KEY POINTS:
Private hospital operator Wakefield Health is eyeing an expansion into the Auckland healthcare market after reporting a stellar full-year result aided by ongoing public health sector unrest.
Wakefield, which has two hospitals in Wellington and one in Hastings, reported an audited net profit after tax of $7.17 million for the year ending March 31 - an 87.4 per cent increase from last year's $3.82 million.
Last year's result, however, had included a $1.36 million writedown of its investment in drug trial company P3 Research. Excluding that, the year's result represents a 45.8 per cent improvement on earnings.
The company disposed of its 50 per cent P3 stakeholding in August at a further $657,000 loss on sale, and a trading loss of $200,000.
"There's probably a lesson in there for the company - that what we do well is run private surgical hospitals and that's where we should maintain our focus," said chief executive Andrew Blair.
Blair said the integration and growth of its three sites had gone smoothly following the acquisition of Royston Hospital in 2006, and the plan now was to look at expanding into other markets, such as Auckland.
"That's a significant area of population and population growth, so among various opportunities throughout the country, Auckland is an area of interest to us, and we are evaluating a range of possibilities."
Hospital revenues had increased 9.1 per cent over the full year - a performance Blair attributed to increased patient volumes, the benefits of increased scale as a result of having a three-hospital business, and a culture of "co-operative" efficiency. The three sites treat 18,000 patients annually.
While all three hospitals have provided surgery for the district health boards, the total contribution to revenue was only 3 per cent.
"It's a small part, really, but we do value it because it adds to our volume, and therefore to the efficient utilisation of our facilities. It's an area of potential growth, but our experience has shown that it tends to be ad hoc, spot purchasing and not something that can be relied on."
More important is the surge in numbers signing up for private health insurance as a result of anxiety over the public system's ability to cope.
Latest data from the Health Funds Association show the number of New Zealanders covered by health insurance to be increasing at a rate of about 50 people a day, rising to a record of nearly 1.4 million in the year to March 31.
A fully imputed final dividend of 12 cents per share was declared.
Wakefield shares closed up 5c at $7.65.
WAKEFIELD HEALTH
Year ended March 31
Operating revenue
2008 - $70.4m
2007 - $64.5m
Net profit
2008 - $7.17m
2007 - $3.82m
Final dividend
2008 - 12cps
2007 - 10cps
