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Wakefield Health to tap investors for $15 mln to pay for acquisitions

Friday 16th September 2011

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Wakefield Health, the private hospital operator, will tap investors for up to $15 million to help pay for recent acquisitions in Tauranga and Auckland.

The Wellington-based company has received commitments from institutional investors and cornerstone shareholders for an $11 million placement at a 3% discount, and it plans to tap shareholders for a further $4 million in a share purchase plan at the same price.

The new funds will go towards the $24.2 million purchase of Norfolk Investment, which owns 60% of Tauranga’s Grace Hospital, and the $7 million it spent on a 30% share in Endoscopy Auckland and Laparoscopy Auckland.

Wakefield failed twice over the past year to successfully take over Norfolk Investment, and had to sweeten the bid by 26 cents a share, or $1.6 million.

The acquisitions are expected to immediately add to the company’s earnings, and Wakefield said it was tracking ahead of 2010 in the four months of this financial year.

The hospital operator, which owns the Wakefield and Bowen hospitals in Wellington, made significant financial gains after completing the takeover of Hastings-based Royston Hospital in early 2006.

Wakefield’s revenue gained 1.8% to $27 million in the four months ended July 31, and earnings before interest, tax, depreciation and amortisation gained 6.8% to $5.9 million, it said in an investor presentation.

Annual profit sank almost 17% to $5.1 million in the 12 months ended March 31, underpinning a smaller final dividend of eight cents a share from the 10 cents return in 2010.

The company’s board declared an interim dividend of 7 cents a share, or some $991,000.

The shares were unchanged at $5 in trading today, and have dropped 13% this year.


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