Business

South African hospital giant takes a hit to earnings after R6 billion sale

Luke Fraser

 ·27 Nov 2025

Life Healthcare has seen a drop in its earnings following the sale of one of its businesses to pharmaceutical giant Lantheus. 

Life Healthcare Group announced its audited results for the year ended 30 September 2025, with revenue increasing by 6.4%, on a like-for-like basis and excluding assets sold in FY2025, to R21.3 billion.

Despite the revenue growth, healthcare services revenue declined by 7.5% following the loss of two government contracts during H2 FY2024, it said.

Life Healthcare also concluded the disposal of Life Molecular Imaging (LMI) during the year, generating upfront proceeds of S$355 million (R6.3 billion). 

The deal will also entitle Life Healthcare to potential future earnouts of up to US$400 million linked to future commercial and regulatory milestones.

Life Healthcare sold LMI to the British subsidiary of United States-based pharmaceutivcal group, Lantheus. 

Through the deal, the local group retains the rights to M2 milestone and regulatory payments, as well as the rights to manufacture, commercialise and distribute LMI products in Africa. 

Following the sale, Life Healthcare delivered a special dividend of R2.35 per share in September 2025. 

The group’s overall EBITDA increased 4.7% to R3.8 billion, while normalised earnings per share (EPS) were up 10.1%. 

However, earnings per share and headline earnings per share were materially affected by the R2.9 billion fair value adjustment to the Piramal liability, which reduced earnings from continuing operations. 

When Life Healthcare acquired LMI, it had a profit-sharing deal with Piramal Enterprises. As per the sale of LMI to Lantheus, proceeds went to Piramal.

Life Healthcare said that the drop in earnings was caused by the following: 

• In the prior year, the impact of the disposal of Alliance Medical Group (AMG) and the benefit of receiving an upfront payment for sublicensing one of LMI’s products contributed to a R3.2 billion post-tax profit
• In the current year, the disposal of LMI generated a net post-tax profit of R2.4 billion. 
• The disposal of LMI created some accounting anomalies where the adjustment to the liability relating to the original owners of LMI is reflected as part of continuing operations.
• Impairments of R211 million were recognised in relation to underperforming units.

While total EPS decreased by 20% to 263.0 cents, the group’s total dividend increased 12.0% to 35 cents per share. 

“The fundamentals of our business remain resilient, and the substantial returns to shareholders this year reflect our disciplined capital management,” said Life Healthcare CEO Pete Wharton-Hood. 

“With our focus now firmly on continuing operations, investors have clearer visibility into a stable, well-positioned organisation.” 

“The targeted interventions within our asset optimisation programme, together with our strategic growth initiatives such as Life Paarl Valley Hospital, position us for stronger performance in FY2026 and beyond.”