Research archive for MEI

Mediclinic released a trading statement yesterday morning. This is ahead of their results release, which is expected to be on the 21st of May. That is not too far away, a week today, all will be revealed. There are some accounting issues that have not been dealt with immediately in the trading release. Normalised HEPS, which excludes one-off and exceptional items, is expected to be between 8 and 10 percent higher than the 375.8 cents at the same stage last year. Somewhere around 411 cents for the full year. Basic EPS however is expected to be as much as 521 cents. Basic headline earnings per share is expected to be around 485 cents worth of earnings. Why all the different numbers? It is enough to make you want to weep. The interpretation of all the numbers is found in the interim numbers, IAS 33 reveals a little more.

Mediclinic released an announcement on Monday, titled Swiss refinancing, impact of Swiss interest rates, and UAE growth and refinancing. It is pretty simple. Mediclinic are taking advantage of a world of low yields to refinance some of their existing debt at lower rates, in a market where investors are looking for yield.

A company NOT to avoid is one involved in the growing sector of healthcare. You might buy fewer restaurant meals, you may go down in the food stakes to brands of lower quality, heck, South Africans might even eat humble pie and downgrade to a lesser German automobile, the shock and horror of it all. When it comes to your health however, you are almost always inclined to go with the best affordable option, the truth is that the wealthier you are, the more you can spend on quality life saving therapies or procedures. Which is why we like businesses like Mediclinic, that company released their results this morning, for the six months to end 30 September 2014.

Mediclinic announced yesterday a transaction that has been known to the market for over three weeks, that they had reached an agreement to buy an existing facility in Switzerland, 98 percent of the operating business of Swissana Clinic in Meggen. For those of you who are familiar with the Swiss countryside (lucky you) Meggen is smack bang in the middle of the country, and looks as beautiful as a postcard. Or should I say jigsaw puzzle. Almost everyone there speaks Swiss German, of course if German was your first language you would be able to tell the difference. According to the Wikipedia page on the town, a notable resident was the late Mark Rich. The town itself is around 550 years old, if we continue the historic theme!

Yesterday we received full year results for the year ended 31 March for the business we know as Mediclinic. Now this one has been on our shortlist for a while. Lets take a closer look at these results and see whether this company fits the Vestact standards of investable businesses, which we like to think are very high.

Mediclinic released a trading update on Friday afternoon. It is an investment theme that we like a lot, healthcare. The thinking is pretty simple, the richer people get, the longer they are inclined to live and spend on their health. The Americans on a per capita basis still spend the most on healthcare, the benefactors being big pharma, medical professionals and perhaps the "wrong" quarters. Mediclinic has a business in Switzerland, where on a per capita basis the country ranks third globally, at around 5200 USD per person. For perspective, we spend about the same amount as Turkey, Mexico and Brazil on healthcare. The further down the global list you go, unfortunately you see the familiar "faces", with Eritrea at the bottom, spending a mere 18 Dollars per annum per person. Population there is around 6.1 million folks. In Switzerland, there are roughly 8 million people living there. Yet in Switzerland, the average spend on healthcare is 290 times above that in Eritrea, on a per capita basis. Unfair I guess you could say, but that is the truth. Divergent histories and wealth creation over time I guess, using the resources available.