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Johannesburg - JSE-listed healthcare group Netcare has become a serious global player as the group's acquisition strategy starts to pay off.
This is the opinion of analysts after the release of the company's financial results on Monday for the six months to end-March 2009.
Frost & Sullivan healthcare analyst Lizelle Wentzel described Netcare as a formidable international company.
"Netcare's acquisition strategy has led to strong revenue generation in the UK, even though this market's growth is not as high as that of its African operations," said Wentzel. She added that the group's public-private partnership strategy has also made it a popular service provider in South Africa and other markets.
The company reported a 12% increase in revenue to R11.6bn, while operating profit rose 15% to R1.8bn. Neville Chester, a portfolio manager at Coronation Fund Managers, described the results as "strong".
Netcare cautioned that though it was seeing an increase in the number of patients through the NHS, the UK government's subsidised healthcare offering, payment delays were placing pressure on UK working capital.
Ampath sale boosts SA ops
Analysts expect the company to improve its ability to reduce debt and gearing.
South African operations received a R588m realised profit boost after the disposal of Netcare's 50.1% stake in laboratory operator Ampath.
"The company has also had to deal with the debt accumulated due to its investments, although this should prove to be manageable," Wentzel says.
"The sale of its 50% shareholding in Ampath for R1bn, although a small amount compared to its other transactions, alleviated some of this debt."
Chester said: "As they de-gear over time, this will continue to boost the results"
Wentzel also believes there may be further opportunities for Netcare in Africa, including countries such as Kenya, Tanzania, Angola and Mozambique.
In early Monday trade, Netcare shares were initially higher but subsequently dropped to 940c, down 10c.
- Fin24.com
