The Group’s Chief Executive Officer and Chief Financial Officer have restructured the operating segments due to the purchase
of the new WAD healthcare assets in the prior financial year. The operating segments identified are examined from a service
perspective (total healthcare vs information technology) and geographical perspective (South Africa vs Africa). The geographical
segments identified include all businesses outside of South Africa which include Botswana, Mauritius, Namibia, Kenya,
Swaziland and Zimbabwe. Individually, each business outside of South Africa is not material hence management has taken the
decision to disclose all business outside of South Africa as a separate operating segment. All segments have been disclosed
according to what the Chief Operating Decision-Maker reviews.
Nature of business segments:
- Healthcare SA – consists of medical scheme administration and health risk management services in South Africa.
Please refer to Note 11 which indicates Medscheme Holdings Proprietary Limited’s summarised financial information.
- Healthcare Retail – consists of pharmaceutical sales/services from the WAD Healthcare Assets acquisition. These services
are rendered in South Africa.
- Healthcare Africa – consists of all healthcare services outside of South Africa. This includes associate earnings (Botswana,
Kenya, Namibia, Zimbabwe, Swaziland and Mauritius).
- Information technology – this relates to all IT-related services for the Group predominantly within South Africa.
| 2017 |
| Gross revenue |
2 378 130 |
1 069 435 |
184 443 |
3 632 008 |
561 021 |
(408 328) |
3 784 701 |
|
| Administration expenses |
(2 108 391) |
(1 000 246) |
(141 914) |
(3 250 551) |
(378 336) |
408 295 |
(3 220 592) |
|
| Amortisation of intangibles |
(1 754) |
(9 057) |
(340) |
(11 151) |
(71 391) |
(3 908) |
(86 450) |
|
| Depreciation |
(14 339) |
(3 852) |
(2 087) |
(20 278) |
(24 821) |
1 |
(45 098) |
|
| Net finance income |
32 064 |
2 054 |
1 160 |
35 278 |
3 581 |
(45 905) |
(7 046) |
|
| – Finance income |
34 490 |
2 106 |
1 657 |
38 253 |
3 581 |
(2 213) |
39 621 |
|
| – Finance cost |
(2 426) |
(52) |
(497) |
(2 975) |
– |
(43 692) |
(46 667) |
|
| Share-based payment expense |
(2 096) |
– |
– |
(2 096) |
– |
– |
(2 096) |
|
| Net fair value gain/(impairment) of assets |
1 323 |
– |
– |
1 323 |
(132) |
2 110 |
3 301 |
|
| – Fair value gain |
17 079 |
– |
– |
17 079 |
– |
6 073 |
23 152 |
|
| – Impairment of assets |
(15 756) |
– |
– |
(15 756) |
(132) |
(3 963) |
(19 851) |
|
| – Fair value of contingent consideration |
(59 582) |
– |
– |
(59 582) |
– |
– |
(59 582) |
|
| – Profit warranty expense |
(14 787) |
– |
– |
(14 787) |
– |
– |
(14 787) |
|
| Net share of profit of associate |
(725) |
9 656 |
5 374 |
14 305 |
– |
1 |
14 306 |
|
| – Share of profit of associate |
(725) |
9 656 |
5 374 |
14 305 |
– |
1 |
14 306 |
|
| Profit/(loss) before taxation |
209 843 |
67 990 |
46 636 |
324 469 |
89 922 |
(47 734) |
366 657 |
|
| Income tax expense |
(93 295) |
(18 432) |
(17 058) |
(128 785) |
(21 351) |
3 520 |
(146 616) |
|
| Profit/(loss) for the year |
116 548 |
49 558 |
29 578 |
195 684 |
67 571 |
(44 214) |
220 041 |
|
| Net segments assets |
3 435 646 |
353 504 |
112 402 |
3 901 552 |
420 138 |
(1 252 810) |
3 068 880 |
|
| Segments assets |
3 431 319 |
327 411 |
103 997 |
3 862 727 |
420 138 |
(1 252 808) |
3 030 057 |
|
| Investment in associates |
4 327 |
26 093 |
8 405 |
38 825 |
– |
(2) |
38 823 |
|
|
|
|
|
|
|
|
|
|
| Segment liabilities |
418 127 |
220 409 |
17 361 |
655 897 |
155 342 |
(121 412) |
689 827 |
|
|
Adjusted profit (EBITDA) earnings for management earnings (non-IFRS information)
EBITDA excludes the effects from significant items of income and expenditure which may have an impact on the quality of
earnings such as depreciation, amortisation and impairments. It also excludes the effects of equity-settled share-based
payments.
| 2017 |
| Profit/(loss) before taxation |
209 843 |
67 990 |
46 636 |
324 469 |
89 922 |
(47 734) |
366 657 |
|
| Depreciation and amortisation |
16 093 |
12 909 |
2 427 |
31 429 |
96 212 |
3 907 |
131 548 |
|
| Reversal of impairment |
15 756 |
– |
– |
15 756 |
132 |
3 963 |
19 851 |
|
| Share-based payment expense |
2 096 |
– |
– |
2 096 |
– |
– |
2 096 |
|
| Net finance income |
(32 064) |
(2 054) |
(1 160) |
(35 278) |
(3 581) |
45 905 |
7 046 |
|
| Adjusted profit/(loss) for the year (EBITDA) |
211 724 |
78 845 |
47 903 |
338 472 |
182 685 |
6 041 |
527 198 |
|
| |
| 2016 (Restated) |
Healthcare
SA
R’000 |
Healthcare
Retail
R’000 |
Healthcare
Africa
R’000 |
Total
Healthcare
R’000 |
Information
Techno-
logy
R’000 |
Inter-Group
Elimina-
tions
R’000 |
Group
R’000 |
|
| Gross revenue |
2 066 327 |
748 477 |
180 534 |
2 995 338 |
499 411 |
(346 603) |
3 148 146 |
|
| Other income |
– |
– |
– |
– |
– |
– |
– |
|
| Administration expenses |
(1 893 117) |
(701 287) |
(117 651) |
(2 712 055) |
(382 940) |
306 599 |
(2 788 396) |
|
| Amortisation of intangibles |
(1 385) |
(8 171) |
(336) |
(9 892) |
(55 629) |
(13 811) |
(79 332) |
|
| Depreciation |
(11 935) |
(2 531) |
(2 242) |
(16 708) |
(21 302) |
(1) |
(38 011) |
|
| Net finance income |
(3 612) |
2 343 |
3 508 |
2 239 |
640 |
– |
2 879 |
|
| – Finance income |
31 109 |
3 001 |
3 530 |
37 640 |
689 |
(5 943) |
32 386 |
|
| – Finance cost |
(34 721) |
(658) |
(22) |
(35 401) |
(49) |
5 943 |
(29 507) |
|
| Share-based payment expense |
(6 444) |
– |
– |
(6 444) |
– |
– |
(6 444) |
|
| Net fair value gain/(impairment) of assets |
20 995 |
– |
– |
20 995 |
– |
1 232 |
22 227 |
|
| – Fair value gain/(impairment) of assets |
25 853 |
– |
– |
25 853 |
– |
1 232 |
27 085 |
|
| – Impairment of intangibles |
(4 858) |
– |
– |
(4 858) |
– |
– |
(4 858) |
|
| Net share of profit of associate |
(713) |
7 479 |
3 352 |
10 118 |
– |
– |
10 118 |
|
| – Share of profit of associate |
(713) |
7 479 |
3 352 |
10 118 |
– |
– |
10 118 |
|
| Profit/(loss) before taxation |
170 116 |
46 310 |
67 165 |
283 591 |
40 180 |
(52 584) |
271 187 |
|
| Income tax expense |
(35 020) |
(14 545) |
(13 663) |
(63 228) |
(11 342) |
(2 945) |
(77 515) |
|
| Profit/(loss) for the year |
135 096 |
31 765 |
53 502 |
220 363 |
28 838 |
(55 529) |
193 672 |
|
| Net segments assets |
3 328 479 |
238 198 |
160 739 |
3 727 416 |
310 001 |
(996 701) |
3 040 716 |
|
| Segments assets |
3 328 479 |
221 762 |
152 698 |
3 702 939 |
310 001 |
(996 701) |
3 016 239 |
|
| Investment in associates |
– |
16 436 |
8 041 |
24 477 |
– |
– |
24 477 |
|
|
|
|
|
|
|
|
|
|
| Segment liabilities |
1 059 074 |
163 482 |
26 159 |
1 248 715 |
129 339 |
99 080 |
1 477 134 |
|
Adjusted profit (EBITDA) earnings for management earnings (non-IFRS information)
EBITDA excludes the effects from significant items of income and expenditure which may have an impact on the quality of earnings
such as depreciation, amortisation and impairments. It also excludes the effects of equity-settled share-based payments.
| 2016 (Restated) |
Healthcare
SA
R’000 |
Healthcare
Retail
R’000 |
Healthcare
Africa
R’000 |
Total
Healthcare
R’000 |
Infor-
mation
Techno-
logy
R’000 |
Inter-
Group
Elimina-
tions
R’000 |
Group
R’000 |
|
| Profit/(loss) before taxation |
170 116 |
46 310 |
67 165 |
283 591 |
40 180 |
(52 584) |
271 187 |
|
| Depreciation and amortisation |
13 320 |
19 323 |
2 578 |
35 221 |
76 932 |
5 190 |
117 343 |
|
| Reversal of impairment |
(20 995) |
– |
– |
(20 995) |
– |
(1 232) |
(22 227) |
|
| Share-based payment expense |
6 444 |
– |
– |
6 444 |
– |
– |
6 444 |
|
| Net finance income |
3 612 |
(2 343) |
(3 509) |
(2 240) |
(639) |
– |
(2 879) |
|
| Adjusted profit/(loss) for the year (EBITDA) |
172 497 |
63 290 |
66 234 |
302 021 |
116 473 |
(48 626) |
369 868 |
|
Correction of error in accounting for interest on conditional financial obligation
Due to an error in the accounting treatment of interest accrued under the conditional put option obligation, the segment profit and
loss of the Healthcare SA segment for the year ended June 2016 were overstated by R24.960 million.
The error has been corrected by restating each of the affected segment information line items for the prior year, as
described above.
Further information on the error is set out in Note 39.
|