Profits up for Netcare

November 24 - Netcare, the South African based private healthcare group that runs hospitals in South Africa and the United Kingdom, has announced good profit increases for the full year.

The group said that profits had risen by nearly 30% thanks to a number of factors, including reduced debt pile and a drop in interest rates in South Africa.

Nevertheless, while profits were good, Netcare still warned that 2010 could prove to be particularly volatile as regulatory pressures would be felt.

"While demand for healthcare services is expected to increase due to a higher burden of disease, regulatory pressure to provide greater access and reduce pricing is inevitable," said a company statement.

Headline earnings per share for the full year (end September) jumped to 78.2 cents, an increase of 27.2%.

Analysts had forecast headline earnings per share at a 25 - 35 %, thus putting this year's earnings in line with predictions.

A higher demand for quality private health care in South Africa led to an increase of nearly 7% in revenue to R23.2 billion in the full year report.

While the recession has definitely hit middle class South Africa and therefore self funded funds such as Netcare, this has been offset by the growing demand for this type of service, and an even faster growing middle class sector.

The group was able to increase its profits even further by saving on financial costs due to lower interest rates in South Africa.

The care company contracts in the UK through Netcare UK, and operates the largest private hospital network in both countries. Netcare has been trading on the Johannesburg Stock Exchange since 1996.