News

Salient features

• 4.5% increase in Group revenue to R26 344 million
• 8.4% growth in normalised Group EBITDA
• 60 basis point improvement in normalised Group EBITDA margin to 18.6%
• 11.3% growth in normalised Group operating profit, achieving 2.5x operating leverage
• 20.7% increase in adjusted HEPS to 137.2 cents
• 1.1 times net debt to EBITDA from 1.2 times in FY 2024
• R1.8 billion returned to shareholders in ordinary dividends and share buybacks in FY 2025
• 111.3% cash conversion ratio
• ROIC increased to 12.6% from 11.7% in FY 2024
• 21.4% increase in total dividend to 85.0 cents

The Netcare Group, which provides innovative, quality healthcare across South Africa, has delivered a robust financial performance for the year ended 30 September 2025 (“FY 2025”), successfully achieving the Group’s key operational and strategic objectives.

Group revenue for FY 2025 increased by 4.5% to R26 344 million (FY 2024: R25 202 million) and normalised Group EBITDA for FY 2025 improved by 8.4% to R4 912 million (FY 2024: R4 530 million). Higher activity levels, ongoing digital benefits and reduced expenditure from certain strategic projects coming to an end resulted in strong operating leverage and an improvement in the Group EBITDA margin of 60 basis points to 18.6% from 18.0% in FY 2024.

Cash generated from operations increased to R5 468 million (FY 2024: R4 374 million) with a cash conversion ratio of 111.3% (FY 2024: 96.5%).

Netcare CEO, Dr Richard Friedland, commented, “These pleasing results have been achieved, notwithstanding a challenging macroeconomic and competitive landscape. Our performance was underpinned by resilient demand for private healthcare services and continued benefits arising from the Group’s digitisation strategy, which is clearly reflected in improved operational efficiency, enhanced quality of care, and sustained margin expansion.”

Total paid patient days (PPD) increased by 0.7% * compared to the year ended 30 September 2024 (“prior year” or “FY 2024”). Continued progress on efficiency initiatives, underpinned by digital enablement and prudent cost management, coupled with lower strategic costs, translated into excellent operating leverage, resulting in an 11.3% increase in operating profit.

The Group’s return on invested capital improved to 12.6% (FY 2024: 11.7%).

In line with Netcare’s capital allocation strategy of returning excess cash to shareholders, the Group continued with its share buyback programme. For FY 2025, R855 million was applied to repurchase 64.2 million ordinary shares at an average price of 1 324 cents per share. Since the commencement of the share buyback programme in September 2023, Netcare has bought back 149.0 million shares (10.4% of total ordinary shares in issue on 30 September 2023) at an average price of 1 269 cents per share.

In line with the Group’s dividend policy, where the aim is to provide shareholders with a sustainable dividend of 50% - 70% of earnings, Netcare’s Board has declared a final dividend of 49.0 cents per share. This, together with the interim dividend of 36.0 cents per share, equates to a total dividend for the year of 85.0 cents per share, representing 62.0% of adjusted headline earnings per share (“HEPS”) and an increase of 21.4% over FY 2024.

Dr Friedland added, “We are confident that our strategy is entrenching a sustainable competitive advantage which allows Netcare to substantially differentiate the patient experience, improve patient safety and clinical outcomes, and make a notable scientific contribution to medicine and surgery in South Africa. In addition, it positions the Group to grow organically, harness efficiencies and capitalise on growth opportunities, ultimately enhancing returns for shareholders.”

Beyond the substantial enhancements in clinical outcomes and patient experience, the digital transformation continues to deliver a tangible digital ‘dividend’, driving operational efficiencies, deeper funder and clinician value proposition, and improved quality of care. While still in its early stages, the strategy has already generated exceptional financial returns, delivering an internal rate of return exceeding 25% and cumulative gross cash savings and cost avoidance of R587 million since FY 2022, surpassing original expectations.

Dr Friedland said, “We are also excited to announce the imminent rollout of wearable devices for all patients in general wards across the country, commencing with an extensive pilot at a flagship facility. These devices offer continuous clinical grade monitoring of all key vital signs 24 hours a day, including heart rate, respiratory rate, core temperature, oxygen saturation and, uniquely, blood pressure. There are numerous benefits to continuous patient monitoring, which will integrate with our Electronic Medical Record (“EMR”) platform to substantially improve quality of care, safety and clinical outcomes.”

Group financial overview

Normalised operating profit increased by 11.3% to R3 559 million (FY 2024: R3 198 million). Normalised profit before taxation increased by 15.9% to R2 524 million (FY 2024: R2 177 million). Profit after tax and exceptional items increased by 17.0% to R1 810 million (FY 2024: R1 547 million), and adjusted HEPS increased by 20.7% to 137.2 cents (FY 2024: 113.7 cents).

In FY 2025, the Group incurred operational costs relating to strategic projects of R56 million (FY 2024: R131 million). Total capex, including strategic projects, amounted to R1.6 billion for the year, of which R288 million related to expansionary projects.

At 30 September 2025, the Group’s cash resources and available undrawn committed facilities amounted to R2.9 billion. Group net debt (exclusive of IFRS 16 lease liabilities) increased marginally to R5.5 billion from R5.3 billion at 30 September 2024.

Divisional review

Hospital and emergency services

The Hospital and emergency services segment delivered a steady performance for FY 2025. Total PPD increased by 0.7% * and revenue for the segment increased by 4.9% to R25 695 million (FY 2024: R24 506 million). Normalised EBITDA for the segment increased by 8.8% to R4 750 million from R4 366 million in FY 2024. The EBITDA margin increased to 18.5% from 17.8% in FY 2024.

Surgical cases continued to contribute over 70% of total revenue, accounting for 51.2% of PPD (FY 2024: 51.3%), with medical cases comprising the remaining 48.8% (FY 2024: 48.7%) of PPD.

Although the case mix remains more complex than before the COVID-19 pandemic, the overall acute length of stay remained flat at 4.5 days, reflecting a higher proportion of less severe medical admissions and a milder flu season during the year. Increased activity levels resulted in an improvement in acute occupancy to 65.0% * from 64.3% in FY 2024.

Demand for mental healthcare remains strong, but same-store capacity was temporarily constrained by the unavailability of beds at certain high-occupancy facilities undergoing essential refurbishment. As these projects neared completion towards the end of the financial year, occupancy levels improved from 68.2% in H1 2025 to 70.3% for FY 2025 (FY 2024: 70.3%).

Netcare’s extensive geographic presence, leading clinical centres of excellence, and distinction of operating the only four Level 1 trauma facilities in the country accredited by the Trauma Society of South Africa, combined with its EMR platform, continue to enhance Netcare’s appeal to medical specialists. During the year, in a first for Africa, two Netcare hospitals were accredited by the World Stroke Organization (34 facilities accredited worldwide). During FY 2025, admission rights were granted to a net 117 new specialists across acute and mental health facilities.

Within the Akeso operations, demand for quality mental healthcare services continues to grow, and Netcare remains firmly committed to expanding access and pursuing new opportunities in this vital space. Construction of the Netcare Akeso Polokwane facility (87 beds) is advancing well and remains on track for commissioning in March 2026. In response to the demand for mental health support in the broader Tshwane region, the new Netcare Akeso Montana facility (88 beds) will be commissioned in October 2026. Furthermore, the Netcare Akeso Alberlito facility (80 beds) is scheduled to open its doors in March 2027, strengthening Netcare’s national footprint and reinforcing its dedication to meeting the mental healthcare needs of communities across South Africa.

Primary care

Lower activity levels, together with the non-renewal of a large occupational health contract that ended in May 2025, resulted in a 7.0% decline in revenue to R662 million in FY 2025 (FY 2024: R712 million). Normalised for the loss of this single contract, underlying revenue growth in the Primary Care segment amounted to 2.8%.

The business successfully diversified its occupational health client base during the year through the addition of several new contracts. However, this was not sufficient to offset the impact of the loss of the occupational health contract that was not renewed, as well as lower activity levels. Consequently, EBITDA declined by 1.2% to R162 million (FY 2024: R164 million). Despite the challenging environment, continued operational efficiencies enabled an improvement of 150 basis points in the EBITDA margin to 24.5% (FY 2024: 23.0%).

Strategic update

Netcare is executing a ten-year strategy designed to create an enduring competitive advantage and position the Group as the first choice for patients, doctors, and funders. Anchored in three global healthcare megatrends of customer centricity, digitisation, and data and AI driven care, the strategy leverages Netcare’s integrated ecosystem of assets and services to deliver a connected, efficient, and responsive healthcare experience.

Dr Friedland said, “Following the successful completion of the ‘Digitally Enabled’ first phase in 2024, which fully digitised the Group’s ecosystem and implemented our EMR system, we have established a robust foundation for the next exciting wave of innovation.”

The Group is now well advanced in the ‘Data and AI Driven’ second phase of its journey. This phase harnesses over 53GB of clinical data generated daily to enhance clinical efficiency, patient safety, and outcomes, while optimising cost-effectiveness. An advanced analytics platform provides clinical and analytical teams with real-time, actionable insights, enabling improved consistency, quality of care, and operational efficiency. This capability also supports measurable financial benefits through standardised clinical pathways and reduced morbidity and mortality rates.

Netcare’s advanced data capabilities have enabled the implementation of a Large Language Model that engages directly with patients, making Netcare the first hospital group in Africa to deploy this feature. This innovation enhances the experience for both clinicians and patients, further strengthening Netcare’s digitally enabled, data and AI driven model of care.

Simultaneously, the third phase of ‘Person Centred Health and Care’ is being advanced to place greater control in the hands of patients through direct access to their health records. This initiative deepens engagement in the care process and strengthens Netcare’s commitment to truly personalised, coordinated healthcare.

Other key strategic initiatives

NetcarePlus: The division experienced strong growth in sales of innovative products in both the retail and corporate channels in FY 2025. NetcarePlus has established itself as a preferred partner for many of the key healthcare brokerages in the market.

Environmental sustainability: Following the success of Phase 1 of the Group’s environmental sustainability programme, which delivered a 39% reduction in energy intensity per bed and R1.5 billion in cumulative savings and cost avoidance, Netcare has advanced into Phase 2 of its 2030 strategy. This phase focuses on driving ongoing financial benefits through modest capital investment, while progressing towards the net zero emissions goal by 2050. Netcare achieved a 14% reduction in water usage in FY 2025 compared to FY 2024. In FY 2025, 80% of general waste and 31% of healthcare risk waste were diverted from landfill. Since launching the environmental strategy in 2013, the Group has received 51 local and international awards, reflecting more than a decade of consistent leadership in this space.

Universal health coverage: In May 2024, the President signed the National Health Insurance (NHI) Act into law, but no sections have been proclaimed as yet. Netcare acknowledges the current mounting pressures in both the private and public healthcare sectors and is supportive of constructive and sustainable solutions. There are legitimate concerns and constitutional deficiencies with the single-fund NHI model proposed by the NHI Act, and as a result, several legal actions have been initiated against the NHI Act by various stakeholders. Dr Friedland commented, “We believe that a collaborative partnership between the public and private sectors is essential to developing sustainable and affordable solutions that advance the goal of universal healthcare. Notwithstanding the legal proceedings underway, Netcare remains committed to constructive engagement and stands ready to work in partnership to meaningfully reform and strengthen South Africa’s health system.”

Conclusion

While the Group is encouraged by the improvement in some of South Africa’s macroeconomic indicators, the broader operating environment remains challenging as formal sector employment levels have yet to show meaningful improvement.

Consumers continue to experience sustained financial strain, reinforcing the ongoing shift towards lower-cost, restricted network medical scheme options. Notwithstanding this shift, Netcare’s extensive geographic footprint, complemented by the NetcarePlus GapCare offering, ensures that the Group remains well positioned to maintain a meaningful share of patient volumes within these increasingly cost-sensitive networks.

Furthermore, demand for quality private healthcare remains resilient, supported by an ageing insured population and the growing burden of disease.

Dr Friedland concluded, “Our unique strategy, built on person-centred care, advanced digital capability, and intelligent data use, continues to strengthen our competitive position amid challenging market conditions. It ensures we remain relevant across the evolving healthcare landscape while driving sustainable earnings growth and long-term shareholder value.”

* In December 2024, a fire occurred at the 358-bed Netcare Pretoria East Hospital, affecting activity in multiple wards and seven theatres. As a result, certain disciplines experienced temporary disruptions while restoration efforts were underway. Accordingly, paid patient day and occupancy metrics for FY 2025 have been reported excluding this facility.

Ends.

Editor’s notes

About Netcare
The Netcare Group (JSE: NTC) offers a unique, comprehensive range of medical services across the healthcare spectrum, enabling us to serve the health and care needs of each individual who entrusts their care to us. Our focus on implementing sophisticated digital systems will enable us to provide care that is fully integrated and an enhanced experience across our Group's operations. At Netcare, we are striving to change healthcare for the better. In addition to its world-class acute private hospital services, Netcare provides:

• radiosurgery, radiotherapy, chemotherapy, bone marrow transplant and robotic-assisted surgery through Netcare Cancer Care;
• primary healthcare services through Netcare Medicross;
• emergency medical services through Netcare 911;
• occupational health and employee wellness services through Netcare Occupational Health;
• mental health and psychiatric services through Netcare Akeso;
• innovative solutions to increase access to quality and affordable private healthcare through NetcarePlus; and
• renal dialysis services through National Renal Care (NRC).

Netcare is also a leading private trainer of emergency medical and nursing personnel in the country.

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