(MENAFN - ProactiveInvestors - Australia) Pulse Health Group (ASX: PHG) plans to take full advantage of the growth in the private hospital sector with plans to expand its bed capacity.
The market dynamics in which Pulse operate remain favourable, with private health insurance membership growing beyond 46.5% of the Australian population at 30 June 2012.
Stuart James, chairman, told shareholders today at the company's AGM private health funds continue to exert significant pressure on private hospital operators.
He said Pulse is responding to this with "enthusiasm and vigour" with its larger pool of hospitals and financial stability enabling it to negotiate more fully with health funds.
"Whilst the relative financial strength of large health funds and small operators such as Pulse is significant, our facilities offer their members unique services within their local communities, due to their regional location or niche rehabilitation services such that we believe our value proposition is clear to health fund members."
Pulse won approval in the Lands and Environments Court to proceed with a five bed expansion at its Westmead Rehabilitation Hospital.
The company is also reviewing capacity increases at its Eden Rehabilitation Hospital and Gympie Private Hospital.
At Gympie, Pulse has made a small residential property acquisition adjacent to the hospital to facilitate an expansion.
The company also recently increased its tenancy at Forster Private Hospital, adding an additional 12 beds to the rehabilitation unit, and is awaiting the completion of a hydrotherapy pool onsite in early 2013.
Pulse has made substantial financial progress in the 2012 financial year, growing revenues by more than 5% and EBITDA by more than 21% over the previous financial year.
Equally, the company generated 3.9 million in net cash inflow from operating activities which was more than 95% higher than 2011.
James said the most significant corporate event affecting the company during the 2012 financial year was the successful non-renounceable pro-rata rights issue completed in June 2012 raising 8.15 million.
"The funds were largely used to fund the acquisition of the Eden Rehabilitation Hospital which settled in July 2012.
"The acquisition brings to six the number of facilities within our group, and further enhances our Queensland and rehabilitation profile."
Importantly, the Eden Rehabilitation Hospital is performing better than the company's internal projections.