Mediclinic trading statement

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.

Huh? What is IAS 33? International Accounting Standard 33, Earnings per share. I think what is important to remember too, is that in as much as the Swiss National Bank removing the Euro peg has been good for Mediclinic (more Rand earnings from their Swiss operation), the debt in Rand terms (three quarters of it issued in Switzerland) would have grown too. The question is either for the CFO, Craig Tingle, or quite simply, you can know that this relates to the weighted average number of shares in issue.

According to an IFRS IAS 33 paper I found, this is the reason, (Paragraph 26) "The weighted average number of ordinary shares outstanding during the period and for all periods presented shall be adjusted for events, other than the conversion of potential ordinary shares, that have changed the number of ordinary shares outstanding without a corresponding change in resources."

I am glad that you are all familiar with paragraph 26 now of IAS 33. It is seemingly important. Not too worry, all will be revealed a week today, remembering that the company raised a significant amount of money back in June last year, the number of shares in issue increased. We explained what they did with the money, they issued another 41 million shares to raise 3.177 billion Rand. This will jog your memory: Two transactions in Switzerland, raising cash. More on the results this time next week. The stock price sold off, we used it as an opportunity to buy people more shares who were underweight.