Life Healthcare Group Holdings (LHC) H1 2026 earnings summary

Executive summary

• Revenue grew 2.4% year-over-year for the six months ended 31 March 2026, with normalised EBITDA margin improving to 15.8% and operating profit up 8.4%.

• Normalised earnings per share increased by 8.4%, return on capital employed held steady at 17.8%, and interim dividend rose 9.5% to 23 cents per share.

• Portfolio and asset optimisation, including cost-saving initiatives targeting R400 million over three years, are underway with external advisors engaged.

• A setback occurred due to a funder under curatorship, impacting occupancy and paid patient day (PPD) growth.

• Results exclude discontinued operations following the disposal of Life Molecular Imaging (LMI).

Financial highlights

• Revenue reached R12,422 million, up 2.4% year-over-year; normalised EBITDA up 5.2%; operating profit before non-trading items up 8.4%.

• Normalised EBITDA margin improved to 15.8%; return on capital employed at 17.8%.

• Interim dividend per share increased by 9.5% to 23 cents (total ZAR 337 million).

• Net debt to normalised EBITDA at 0.93x, well below covenant limits; investment-grade credit rating maintained.

• Free cash flow declined to R31 million from R560 million year-over-year, impacted by working capital timing and liability settlements.

Outlook and guidance

• Full-year occupancy expected at 68%, with flat PPD growth and revenue growth just over 2%.

• Specialist recruitment on track to exceed 140 new doctors; continued focus on margin improvement and cost savings.

• Asset optimisation decisions to be finalised within the year, with implementation ongoing and R400 million in cost savings targeted over three years.

• Plans to add 87 acute hospital beds, 64 acute rehabilitation beds, and expand diagnostics with three new PET-CT sites.

• FY2026 capex expected at approximately R2.4 billion.