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Litha Healthcare increases revenue

Johannesburg - The unaudited condensed consolidated results for the Litha Healthcare Group [JSE:LHG] for the six months ended June 30 shows revenue up 16.3% compared to the first half of 2013.

Earnings per share (EPS) decreased from 4.0 cents per share (cps) in the first half of 2013 to 0.2 cps in the first half of 2014.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) decreased by 10.5% to R 61.5m in the first half of 2014 from R68.7m in the first half of 2013, but increased from R42.0m in the second half of 2013.

Litha Healthcare Group is a diversified healthcare business providing services, products and solutions to public and private hospitals and government healthcare programmes in Southern Africa. It has three divisions, namely Litha Pharma (pharmaceuticals and complementary medicines), Litha Medical (medical devices, equipment and consumables) and Litha Biotech (human vaccines).

Litha Pharma provided 25% of group operating profit before head office expenses. Revenue decreased by 1.8% to R281m for the first half of 2014. Margins continue to be affected by the depreciation of the rand and provisions for stock obsolescence.

In the first half of 2013 there was a significant gain on revaluation of forward exchange contracts. This was partially offset by cost savings which accrued following a restructuring activity. The full effect of the restructure will be felt in the second half of 2014.

Litha Medical had a strong first half of 2014, primarily driven by the sale of the Da Vinci Surgical Robotic Systems, which were in-licensed during the second half of 2013. Sales in the forensics business unit were stronger than the prior year due to a full six months of tender sales in the first half of 2014 compared to the first half of 2013 when tender sales only started to flow through in the latter part of the half.

Litha Biotech contributed 44% of group operating profit before head office expenses. Revenue increased by 14.0% to R106.3m in the first half of 2014 compared to R93.3m in the first half of 2013 due to strong flu vaccine sales.

No dividend has been recommended or declared for the period. It is anticipated that, while the group continues with its growth strategy, it will continue to reinvest any profit generated back into the businesses. The group will review its dividend declaration policy in the medium term.

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