Consolidated statement of comprehensive income

FOR THE YEAR ENDED 30 JUNE 2016

2015/16 $M

2014/15 $M

Revenue

Hospital income from ordinary activities

1,372.1

1,116.2

Pathology income from ordinary activities

132.9

127.1

Other income

67.2

58.5

Total revenue for the period

1,572.2

1,301.8

Expenses

Employment costs

877.6

694.7

Medical consumables and supply expenses

372.9

317.3

Other expenses from ordinary activities

207.1

171.9

Total expenses for the period

1,457.6

1,183.9

EBITDA

114.6

117.9

Interest, depreciation and amortisation

77.1

66.7

Net surplus for the period

37.5

51.2

Consolidated statement of financial position

AS AT 30 JUNE 2016

2015/16 $M

2014/15 $M

Current Assets

262.7

208.5

Non-Current Assets

Property, Plant & Equipment

1000.4

940.0

Other

50.5

59.5

Total Assets

1,313.5

1,208.0

Current Liabilities

Other

289.2

252.9

Non-Current Liabilities

Borrowings

312.0

276.2

Other

42.3

41.5

Total Liabilities

643.5

570.6

Net Assets

670.0

637.3

Equity

670.0

637.3

Consolidated statement of cash flows

FOR THE YEAR ENDED 30 JUNE 2016

2015/16 $M

2014/15 $M

Net Cash Inflows from Operating Activities

100.3

112.9

Net Cash Outflows from Investing Activities

(123.1)

(128.7)

Net Cash Flow (used in) / from Financing Activities

31.8

17.7

Net increase / (decrease) in Cash and Cash Equivalents

9.0

2.0

Cash and Cash Equivalents at the beginning of the year

31.0

29.0

Cash and Cash Equivalents at the end of the year

40.0

31.0

Stewardship

Revenue

Line graph of total revenue in millions for years 2011-2012 to 2015-2016.

Consistent with our strategy to grow our public hospital activity, our revenue during the year increased by 20.8%, well above the 8.4% average of the four prior years. This was primarily due to the acquisition and integration of Hawkesbury District Health Service on 4 November 2015 and commissioning of St John of God Midland Public and Private Hospitals on 24 November 2015.

Capital Expenditure

Line graph showing capital expenditure for years 2011-2012 to 2015-2016.

FY16 saw the completion of our largest new hospital development: the 307 bed St John of God Midland Public Hospital and 60 bed St John of God Midland Private Hospital. We also progressed major facility expansions at our Bendigo, Berwick, Geelong, Mt Lawley and Murdoch Hospitals. St John of God Health Care has successfully managed $885 million of hospital facility developments in the last five years, all being on time and on budget.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)

Line graph showing earnings before interest, tax, depreciation and amortisation in millions for years 2011-2012 to 2015-2016.

Despite our total revenue increasing by 20.8% our EBITDA dropped by 2.8%. This reflects the very significant commissioning costs for our new Midland Hospitals ($12.3m) and operating losses at Midland during its first seven months of operation ($5.3m). In addition, in pursuit of our strategic objectives, we increased our social justice expenditure by $2 million, our mission and pastoral care expenses by $1.4 million and our research expenditure by $1 million during the year.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) percentage

Line graph showing earnings before interest, tax, depreciation and amortisation percentage for years 2011-2012 to 2015-2016.

The Midland commissioning costs and operating losses, plus our increased expenditure on social justice, mission and pastoral care and research, were the prime reasons for the drop in our EBTIDA margin. Excluding our new Midland and Hawkesbury Hospitals, our hospital EBITDA increased by 7.8% reflecting previous facility expansion with associated patient volume increases plus productivity improvements.

Bank Debt

Line graph showing bank debt in millions for years 2010-2011 to 2014-2015-2016.

St John of God Health Care relies on the generosity of donors, cash surpluses it generates and commercial borrowing from banks to finance its operations, particularly its investment in expanding existing and developing new high quality facilities to meet community need. Our extensive facility investment in FY16 led our bank debt to increase by 12.9%. We are conservatively geared and closely monitor our bank debt, balancing this with our need and desire to grow services.

Operating Revenue - Geographic Analysis

Line graph showing operating revenue for Australian States and New Zealand for years 2011-2012 to 2015-2016.

Of the 20.8% revenue growth in FY16, the largest growth geographically was in NSW where the addition of Hawkesbury District Health Service led to 102.5% growth in revenue. Due primarily to our Midland Hospital’s commissioning, revenue in WA grew 25.1%. WA now represents 65.3% of operating revenue, Vic 28.3%, NSW 5.6% and NZ 0.8%. Group revenue has risen by 36% in the last two years.

Social Justice Expenditure

Line graph showing social justice expenditure for years 2011-2012 to 2015-2016.

In FY16 St John of God Health Care again contributed more than $20 million of its own funds to social justice initiatives. Excluding the prior year capital commitment of $7.2 million to build St John of God Accord’s new day program facilities, our contribution for social justice initiatives rose 15.2% in FY16 from the prior year.

Separations

Line graph showing number of separations for years 2011-2012 to 2015-2016.

Total patient separations in FY16 were 12.3% higher than prior year with overnight patients up 16.5% and same day patients up 9.6%. St John of God Midland Public and Private Hospitals and Hawkesbury District Health Service accounted for most of the growth. Excluding our Midland Hospitals and Hawkesbury District Health Service, overnight patients were up 3.2% (higher than long term average) and same day patients up 3.6% (lower than long term average). These total separations accounted for 814,543 days of care.

Procedures

Line graph showing number of procedures for years 2011-2012 to 2015-2016.

An increase in total procedures of 8.6% resulted from procedures on overnight patients increasing by 8.1% and for same day patients by 8.9%. Excluding St John of God Midland Public and Private Hospitals and Hawkesbury District Health Service, overnight procedures increased 2.3% and same day procedures were up 3.4%, both consistent with long term trends. At our hospitals approximately 60% of patients undergo a procedure.

Obstetric Deliveries

Line graph showing number of obstetric deliveries (births) for years 2011-2012 to 2015-2016.

Birth numbers increased by 14.9%, with 871 babies born at St John of God Midland Public Hospital from 24 November 2015 and 463 born at Hawkesbury District Health Service from 4 November 2015. Excluding our Midland and Hawkesbury Hospitals, birth numbers grew 2.2% vs the prior year. Expected birth numbers for FY16 are more than 13,500 due to the full year impact of our Midland and Hawkesbury Hospitals.

Emergency Department Presentations

Line graph showing number of emergency department presentations for years 2011-2012 to 2015-2016.

Total presentations more than doubled (253% growth) due to busy public emergency departments at St John of God Midland Public Hospital and Hawkesbury District Health Service. Excluding these two public emergency departments, our emergency department presentations grew 1.1%. The full year impact of our Midland and Hawkesbury Hospitals in FY17 will see emergency department presentations across the group exceed 130,000.

Pathology Episodes

Line graph showing number of pathology episodes for years 2011-2012 to 2015-2016.

In a very difficult industry environment we were pleased to increase our total pathology episodes by 3.4%, with inpatient episodes up 14% (mainly due to Midland work) and outpatient episodes slightly down by 0.7%. In June we announced the sale of our Pathology division with legal settlement expected in the first half of 2016/17.