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Acurity Health 1H earnings fall 25%

Monday 5th November 2012

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Acurity Health, the private hospital operator formerly known as Wakefield Health, reported a 25 percent drop in first-half earnings as the cost of upgrading its Bowen Hospital site weighed on the bottom line. It expects annual profit will fall by as much as a quarter.

Net profit declined to $2.4 million, or 14 cents per share, in the six months ended Sept. 30, from $3.2 million, or 22 cents, a year earlier, the Wellington-based company said in a statement. Revenue fell 1.4 percent to $40.6 million as private healthcare volumes were subdued and demand for Accident Compensation Corp-paid surgery outpaced available funding.

The group downgraded its flat annual earnings outlook, saying net profit is expected to be between 20 percent and 25 percent lower than a year earlier.

"The company is experiencing significant month-on-month volatility in work flows and making predictions in this environment is difficult," chairman Alan Isaac said. "Private demand remains somewhat subdued and we have continued to see a slight decline in the total number of New Zealanders with private health insurance."

Last week Acurity chief executive Andrew Blair announced his resignation, effective from next March, marking a changing of the guard with chief financial officer Bevan Miller also on the way out.

Acurity's biggest shareholders, the Stewart family and Royston Hospital Trust Board, took control of the company in September, pooling their investments into a joint vehicle called Medusa.

The company expects to realise some $2.7 million from its 12 percent stake in Boulcott Clinic in the current financial year.

The board declared an interim dividend of 6 percent per share, down from 7 cents a year earlier, to be paid on Dec. 7. The shares were unchanged at $5.90 today, and have rallied 23 percent this year.

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