LENMED AIR 2019.pdf

Financial resources CREATING VALUE How we utilise financial capital is fundamental to creating sustained value for our shareholders and other stakeholders. Our ability to self-fund and access cost-effective funding through equity or debt is vital to commercial success. Lenmed can remain sustainable and expand by continuously managing our cost of capital and working capital effectively. WHAT IT IS The pool of funds that is: available to an organisation for producing goods or for providing services obtained through financing (such as debt, equity or grants), or generated through operations or investments CHALLENGES + Restraints on the raising of loan capital given the current high gearing levels + Challenge in debt collection from non-South African medical schemes OPPORTUNITIES + A strong asset base (R3 billion) that can release capital and good relationships with banks + Effective cost controls + Investor demand for healthcare assets in South Africa The GROUP’S REVENUE increased by 15% from R2 220.8 million to R2 546.1 million year-on-year Lenmed invested R221.4 million into GROWTH OPPORTUNITIES OPERATING ACTIVITIES generated R423.6 million (2018: R360.8 million), which reflected improved cash management during the current year HIGHLIGHTS LOOKING AHEAD During 2020 we will focus on: + a strong asset base with permanent equity and continued bank support to provide a 40% debt/equity ratio + a strong income statement from increased profit margins due to higher bed occupation rates, effective cost controls, a good case mix and excellent patient outcomes + working capital improvements 36 HOW WE PERFORMED