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Life Healthcare sale lifts Mvela

Johannesburg - Proceeds from the sale of a stake in Life Healthcare Group Holdings [JSE:LHC] enabled investment holdings firm Mvelaphanda Group [JSE:MCG] to post a fourfold increase in full-year headline earnings.

Mvelaphanda on Thursday reported full-year diluted headline earnings per share of 215 cents for the year to end-June, compared to 50.1c the year before.

The company said its profit for the year quadrupled to R878.8m, from R172.8m the previous year.

Profit from operations increased 28% to R327m and revenues were up 12% to R4.2bn on the back of a strong performance from Mvelaserve, the support services company.

Mvelaserve has four key operational areas being Facilities Management, Security, Cleaning and Catering and Diversified Services.

At Mvelaserve, revenues were up 17% and earnings before interest, tax, depreciation and amortisation up 31% for the financial year on a comparable basis while its operating margin increased from 7.4% to 8.3%.
    
Cash generated from operations was up 18% to R428m.

Mvelaphanda Group has announced that its board is considering the separate listing of Mvelaserve on the JSE and unbundling to shareholders.
    
This is in accordance with the company's objective of unlocking value from this investment in the second half of this calendar year.
    
"These are really very strong results from Mvelaserve and we believe more can be achieved as the company continues with its objective to be a significant player in the outsourced support services market," said Mvelaphanda Group CEO Yolanda Cuba.

The company said it made significant progress with its strategy to unlock value for shareholders during the year.

Following the successful listing of Life Healthcare Group Holdings on the JSE in June, Mvelaphanda Group unbundled about 14.2% of Life Healthcare to its shareholders.

Of the original 21.65% interest in Life Healthcare, Mvela Group now holds 3.3% in the company.

"We remain on course with our realisation and unbundling strategy," said Cuba.
    
"We have unlocked significant value for our shareholders with the unbundling of most of our interest in Life Healthcare and are committed to a value unlocking transaction with Mvelaserve before the end of the year. Following the conclusion of this transaction, we will have realised about 70% of the value of the company for shareholders," she said.

The company declared a cash preference share dividend of 27.1c.
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