Life Healthcare Group Holdings’ Southern African business experienced good underlying activity growth in the six months to March 31, the JSE-listed private healthcare provider said in a trading update Thursday.

The update referred to the Southern African business as continuing operations, while the discontinued operations comprise the LMI and Alliance Medical Group's (AMG) operations - the R13.9 billion disposal of LMI to Lantheus Holdings announced in January was on track and was expected to be completed during the second half.

Overall paid patient days (PPDs) increased by 2%, with occupancies improving to 68.6% from 66.6% in the first half of 2024.

Acute hospitals PPDs increased 2%, with the acute hospitals' occupancy improving to 68.3% from 66.2%. Complementary services PPDs grew 2%, with occupancies improving to 71.6% from 70.4%.

Life Healthcare’s directors said the Southern African business benefited from the timing of the Easter holidays falling in April 2025 versus in March 2024.

Revenue per PPD increased 6.1% due to a changing case mix and a tariff increase of 5.1%. This resulted in revenue growth of between 8% and 9%.

This meant the Southern African business was in line to meet its 2025 guidance of 79 additional beds and the start of the construction of a new 140-bed hospital, additional imaging transactions and PET-CT sites, and improving occupancies to 70%.

Operational efficiency was a focus through the 2025 financial year, and the FMC renal business would be embedded. The intention is also to expand the roll-out of the renal dialysis integrated care program.

Capital expenditure for the second half was expected to be about R1.2bn.

Shareholders had overwhelmingly voted for the LMI transaction on April 2, 2025. The profit on disposal would be accounted for in the reporting period in which the transaction closes.

Normalised earnings per share (NEPS) provided the actual performance of the South African business as it excludes non-trading related items and discontinued operations.

NEPS was expected to increase between 45% and 50.4%. LMI's senior management team, in terms of their incentive scheme, would receive about $18 million post completion of the disposal. The additional employee charge is estimated to be R303m, or a reduction of 21 cents per share.

The sale of AMG that was concluded in the first half of 2024 resulted in a R2.8bn profit on disposal which was recognised as part of profit from discontinued operations. This once-off gain, in isolation, equated to 195.7 cents per share in the first half of the 2024 financial year.

There was a contingent consideration to the previous owners of LMI, Piramal Enterprises. The fair value adjustment was estimated to be R2.9bn, which would have a big impact on the current period's earnings. This fair value loss, in isolation, equated to a reduction of 203 cents per share. The fair value loss was excluded from NEPS.

Life Healthcare’s share price increased by 2.02% to R14.11 on Thursday morning, a price 30% higher than what it traded at 12 months before.

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