Larry Goodman’s healthcare group hires Datalex turnaround CFO

Companies behind Blackrock, Hermitage and Galway clinics saw profits drop in 2020

Blackrock Hospital Ltd, whose main subsidiary is Blackrock Clinic, revealed that its pre-tax profit dropped 39 per cent last year to €6.4 million. Photograph: Cyril Byrne

Blackrock Hospital Ltd, whose main subsidiary is Blackrock Clinic, revealed that its pre-tax profit dropped 39 per cent last year to €6.4 million. Photograph: Cyril Byrne

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Blackrock Healthcare Group, the umbrella company businessman Larry Goodman is forming for three of the best-known private hospitals in the State, has tapped a senior executive involved in the recent turnaround of Datalex to become its chief financial officer (CFO).

Niall O’Sullivan, who joined Dublin-listed Datalex as CFO in June 2019 as the Dublin-listed travel retail software group was reeling from an accounting scandal, said in September that he was leaving the company after being involved in a massive restructuring of the business.

Blackrock Healthcare Group’s chief executive, Caroline Whelan, confirmed the appointment in a statement to The Irish Times, adding that she was looking forward to working with Mr O’Sullivan as the company prepares for its official launch early next year. Mr O’Sullivan also previously held senior finance positions at Google and Vodafone.

The establishment of the healthcare group follows on from Mr Goodman’s moves to take full control of the Blackrock Clinic, Hermitage Clinic and Galway Clinic in recent years.

Agreement

News of the CFO appointment comes in a week that the companies behind the three clinics each reported a drop in earnings in 2020, mainly due to an agreement stuck at the onset of the Covid-19 crisis where private hospitals provided their full capacity to the Health Service Executive (HSE) on a not-for-profit basis for three months.

Blackrock Hospital Ltd, whose main subsidiary is Blackrock Clinic, revealed that its pre-tax profit dropped 39 per cent last year to €6.4 million. Turnover declined by 4.5 per cent to €130.4 million.

The company received a €38.6 million equity injection from its main shareholder, Mr Goodman’s Parma Healthcare Holdings Unlimited, in December last year. Most of this was used to repay €34.4 million of bank debt, leaving it with €7.7 million of net cash at the year end.

Hermitage Clinic Unlimited saw its pre-tax profit drop 88 per cent to €514,536, while turnover dipped 2.8 per cent to €83.4 million.

A Goodman vehicle, Hermitage Medial Holdings Unlimited, subscribed for €34.4 million of shares in the company late last year, including the conversion of a €26 million shareholder loan into equity. The company also repaid in full its €9.1 million of bank debt and had net cash of €10.1 million at the year end.

Meanwhile, pre-tax profit at Galway Clinic Doughiska declined by 47 per cent to €4.1 million, while turnover fell by 3 per cent to €96.5 million.

Medical costs

The companies behind all three hospitals said that while they continued to see an increase in activity following investment programmes in recent years, the cost of providing healthcare “remains a concern” as rising medical costs are not being matched by price increases being received from health insurers.

“Medical inflation, driven by the adoption of new technologies and techniques, together with the use of more expensive consumables and drugs, poses a significant challenge for healthcare providers. In addition to medical inflation, the Covid-19 pandemic has also significantly increased the cost of providing healthcare, which is likely to remain a challenge for the foreseeable future,” each of the three companies said.

Datalex, whose turnaround culminated in a €25 million share sale in July, mainly to repay emergency loans from its main shareholder, the billionaire Dermot Desmond, is expected to name a new CFO imminently.