Life Healthcare has been operating hospitals for 27 years and 2010 marked
the Group’s re-listing on the JSE as Life Healthcare Group Holdings Limited.
It therefore gives me pleasure to report that the Group recorded a strong
performance over the last 12 months. These results bear testimony to the
Company’s emphasis on operational excellence, achieved through a focus
on growth, quality, efficiency and sustainability in all its endeavours.
The initial public offering (IPO) that preceded Life Healthcare’s listing resulted
in 37.35% of the Company’s total issued share capital changing hands. Shares
were offered to selected institutional investors, and qualified institutional
buyers. Life Healthcare management, staff and supporting doctors subscribed
to shares worth R134 million. Offshore investors showed a keen interest and
took up 40% of the IPO despite volatile markets preceding the listing.
On 10 June 2010, Life Healthcare listed on the JSE in the Health Care
Providers sector. The listing provided selling shareholders with the opportunity
to unlock value for their shareholders through the disposal of a portion of their
investment in the Group.
One of the most pleasing aspects of the listing was the participation of
permanent South African employees in the success of the Group through
the Life Healthcare employee trust. This trust enabled these employees to
benefit from the Group’s growth. Employee trust participation was based on
length of service from 2005 and not seniority, thus ensuring fair and equitable
reward for the number of years with the Company. Seventy percent of the
approximately R470 million was paid out in June 2010 with the balance being
paid to employees once the six month lock-in period expires in December.
Of the approximately 12 700 employees who are eligible, 61% are historically
disadvantaged individuals excluding white women (94% including white
Although primarily a provider of acute care, high technology, private hospital
services to the medically insured population, our group has demonstrated,
through Life Esidimeni, that public/private partnership (PPP) models are
highly effective in addressing some of the country’s healthcare challenges.
It is imperative to improve access to critical health services including
hospital care. Partnerships between government and the private hospital
sector with its valuable management expertise, clinical skills and assets
could make a significant impact in this respect. We welcome participation
with the public sector in establishing parameters which will enable us to
participate in addressing healthcare challenges, and are encouraged by
recent developments in which the government appears to be more willing to
collaborate meaningfully with the private sector. In this regard we look forward
to engaging with government on the national health insurance (NHI) proposal
recently released by the ANC.
Good corporate governance and sustainability are pivotal to our success.
Governance and sustainability have become more complex and regulated
with changes to the Companies Act. This report is not only our maiden
communication to our shareholders as a public company, but also our
first attempt bearing King III requirements in mind. Over the next year Life Healthcare will concentrate on aspects that have
been identified as requiring improvement to achieve
optimum sustainability levels.
In June, we welcomed three new independent directors
to the board – Louisa Mojela, Peter Golesworthy and
Trevor Munday, who is the lead independent nonexecutive
director. Richard Laubscher, Eutychus Mbuthia
and Neo Mokhesi stepped down from the board. I would
like to thank them for their valuable contribution as
directors of Life Healthcare.
Life Healthcare has a dedicated executive management
team with a depth of experience. The team’s
entrepreneurial approach has been instrumental in
expanding the group to the R15 billion organisation it is
today. Life Healthcare’s reputation for quality healthcare,
ethics and integrity in its business dealings is in large
measure due to the calibre of its managers. While
successfully managing its hospitals and other operations
as businesses, Life Healthcare does not compromise
the quality of medical care for its patients. Its status as a
world class healthcare provider has been earned through
the consistent delivery of quality in all its endeavours.
South African healthcare is at a crossroads and Life
Healthcare has boldly adapted to the challenges of the
past year with flexibility and flair. I am deeply appreciative
of the efforts of my fellow directors, the executive team
under Michael Flemming’s strong leadership, and all
the employees, as well as of the support of our other
stakeholders. You are responsible for the continued
enhancement of this dynamic group and have helped
to secure this set of impressive results.
Professor Jakes Gerwel