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Annual integrated report 2011


Chief Financial Officer’s review

KEITH GIBSON KEITH GIBSON

In a year characterised by global economic uncertainty and volatile conditions, Netcare is pleased to report continued earnings growth and a strengthening of its overall financial position.

Introduction

This review of the Group’s financial performance and position should be read together with the Group annual financial statements on page 131.

The Group’s South African operations produced a solid performance, while its United Kingdom (UK) business suffered the knock-on effects of local economic difficulties. Group profit after tax grew 27.1% to R1 855 million (2010: R1 460 million) and headline earnings per share (HEPS) increased by 21.2% to 117.0 cents (2010: 96.5 cents).

The Group’s investment in General Healthcare Group (GHG) in the UK exposes it to the effects of currency fluctuations which, according to Group policy, are not hedged. The average exchange rate used to convert offshore income and expenditure of R11.09 to the Pound Sterling (Pound) was 4.6% stronger than the average rate of R11.63 for the 2010 financial year. Currency conversion had an adverse effect of 1.9% on Group revenue, 1.6% on earnings before interest, taxation, depreciation and amortisation (EBITDA) and 1.2% on operating profit.

While the Rand fluctuated within a relatively narrow band for most of 2011, the currency weakened rapidly in late September 2011, with the closing exchange rate peaking at R12.54 to the Pound by financial year-end. This was 14.7% weaker compared to the closing rate of R10.93 for the prior year. Consequently, currency conversion had a far more pronounced impact on the Group’s statement of financial position, adding R546 million to the reported Group net asset value.

The Group’s disciplined focus on managing its investment in working capital resulted in excellent cash conversion in both South Africa (SA) and the UK, which contributed significantly to the reduction in net debt balances by R1 384 million (excluding the effects of currency conversion). SA debt reduced to its lowest level in five years, while interest cover strengthened further to a comfortable 6.7 times (2010: 5.1 times). The Group continued to invest in infrastructure, spending R1 327 million on property, plant and equipment and R81 million on intangible assets during the year.

Rand: Pound Sterling monthly closing rate
Rand: Pound Sterling monthly closing rate


Income statement

Summarised income statement

Rm Reported
2011
  Constant
currency
adjusted*
2011
  Reported
2010
  Reported
% change
  Constant
currency
% change
Revenue 23 221   23 673   22 474   3.3   5.3
Operating profit 3 701   3 745   3 708   (0.2)   1.0
Net financial expenses (1 755)   (1 838)   (1 978)   11.3   7.1
Profit for the year 1 855   1 832   1 460   27.1   25.5

* Recalculated at constant exchange rates to remove the impact of foreign currency fluctuations on translation of the UK results.

Revenue

The composition of Group revenue by segment for the past five years is set out in the graph below.

In SA, the Hospital and Emergency services segment increased revenue by 8.3% to R12 089 million (2010: R11 167 million), driven primarily by 2.2% growth in patient days, an increase in net revenue per patient day of 6.4% and the addition of 178 beds during the course of the year. Primary Care revenue declined year-on-year from R1 374 million to R1 272 million in line with its strategy to reduce full-risk lives under management, which has been integral to the turn-around in performance for this segment over the past two years.

In the UK, GHG increased its revenue by 3.8% from £855.0 million to £887.6 million as a result of 23.1% growth in National Health Service (NHS) cases and the full-year contribution from the Abbey hospitals and Transform cosmetic surgery businesses, both acquired in May 2010. This was offset by a further reduction in insured caseload and the winding down of the NHS treatment centre contracts, with only one contract operational during 2011.

Expressed in constant currency terms, Group revenue increased 5.3%, which reduces to a 3.3% increase after including the impact of exchange rate fluctuations. Consequently, reported Group revenue for the year amounted to R23 221 million (2010: R22 474 million).

Revenue
R million
Revenue

Operating profit

Group operating profit increased 1.0% to R3 745 million, stated in constant currency. The impact of exchange rate movements reduced the reported operating profit by R44 million to R3 701 million, a 0.2% reduction from the prior year’s R3 708 million.

Hospital and Emergency services improved their operating performance by 15.3% from R1 893 million to R2 182 million due to growth in activity and efficiency improvements. Strong operating leverage resulted in the widening of the operating margin from 17.0% in 2010 to 18.0% in the year under review. The recovery in the Primary Care segment continued with operating profit increasing to R38 million from R6 million in the prior year.

The recessionary climate in the UK, particularly the rising levels of unemployment and diminishing disposable income, impacted GHG’s operating performance. However, demand for healthcare services remained strong, as evidenced by an overall increase in GHG’s inpatient and day caseload of 4.2%. There was a further shift in business mix as insured caseload declined, while NHS cases continued to grow.

Operating profit was affected by the change in business mix, an increase in the VAT rate to 20.0% from 17.5% (adding to GHG’s cost base as input VAT cannot be claimed), and the winding down of the higher margin NHS treatment centre contracts. A capital profit of £15.0 million realised on the sale of the freehold of two BMI hospital properties favourably impacted the operating result. BMI will continue to operate these hospitals, but now incurs an external rent charge for these sites. The prior year’s operating profit included a gain on the bargain purchase of assets of £6.9 million, offset by costs incurred on the aborted Initial Public Offering (IPO) of £2.5 million. Total operating profit, inclusive of these items, declined from £158.6 million to £132.4 million.

Net financial expenses

Net financial expenses decreased from R1 978 million to R1 755 million. This represents a decline of 7.1% excluding currency conversion and 11.3% in overall terms. The decline was due to a number of factors, including:

  • Lower debt levels in both SA and the UK as a result of improved cash collections, sound working capital management and property sales;
  • The rolling of SA debt at cheaper rates of interest;
  • The conversion of UK interest costs at a lower rate of exchange; and
  • The recognition of a non-cash credit of £2.8 million with respect to the ineffective portion of the interest rate swap fair-value adjustment, as compared to a non-cash charge of £8.7 million in the prior year.

Shortly after GHG was acquired, it was structured into a group of operating companies (OpCo) and a group of property-owning companies (PropCo). The separation of the OpCo and PropCo businesses was done, inter alia, to facilitate the raising of independent, long-term financing facilities.

GHG has fixed its borrowing costs on its OpCo and PropCo debt through interest rate swaps. These swaps are derivative financial instruments and are reflected at fair value in the statement of financial position. Hedge accounting is applied whereby fair value adjustments to the carrying value of the swaps are recognised directly in the statement of comprehensive income, to the extent the hedging proves to be effective. Any portion of the fair value adjustment, which is deemed to be ineffective, is recognised in the income statement. This adjustment is determined by the long-term interest rate outlook and can be either a charge or a credit. The risk of hedge ineffectiveness on the UK interest rate swaps remains a factor that can significantly affect future earnings, although this would not result in any cash flow consequences for the Group.

Attributable earnings of associates

Attributable earnings of associates declined marginally from R24 million to R23 million. Earnings from associates comprise various investments in SA and the UK, as well as the results of Netcare’s Public Private Partnership (PPP) investments in Bloemfontein, Port Alfred, Grahamstown and Lesotho. Some of the PPPs are accounted for in terms of IFRIC 12 Service Concession Arrangements, which requires the recognition of revenue and profit during the construction period.

Taxation

The Group tax charge amounted to R114 million for the year compared to R294 million for 2010. The effective tax rate for the SA operations equated to 26.9%, marginally below the statutory tax rate of 28% due to the utilisation of assessed losses and some permanent differences. The UK benefited from the non-cash release of deferred tax in the amount of £27.5 million (2010: £13.7 million) due to the proclaimed reduction of the statutory tax rate from 27% to 25% during the course of the year. In addition, the UK tax line also benefited from the recognition of further previously unrecognised tax losses. GHG has approximately £230 million of accumulated tax losses available to offset against future taxable income.

Headline earnings per share

HEPS increased by 21.2% from 96.5 cents to 117.0 cents. The SA operations contributed 101.2 cents (2010: 85.0 cents) to Group HEPS, which represents growth of 19.1% on the prior year resulting from strong underlying local performance. The UK business contributed 15.8 cents (2010: 11.5 cents) to Group HEPS as the cumulative benefits of the capital profit on sale of properties and the tax rate change more than offset the lower operational performance.

Statement of financial position

The most important components of the statement of financial position are discussed below.

Due to the rapid weakening of the Rand against the Pound at year-end, currency conversion had a significant impact on the conversion of the Group’s offshore assets and liabilities. The table opposite breaks down the year-on-year change in the carrying value of key line items on the statement of financial position between currency impacts and the underlying real movements.

Rm 2010   Currency
impact
  Other net
movement
  2011  
Property, plant and equipment 23 852   2 614   (50)   26 416  
Goodwill 13 153   1 881       15 034  
Net debt                
   Long-term debt 21 630   2 988   488   25 106  
   Short-term debt 3 852   98   (1 562)   2 388  
   Gross debt 25 482   3 086   (1 074)   27 494  
   Cash and cash equivalents (1 378)   (210)   (767)   (2 355)  
   Bank overdrafts 93       457   550  
   Net debt 24 197   2 876   (1 384)   25 689  
Financial liability – derivative financial instruments 4 113   681   525   5 319  

Property, plant and equipment

The carrying value of property, plant and equipment increased from R23 852 million to R26 416 million. However, currency fluctuations accounted for almost all of this movement. Capital expenditure continues to be tightly controlled in both SA and the UK, and capital allocations are governed by strict return hurdles in line with the Group’s focus on investing in projects with high cash value returns. The Group invested R1 327 million (2010: R1 284 million) in property, plant and equipment during the year.

Movement in Group property, plant and equipment
R million
Movement in Group property, plant and equipment

The SA operations invested R903 million (2010: R787 million) in sustaining and growing its infrastructure. This expenditure included:

  • Completion of the 126-bed Netcare Waterfall City Hospital;
  • Renovating operating theatres at Netcare Park Lane and Netcare Garden City hospitals;
  • Ward renovations at Netcare Milpark Hospital;
  • The addition of four new Intensive Care Unit (ICU) beds at Netcare Pretoria East Hospital;
  • Refurbishment of the paediatric wards at Netcare Unitas and Netcare St Anne’s hospitals; and
  • The first phase of a 54-bed expansion project at Netcare Montana Hospital, including eight new ICU beds, theatre renovations and new consulting rooms.

Construction has commenced on various projects due for completion in the 2012 financial year, which will add a further 233 beds.

GHG continued to invest in its infrastructure and facilities, with capital expenditure amounting to £42.6 million (2010: £46.7 million). This included:

  • Adding a major extension to BMI The Park Hospital, including a new intensive treatment unit department, new endoscopy suite and new theatre, along with the refurbishment of three existing theatres;
  • Refurbishing seven theatre suites and three existing wards, and building new oncology and paediatric wards at BMI The Alexandra Hospital; and
  • New operating theatres and refurbishments at BMI The Ridgeway Hospital.

Further details on the Group’s capital expenditure is provided in note 2 to the Group annual financial statements and on pages 52 and 91 respectively of the SA and UK operating reviews.

Goodwill

The carrying value of goodwill amounted to R15 034 million (2010: R13 153 million), with currency fluctuations accounting for the entire movement over the prior year’s balance. Goodwill amounting to R14 491 million (£1 154.3 million) arose from the 2006 acquisition of GHG and has been allocated to the OpCo and PropCo cash generating units.

Goodwill is reviewed for impairment at each reporting period in accordance with the provisions of IAS 36 Impairment of Assets, and the recoverable amount of the cash generating units is based on a value in use calculation. The key assumption areas applicable to the impairment review include discount rates, EBITDA growth, capital expenditure, rental income growth rates and residual value of properties. No goodwill was impaired during the year under review.

Further detail on the Group’s goodwill impairment testing is provided in note 3 to the Group annual financial statements.

Debt

Net debt increased from R24 197 million to R25 689 million at 30 September 2011. However, R2 876 million of this total is attributable to currency conversion, thus actual net debt decreased by R1 384 million. Further detail on long-term and short-term debt is provided in notes 15 and 22 to the Group annual financial statements.

Geographical split of net debt

Rm 2011   2010
South Africa 3 303   3 706
United Kingdom 22 386   20 491
Total net debt 25 689   24 197

South African debt

The debt position in SA is at its lowest level in five years, since the acquisition of GHG, and is analysed in the SA debt table below.

South African debt

Rm 2011   2010
Promissory notes* 2 120   600
Commercial paper in issue* 1 060   1 510
Redeemable cumulative preference shares 34   252
Convertible bonds (debt portion)     1 417
Unsecured liabilities 200   301
Finance leases 57   40
Gross debt 3 471   4 120
Cash and cash equivalents (718)   (507)
Bank overdrafts 550   93
Net debt 3 303   3 706

* Raised in terms of Netcare’s Domestic Medium Term Note programme.

In January 2011, Global Credit Rating Co. upgraded Netcare’s credit rating to A for long-term debt (previously A-) and an A1 rating for short-term debt (previously A1-). In August 2011, Netcare raised an additional R1 billion under its Domestic Medium Term Note programme. This is the first time the company has sought to raise five-year finance and it was encouraging to note that this offering was 1.5 times oversubscribed. We regard this as recognition by the market of the sustainable cash generating capabilities of the SA operations, and the strengthening of its financial position. On 28 September 2011, the R1.7 billion convertible bond listed on the Singapore Stock Exchange was successfully redeemed.

South African net debt: EBITDA
R million
Movement in Group property, plant and equipment

United Kingdom debt

  2011
£m
  2010
£m
  2011
Rm
  2010
Rm
PropCo 1 1 585.8   1 605.1   19 882   17 538
PropCo 2 47.5   79.2   595   865
OpCo 237.9   233.6   2 983   2 553
Transform 20.2   20.0   254   219
Unamortised debt-raising fees (12.1)   (19.5)   (151)   (213)
Secured bank debt 1 879.3   1 918.4   23 563   20 962
Finance leases 12.3   11.3   154   124
Other liabilities 24.4   25.3   306   276
Gross debt 1 916.0   1 955.0   24 023   21 362
Cash and cash equivalents (130.6)   (79.8)   (1 637)   (871)
Net debt 1 785.4   1 875.2   22 386   20 491

UK net debt reduced by £89.8 million during the year from £1 875.2 million at 30 September 2010 to £1 785.4 million at year-end. Net debt has increased in Rand terms by R1 895 million from R20 491 million at 30 September 2010 to R22 386 million. However, currency fluctuations account for R2 876 million of this movement, which mask the underlying reduction in net debt of R981 million. This reduction was driven primarily by repayments of secured bank debt of £63.1 million and a £50.8 million improvement in the year-end cash balances which ended at a record high of £130.6 million. Secured bank debt reduced as a result of scheduled capital repayments of £33.1 million, and the settlement of a further £30.0 million of PropCo 2 debt following the sale of the freehold properties of BMI The Duchy Hospital in Harrogate in January 2011 and BMI The Harbour Hospital in Poole in July 2011. This was offset by the drawdown of a further £16.4 million from the OpCo revolving facility during the year. The improvement in cash balances is largely a result of the sustained focus on the management of working capital, which is described in more detail on page 36.

The UK secured bank debt has been structured so there is no recourse to the SA business, being secured against assets in the UK. Furthermore, the four categories of secured bank debt (PropCo 1, PropCo 2, OpCo and Transform) are ring-fenced from each other with no events of cross default. In terms of the OpCo/PropCo restructuring, which took place shortly after the acquisition of GHG, the OpCo rents hospital premises from the PropCo under long-term, market-related lease agreements. Consequently, the OpCo has the right to unfettered use of these properties, as long as it remains compliant with its obligations as tenant under the lease arrangements.

The PropCo 1 debt is due for refinancing in October 2013. The investor consortium has appointed property and financial advisors in this regard and various workstreams are in process. Given the unprecedented volatility in global financial markets and the time horizon for refinancing of just less than two years, the scope and range of refinancing solutions are subject to change. However, based on professional advice, the company believes that sufficient viable options exist at this stage to enable a timely and orderly refinancing of the PropCo 1 debt.

The UK business remains compliant with all its banking covenants, which are tested on a quarterly basis.

The PropCo covenants comprise:

  • Interest cover;
  • Rent cover; and
  • Loan to value.

The loan to value covenant is not tested unless the rent cover falls below 1.4 times and the Group currently enjoys adequate headroom on this metric. The interest cover covenant risk has effectively been negated through the fixing of both rental income and interest costs via the lease agreements and interest rate swap contracts respectively.

The OpCo covenants comprise:

  • Cash cover;
  • Interest cover;
  • Leverage; and
  • Capital expenditure.

The forecast future covenant compliance is based on a number of key assumptions and permitted adjustments, which indicate that sufficient headroom exists across all covenant metrics and that GHG will operate within its available credit facilities. The lowest headroom over the forecast period is on rent cover which is forecast to be greater than 10% of EBITDA at all times. In the circumstances that a covenant breach looks possible, GHG management has a number of mitigating actions available. The GHG Board is confident that these mitigating actions would be sufficient to ensure that the GHG complies with its covenants throughout the forecast period.

GHG has undrawn loan facilities of £39.1 million available to finance working capital, capital expenditure and for general corporate purposes.

Financial liability – derivative financial instruments

The Group manages its exposure to interest rate fluctuations by means of interest rate swaps. Further details of these derivative financial instruments are set out in notes 16 and 34 to the Group annual financial statements.

Geographic split of derivative financial liabilities

Rm 2011   2010
Interest rate swaps      
United Kingdom (£m) 422.7   374.2
United Kingdom 5 300   4 089
South Africa 16   24
  5 316   4 113
Inflation rate swaps      
South Africa 3    
Total derivative financial liabilities 5 319   4 113

The UK business hedges its exposure to interest rate fluctuations through five interest rate swaps, which effectively hedge 95% of total debt. These swaps comprise:

  • A 10-year amortising swap covering a notional loan value of £150 million maturing in April 2015;
  • A 10-year amortising swap covering a notional loan value of £1 586 million maturing in April 2016;
  • A forward-starting 15-year swap with an effective starting date of April 2016;
  • An eight-year amortising swap covering a notional loan value of £47 million maturing in April 2015; and
  • A six-year amortising swap covering a notional loan value of £17 million maturing in May 2016.

The SA business manages its interest rate exposure by means of a pool of funds, whereby up to 75% of total debt is hedged through interest rate swaps. At year-end, 34% of total debt was fixed. Further swap contracts were taken out in early October 2011, which increased the proportion of total debt at fixed rates to 49%, while the rest remains at floating rates linked to prime and the Johannesburg Interbank Agreed Rate (JIBAR). During the year under review, an inflation rate swap was entered into to hedge the exposure to inflation rate fluctuations under a lease whereby escalations are calculated with reference to the consumer price index.

The Group applies hedge accounting on the interest rate swaps in accordance with IAS 39 Financial Instruments: Recognition and Measurement by using regression analysis modelling to determine hedge effectiveness in both geographies. A dynamic hedging strategy is employed on certain interest rate swaps whereby the portion of the swap designated for hedging purposes may be varied to achieve optimum hedge effectiveness. No hedge terminations or re-designations were made under this strategy during the year. However, this position will remain under review in the year ahead to respond to changing market dynamics. Of the fair value movement of £48.5 million in the UK, the ineffective portion taken to the income statement amounted to a credit of £2.8 million. In addition, a charge of £4.1 million arose from the settlement of the interest rate swaps pertaining to the sale of two freehold properties described in the UK debt overview. It should be noted that the fair value adjustments have no cash flow impact on the Group.

Working capital

  2011   2010   % change
South Africa (Rm)          
Inventories 431   413   (4.4)
Trade and other receivables 1 596   1 693   5.7
Trade and other payables (2 250)   (1 764)   27.6
Taxation (164)   (250)   (34.4)
  (387)   92   520.7
United Kingdom (£m)          
Inventories 23.1   21.9   (5.5)
Trade and other receivables 116.7   146.7   20.4
Trade and other payables (131.4)   (123.9)   6.1
Taxation (3.2)   (2.4)   33.3
  5.2   42.3   87.7

The excellent improvement in working capital management throughout the Group has been a highlight of the 2011 financial year. Both SA and the UK have focused persistently on cash collection and aligning the payables and receivables cycles under the auspices of local working capital committees. Improved processes within the SA and UK shared services centres and the entrenchment of relationships with NHS Primary Care Trusts in the UK have facilitated a significant shortening of the receivables cycle, with debtors days in both geographies achieving record lows at year-end. The success of these initiatives resulted in a reduction in the investment in working capital of R479 million in SA and £37.1 million in the UK.

Post-retirement benefit obligations

The Group has two post-retirement benefit obligations. In SA, Netcare has an obligation to subsidise the medical aid contributions of certain pensioners and employees who commenced service with Netcare prior to 1 November 2004. The scheme is now closed. An actuarial valuation of the obligation was undertaken in the year with the resulting liability, which is unfunded, amounting to R188 million (2010: R158 million). An actuarial loss of R17 million (2010: Rnil) was recognised in the Group statement of comprehensive income relating to amendments to underlying assumptions.

In the UK, GHG has a defined benefit pension fund that has been closed to future accrual and members since 31 August 2008. The liability amounts to £79.4 million (2010: £86.7 million) and is funded by plan assets of £87.1 million (2010: £84.8 million). No asset has been recognised in respect of the net surplus on the basis that GHG is not entitled to this surplus.

Statement of cash flows

Cash generated from operations

Cash generated from operations grew 12.9% to R5 572 million (2010: R4 934 million). The Group delivered a particularly strong cash conversion to EBITDA ratio of 113.4%, a further improvement on the solid achievement of 101.4% in 2010. The SA operations achieved a cash conversion of 116.0%, while the UK lifted its cash conversion to 103.6%. The improvement was due to the efforts made in managing working capital throughout the year and the result is particularly pleasing in light of the difficult trading environment in the UK.

South Africa   United Kingdom
R million   £ million
South Africa   United Kingdom

Financial risk management

The Group is exposed to financial risks through its business activities, including interest rate risk, currency risk, credit risk, liquidity risk and risk arising from insurance contracts. The Group’s exposure to these risks and the policies for managing the risk are detailed in note 34 to the Group annual financial statements.

Accounting policies

The annual financial statements have been prepared in accordance with the Group’s accounting policies, which comply with International Financial Reporting Standards (IFRS) and the requirements of the South African Companies Act, as amended.

The principal accounting policies are consistent with those applied in the previous year, except for the adoption of various amendments to the standards as a result of Improvements to IFRS 2010 (issued May 2010), which had no impact on the financial position or performance of the Group, and the change in accounting policy set out in note 33 to the Group annual financial statements, which had no effect on the earnings of the Group for the prior year.

For further details on the Group’s accounting policies, refer to note 1 of the Group annual financial statements.

Shareholder distributions

The Board of directors declared a final dividend of 31.0 cents per ordinary share, payable to shareholders recorded in the Company’s register at 13 January 2012. In the prior year, a final capital reduction out of share premium of 6.5 cents per ordinary share and a dividend of 21.0 cents per ordinary share was distributed to shareholders.

Total distributions to shareholders in the 2011 financial year, including the interim dividend of 22.0 cents per share, amounted to 53.0 cents (2010: 46.5 cents) per ordinary share, representing an increase of 14.0%.

In determining distributions, the Board takes into account the earnings growth for the past year, current market conditions, de-gearing benefits in SA and the Health Partners for Life dividend requirements.

Financial targets

During 2011 the SA operations fell slightly short of the stated revenue growth target of 7% to 10%, achieving revenue growth of 6.5%. However, this outcome was influenced by a strategic decision to reduce the number of full-risk lives under management in the Primary Care division and the non-renewal of certain loss-making contracts in the Emergency services business. Capital expenditure of R903 million came in just below the indicative minimum expenditure of R950 million.

The UK business exceeded the 1% to 2% revenue target, achieving growth of 3.8%. Capital expenditure of £42.6 million was marginally below the indicative expenditure of £50 million.

Looking ahead

Financial targets

The Group believes that the demand for healthcare services at primary and tertiary levels will be sustained in SA. Revenue growth is expected to be in the upper single digit range. The focus on further efficiencies and cost reductions will remain entrenched in the business. Capital expenditure in the SA operations is expected to amount to R1 billion, with more than half of this being spent on expansionary projects that will increase capacity and introduce new beds during 2012.

The next 12 months are anticipated to remain very challenging for GHG, due to persisting global economic uncertainty, the impact of government austerity measures and budgetary and structural uncertainties within the NHS. Insured caseload is expected to remain subdued. The UK operations will however continue to invest in sustaining and expanding its infrastructure, and anticipates capital expenditure of approximately £50 million.

Interest rate swaps

The scale and complexity of accounting for these derivative financial instruments in unpredictable market conditions means that the risk of further volatility and potential income statement impact remains high. Consequently, significant non-cash, fair value adjustments could arise through the income statement in future years.

Acknowledgements

I would like to thank all financial personnel across the Group for their continued commitment and support, which enables the regular and consistent reporting of relevant and high quality financial information to all of our stakeholders. To my predecessor Vaughan Firman, thank you for your sound financial management of the business over the years, and for the strong base you set.

Keith Gibson
Chief Financial Officer