Pegasus Health (Charitable) Ltd

Financial Statements Commentary

Year Ended 30 June 2018

The financial statements for the year ending 30 June 2018 illustrate what has been another sound year for the company.  Highlights of interest include:

  • Sirius preparation is nearing completion with the first implementation carried out in August 2018. Sirius is a transformational electronic medical record platform that will replace the Patient Management System in those practices that choose to adopt it, providing the technology to enable changes to enhance patient care, improve business efficiency and encourage innovation.
  • Extending the delivery of our Workforce Solutions programme to members under the Support Plus Banner. This includes the BeeFoundNZ locum matching service which is now available for Nurses as well as GPs and has gained considerable momentum;
  • Continued focus on advocacy re General Practice funding concerns at a national level in conjunction with our N4 Partners;

These initiatives, and many others, continue to increase the value of our services to patients and practices and position Pegasus well as an integral partner in the Health Sector.

Comprehensive Revenue and Expenses (aka Profit and Loss account)

We present consolidated “Group” Financial Statements.

The Company consists of Pegasus Health (Charitable) Ltd and its associates – the most significant being After Hours Properties Ltd.

The Group consists of the Company and its subsidiaries, most notably Pegasus Health (LP) Ltd, which holds our 50% investment in HomeCare Medical (NZ) Limited Partnership (HCM).

The Company’s operating result, a surplus of $453k, was $376k better than budget $77k and $226k better than prior year.

Revenue from the delivery of health services increased by $4.1M. The increase in revenue was across the business, for example incremental increases for HealthOne and ERMS and increased activity in Mental Health (Enhanced Recovery Practitioners), plus a range of other smaller contributions. 

Operating expenses increased by 3.8M. Expense movements are consistent with activity levels; the most significant component of expenses, after wages and salaries, continues to be the data related support of general practice information systems.

Net finance costs increased (133k). This is due to a small reduction in interest received and an increase in Finance costs of 108k. Finance costs include a small-unrealised loss due to financial derivatives in place to manage risk on floating rate loans.

Pegasus has not revalued property this year, whereas last year there was a significant gain in value of 401 Madras Street once works were completed for the 24 Hour Surgery and the building was fully occupied.

The Group’s operating result also includes the 50% Pegasus’ share of HCM’s surplus of $544k.

The overall Group operating surplus of $985k (2017:$2425k) demonstrates another good year of continued prudent management.

Financial Position (aka Balance Sheet)

The strengthening of the balance sheet reflects the investment in Intangible assets such as Sirius. Intangible assets have increased by $2.5M.  

Our investment HomeCare Medical has decreased as a result of a partial repayment of advances of which $125k remains as receivable at balance date.

Pegasus refinanced borrowings during the year; $4M of Loans have been classified as Current, leaving Non-Current of $9M.

Our investment properties are recognised in the financial statements at their 30 June 2017 valuations.

Pegasus’ equity has increased by $442k to $18.5M.

Cash flow

Cash has been well managed to ensure Pegasus could continue to fund development of Sirius along with other asset purchases whilst remaining within banking covenant requirements.  A net decrease in cash of $596k resulted, leaving a year end cash balance of $1.9M.

Cash generated from operating activities totalled $1.7M, and the Company received a cash repayment $875k due to a capital distribution from Homecare Medical (NZ) Limited Partnership. $327k was received from draw down of loans to fund the final payments in respect of Pegasus House fit-out.

Payments for property, plant, and equipment including the development of Sirius amounted to $3.5M.

Primary Health Organisation (PHO) Functions Special Purpose Financial Statements

These separate special purpose financial statements are produced specifically to meet PHO reporting requirements.  They are an extract from the full financials commented upon above.

The PHO had a stable twelve months of operations. This culminated in an operating surplus of $221k for the year.  As expected the cash position remained at $2.3M.

Summary

In summary Pegasus remains in a sound financial position, demonstrates prudent governance and management practices, and maintains a measured approach.  This year’s initiatives continue to position Pegasus well to support general practice through the challenges and opportunities ahead, enabling Canterbury people to be well and healthy in their own homes and communities.

We hope this commentary assists your understanding when reading both sets of enclosed financial statements. We look forward to seeing you at the Annual General Meeting where we will be happy to answer any questions you may have or provide further explanation.

Click on the links below to download these financial statements for the year ended 30 June 2018:

Pegasus Health (Charitable) Ltd Financial Statements [PDF, 1 MB]

Pegasus Health (Charitable) Limited Primary Health Organisation Function Financial Statements

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