Surgery shortfall prompts Wakefield warning

By Phil Boeyen, ShareChat Business News Editor

Friday 16th November 2001

Newly listed Wakefield Hospital (NZSE: WFD) says full-year earnings could be 50% below forecast if a decline in cardiac surgery contracts continues.

The hospital has released its half-year result and reported a 60% slump in profits due to a reduced amount of publicly-funded cardiac surgery contracts during the period.

The hospital says interim profit at the end of September was $417,000, down from $1.04 million last year. Sales revenue fell to $11.39 million from $12.95 million previously.

Chairman, John Calder, says the result was within 4% of expectations and while the decline in cardiac surgery revenue is disappointing, it is not unprecedented.

"While cardiac procedures are an important source of revenue, increased volumes in most other surgical specialities mitigated the decline to a degree and have helped broaden our revenue base.

"Wakefield Hospital had experienced similar variances in patient numbers in the past and had nevertheless recorded a 12 year trend of steady and impressive overall growth in numbers, revenues and profits."

"However, the amount of cardiac surgery we do is unlikely to increase before the end of the year. If that is so, Wakefield Hospital's full-year earnings are likely to be about 50% of the figure forecast when the company floated."

Wakefield says floating on the stock exchange had strengthened its balance sheet and it is now investigating opportunities in the healthcare sector that would complement existing operations.

The company will pay an interim dividend of 2 cents per share, fully imputed.

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