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Mediclinic profits grow slower than sales as new clinics roll out

The private hospitals group plans to open six more clinic in South Africa after the successful launch of the Stellenbosch day case clinic in June

Mediclinic International Plc -
Mediclinic's South African hospitals have 20.1% profit margins, the highest across the group

Private hospital group Mediclinic International Plc (LON:MDC) welcomed higher half-year revenues and hopes profit growth catches up as it opens more clinics in its highly profitable South African division.

Turnover was £1.5bn in the six months to the end of September, up 6% on the same period last year, the FTSE 250 company said in its half-year results on Thursday.

READ: Mediclinic jumps as profit fall likely to be better-than-feared

This fed through to 4% higher underlying profits (EBITDA) of £222mln as the investment in the new Stellenbosch day case clinic in June and efforts to enhance clinical standards squeezed margins to 14.7% from 15.3% last year.

The private healthcare group plans to add six more day clinics in South Africa over the next two years, as part of chief executive Ronnie van der Merwe's intended “expansion across the healthcare continuum”, investing in “day case clinics, primary care facilities, sub-acute hospitals, radiology, precision medicine, IVF and digital healthcare solutions”.  

In its Middle East division, a ramp-up at the new Mediclinic Parkview Hospital in Dubai and renovations at the ground and mezzanine floors at Mediclinic Al Noor Hospital helped bring revenues up 8%.

Elsewhere, its Swiss business, which accounts for 46% of group revenues, grew a more modest 5% as a result of a more difficult regulatory environment and reduced tariffs, which Mediclinic is hoping to offset with better cost efficiency.

Van der Merwe kept full-year guidance unchanged, saying that he was pleased that all three divisions were growing revenue, EBITDA and patient volumes.

The shares were up 1% to 380.7p mid-morning on Thursday.

Quick facts: Mediclinic International Plc

Price: 407.6381 GBX

LSE:MDC
Market: LSE
Market Cap: £30.46 m
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