Investors shrug off exit of Life Healthcare chief

Andre Meyer, former CEO at Life Healthcare

In the top post for just three years, Meyer had the job of diversifying Life across geographies and "practice areas". In this, he appears to have been only partly successful.

While Life now has a foothold in the UK, Poland and India, business in the latter two regions does not appear to be going to plan. Poland has a fragmented hospital sector. A cut in cardiology tariffs in the past set of financials caused margins to dwindle to just 5.1%, from 13.5%.

India's listed Max Healthcare, in which Life owns just more than 46%, appears to have a perennial issue with costs. Some analysts say the two businesses should be cut loose, despite their short lives in Life's portfolio.

While Life Healthcare did rally to a record high of R47.81 in September 2014, shortly after Meyer's incumbency, the stock has proved a disappointing hold under his watch, now languishing at about R26. It has, admittedly, undergone a massive capital-raising exercise to fund its acquisition of Alliance Medical, a British provider of medical imaging services.

In this, Life Healthcare may have found a winner, though at 800m, it is not cheap.

Life's three biggest shareholders are the Public Investment Corporation, Allan Gray and the Industrial Development Corporation. Allan Gray appears to have had a slight change of heart though, having sold its interest down to 6.85% by end April, after raising its exposure to 10% just last November.