RNS Number:8122P
Global Health Partner PLC
11 March 2008
Global Health Partner Plc announces preliminary results for the year ended
31 December 2007
Global Health Partner plc (London AIM: GHP) (the "Company" or "GHP"), the
provider of specialist clinical healthcare services, reports its preliminary
results for the year ended 31 December 2007.
Revenue from its first full year of operations (previous year comprised only 4.5
months of operations) was �20.5 million and operating profit before central
costs was �1.7 million. Loss before taxation for the year amounted to �(1.2)
million and loss per ordinary share was 2.2p (2006- 4.6p).
The financial key performance indicators are:
2007 2006
Revenue from operations �20.5 million �5.7 million
Operating loss �(1.2) million �(0.3) million
Operating profit before central costs �1.7 million �1.0 million
Operating profit before central costs as a 8 % 18%
percentage of revenues
Loss before taxation �(1.2) million � (0.7) million
Borrowings as a percentage of total assets 26 % 35%
The operating loss for the year of �(1.2) million is stated after central costs
of �(3.0) million which relate to those costs incurred in maintaining the group
central management team. This team oversees the current business and is also
responsible for business development activity to lead growth. Finance income of
�1.0 million, mainly interest on cash deposits, is offset by finance expenses of
�(0.8) million, principally arising on external acquisition financing. Together
with a share of loss of associates of �(0.2) million, this resulted in an
overall loss before taxation of �(1.2) million.
During the year, the Company has strengthened its balance sheet and retained
significant year end cash resources of �18.0 million, which will be used to
develop GHP both organically and by acquisitions.
CEO Per Batelson said:
"GHP was founded on the public market in August 2006 with the ambition to take
the delivery of healthcare services beyond the standards and expectations
created by the first generation of European private healthcare providers. Our
business model and a fresh start continue to give us cost and flexibility
advantages versus both private sector competitors and public sector hospitals.
Despite the wide range of opportunities presented to the group during the year
we have continued to focus our work in carefully selected clinical areas,
together with the best medical entrepreneurs, in keeping with our business
approach "Quality through Specialisation".
During 2007 we have increased the number of clinics from 5 to 10, and we are now
well established in four clinical areas, principally in Sweden:
* Spine surgery and rehabilitation
* Dental implant surgery and prosthesis treatment
* Orthopaedic and sports medicine surgery
* Obesity treatment including bariatric surgery
Overall, we are pleased with the performance of the clinics with sound and
stable operating margins, however the consolidated operating margin for 2007 has
been impacted by the start-up of new businesses and the restructure of our
Gothenburg orthopaedic businesses. We have built a strong platform of central
resources that makes us well positioned to further increase growth and operating
profit margins within the respective service lines, without significant increase
in central costs.
In general, our business activity is at this time concentrated within our core
Swedish and Scandinavian markets to develop our chosen Service Lines. We believe
the concentration of our resources in this area today best matches our skills to
the market opportunities available to us. During 2008 we will use our positive
experiences from successful acquisitions, roll-outs and turn-arounds, and focus
our activities both through roll-outs and further add-on acquisitions within our
selected service lines. We believe that organic start-ups provide a higher value
creation compared to acquisitions, but acquisitions are also important to gain
strategic entries to markets and economies of scale. Start-ups, however, imply a
significant initial investment cost and working capital need to cover the 12-18
months start-up period. We are seeking opportunities to cooperate and co-locate
with public sector hospitals to reduce costs and shorten start-up periods for
some projects.
Overall we are pleased at the development of the holistic care delivery model we
have chosen to operate under. We believe that patients are best served by a
multi-professional and team oriented organisation that has a full range of
treatment modalities for a specific diagnose area.
Service Line highlights
Spine surgery and rehabilitation
Stockholm Spine Center continued to perform satisfactorily during 2007 and
increased its total revenue compared to 2006. During the year, we have
successfully established Spine Center Gothenburg which has exceeded initial
expectations following its start-up in May. Three new partner surgeons came
onboard to start operating within the existing facilities of our Gothenburg
orthopaedic clinic. Spine Center Gothenburg turned profitable at the
contribution level within four months of operations.
Our associated Norwegian clinic, VOS, continued in loss during the year, but
following the award of a care contract after year end together with a new share
issue, in which we increased our ownership to 41.4 percent, the clinic is now
well positioned to accelerate its financial performance during 2009 and 2010.
Dental implant surgery and prosthesis treatment
Our dental operations in Stockholm had a difficult first half year due to a fire
at the smaller of the two clinics. The complete refurbishment kept the referral
based clinic out of operations for three months before starting to operate from
a temporary facility. The resulting decrease in revenue has lead to weaker
financial performance during 2007, but both clinics are now well positioned to
benefit from the reimbursement changes to be implemented in the second half of
2008 and to further reinforce the position among the market leaders in Sweden.
During 2007, we have developed our Dental business through the acquisition of a
clinic in Norrkoping. The acquisition was made together with our current dental
surgeon partners, with whom we acquired 80% of the clinic. In January 2008, we
opened our first UK based dental implants clinic in central Leeds, a new purpose
built state of the art clinic specialising in the surgical placement of dental
implants.
Orthopaedic and sports medicine surgery
In January 2007 we completed the acquisition of Stockholm's Specialistvard, an
orthopaedic surgery clinic with two operating theatres situated in the same
premises as Stockholm Spine Center at Lowenstromska Hospital. The acquisition
has provided a good opportunity for GHP to expand its operating capacity in
specialist orthopaedic surgery in the Stockholm market and the clinic has
performed above expectations during 2007.
Following a local corporate merger, the IFK and GMC clinics in Gothenburg now
form a joint business within orthopaedic clinical services and are consolidated
within GMC's operating facilities and the newly opened Annedal clinic. These
will provide a lower cost, fully equipped, top quality surgical environment for
the surgeons. The operating loss for 2007 includes direct and indirect
restructuring costs for GMC.
Obesity treatment including bariatric surgery
In February 2007, we took a major step forward within the Obesity Service Line
with the acquisition of 65 percent of Kirurgkliniken Sverige. The clinic is a
leading provider of bariatric surgery in Sweden and operates at Sophiahemmet
hospital in Stockholm. Following the acquisition the clinic has performed in
line with our expectations and will expand in new premises at the Sophiahemmet
hospital during 2008.
We are concluding the development of care manuals, IT support systems and
working tools during the first half of 2008. We are also preparing to launch 3-5
new clinics during 2008. The market conditions are favourable due to an
increased demand for obesity treatments in general, and gastric bypass surgeries
in particular.
Global Health Partner's Business Model
Our business model has proven to work well in our selected clinical areas. The
partnership structure with leading specialists and the network amongst
clinicians serving similar patient groups gives outstanding opportunities to
benchmark, compare and further develop our services. So far we have just started
to see synergies and we will need another 12-24 months, additional clinics, and
critical mass to fully exploit the potential of the Service Line model. During
2007 extensive analysis has been done to assess market opportunity and roll-out
strategies for the different Service Lines. In 2008 we will strengthen the
Service Line management teams and increase our efforts to start-up new clinics
in selected new geographies.
Directorate Changes
On 25 January 2008, GHP announced that Urban Jansson has agreed to take on the
role of Non-Executive Chairman of the Board and also that Dr Joachim Werr, a
director of Investor Growth Capital Europe, a 15.6% shareholder in GHP, joined
the Board.
Mr Jansson, who joined the Board in September as independent Non-Executive
Director takes over the Chairman's responsibilities previously carried out by
Per Batelson, who is continuing in his role as Chief Executive.
For Further Information contact GHP:
In the UK: 44-207-665-1833
In Sweden: 46-31-712-5300
www.globalhealthpartner.com
Summarised Consolidated Income Statements (Unaudited)
For the period 1 January 2007 to 31 December 2007 (comparative - 9 months ended
31 December 2006)
2007 2006
�000 �000
Revenue and other operating income
Revenue 20,458 5,718
Other operating income 952 305
21,410 6,023
Operating expenses (22,658) (6,277)
Operating loss (1,248) (254)
Financial income 1,027 221
Financial expenses (745) (659)
Share of net loss of associates (198) (13)
84 (451)
(Loss) before taxation (1,164) (705)
Taxation 219 (277)
(Loss) for the period (945) (982)
Attributable to
Shareholders' equity (1,136) (1,092)
Minority interests in equity 191 110
(945) (982)
(Loss) per ordinary share
Basic and diluted (pence) (2.2)p (4.6)p
Summarised Consolidated Balance Sheets (Unaudited)
At 31 December 2007 (comparative - 31 December 2006)
2007 2006
�000 �000
Assets
Non-current assets
Goodwill 27,953 22,627
Other non-current assets 4,665 1,769
Total non-current assets 32,618 24,396
Current assets
Trade and other receivables 5,049 3,272
Cash and cash equivalents 17,973 12,614
Total current assets 23,022 15,886
Total assets 55,640 40,282
Liabilities
Current liabilities
Short term borrowings 1,321 1,877
Other current liabilities 3,423 3,031
Total current liabilities 4,744 4,908
Non-current liabilities
Long term borrowings 12,984 12,028
Other non-current liabilities 1,449 515
Total non-current liabilities 14,433 12,543
Total liabilities 19,177 17,451
Net assets 36,463 22,831
Total shareholders' equity 35,048 22,523
Minority interests in equity 1,415 308
Total equity 36,463 22,831
Summarised Statement of Changes in Consolidated Total Shareholders' Equity
(Unaudited)
Opening balance at
1 January 2007 22,523
Issue of share capital (net of expenses) 12,698
Net loss (1,136)
Foreign exchange 963
Closing balance at 31
December 2007 35,048
Summarised Consolidated Cash Flow Statements (Unaudited)
For the period 1 January 2007 to 31 December 2007 (comparative - 9 months ended
31 December 2006)
2007 2006
�000 �000
Operating activities
Operating loss (1,248) (254)
Depreciation and amortisation 918 254
Other operating activities - net (317) (250)
Changes in working capital - net (661) (804)
Net cash flow (used in) operating activities (1,308) (1,054)
Investing activities
Acquisition of subsidiaries (1,095) (3,259)
Other investing activities (3,276) (229)
Net cash flow (used in) investing activities (4,371) (3,488)
Financing activities
Movement in borrowings - net (1,247) 414
Issue of ordinary share capital (net of 12,165 13,180
expenses)
Net cash flow from financing activities 10,918 13,594
Effects of exchange rate changes 120 48
Net increase in cash and cash equivalents 5,359 9,100
Cash and cash equivalents at the beginning of
the 12,614 3,514
period
Cash and cash equivalents at the end of the 17,973 12,614
period
Notes to the Summarised Consolidated Financial Information for the year ended 31
December 2007 (unaudited)
1. General information
The consolidated financial information has been prepared for the 12 months
period 1 January 2007 to 31 December 2007. The comparative period is for the
nine month period 1 April 2006 to 31 December 2006, however GHP's operations
effectively commenced in August 2006 following the Company's admission to AIM.
The unaudited consolidated financial information does not constitute full
financial statements within the meaning of Section 240 of the UK Companies Act
2005. The group's full consolidated financial statements, prepared in accordance
with International Financial Reporting Standards as adopted by the European
Union, will be completed and sent to the shareholders in due course.
The Sterling / Swedish Kronor exchange rate at 31 December 2007 was 12.7747
(2006 - 13.4273).
Year ended 31 December 2007
* On 12 January 2007, the Group acquired 88 percent of Stockholm's
Specialistvard AB, an orthopaedic surgery clinic located in Stockholm, Sweden.
The acquisition was financed by cash of approximately �1.0 million.
* On 7 February 2007, the Company announced that it had issued 314,439
ordinary shares at 71.24 pence each to certain senior managers in the Gothenburg
Medical Center business.
* On 15 February 2007, the Group acquired 65 percent of Obesity
Stockholm AB, with its wholly-owned subsidiary Kirurgkliniken Sverige AB, a
private obesity clinic located in Stockholm, Sweden. The acquisition was
financed by the issuance of 328,829 ordinary shares at 130 pence each.
* On 20 February 2007, the Company announced that it had placed, with
certain existing shareholders, a further 12 million ordinary shares of 50 pence
each at an issue price of �1 per share, raising approximately �12 million after
expenses. The net proceeds of the placing will be utilised as additional working
capital to fund growth of the Group both organically and by acquisition.
* On 23 April 2007, the Group acquired the entire issued share capital
of Leif Sward Ortopedi AB (IFK- kliniken), a private sports medicine clinic
located in Gothenburg, Sweden. The acquisition was financed by cash of
approximately �1.1 million and the issuance of shares in the Group's subsidiary
Gothenburg Medical Center AB (GMC) at a value of approximately �1.0 million and
representing a 28 percent minority holding in GMC.
* In May 2007 the Group established Spine Center Gothenburg, a sister
clinic to Stockholm Spine Center. Three new partner surgeons came onboard to
start operating within the existing facilities of our Gothenburg orthopaedic
clinic.
* On 20 June 2007, the Group announced the provision of approximately
�0.9 million committed resources to be made available as venture capital to
develop Elutera, a new venture within the Swedish elderly care market in which
the Group owns approximately 40 percent of the operating company and
approximately 46 percent of the investment company, whilst acting in partnership
with an elderly care entrepreneur and a property company.
* On 31 October 2007, the Company announced the acquisition of a 1.1
percent interest in Priory Investments Holdings Limited (PIHL). Priory is the
leading UK independent provider of acute and secure mental health,
neuro-rehabilitation and specialist education services.
* On 31 October 2007, the Group acquired the assets of Specialistkliniken for
implantat och kakkirurgi (SFIK). Nordic Dental Holding AB (NDH), a 51 percent
owned subsidiary of GHP, acquired an 80 percent interest in SFIK together with
the dental implants clinicians at Specialistkliniken at Sophiahemmet who are the
49 percent minority owners of NDH. The oral and maxillofacial surgeon will own
20 percent of SFIK. The total consideration paid for 100 percent of the assets
was approximately �0.2 million in cash. SFIK is a major private supplier of
highly specialised dental rehabilitation in the Ostra Gotaland county in Sweden.
* On 29 November 2007, the Company announced that in connection with
the acquisition of 100 percent of the share capital of Sabbatskliniken AB, GHP
issued 89,000 new ordinary 50p shares of GHP to the company's owner at a value
of 117.5 pence per share. The company contains a care contract under which
Stockholms Specialistvard AB (SSV), the specialist orthopaedic clinic acquired
by the Group in January 2007, currently operates.
* In January 2008, the Group opened its first UK based dental implants
clinic in central Leeds, a new purpose built state of the art clinic
specialising in the surgical placement of dental implants.
2. Segment information
At 31 December 2007, the directors have determined that the Group is currently
engaged in four primary reporting business segments each providing specialised,
integrated healthcare services:
- spine surgery and rehabilitation;
- dental implant surgery and prosthesis surgery;
- orthopaedic and sports medicine surgery; and
- obesity treatment, including bariatric surgery
The segment information is provided before any allocation of costs for group
central overhead functions but after certain development costs.
Year ended 31 December 2007
Spine surgery & Dental Orthopaedic & Obesity Corporate Total
rehabilitation implant sports treatment, costs
surgery & medicine including
prosthesis surgery bariatric
surgery surgery
�000 �000 �000 �000 �000 �000
Revenue 9,830 2,524 6,903 1,201 - 20,458
Operating profit 1,194 455 (109) 187 (2,975) (1,248)
(loss)
3. (Loss) per ordinary share
Basic (loss) per ordinary share has been calculated on the (loss) after tax
attributable to equity shareholders of �(1.136)m divided by the weighted average
number of ordinary shares in issue during the year of 52,637,288.
4. Financial income and expenses
2007 2006
Financial income: �000 �000
Bank interest receivable 1,009 221
Foreign exchange gain 15 -
Other financial income 3 -
1,027 221
Financial expense:
Bank interest payable (493) (146)
Interest on minority shareholder debt (64) (22)
Interest on convertible bond (170) (63)
Interest on financial leases (7) (2)
Foreign exchange (loss) - (423)
Other financial expenses (11) (3)
(745) (659)
5. Taxation
Taxation principally arises on the group's operations in Sweden. Deferred tax
assets have been recognised in respect of certain corporate and other costs
arising in Sweden.
6. Share capital
As 31 December 2007, there were 54,434,492 allotted, called up and fully paid
ordinary shares of 50p each in issue (31 December 2006 - 41,702,224). During the
year a total of 12,732,268 ordinary shares were issued in respect of the placing
of shares and acquisitions. In total 12,314,439 shares were issued for cash and
417,829 shares were issue as consideration for acquisitions.
-------------------------------------ENDS---------------------------------------
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The company news service from the London Stock Exchange
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