Wakefield Health surges

BY DAVID HARGREAVES
Last updated 16:17 19/05/2009

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Private hospital operator Wakefield Health has reported a more than 40 percent lift in full-year earnings.

The company said after-tax profit for the year to March was $10.13 million compared with $7.2 million.

However, Wakefield warned that future earnings growth may slow on the back of slowing growth in patient numbers.

The profit was achieved on a 10.3 percent rise in revenue to $86.08 million.

Wakefield said with continued focus on cost efficiency the company had again been able to show improvement in operating margins.

Revenue growth reflected both increases in in-patient numbers and a favourable case mix driving increased utilisation of hospital facilities. Solid growth was maintained across each of the Company's three hospitals, the company said.

Wakefield Health's chairman, John Calder, said: "We are delighted with the financial performance that has been achieved against a slowing economy, while continuing to maintain our programme of reinvestment in equipment and facilities."

The Directors have declared a final dividend of 15 cents a share, bringing total distributions for the year to 25c a share. This represents an overall increase of 25 percent in the level of dividends paid when compared with last year.

Calder said that despite an aging population and difficulties for the public health service in meeting demand for elective surgery, patient number growth had slowed in recent times. That indicated a possible slowdown in future revenue and earnings growth.

"In the current environment there is a risk that self funded patient numbers will decline, and also that those insured patients with a substantial excess in their policy will be less able to fund major surgeries," Calder said.

Redevelopment of Wellington's Bowen Hospital and ongoing capital needs meant that borrowing would increase this year, but the company was confident it would still be able to develop its existing business and look at other opportunities, Calder said.

- with NZPA

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- © Fairfax NZ News

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