The ratings on Netcare Limited reflect the group’s modest leverage profile, alongside its strong domestic market position and stable earnings. This is, however, counterbalanced by the group’s geographic concentration.
Positively contributing to the rating is Netcare’s strong domestic market competitive position as one of the three largest private healthcare groups in South Africa.
The group’s liquidity is viewed as improving on a uses vs sources basis, supported by committed bank facilities of R2bn and cash reserves of R1.7bn as well as projected positive free cashflows. Counterbalancing this somewhat is the ongoing need for capex (budgeted at R1.4bn in FY20), underpinned by c.R1bn of annual replacement expenditure.