LENMED AIR 2019.pdf

growth within specific strategic and acquisition criteria, though we do consider unique opportunities that arise. In this reporting period the executive team focused primarily on optimising our current hospitals. The R221.4 million invested included new critical care facilities at Ethekwini Hospital and Heart Centre, a new theatre complex at Laverna Private Hospital and acquiring additional land at Ahmed Kathrada Private Hospital and Maputo Private Hospital. A particular highlight was Royal Hospital and Heart Centre in Kimberley reaching full functionality. As I alluded to earlier, competing in stressed economic climates can unearth opportunities for the next growth phase. Lenmed is well positioned and provisioned due to prudent resource allocation, therefore the Board has decided to build critical mass by actively scouting for underperforming and high potential hospital assets. This broadened investment mandate also includes building and managing medical facilities on behalf of third parties. Lenmed hasn’t pursued further opportunities in the rest of Africa due to both funding and regulatory obstacles. We are, however, receiving enquiries from across the continent regarding underperforming medical facilities that Lenmed can turnaround. Reviving underperforming facilities may well become a bigger part of Lenmed’s growth strategy, as economic and political dynamics shift across Africa. Corporate citizenship and governance Although a JSE listing is not presently on the agenda, the Board consistently applies JSE recommended governance practices and complies with the current King IV™ regulations. We also take care to comply with the highly regulated healthcare environment wherever Lenmed operates. The leadership team is keenly aware that Lenmed’s economic sustainability depends on the strength of our relationships with investors, employees, medical practitioners, patients, suppliers and the communities where our hospitals are situated. This year we assisted financially distressed individuals by providing discounted hospital services worth R9.7 million, which was substantially higher than last year’s R2.1 million. We also continued our traditional cataract surgery sponsorship of 55 eye cataract procedures to underprivileged community members. Lenmed launched an innovative new community initiative by introducing the only cardiac response vehicle of its kind in KwaZulu-Natal capable of administering life-saving drugs for heart attacks and strokes before getting the patient to hospital. We further improved our emergency response capability by launching the ‘Lenmed1’ helicopter in partnership with key local EMS providers. Lenmed1 is equipped to transport trauma, cardiac, stroke and paediatric referrals to Lenmed or other facilities. Listening to patients and medical professionals We are extremely proud to have had the Ethekwini Hospital and Heart Centre and Shifa Private Hospital being rated in the Discovery Top 20 hospitals as rated by Discovery medical aid in its annual survey of patients. This is substantiated by the results from our most recent annual patient and staff surveys, which showed improved results for almost every indicator. People today view timely and accurate communication as essential for further engagement. Lenmed’s in-house marketing department assisted in this regard, by running a social media programme in 2018 and launching a new website in mid-2019. Typical posts include news and updates at our hospitals, health information, lifestyle tips, event information and general feel- good messages. This resulted in an 80% increase in followers across our platforms and an invaluable source of stakeholder feedback on Lenmed’s various impacts. Outlook for 2020 Forward planning in a highly unpredictable environment is about hoping for the best outcome, while preparing for the worst. Lenmed has plans in place for various scenarios, so allowing it to react swiftly and appropriately, as required. Lenmed also has the balance sheet and credibility to pursue opportunistic plays as these present themselves. While looking out for expansion opportunities, we are pursuing organic growth in parallel. We are also preparing our systems and people for future growth while maintaining cost and asset efficiencies. Lenmed’s dividend policy is to retain cash for further expansion until the Group has reached the critical mass that could potentially allow it to list on a local or international exchange. We have not yet reached that point and so, for the current period, the Board has decided to forgo a dividend. In line with this, I’m regularly asked if or when Lenmed will list. My answer remains unchanged, in that we will only list when we are satisfied that Lenmed’s growth strategy is sustainable, and the Group can properly manage the inflow of capital and shareholder expectations. In appreciation I dedicate this report to all the Lenmed people who have worked with resilience to maintain — and even lift — standards through yet another challenging year. Lenmed hospitals are run as key community assets that all stakeholders can be proud of. The Board and executive team performed admirably, which gives me confidence in handing over the baton to Amil Devchand in March 2020, as I step aside as CEO, yet continue to guide as Group Chairman. Mr Prakash Devchand Chairman and Chief Executive Officer Reflections from our Chairman and Chief Executive Officer continued 04 OUR VALUE CREATION POSITIONING