Enabling Our Vision of Affordable Healthcare
In our first year of operations, our focus was on building platforms for the acquisition and consolidation of independently run hospitals to create economies of scale and extract efficiencies. The manifestation of this has seen us invest in infrastructure and support a number of groups, making us a catalyst of change in the healthcare industry. Therefore, the consolidation of key platforms and operators within the healthcare system remains an important pillar of our strategy.
In the current financial year, the team has continued to grow our infrastructure portfolio by increasing the number of beds from zero at listing to 855 as of May 30th 2019, building our platform into one with a national footprint.
However, creating a consolidated hospital infrastructure portfolio alone does not, in and of itself, deliver affordable healthcare – an integrated approach to healthcare provision and a supportive policy environment are necessary and vital components to achieve our mandate. In this regard, management has started to activate the second pillar of our strategy – which is the provision of affordable health insurance products to increase access to the RH Bophelo infrastructure and thus healthcare services. The medical aid population in South Africa has been relatively stagnant at 16% penetration or 9 million members. This low penetration rate and the fact that a significant number of South Africans are starting to find medical aid cover unaffordable are critical indicators of the need for an affordable alternative.
As we build our hospital platforms and continue the development of the RH Bophelo footprint, we have doubled down on deepening our management expertise by integrating our external hospital managers and capabilities with those of our internal ones.
As we seek to drive synergies (as per our pre-listing statement) in our hospitals, we have begun the process of the integration of a group-wide healthcare IT platform, the invigoration of our nurses training college (including a hospital manager training program), and a project that will see us become energy self-sufficient, utilising renewable energy to power our hospitals. Additional details on our integrated model and verticalization driven by our infrastructure for affordable healthcare provision are covered in the CEO’s report.
Our focus as a Company is to create sustainable value for the shareholders while simultaneously having a positive impact on society through the provision of affordable healthcare. As a platform, we offer investors direct access to impact investments in the healthcare sector. We have delivered a strong set of results – earnings per share increase of 63% in the year under review – while having a positive impact on the societies in which we operate. The details on the overall financial performance of the Company and the outlook are covered in the financial statements.
As RH Bophelo’s deal pipeline is robust, the Board has identified the need to raise additional funding. Our capital raise will focus on diversifying the investor base, while also bringing on board institutional investors with an appetite for positive impact investments.
Key Governance Developments
Our commitment to best practice governance is fundamental to our business. The Board takes collective responsibility for its governance role and recognises that the execution thereof allows for an ethically run company. The Board’s role and responsibilities, and the way that it executes its duties and decision-making, are documented and set out in the Board charter, which has been adopted by the Board. The provisions governing the relationship between the Board and its sub-committees are contained in the various sub-committee charters.
During the 2019 financial year, the board applied various principles of good governance in order to enable and support the Company’s value creation process. Appropriate governance policies and frameworks were developed to ensure that the Company adheres to the required governance standards as regulated by King IV. These are detailed in the governance section of the integrated report.
The Board oversees and monitors on an ongoing basis how the consequences of the Company’s activities and outputs affect its status as a responsible corporate citizen. Our stakeholder relations policy encourages the principles of transparency and active listening. Our stakeholder engagement plan takes cognisance of our stakeholders in the business and activities of the Company that enable us to forge relations based on trust.
We continue to strive for an independent, experienced and transformed Board structure that will lead the Company, ethically and effectively, towards our vision of affordable healthcare provision. We will continue to adjust, manage and measure our performance with reference to the principles set out in King IV.
Management and Board Appreciation
The Company is squarely on its way to realising its vision of affordable quality healthcare services. Such a strong start was made possible by the dedicated, driven and quick-witted leadership of RH Bophelo, led by CEO Quinton Zunga, and the support of his courageous executive team, which includes CIO Colin Clarke, CFO Dion Mhlaba, and Investment Director Vuyo Nomvalo, to name a few. The value of the Company’s board members and its committees support over the last two years cannot be overstated. They took total charge of Company compliance and provided much-needed counsel and structure to operations. They remain committed to the corporate culture and to helping navigate the intricacies of an evolving healthcare sector and the habits of consumers.