference call for investors and analysts today at 09.15 BST/10.15 SAST are available at the end of this update.
Commenting today, Dr
"The rapid spread of the COVID-19 pandemic is having a dramatic impact on countries and the lives of people globally. Mediclinic is at the forefront of tackling this crisis, playing a vital role as a leading healthcare service provider. This would not be possible without our exceptional frontline doctors, nurses and staff who each make an invaluable contribution to the societies in which they operate. We are committed to safeguarding their welfare in order for them to focus on caring for patients.
"I have been encouraged by the Group's ability to adapt and innovate as our experts support government efforts in their policy formulation. Each division has well-defined infection prevention and communicable disease emergency preparedness programmes and is working collaboratively with their respective local health authorities in assessing and implementing appropriate measures to deal with the pandemic. A key tenet of the Group's values is putting Patients First to which we remain committed during and after this crisis."
Mediclinic's approach to COVID-19
Mediclinic is working closely with governments and local regulators to combat the COVID-19 pandemic, supporting the different initiatives being implemented across geographies. Clearly defined infection prevention and communicable disease emergency preparedness programmes that govern admission, containment, triage and treatment of suspected or confirmed COVID-19 cases, are already well-established across the Group.
With the assistance of strong infection prevention and control teams, dedicated multi-disciplinary taskforces are constantly re-evaluating Mediclinic's responses to this dynamic and rapidly evolving situation. The Group taskforce, centrally co-ordinated by the Group Chief Clinical Officer with its global view of trends and policy, helps ensure medical protocols and best practices are shared across the Group and supports the divisions' establishment of contingency plans with particular consideration for any impact on supply chain, ICT, finance, risk and human resource capacity.
The Group benefits from having procurement teams on three continents, all taking co-ordinated and pro-active measures to secure the supply of critical personal protective equipment ("PPE"), drugs, consumables and Intensive Care Unit ("ICU") equipment. The Group's global sourcing capability strengthens its ability to respond to the current situation and evolving needs.
Across the Group, and in line with the global trend, most non-essential elective procedures and outpatient activities have been postponed. This is intended to safeguard, as far as possible, sufficient hospital capacity, frontline clinical staff and PPE as the pandemic peaks and related admissions increase. These cases are reimbursed through the established health insurance schemes in all divisions.
In addition to COVID-19 admissions, the Group continues to make available its wide range of acute care services for urgent healthcare requirements including emergency and trauma care, urgent medical care, cardiac and vascular surgery, obstetrics and gynaecology, paediatric and neonatology procedures and neurology, oncology and urology treatments.
The Group has invested in a number of key initiatives to help its staff and patients deal more effectively with the crisis, including: acquiring additional ventilators and related consumable products; expanding ICU capacity where possible; establishing testing units; sourcing additional PPE for the treatment of COVID-19 cases; establishing additional laboratory facilities to support COVID-19 testing; launching telemedicine and prescription home delivery services for chronic medication; creating drive-through pharmacies; identifying separation areas in hospitals and ensuring these are sufficiently prepared for infection and prevention control and treatment; establishing alternative interim facilities to admit asymptomatic and low acuity cases; establishing 24/7 patient call centres and crisis control centres; updating websites and developing online risk assessment tools; software development to support various tracking and testing initiatives; and, developing communication tools and guidelines for staff and patients.
The safety and wellbeing of all the Group's employees, supporting doctors and patients remain a key priority. Appropriate measures and programmes have been put in place to provide staff with COVID-19 training and all necessary precautions are being taken to limit the spread of COVID-19 in Mediclinic facilities.
Protocols on the safety of healthcare workers and the use of PPE are adhered to, including screening and self-isolation of employees based on official case-definitions. Vulnerable healthcare workers with, for instance, underlying health conditions, have been identified and redeployed to lower risk units.
The Group's focus currently is to create capacity in its front-line resources to help tackle the crisis. The suspension of non-urgent elective surgery has created some capacity and these team members have, where possible, been redeployed to support emergency areas within the hospitals. Staff members in teaching positions and clinically qualified staff working in non-clinical positions are available to be redeployed if needed.
Strong financial position and liquidity
As with most industries and companies, the full impact of the COVID-19 pandemic on Mediclinic is currently uncertain. The Group has put in place the necessary structures and processes to monitor and mitigate existing and emerging risks to the business with the main focus areas being people, supply chain and liquidity.
The pandemic and its consequent national lockdowns and associated actions suspending non-urgent elective surgery is likely to have a significant impact on the Group financial performance for the year ending
As part of the Group's proactive measures, covenant test waivers have been agreed in respect of its material borrowings across all three divisions up to and including
As part of the Group's broad response to maintaining its liquidity position through the crisis and to maximise its support tackling COVID-19, the Board has taken the prudent and appropriate decision to suspend the dividend. The Board recognises the importance of its dividend to shareholders and will keep this position under review. In line with this unprecedented decision, the Executive Directors' annual salary increases and short-term incentives have also been suspended.
In support of
Group FY20 trading was broadly in line with expectations. Performance of the Group was in line until
In constant currency, FY20 revenue was up around 4.0% (FY19:
On a reported basis, FY20 revenue was up around 5.5% and pre-IFRS16 EBITDA was down around 2.5% (FY19 pre-IFRS16:
The pre-IFRS16 earnings per share is expected to be around
The average foreign exchange rates for FY20 were GBP/
The Group will, as part of its usual period end reporting process, conduct impairment reviews across all divisions and investments. The process will be informed by the impact of challenging trading environments due to the competitive landscape and macro-economic weakness, exacerbated by the uncertainty created by the COVID-19 pandemic.
The EBITDA margin was, until
On an IFRS16 accounting basis, the EBITDA margin was in line with expectations at around 21.0%. The pre-IFRS16 EBITDA margin for FY20 was around 20.0% (FY19: 21.2%).
On an IFRS16 accounting basis, the EBITDA margin in FY20 was around 15.0%. The pre-IFRS16 EBITDA margin for FY20 was below expectations at around 12.0-12.5% (FY19: 13.0%), largely relating to lower than expected patient volumes.
Spire Healthcare Group
Mediclinic holds a 29.9% investment in Spire Healthcare Group plc ("Spire"). Spire's reported performance for its full-year financial period ended
The investment in Spire is equity accounted, recognising the reported IFRS16 profit of
Please refer to separate announcements made on the
* The Group uses adjusted income statement reporting as non-IFRS measures in evaluating performance and as a method to provide shareholders with clear and consistent reporting. The Group's non-IFRS measures are intended to remove from reported earnings volatility associated with defined one-off incomes and charges which were previously referred to as underlying.
** IFRS 16 accounting standard: addressing the definition of a lease, recognising and measuring leases and establishing principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors.
This announcement contains certain forward-looking statements relating to the business of the Company and its subsidiaries, including with respect to the progress, timing and completion of the Group's development; the Group's ability to treat, attract and retain patients and clients; its ability to engage consultants and general practitioners and to operate its business and increase referrals; the integration of prior acquisitions; the Group's estimates for future performance and its estimates regarding anticipated operating results; future revenue; capital requirements; shareholder structure; and financing. In addition, even if the Group's actual results or development are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of the Group's results or developments in the future. In some cases, forward-looking statements can be identified by words such as "could", "should", "may", "expects", "aims", "targets", "anticipates", "believes", "intends", "estimates", or similar. These forward-looking statements are based largely on the Group's current expectations as of the date of this announcement and are subject to a number of known and unknown risks and uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by these forward-looking statements. In particular, the Group's expectations could be affected by, among other things, uncertainties involved in the integration of acquisitions or new developments; changes in legislation or the regulatory regime governing healthcare in
The Group is providing the information in this announcement as of this date, and disclaims any intention to, and make no undertaking to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Mediclinic is a diversified international private healthcare services group, established in
Its vision is to be the partner of choice that people trust for all their healthcare needs.
The Group is focused on providing specialist-orientated, multi-disciplinary services across the continuum of care in such a way that the Group will be regarded as the most respected and trusted provider of healthcare services by patients, medical practitioners, funders and regulators of healthcare in each of its markets.
The divisions' contributions to Group revenue for the financial year ended
The Company's primary listing is on the
Conference call details
Management will host an investor and analyst conference call today at 09.15 BST/10.15 SAST.
To access the call, please dial the appropriate number below 15 minutes before the start of the event:
International Dial-In: +44 (0) 20 7192 8338
Conference ID: 2179633
For further information, please contact:
+44 (0)20 3786 8181
+44 (0)20 3727 1000
+27 (0)21 487 9000
The information contained in this announcement is inside information. If you have any queries on this, then please contact
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