As Africa’s healthcare system evolves, so too must the strategies of those that drive change. In response, RH Bophelo, a pan-African healthcare investment firm, now embraces an innovative, asset-light strategy. This move increases financial flexibility and aligns with our vision for a more integrated, patient-focused healthcare system across the continent.
Improved Efficiency
This transition goes beyond reducing capital spending; it addresses emerging market trends and new regulations, allowing us to deliver essential services—such as radiology, pathology, pharmacy distribution, and hospital management—within healthcare facilities. Shifting away from a capital-intensive model enables us to allocate resources more effectively and focus on services that boost operational efficiency and revenue growth.
Through this strategy, we can tap into the increased demand for specialised healthcare services across the continent. By concentrating on high-demand sectors like dialysis, we secure new revenue streams while expanding access to vital care.
Better Operations Drive Revenue Growth
This realignment positions us to achieve substantial financial and operational gains, including a projected 15-30% increase in EBITDA margins across our hospital network, underscoring the potential of this approach for transforming healthcare in Africa. Moreover, the asset-light strategy enhances scalability, allowing us to expand our service offerings without the burden of heavy capital expenditures.
Traditionally, healthcare has prioritised core services like hospital infrastructure, with ancillary services often handled by external providers. Our new asset-light approach changes this as it integrates these services in-house, improving operational synergy and overall service delivery.
Comprehensive Patient Care
By incorporating pharmacy, radiology, and dialysis services into our hospital framework, we are not only boosting patient care with a seamless experience—but we are also diversifying revenue streams to make the business more resilient to financial risks. This holistic healthcare ecosystem positions us to meet the growing demand for consumer-centric healthcare, offering a model that benefits both patients and investors.
Evidence of the Strategy’s Success
The shift to an asset-light model is not just a theoretical exercise—it has already produced measurable outcomes. In 2023/24, we grew our net asset value to over R1 billion—a 19% increase—and reported a net profit of R183 million, turning around last year’s R32 million loss.
We overcame challenges like load-shedding and rising energy costs by focusing on operational efficiencies and investing in alternative energy solutions. These initiatives allowed us to maintain profitability despite external pressures.
Our healthcare portfolio also delivered higher returns from dividend income, and our move into financial services further demonstrated the strength of our asset-light approach. Increased dividends from key investments have strengthened our ability to provide shareholder returns while maintaining a strong operational framework.
Sustainability Driven
A critical element of our asset-light strategy is that it is rooted in sustainability. In light of the challenges posed by load-shedding and escalating energy costs, we have made early investments in alternative energy solutions. For example, our partnership with Energy Venture Capital has enabled the implementation of solar solutions at RH Bell, with plans to extend these initiatives to other hospitals.
By adopting renewable energy and green technologies, we reduce operational costs and align with global ESG trends. This commitment to sustainability ensures that our growth remains both profitable and socially responsible.
Looking Ahead
Implementing our asset-light strategy embodies more than immediate financial gains; it reflects our commitment to a long-term vision for scalable growth across the continent. Integrating ancillary services within our hospitals creates a unified healthcare ecosystem that enhances profitability while simultaneously elevating the quality of patient care.
As Chief Investment Officer Colin Clarke noted in our annual report, this strategy will expand our service offerings, attract a broader patient base, and enhance operational efficiency across our healthcare network. More importantly, it positions us as leaders in shaping the future of African healthcare delivery, balancing financial growth with patient-centred outcomes.
With the healthcare sector in Africa poised for growth amid rising population levels and increasing demand for better services, our asset-light strategy offers a scalable model for sustainable growth. It provides a blueprint for other healthcare investors looking to achieve both profitability and impact in a rapidly changing landscape.
Even though our journey is only beginning, our transformative approach is set to shape the future of healthcare investment in Africa for years to come.
Please read our latest annual report to learn more.
