ANNUAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2023
| Carrying value 2023 R'000 |
Restated* Carrying value 2022 R'000 |
Amortisation for the year 2023 R'000 |
Amortisation for the year 2022 R'000 |
|||
| Goodwill | 1 558 496 | 1 558 496 | — | — | ||
|---|---|---|---|---|---|---|
| AfroCentric Health | 473 980 | 473 980 | — | — | ||
| Pharmacy Direct and Curasana | 473 954 | 473 954 | — | — | ||
| Activo | 424 645 | 424 645 | — | — | ||
| DENIS | 34 918 | 34 918 | — | — | ||
| Activo Healthcare Assets | 150 999 | 150 999 | — | — | ||
| Intangible assets | 1 487 045 | 1 517 840 | (208 823) | (231 269) | ||
| Customer relationships — Pharmacy Direct and Curasana | 19 730 | 28 678 | (8 949) | (8 949) | ||
| Activo Dossiers | 256 372 | 266 781 | (17 618) | (17 259) | ||
| Customer relationships — DENIS | 29 259 | 42 262 | (13 003) | (13 003) | ||
| Activo Healthcare Assets Dossiers | 153 689 | 161 124 | (13 103) | (19 942) | ||
| AfroCentric Health intangible assets | 96 177 | 112 065 | (36 937) | (59 528) | ||
| AfroCentric Health PPA — customer relationships | 42 559 | 48 568 | (6 008) | (11 970) | ||
| AfroCentric Health Software | 53 618 | 63 497 | (30 929) | (47 558) | ||
| Administration Systems — Self Generated | 931 818 | 906 930 | (119 213) | (83 144) | ||
| Nexus & Other Healthcare Administration Systems | 931 818 | 906 930 | (119 213) | (83 144) | ||
| Insurance Fraud Manager (Fraud Management Software) | — | — | — | (29 444) | ||
| 3 045 541 | 3 076 336 | (208 823) | (231 269) |
| * | In the current financial year the Group performed a detailed review of the classes of intangible assets to ensure that the disclosure in the summarized financial statements aligns to the underlying accounting records. Reclassifications were performed to correct the prior period classification error. The total intangible asset value was not impacted by the reclassification. |
| As at 30 June 2023 R'000 |
As at 30 June 2022 R'000 |
|
| Borrowings (non-current) | 528 005 | 531 082 |
|---|---|---|
| Borrowings (current) | 120 000 | 120 000 |
| Total borrowings | 648 005 | 651 082 |
During the current financial period, the group disposed of 74% of its investment in the following subsidiary:
| Subsidiary | Effective date of sale |
| Private Health Administrators Proprietary Limited | 01-Jul-22 |
Loss from discontinued operations excluding gains and losses from measurement or disposal are as follows:
| Year ended 30 June 2023 R'000 |
Year ended 30 June 2022 R'000 |
|
| Revenue | — | 29 353 |
|---|---|---|
| Gross profit | — | 29 353 |
| Finance Income | — | 90 |
| Depreciation | — | (161) |
| Right of use assets depreciation | — | (1 681) |
| Interest on lease liability | — | (573) |
| Lease reversal | — | 1 681 |
| Other expenses | — | (33 156) |
| Loss before tax | — | (4 447) |
| Income tax | — | (2 490) |
| Loss for the year | — | (6 937) |
Cash flows from discontinued operations
| Year ended 30 June 2023 R'000 |
Year ended 30 June 2022 R'000 |
|
| Net cash flows generated from operating activities | — | 10 760 |
|---|---|---|
| Net cash flows generated from investing activities | — | 270 |
| Net cash flows utilised in financing activities | — | (8 174) |
| — | 2 856 |
| The Group disposed of the following subsidiaries in the current financial year: | |
| Subsidiary | Effective date of sale |
| Private Health Administrators Proprietary Limited | 01-Jul-22 |
| MMed Distribution Proprietary Limited | 01-Jun-23 |
During the current financial year, the Group disposed of 74% holding in Private Health Administrators Proprietary Limited which resulted in the remaining interest of 26% being held as an investment in associate.
During the current financial period, MMed Distribution Proprietary Limited (MMed) was disposed for a consideration of R2 to RH Bophelo. As part of this disposal, a systematic approach was followed to first cease the sale of consumables to hospitals, followed by the restructure of MMed through a transfer of its remaining business to Activo Health Proprietary Limited by way of acquisition of the remaining MMed assets and assumption of its liabilities, resulting in a zero net asset value remaining in MMed.
Details of the sale of the subsidiaries
| Private Health Administrators Proprietary Limited R'000 |
MMed Distribution Proprietary Limited R'000 |
|
| Consideration received or receivable: | ||
| Fair value of deferred consideration | 3 946 | — |
| Fair value of remaining investment | 1 757 | — |
| Total disposal consideration | 5 703 | — |
| Carrying amount of net assets sold | (5 901) | — |
| Loss on sale | (198) | — |
| Income tax expense on loss | — | — |
| Loss on sale after income tax |
(198) | — |
The carrying amounts of assets and liabilities as at the date of sale were:
| Private Health Administrators Proprietary Limited R'000 |
MMed Distribution Proprietary Limited R'000 |
|
| Property, plant and equipment | 539 | — |
| Other financial assets | 327 | — |
| Right of use assets | 6 304 | — |
| Deferred tax asset | 746 | — |
| Trade and other receivables | 7 283 | — |
| Cash and cash equivalents | 3 629 | — |
| Total assets | 18 828 | — |
| Lease liability | 7 580 | — |
| Trade and other payables | 4 111 | — |
| Current tax liability | 1 236 | — |
| Total liabilities | 12 927 | — |
| Net assets sold | 5 901 | — |
| Non-distributable reserves | — | — |
| Non-controlling interest | — | — |
| Carrying amount of net assets sold | 5 901 | — |
| Cash flow on disposal of subsidiary | ||
| Proceeds on sale of subsidiaries | — | — |
| Less cash balances disposed | (3 629) | — |
| Net cash outlfow on disposal of subsidiaries | (3 629) | — |
As part of the purchase consideration for the disposal of the 74% of the shareholding in Private Health Administrators Proprietary Limited, it was agreed that the purchaser will forfeit dividends accrued to them to the maximum value of R5 million in favour of iThrive Business Solutions Proprietary Limited. The deferred payment asset represents the present value of the R5 million dividends that are receivable by iThrive Business Solutions Proprietary Limited.
| Group | ||
| 2023 R'000 |
2022 R'000 |
|
| Details of the Deferred payment asset: | ||
| Asset arising at disposal | 3 946 | — |
| Payments made during the year | — | — |
| Finance Income | 481 | — |
| Balance at the end of the year | 4 427 | — |
During the 2020, 2021 and 2022 financial periods, MMed Distribution Proprietary Limited erroneously omitted to accrue for purchase invoices as a result of late submission of the invoices by the suppliers.
These cut-off errors resulted in MMed's cost of sales and payables being understated at each year end. The cut-off error relates to inventory already delivered to customers at each year end, therefore the inventory balance is unaffected by the error.
The error did not have an impact on the Group's cash flows.
The error has been corrected by restating each of the affected financial statement line items for the prior periods as follows:
| Consolidated statement of financial position (extract) | 30 June 2022 As previously reported R'000 |
Adjustment (decrease)/ increase R'000 |
30 June 2022 Restated R'000 |
30 June 2021 As previously reported R'000 |
Adjustment (decrease)/ increase R'000 |
1 July 2021 Restated R'000 |
| Equity | ||||||
| Retained income/(accumulated loss) | 1 255 650 | (9 685) | 1 245 965 | 1 149 171 | (8 213) | 1 140 958 |
| Non-controlling interests | 997 491 | (9 719) | 987 772 | 928 752 | (8 241) | 920 511 |
| Total equity | 3 445 885 | (19 404) | 3 426 481 | 3 255 724 | (16 454) | 3 239 270 |
| Trade and other payables | 613 200 | 19 404 | 632 604 | 436 520 | 16 454 | 452 974 |
| Total current liabilities | 995 798 | 19 404 | 1 015 202 | 785 977 | 16 454 | 802 431 |
| Total liabilities | 1 991 721 | 19 404 | 2 011 125 | 1 858 642 | 16 454 | 1 875 096 |
| Total equity and liabilities | 5 437 606 | — | 5 437 606 | 5 114 366 | — | 5 114 366 |
| Consolidated statement of comprehensive income (Extract) | 30 June 2022 As previously reported R'000 |
Adjustment increase R'000 |
30 June 2022 Restated R'000 |
| Expenses | |||
| Cost of pharmaceutical products and finished goods | (2 022 726) | (2 950) | (2 025 676) |
| 30 June 2022 As previously reported R'000 |
Adjustment decrease R'000 |
30 June 2022 Restated R'000 |
|
| Income | |||
| Profit for the year | 481 740 | (2 950) | 478 790 |
| Profit for the year attributable to: | |||
| Owners of Parent | 314 276 | (1 472) | 312 804 |
| Non-controlling interest | 167 464 | (1 478) | 165 986 |
| Total comprehensive income | 483 241 | (2 950) | 480 291 |
| Comprehensive income attributable to: | |||
| Comprehensice income, attributable to owners of parent | 315 341 | (1 472) | 313 869 |
| Comprehensive income, attributable to non-controlling interests | 167 900 | (1 478) | 166 422 |
| 483 241 | (2 950) | 480 291 | |
| Earnings per share (cents) attributable to equity holders of the parent | |||
| Total basic earnings per share | 54.57 | (0.25) | 54.32 |
| Total diluted earnings per share | 52.75 | (0.24) | 52.51 |
During the current financial period, the disclosure was revised to disaggregate material expense line items from Other expenses as previously disclosed, to provide more relevant information for the users of the financial statements.
The enhancement has been effected by restating the financial statement line items for the prior periods as follows:
| Statement of comprehensive income (Extract) | 30 June 2022 As previously reported R'000 |
Re-presentation due to discontinued operations increase R'000 |
Adjustment (increase)/ decrease R'000 |
30 June 2022 Restated R'000 |
| Capitation costs | — | — | (1 851 342) | (1 851 342) |
| Other expenses | (2 879 641) | (425) | 1 851 342 | (1 028 724) |