October 24, 2018 / 3:17 PM / 9 months ago

UPDATE 1-South Africa's Long4Life enters healthcare sector with ClaytonCare acquisitions

(Recasts with ClaytonCare acquisition)

JOHANNESBURG, Oct 24 (Reuters) - South African investment firm Long4Life has made its first acquisition in the healthcare sector, buying 61 percent of ClaytonCare healthcare group, Chief Executive Brian Joffe said on Wednesday, after the company reported first-half results.

“We’ve got our foot in the door to be able to increase and grow our aspirations in the healthcare business. This is a very interesting area,” Joffe, one of South Africa’s most respected dealmakers, told analysts at the company’s results presentation.

“We believe that there are consolidation opportunities in this particular space,” he added.

Long4Life acquired ClaytonCare - a sub-acute rehabilitation medical group that owns two facilities - through subsidiary Long4Life Health, in which it holds a 59 percent stake, resulting in the firm holding a 36 percent economic interest in ClaytonCare.

Earlier on Wednesday, Long4Life reported a first-half trading profit of 178 million rand ($12.48 million) versus a loss of 4.9 million rand in the six months ending September 2017 as asset acquisitions became effective, lifting group sales.

The firm has acquired retailer Sportsmans Warehouse, salon group Sorbet and Chill Beverages, among other brands, since its listing last year.

None of Long4Life’s acquisitions were included in the earlier period, rendering the two sets of results largely incomparable, it said. The company has also changed its financial year since listing.

Its sport and recreation division, which includes Sportsmans Warehouse, Outdoor Warehouse and Performance Brands, contributed 60 percent of the group’s revenue and 64 percent of trading profit before central expenses in the period.

The company said a strong balance sheet, including cash resources of around 1 billion rand, provided the basis for further acquisitions.

“These are continually being assessed and anticipated to lead to the addition of exciting new opportunities,” it said.

Long4Life, which focuses predominantly on lifestyle businesses, reported group revenue of 1.5 billion rand in the period, while headline earnings per share rose 52 percent to 16 cents from 10.55 cents in the half-year ending September 2017.

The firm did not declare an interim dividend, it said, as the board has decided to continue paying dividends on an annual basis until it is fully invested.

$1 = 14.2600 rand Reporting by Nqobile Dludla; Editing by Jan Harvey and Kirsten Donovan

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