Private hospital group Netcare is on track to achieve revenue growth of 5% to 6% for the financial year ending in September 2025. Revenue and occupancy rates are expected to meet guidance.
Valued at approximately R19 billion on the JSE, Netcare operates 49 acute hospitals and 14 mental health facilities in South Africa. For the six months ending in March 2025, the group anticipates a rise of just over 1% in total paid patient days (PPD). A projected 1.5% year-on-year increase in occupancy at acute hospitals is keeping Netcare on track.
Additionally, Netcare remains firmly on track, as the revenue per PPD for acute hospitals increased by 4.5% for the five months ending in February 2025, further ensuring Netcare meets its targets.
Netcare on Track with Medical Cases Growing Fast
While surgical cases account for over 70% of revenue, medical cases are growing faster. However, occupancy for mental health services declined by 1.9% due to bed shortages. The group expect overall occupancy to increase between 0.8% and 1.3% for the year, with potential dips during holidays. Despite the temporary challenges, Netcare's on-track status remains firm.
Corporate Governance and Shareholder Value
In February 2025, CEO Richard Friedland had his contract extended until September 2026. This followed the withdrawal of a candidate for the role. The extension occurred after the board appointed Alex Maditse as chair in January 2025, succeeding Mark Bower.
Despite these leadership changes, Netcare's share price has declined by 11.6% this year. However, it increased to R13.57 after a trading statement indicated improved occupancy before closing at R13.25. This change is a positive sign of Netcare being on the right track.
Netcare plans to maintain capital expenditure of R1.5 billion, consistent with the previous year. The group continues its share buyback program, having repurchased 112.6 million shares since September 2023, which keeps it on track financially.