Netcare Profile

Company: 
Netcare
Author: 
Jane Lethbridge
Date published: 
2008

Netcare is listed on the Johannesburg Securities Exchange and has grown from four hospitals in 1996 to a current total of 62 hospitals.  The group also owns and manages Medicross, which runs family medical and dental centres in South Africa.  It also runs 43 pharmacies and 36 administered practices (representing a further 114 general practitioners). In addition, Netcare also provides emergency services, pathology services, renal care and travel clinics. 

Netcare also holds interests in a training academy for nurses.  Netcare was awarded the first Public private partnership (PPP) contract to a consortium consisting of Netcare and black-empowerment company Community Hospital Management (CHM) for Universitas and Pelonomi Hospitals in Bloemfontein.  It owns Prometheus Solutions, which provides IT for healthcare management (Netcare, 2007). The Netcare Group employs 16,574 staff.

Netcare International operates in the UK and the Middle East as a healthcare management company.  A significant expansion for Netcare, was it entry into the British healthcare market in 2002, becoming a provider of healthcare services to reduce  NHS waiting-lists, through the Independent Sector Treatment centre programme, funded by the UK Department of Health.  The company is currently fulfilling a five-year contract to perform 44,500 cataract operations for the NHS via mobile services. The Greater Manchester Surgical Centre (GMSC) is a newly built facility attached to the Trafford General Hospital where specialists from Netcare UK perform elective orthopaedic, ENT and general surgical procedures (Apax Partners Private Equity Group, 2006). 

In 2006, Netcare acquired, with funds advised by Apax Partners Worldwide LLP, London and Regional Properties and funds advised by Brockton Capital LLP the General Hospital Group (GHG)in the UK. Netcare will own 50.1% of GHG in return for an investment of approximately £217m, along with the injection of its wholly owned UK subsidiary Netcare Healthcare UK Limited. Netcare cited the limited opportunities for acquisition in South Africa as the reason for the General Health Group purchase (Apax Partners Private Equity Group, 2006).

Netcare owned 43.75% of a South African company, Community Healthcare Group.  In 2007, the South Africa Competition Commission approved Netcare’s purchase of the remaining 56.25% of the shares, in August 2007.  Netcare is also planning to sell its pathology division, Ampath (Netcare Healthcare Holdings Ltd, 2007).

In September 2007, Netcare announced that it was considering the sale of its UK property portfolio sale 03/09/2007 “Netcare chief financial officer Peter Nelson has been quoted as saying the company will consider selling its UK property portfolio, in order to achieve a better value for its UK main business before any share sale. The JSE-listed healthcare group is reportedly prepared to sell all the properties, which include 35 hospitals and 2,122 beds, under the right conditions. The property sale will formally go to the market in September” (Business Sale Report, 2007).

Netcare, as seen through an account of a Strategy Day in August 2007, thinks that there will be a reduction on of resources for the UK NHS which will lead to rationing and the introduction of user fees.  The company sees opportunities for the development of personal medical insurance, following the decrease in resources going into the NHS (netcare Healthcare Holdings Ltd, 2007). This illustrates how private companies, providing healthcare to a publicly funded system, also consider possibilities for an expansion of private healthcare.

Netcare (2006) Audited Group Results http://reports.netcareinvestor.co.za/prelim_06/

Netcare (2007) http://www.netcare.co.za

Netcare Healthcare Holdings Ltd (2007) Netcare Investor Day webcast transcript http://www.netcareinvestor.co.za/content/netcare_analyst_aug07_richard~1.pdf

Revenues of three healthcare companies: Africa

Company

Home country

Operations 

2005

2006

Life (formerly Afrox)

South Africa

Botswana,

UK

US$ 275m

 

Netcare

South Africa

UK

7,353Rm

8,184Rm

AAR Health Services

Kenya

Tanzania, Uganda

 

 

Sources:

Life/Afrox BOC (2005) 6-K SEC filing http://sec.edgar-online.com/2005/11/17/0001276754-05-000014/Section2.asp

Netcare (2006) Audited Group Results http://reports.netcareinvestor.co.za/prelim_06/