{"id":843751,"date":"2025-11-19T10:19:33","date_gmt":"2025-11-19T08:19:33","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=843751"},"modified":"2025-11-19T10:19:38","modified_gmt":"2025-11-19T08:19:38","slug":"south-african-company-takes-a-hit-after-selling-business-to-american-pharmaceutical-giant","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/843751\/south-african-company-takes-a-hit-after-selling-business-to-american-pharmaceutical-giant\/","title":{"rendered":"South African company takes a hit after selling business to American pharmaceutical giant"},"content":{"rendered":"\n

Life Healthcare\u2019s earnings have taken a hit following the sale of its Life Molecular Imaging (LMI) earlier this year amid complex accounting standards. <\/p>\n\n\n\n

Life Healthcare sold LMI to the British subsidiary of American pharmaceutical giant, Lantheus.\u00a0<\/p>\n\n\n\n

LMI is a fully integrated research and development radiopharmaceutical company that focuses on developing and commercialising molecular imaging agents for use in PET-CT diagnostics.<\/p>\n\n\n\n

It has operations in the EU, UK, and USA, and has extensive relationships with manufacturers, hospitals, imaging centres and neurologists in several key markets.<\/p>\n\n\n\n

The purchase consideration comprised an Upfront Payment of an enterprise value of USD350 million (R6,475 million )<\/p>\n\n\n\n

An additional USD 400 million (R7,400 million) could also be paid and is linked to milestones related to future sales of LMI products up to 2034.<\/p>\n\n\n\n

In a trading update for the year ended September 30, 2025, Life Healthcare stated that it was able to return substantial funds to shareholders following the sale. <\/p>\n\n\n\n

Total funds distributed for the 12 months from 1 October 2024 to 30 September 2025 reached R4.5 billion, thanks to a special dividend from the sale.<\/p>\n\n\n\n

During the reporting period, the group reported a strong trading performance, achieving overall revenue growth of between 5.5% and 6.5%. <\/p>\n\n\n\n

However, the disposals of LMI in the current year and Alliance Medical Group for roughly R20 billion in the prior year had a major impact on earnings in both periods. <\/p>\n\n\n\n

Comparison between the two financial years is complex, with International Financial Reporting Standards requiring any adjustments to the liability relating to Piramal to be included in continuing operations. <\/p>\n\n\n\n

However, any future adjustments to the potential earnouts and milestone payments must be disclosed as part of discontinued operations. <\/p>\n\n\n\n

When Life Healthcare acquired LMI, there was a profit-sharing deal with Piramal Enterprises. As per the sale of LMI to Lantheus, some proceeds went to Piramal. <\/p>\n\n\n\n

The Piramal liability is a pre-existing liability, measured at fair value, and is accounted for as part of continuing operations, amounting to R2.9 billion.   <\/p>\n\n\n\n

In addition to the adjustment to the Piramal liability, the group also recognised impairments of approximately R210 million in respect of underperforming units. <\/p>\n\n\n\n

When including continuing and total operations, earnings per share are expected to decrease by between 18% and 23%, resulting in a range of 253.2 cents to 269.6 cents per share. <\/p>\n\n\n\n

Headline earnings per share are expected to decrease by over 100% to a headline loss per share of between 109.2 and 116.9 cents due to the Piramal liability.<\/p>\n\n\n\n

The group’s results for the current year are in the process of being finalised and are expected to be released on SENS on 27 November 2025.<\/p>\n\n\n

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Life Healthcare Trading Update<\/figcaption><\/figure><\/div>\n\n\n
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Life Healthcare’s sale of Life Molecular Imaging has resulted in earnings taking a hit amid complex accounting standards. <\/p>\n","protected":false},"author":95,"featured_media":773051,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[11955],"class_list":["post-843751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-life-healthcare"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=843751"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843751\/revisions"}],"predecessor-version":[{"id":843765,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843751\/revisions\/843765"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/773051"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}