Good day, ladies and gentlemen. Welcome to Life Healthcare's audited group results for the 12 months ending 30th September 2022. All attendees will be in listen-only mode. There will be an opportunity to ask questions when prompted. If you should need assistance during the call, please signal an operator pressing star and then zero. Please note that this event is being recorded. I'd now like to hand the conference over to the Group Chief Executive, Peter Wharton-Hood. Please go ahead, sir.
Thank you very much, Judith, and welcome, ladies and gentlemen, to our annual results presentation. I'll kick it off by making an opening comment that we demonstrated strong underlying operating performance across all our markets. In our key metrics split across Southern Africa, Alliance Medical, internationally and at group level, one can see that the key metrics have started to show green arrows, green shoots, and a positive improvement at most levels of our company. Whilst this is a 12 months operating review, I urge you to pay attention to some of the statistics that are representative of what happened to underlying volumes in the second half of the year, which Adam and Mark will take you through a little bit later on. You can see for the full year, paid patient days were up by 5.8%.
I draw attention later on to the fact that in the second half, paid patient days were actually up by more than 9%. Theater minutes up by 14.8% for the year. Second half up 18.4%. Occupancy levels at 61.9% a year. Second half of the year, sitting at just short of 65%. Revenue for the year, up 5% and EBITDA of 7.2%. Across our international business, we see encouraging increases in underlying volumes. PET/CT up by 11%, Italian operations up by 7.5%, Irish operations up by a commendable 24.4% and revenues topping out at ZAR 7.7 billion for the year.
At a group level, we exceeded ZAR 28 billion revenue for the year, normalized EBITDA at exactly ZAR 5 billion, and we delighted to declare a final dividend of ZAR 0.25. Our diversification strategy continues to work. Our international domestic split in revenue at 70/30 favor South Africa, acute versus non-acute at 60, our normalized EBITDA at 70/30, and our acute versus non-acute EBITDA at 70/30. The direction of travel is along the lines of the plan that we articulated two years ago, which we will deliver by end of 2026. Underpinning our strategy in action, we can see that we've taken our ESG journey seriously. It's a group imperative. We've increased our renewable energy usage. We made progress towards the environmental targets, and these will be linked to the performance of our executives.
As far as targets are concerned, 2030, we'll get zero waste to landfill, and 2050, zero emissions. Very cautious about our water usage. We've actively installed solar across our complexes and internationally, we are electrifying our fleet. From a social perspective, this is broken down into three key focus areas of community, education and healthcare. We believe this makes for a sustainable business, continue to deliver improvement in our diversity inclusion metrics, and we see ourselves as being a force for good with targeted community support. Across health, we want to improve access. We have more than 20,000 pro bono cataract surgeries which were performed during the year. We're in a screening partnership with the PinkDrive. Got bursaries and training for nurses and specialists in South Africa. We've helped with access to clean drinking water and food relief partnerships with NGOs.
Our technology journey continues. What are we doing? We're modernizing infrastructure, strengthening our cybersecurity, implementing our custom-developed hospital information system, and introducing digital technology, data analytics, and AI processes across the stack. What do we hope to achieve? We think that by modernizing the infrastructure, we'll be able to exploit new technologies to the full advantage, both at the clinical and operating level. Our cyber function will protect the business and patient information as required. Our hospital information system has been a long-term project to manage the commercial process of the patient journey through our hospitals. The introduction of advanced data analytics we see as us being able to leverage our data across the business for efficient resource utilization. At a very high level, that's the picture. I'll now hand you over to Adam to take you through our South African operations.
Thank you, Pete, and good morning, everyone. The Life Healthcare business in South Africa, I think, had experienced a very good year. Excuse me. I'll provide an update on our acute hospital business, our complementary services lines of business and as well as our healthcare services division. I'll start off with just covering the quality slide. When you look at the slide, we started our year coming out of the Delta wave, and we were soon into the Omicron wave in December. We also had to navigate to wave five in June and July this year. What you can see from the graph on the right is the decreasing percentage of COVID PPDs which we had compared to 2021. In 2021 we were between 19% and 24% of our total PPDs were COVID PPDs.
This dropped to just over 7% in H1 and then halved again to just 3.5% in H2. This is a reflection of both the lowering of our COVID admissions we've had as well as the lower severity of these COVID admissions. The result of this is a normalization of our underlying patients. What we saw over the full year is that our hospital admissions increased by nearly 16%. What we experienced was a decrease in our length of stay of nearly 9%. We also experienced a low revenue per admission of nearly 10%.
Although this results in a lower increase at a revenue level, we do view this as a positive sign, in the sense the business is moving on COVID-19 and our case mix is returning to what we experienced pre-COVID-19. The bottom right-hand graph shows a stronger H2 we experienced with admissions growing by 21% in H2 2021. The solid blue line, you can see the decrease in the length of stay. On the back of this increase in admissions, if you look at both the acute and complementary businesses, we finished the year with a 62% occupancy. We had a much stronger performance in H2, and the graph on the top right shows our occupancies of just over 65% for the second half.
In quarter four, occupancies were 66.5%, so again, a continued improvement. The bottom left graph shows occupancy split between facilities. You can see the improvement in H2 2022, where the percentage of facilities over 70% and those below 60% have improved dramatically. We do expect this trend to continue going forward. The graph on the bottom right shows the improvement in both revenue and EBITDA margin from H2 over H1. If we just look at the acute hospital business, we had a full year PPD growth of 5.4%, and our theater minutes grew by nearly 15% from the prior year. A really good underlying performance.
If you look at the second half, and we had an even better performance with our PPDs growing at over 9%, and our theater minutes at just over 18%. In our acute hospitals, then H2 occupancies are nearly on 65%, which is good. For the full year, our acute hospital revenue growth was 5.3%, which is lower than one would normally expect with that underlying PPD growth, but again, this is reflective of the change to a more normalized case mix. The graph on the top right shows the breakdown between those, and you can see the PPD growth, the tariff increase, and then the negative case mix change impact. One can see how this case mix change impact has reversed when you compare 2020 and 2021.
If we move on to the complementary services businesses which had a really strong year. It is slightly different to the acute business in the sense that the activity was fairly evenly spread across both halves. PPDs for the mental health and acute rehab business grew by 9.4% for the full year and nearly 12% for H2 versus H2 2021. This growth is reflected in occupancy percentage for H2, which is over 73%. The renal dialysis and oncology continued to show good underlying growth, and this resulted in a 15% full year revenue growth and nearly a 22% revenue growth in H2 versus prior year. There is less of a case mix impact in the comprehensive lines business when compared to the acute business.
The revenue in H2 also benefited from the acquisition of the non-clinical operations of East Coast Radiology in February and Eugene Marais Radiology in August. The Life Health imaging business now did approximately 19,000 MRI and CT scans and roughly 100,000 X-rays and other scans in 2022, which when you consider that in the prior year this business was nonexistent. A really good performance this year. The photo on this slide is the Varian Ethos radiotherapy machine at Life Vincent Pallotti. This machine is the first in South Africa, one of only 60 in the world. It delivers a highly advanced, precise, and personalized oncology treatment to patients. The purchase of the Ethos machine is an expression of our intention to not just grow our oncology business, but also improve the delivery of cancer treatment.
This is one of a number of steps we've taken to grow our oncology business. As an example, at Life Vincent Pallotti Hospital, we're also adding a new chemotherapy unit as well as adding additional oncologist doctor rooms. If we turn to our healthcare services division, I'll start here with the Life Health Solutions business. In 2021, we mentioned the increased revenue and EBITDA our Life Health Solutions had received from the COVID screening apps and contact tracing, which we introduced during the COVID pandemic. This revenue and EBITDA had started to normalize in the second half of 2021, and there was very little revenue in this regard in 2022. The occupational health and wellness business is a really diminutive one.
This year we've gone through a process in terms of reviewing our cost base, developing new products, new sales channels, and developing systems. I'd say it's been somewhat of a reset year for the business, and we do expect a much better year in 2023. Life Nkanyisa, which is the new brand for Life Esidimeni, and it means the bringer of light, is the largest healthcare PPP in South Africa with over 1 million PPDs. To put that into context, you know that Life Nkanyisa has just over 3,000 beds, and the acute and complementary business has nearly 9,000 beds netted over 2.2 million PPDs. It goes to show you the volume of patients that we treat in Life Nkanyisa.
They had a steady year growing revenue in line with CPI. Despite some overhang from COVID-19 costs, they managed to spend it well. If you look at the segmental breakdown, the underlying activities result in a revenue growth of 5%, with the Acute and Complement businesses growing by 6% off the back of an overall 5.8% PPD growth, at lower revenue PPD due to the normalization of the case mix I mentioned earlier. Normalized EBITDA grew by 7.2%. On an operational level, normalized EBITDA grew by 15% with Acute and Complement businesses growing by 18.3%. In the Acute and Complement businesses, we have been able to improve margins with the increased underlying activity, improved operational leverage, and improved efficiencies.
We are now starting to see the benefits coming through from our increased investment in our integrated clinical products, increased investment in data analytics, I.T. and cyber. These benefits will become clearer going forward. Just an example, we're launching our first integrated clinical product in 2023. Lastly, I'll finish on our quality slide. We had a good overall quality performance. With this normalization of our case mix in the second half, we can start comparing to our pre-COVID-19 years. We also took the opportunity during COVID-19 to review how and what we measure from a quality perspective. As part of our continuous drive to improve patient safety and clinical outcomes and to increase the potential to identify trends, identify opportunities for improvement, we've made a number of changes in terms of what we measure and how we measure.
That is a good reflection in terms of how we look at our clinical outcomes as well as our overall patient experience. Thank you. I will now hand over to Mark Chapman, our CEO of Alliance Medical.
Okay. Thank you, Adam, and good morning, everybody. Over the next few slides, I want to highlight how we're seeing the growth in diagnostics and indeed how diagnostics is having an increased role in the patient pathway. Why diagnostics? We know we operate with an aging population and certainly an increased disease burden, which requires diagnostic investigations. We also know that earlier diagnostics translates into improved outcomes for patients, lower total cost of care, and improved efficiency. However, we can still see the variation to the charts to the right for MRI, CT, and PET/CT. In the markets that we operate, we're still lagging a little bit behind some of our peers in Europe and certainly the U.S.
Indeed, I think the Financial Times this morning highlights the spending in the U.K. which probably concludes some of that thinking. We also know that the population-based diagnostic programs are starting to kick in. Indeed, you can see that in the U.K. with lung cancer screening programs. I'm pleased to say that the team in the U.K. are now starting to implement some of these programs across regions. Looking forward, the theranostics and the therapies and interventional radiology will provide further opportunities for the business. Just to recap on our footprints as well.
We are market leaders in the output positions where we operate, certainly in our three core regions of the U.K., which are a market-leading position in the imaging services, the PET/CT radiopharmacy, which again, is a unique vertically integrated proposition for molecular imaging. In Ireland and Italy, that market-leading position in the imaging services. Also in Germany, I think it's worth noting our network of cyclotrons is a leading position in Germany, which also provides a good distribution network across Northern Europe. Certainly when we start looking at the future for our preparation for Neuraceq manufacturing, we are in a good position. If you look at the markets, just look at the U.K., I think it's probably worth just going through to highlight the history of the growth.
If you look at the average growth rates in CT, MRI, and PET/CT before COVID and the comparison on the right post-COVID. I think that highlights the resilience of diagnostics. We do expect that growth to continue, certainly when you look at the demographics and what I was saying earlier about the aging profiles and the disease burdens. I think that underlines our underlying performance this year in 2022 of a 10% revenue growth. If you look at the markets in the U.K., Italy, and Ireland, all the health services are under stress, and we can see that with the NHS, the ASL in Italy, and the HSE in Ireland. We are supporting the services accordingly. The waiting list in the U.K., as an example, continues to grow over 7 million.
We believe the opportunity is there. If I now just go through a quick overview of the different territories, starting with the U.K. The U.K. accounts for 55% of the revenue. What we have seen is the mix during COVID, the diagnostic imaging sort of overtook that mix of the molecular imaging. You can see in 2022 H2, the molecular imaging, which is the PET/CT and the radiopharmacy, has moved to 55% of the revenues in the country. We also see the increasing number of scanners in two key areas. The PET/CT, which is no surprise when you start seeing the growth and the utilization on those scanners, which you'll see shortly, requires additional PET/CT. Also the CT opportunity.
I think everyone's aware of the CT COVID support during COVID for the NHS. Those facilities and mobiles are still in existence and are being utilized. The charts to the right, you can see this revenue mix. Yes, in 2021, you could see the increase of mobiles from a revenue mix supporting the COVID initiatives. They are also trending in the growth, and you can see the growth in the PET/CT mobiles. It's been normalized now, but good utilization, a bit more of a business as usual tariff. Also diagnostics, I'm pleased to see is coming back to pre-COVID and is growing accordingly.
Just to unpack that a little bit more, if you look at the molecular imaging, the picture at the top right is Sidcup. I think the slide is catching up. I'm hoping you can see the slide with molecular imaging, where the picture in the top right is Sidcup, which is the first digital PET/CT scanner that we deployed into the U.K. with the NHS. You can see the growth with the molecular imaging over the last six years, double digits at 11.8%, encouraging.
You can also see the utilization in the top right chart, which is being driven by increasing the capacity on the existing base, but also using the innovation of the digital PET/CTs, where on an analog, you'd probably be doing around 15-20 scans per day. On the digital, it's circa 30 with an ambition to grow that as well as that innovation matures. In summary, looking forward, the PET/CT, we do see the continuation of this growth. There is an inflationary protection within the contract, which I've explained in the past. We do see an additional growth in the medium term of 11 scanners to support the growth that we're seeing in this part of the business.
Also, we need to make sure that the cyclotron capacity matches that growth through additional cyclotrons, but also we've concluded a refurbishment of the program and to make sure the cyclotron provision is fit for purpose over the next five to 10 years. If I look at the diagnostic imaging part of the U.K., I think it's worth mentioning that slightly inflated due to the COVID-19 support. However, the underlying growth is starting to come through very nicely. That's supported by the waiting lists and supporting the NHS. I think the strategy of CDCs in the U.K. is important to note, where there is a move to move diagnostics away from the acute services. I'm pleased to say that the team now have seven CDCs operational.
There's two under construction, and there's a healthy pipeline of conversations being had with the NHS in different regions and also different trusts. There is continuing pressure on the business from the inflationary pressures, but the team continue to work looking at the pricing strategy for the mobiles and also working with the NHS on some of these new contracts to try and minimize some of that risk. If I then move on to Italy. The Italian market represents 27% of the revenues. Again, you can see on the bottom left, over the last six years, there's been solid growth of 5% in volumes. You can see a slight change in the mix, and indeed, you can see the narrowing on the bottom right of the public and the private mix.
This is to my point earlier on where the government, the ASL budgets are being awarded locally to support the waiting lists. This is a common picture that we're seeing across the market. The team in Italy also are looking at the pricing strategy for the private self-pay to help offset some of the pressures that they are seeing, certainly within the energy increases within that market. Maintaining the margin at the moment, and I foresee that to go forward for the year. If we look at the Irish business, I think Pete just mentioned it, represents 13% of the revenue. The growth coming out of Ireland is very, very encouraging at 17.4% average growth rates. What we are seeing, again, a bit like Italy, is that mix change.
To the chart on the bottom right, you can actually see that the public services for scans has overtaken the private. Again, this is the HSE, the government looking to support the challenges that they have now in a post-COVID world with increasing waiting lists. Pleased to say that our teams are utilizing that effectively and working with the governments accordingly. Also, I think worth noting is that we are utilizing the asset base, and you can see the utilization in the charts to the top right, the number of scans per scanner. I think on the next slide, what I want to try and do here is just pull out a case study which supports our CDC strategy. I think it's quite useful just to go back and look at our first significant CDC in the U.K.
Got to remember, we do have CDCs in Italy, but for the U.K. strategy, supporting the NHS strategy with the Mike Richards report, I think it's worth going through this again. This was Colchester, the Turner Diagnostic Center. Called Turner 'cause of the artist was born there. You learn something new every day. I'm pleased to say that this was a GBP 12 million investment. The payback is just over six years. It is achieving the business case, and it's delivering high-teens IRR. The services that we provide, it's a very strong public-private partnership within the local trust, but also the local area of Colchester. We service it with PET/CT. We have two MRI scanners. Indeed, on the first floor, NHS has nuclear medicine facilities and provide SPECT imaging. They're working very closely together.
I'm pleased to say that this is a great example of PPP, Public-Private Partnerships, and the NHS see this as an excellent reference site as well as ourselves. You can see it is a significant investment, but it does provide us with a long-term performance, but also long-term returns, which are very acceptable. I think we've got the 50-year agreement. We are also now seeing that the mobile is required because the two MRIs are at capacity, and this is now supporting conversations of do we increase another MRI scanner into this building? Indeed, do we look at a second CDC within that geography? Because all future overflow capacity up to that 15 years is got to be delivered by Alliance Medical.
I think it's also worth noting that there's a 60-year lease as well, so it's a long-term investment with long-term returns. On the next slide, I think just with that in mind, I just wanted to go through the capital allocations. We do expect and, looking at the previous slides, we will see the average growth rates in activity to continue. Wanted to have a look at our asset base as well, because you can see here that we've got circa 38% of our scanners over eight years old and 33% under three years old. You can start seeing that there's got to be an element of maintenance CapEx, but also the growth opportunities that will come through.
You've seen that in the last couple of years, certainly as we've increased the CT and also looked at replacement of the MRIs during the COVID period. If you look at our PET/CT, the average age of the PET/CT scanners, you can see that there's a rolling program there, but the average age is around seven years, which is no surprise 'cause that's in line with the contract and for PET/CT in the U.K. Like I just highlighted, I think the CDC strategy provides a very good opportunity for us to invest in long-term returns, sometimes slightly lower margins 'cause of the mix, but it is solid returns. Where appropriately, we'll also include PET/CT within these provisions.
The look forward for this year, we expect a circa GBP 60 million investment into our maintenance but also our growth opportunities going forward. On the next slide, I think it's just a good opportunity to see the health of the business and also the returns of the free cash to support the growth opportunities. You can see over the last four years, we've delivered 61% of the EBITDA free cash. This provides us the opportunity to repay debt but more importantly also to make the investments in the growth opportunities. The return on capital employed, you can see in 2022 was 15.8%, and it did dip in 2020 through COVID. Again, if you were to take an average, it is over the 15%. A good area to invest.
Like I said earlier regarding CDCs, these are long-term investments with growth opportunities that deliver long-term returns. We'll continue the strategy of CDC investment and also supporting the growth of the PET/CT and the molecular imaging through increasing the PET/CT provision and ensuring that we've got a cyclotron network across Europe to maintain the delivery of isotopes for that growth. Finally, to ensure that we are a partner of choice with governments, but also our private customers, we need to deliver excellent clinical services. I'm very pleased to say, if you look at the targets and all the measures across the U.K., Ireland, and Italy, we are ahead of target in every measure.
More pleasing, if you look at some of the exceptional performance in the patient experience and friends and family, this is very encouraging. I'm pleased to say there's nothing significant or any concerns within our clinical quality. That concludes the international section in what I think you can see has been a very solid performance for the business. I'll now pass you over to Peter to go through the finances.
Thank you, Mark. Adam and Mark has gone through the operational performance of the business. Although we had robust growth both in S.A. and in the international operations, there are a number of one-off items in the current year and prior year that distorts the comparison of the results. One is the benefit of a COVID contract in the international business in last year. The disposal of Scanmed business in the last year results. We raised in the current year a provision on a dispute with the tax authorities in South Africa on a VAT matter on an interpretation of a legal contract. Although there is no loss to the fiscus, we provided a or raised a provision of ZAR 200 million for that.
Following on from a news flow on disease-modifying drugs and our expected delay of reimbursement for these disease-modifying drugs, we released a contingent payment provision on the LMI transaction of around ZAR 400 million. Also pleasing to announce that we have launched our corporate bond program in the current financial year and issued our first bonds of ZAR 1 billion in total towards the back end of the current financial year. The balance sheet remains strong with net debt to EBITDA below 2x as measured in terms of the bank covenant agreements, well below the covenant of 3.5x. As Pete stated, we declared a final dividend of a year ZAR 0.25, bringing the total dividend for the year at ZAR 0.40.
Trying to unpack the revenue and try to explain what the underlying business performance contributed in terms of the revenue growth. On the S.A. side, if you go graph on the left-hand side, if you start with 100% being last year, you can see on the graph that the activity growth and the tariff change that came through contributed to roughly about 9% on top of 100%. Because of a mix change as explained by Adam, where the COVID contracts or the COVID cases coming through at a higher revenue per patient day, and we're now seeing a more normalized environment as at a mixed impact of -4%. The overall S.A. business grew at 105%. Similar on the international business.
Actually, international business had very good growth. If you add up all the dark blue slides or bars, it's about 9.8% growth in the underlying business. Compared to last year, where the COVID contracts were included, that's got a -6%, bringing down the overall growth only to 102.8%. If one looks at the income statement, as Pete stated, ZAR 28 billion of revenue growing 4.9% against last year. Including in the results, we've got these once-off items that I just spoke to earlier. The total attributable profit down 12.7% to ZAR 1.5 billion.
On a segmental basis, if one looks at the segments, the S.A. operations contributing a 5% growth against last year at revenue and a 15% growth at the normalized EBITDA level. Corporate costs have increased from ZAR 1 billion to close to ZAR 1.3 billion. There's roughly about ZAR 180 million of this that will be recurring going forward of this variance, and the balance will disappear. It's largely related to the I.T. environment, where we're going through a process of establishing a cloud e-environment, as well as implementing a network modernization across our organization, where we're currently carrying duplicate costs, and we do expect that these costs will disappear in the next 12-18 months.
Normalized EBITDA margin for overall for the group at 17.9% against 18.8% in the prior year. International business, the biggest impact due to the COVID, the benefits of the COVID contracts. The growth initiatives contributing close to ZAR 500 million of revenue, and that's only related to clinical trials. We, as we stated in the prior year's results and at the half-year results, we have commenced our investment for success, at the EBITDA level, it was a ZAR 50 million loss. Earnings per share from continuing operations down 7.7% against last year due to the factors as discussed earlier. Normalized earnings per share down 12.2%.
Uh, and that's a similar level of normalized earnings per share from continuing operations excluding amortization, um, due to the acquisition of, um, Alliance Medical in 2016. There's a huge, um, uh, amortization, and effectively we see this as a cash earnings at ZAR 0.127 Per share. Balance sheet. Uh, as I stated, s-balance sheet remains strong with net debt to EBITDA below 2x . Um, we've got available undrawn facilities of ZAR 4.4 billion as at the end of September 2022 , and we do expect in-- to spend about two point nine billion rand in CapEx in the next financial year. Um, this is split about a ZAR 1.4 billion in Alliance Medical, of which roughly about, um, ZAR 800 million is related to maintenance CapEx, um, and the balance is growth CapEx.
In SA, we're gonna spend about ZAR 1.1 billion. Our IT investment in next year is about ZAR 250 million, and we're gonna spend roughly about ZAR 140 million on our growth initiatives. As Pete stated earlier, strong cash generation. We are above our targeted level of where we wanna be, more than 100%. Our working capital investment needs to be less than 5% of EBITDA. We've achieved in total 100%, slightly down against last year, and it's largely due to the timing of some of our creditor payments in the current year. That target will remain at about 95%.
Included in the cash flow, as well as employee share schemes, in the current year, we invested ZAR 217 million with the introduction of a co-investment scheme for senior management, with the intention is to drive performance, to retain the staff, but also then to make sure that the staff has got aligned to shareholder interests. Growth CapEx for the year at ZAR 700 million, and investments that includes the acquisition of non-clinical businesses of EMR and ECR, as Adam explained, in total, just north of ZAR 300 million. At debt levels, our weighted average cost of debt is increased in line with worldwide interest rates moving upwards. Weighted average is now about 3.5% on a post-tax basis. We've got hedges in place.
With the S.A. debt, we've hedged circa about 50%. On a blended basis with international debt, we've got fixed interest rates at around 25% of the debt. The maturity profile we have refinanced our international debt towards the back end of our current financial year, where we've pushed out the repayment of the debt that's maturing in March of 2023. It's now only maturing in 2025. As well as launching the corporate bond program with a three-year note of ZAR 500 million and a five-year note of ZAR 500 million. The inaugural bond was oversubscribed by 4.8 x. We are in the process of flattening the maturity profile from 2025 onwards.
Lastly, the Board has considered the growth opportunities as well as the available cash, the uncertain economic environment and approved a final cash dividend of ZAR 0.25. Gonna hand you now over to Pete to take you through the growth strategy and the outlook.
Thank you, Peter. In summing up the context of today's discussion, I think you can see that the second half of the year's performance certainly demonstrates that the underlying operating activities are starting to return to a post-pandemic norm. Added to which we've got some strong structural tailwinds, where the demand for our services will continue to increase. The story at Life Healthcare is about good cash generation, and one can see over the four-year period depicted on the right-hand side, that over those four years, 50% of the EBITDA that we recorded was generated as free cash after well, little investment in working capital, the payment of our taxes and the necessary maintenance CapEx. Maintenance CapEx in this business is particularly important. It sustains and differentiates us.
It improves efficiencies, improves our clinical outcomes, allows us to modernize our facilities and then also comply with regulations. Growth CapEx, on the other hand, together with acquisitions, will drive our diversification. You have to see these in the two respective boxes. Our CapEx projects are all evaluated against strong, strict internal IRR hurdle rates, and to the extent that we can, excess cash is returned to shareholders. You'll see that 34% of the free cash flow generated during the course of the last four years has been returned to our non-controlling interests and to our shareholders. When it comes to the outlook, one can see that our strategy of revenue diversification and our strategy of moving to a lesser dependency on acute is taking shape.
We have an integrated model that depends on the skill sets that we have in Alliance Medical to be able to differentiate ourselves in our South African market, and the free cash flow is also available of our South African business to be able to explore and expand internationally. We do represent a differentiated set of capabilities as an institution. We acknowledge that there's some inflationary headwinds, but we can see strong volume growth offshore and domestically to offset those challenges. Our robust cash generation will continue, our disciplined capital allocation will continue, and our strict balance sheet management will ensure that we continue to remain resilient and well-positioned to deliver our sustainable returns.
When one thinks about sustainable growth in 2023 and beyond, we can see it in three buckets, grow our existing business, build new offerings, and be recognized as the partner of choice with governments. In growing our business, we can see organic volume growth. We will invest in renal and other value-based care products brought into the market in the first quarter of next year. We'll expand our footprint in oncology. We'll continue with our imaging services strategy. We'll deploy radiopharmacy at scale in South Africa, and we will deliver new products and expand our existing PPPs with government. Internationally, we can also see organic volume growth, particularly evident in the second half. We'll strengthen our partnerships. We will continue to explore new markets, and we will make selected acquisitions.
Our zero cost up-call option on Neuraceq continues to be a conversation which I think we've explored in significant detail over the 12 months, but the next quarter will manifest itself in news flow that will allow us to be more specific as to what we think the outcomes are likely to be. As an organization, our growth opportunities continue to be underpinned by our never-ending care of our people and our continuing investment in technology, data and analytics. The current trend which we've spoken about supports increased activities and higher occupancies in South Africa, and we're seeing growth in paid patient days of between 5% and 6% during the first quarter of 2023.
Government's drive around the world to reduce diagnostic waiting lists is expected to continue to increase demand for Alliance Medical Services, and there we're expecting a growth in total scans in the first half of 2023, somewhere between 5% and 7%. In the context of our exciting growth opportunities, the selected acquisitions of the non-clinical operations in imaging will continue. Our radiopharmacy establishment and the build-out, there'll be more announcements in due course as to how that progress has taken shape. Our expansion into integrated clinical products, which depends on our substantial investment in data and analytics, will also be announced during the course of next year. In the context of expansion internationally, as Mark Chapman said, we'll continue to invest in our additional CDC sites, expand our contracts with governments where possible, and selective acquisitions will be made in Italy.
We as an executive team recognize both the challenges that our staff had to go through during the full year, the excitement that's been generated by the return to post-pandemic normal levels of operating activities in the second half. We believe we have an exciting platform for sustainable growth in 2023 and beyond. I'll hand you back to Judith, and we will take questions. Thank you.
Thank you, sir. Ladies and gentlemen, we will now be conducting a question and answer session. For the benefit of the telephone line attendees, if you'd like to ask a question, please press star then one on your telephone keypad. For the benefit of the participants connected via the webcast, you're welcome to pose your written questions in the question box provided on your screen. At this stage, we have no questions from the online attendees. I will hand over for questions from the webcast.
Okay. Thank you, Judith. There are a number of questions. This is Adam here. Sorry, by the way. I'll start with questions on the cyclotron side. There's a number of questions regarding occupancy levels and what does it look like going forward, as well as how does it translate into, or does it translate into improved margins. I suppose we finished the year with 62% occupancy. H2 was, you know, getting close to 66%, and we'd certainly expect that in 2023 our occupancies be around these levels. We do see an improvement in occupancies going forward.
Whether we get back to a 69%-70% occupancy, it's certainly our intention and certainly a number of levers that Peter spoke about, which we're utilizing to increase occupancies further. You know, it's just a tight and competitive market, but we certainly expect our occupancies to get back to the 66%-70% level as a start. How that translates into improved margins, you know, I mean, I suppose we would like to have a higher margin, but we did see an improvement in H2. You know, you compare it to H1, there was a fairly good move in our margins.
Yeah, it was hampered by the fact that the revenue line is lower because of the sort of normalization of case mix, the decrease in revenue per admission, the impact of the healthcare services division, and also some of the sort of the head office costs which impacts our margins. Going forward, we can continue to drive occupancies. We expect to see further operational improvement coming through in the cyclotron business. There was a question in terms of corporate costs and how much is permanent and how much is temporary, and I think, Peter, you addressed that in terms of your slide. Mark, there were a couple of questions in terms of PET/CT and scan volumes in AMG, and how does that translate into the margins in your side?
Yeah, sure. Thanks, Adam. Yeah, if I take the PET/CT margin, the question was, is it increasing year-on-year? The answer is, it is. Certainly if you look at the margin growth between 2021 and 2022, that increased by 1.7%, and that was including additional investment in additional cyclotron capacity. We do see the growth coming through on the PET/CT. The question was also asked about sort of the overall margins, and I think the PET/CT element doesn't come out overall, which we just talked to. I think we've got to be very mindful that the opportunities with CDCs are there for that long term, like I said earlier, the long-term investment.
Some of those do come at lower margins but is growing the EBITDA overall. Also the reference to lung cancer screening programs, with additional staffing and nursing required to provide that service. However, the absolute EBITDA growth comes through. We are seeing in diagnostic imaging the growth, the volumes, but it is at slightly lower margin overall. I think this is also worth noting that the cost pressures are real, certainly in the Eurozone. Where we do have the facilities, we are reviewing all the pricing. For the self-pay and the mobile business, which it's not tied to tariff, that sort of pricing strategy and review has taken place.
Prices have increased from the beginning of the year and is an area that we'll continue to monitor over the coming months. Thank you.
Okay. Thank you, Mark. I'll come back to a couple of questions on S.A. regarding October and November sort of trading. What we've seen is the continued performance of the business from sort of the quarter four onwards into October, November. Given, considering that we had a fairly quiet start to H1 last year, there's been a sort of good activity improvement and we expect that to continue going forward. October, November looks pretty similar to what we experienced in quarter four of 2022. Question about whether we can get back to 20% EBITDA margin is certainly our intention. You know, certainly something that we are working on hard in the business. Yeah, Mark mentioned the pressure on costs.
Look, in S.A. I think we have a sort of fairly experienced way of managing our costs and, you know, from our side, we will continue to make sure that we, if possible, we can improve our margins. Pete, coming back to you. There's a question about, are we happy owning the AMG business and its entirety long term, or will we consider exiting certain segments of it? If I hand that back to you, Pete.
Yeah, sure. I think in Mark's case study, one can see that the return in sterling by project for the CDCs is an attractive high teens return coming back to us in sterling with payback periods of sort of 6.5 years. We are pleased to allocate capital into such projects. In the context of, I've been asked the question, would we ever sell an asset? For a chief executive to say we'd never sell an asset is irresponsible. I've also asked, are we selling the asset? At this juncture, we're not selling the asset. We continue to invest. We believe in the plan. We can see the growth outcomes coming from the strategy.
We've built a significant barrier to entry by developing that footprint across the key geographies in which we operate. We're delighted to have the asset, and we're delighted to operate it. The answer is, I think, absolutely abundantly clear. We as executives continue to manage the asset.
Okay. Thank you, Pete. There's just a couple more questions regarding the inflation environment. Mark, before I come to you, Mark, from S.A,, I mean, you know, we've been through some heightened inflation this year. I think we managed our costs in that regard fairly well, and we expect that to be the same next year. I mean, we do have challenges. You know, we have increased costs coming through from load shedding, which really came through in quarter four. Actually, in H2, we spent ZAR 20 million more on diesel and petrol we had in the prior year.
Those costs are real, but we do what we can to drive efficiencies in the business to mitigate some of those increased costs. You know, what I'll do is I'll hand over to Mark. Just want to touch a little in terms of your inflation challenge you have in your business, and then your ability to get increases coming through in the revenue line in terms of tariff in certain lines of business.
Yeah. Yeah. Look, I think people probably saw the headline yesterday where inflation in the U.K. has gone over 11%, and it's the highest in 41 years. What measures do we have within the business? I've just touched on, certainly in the self-pay market, where we've done a pricing review and increased the prices from the beginning of the year. The tariff conversation, if you look at the U.K. as an example, which is set, I call it sort of the NHS currency, and that's not just the currency for ourselves operating in that market, but also an average NHS trust, which is experiencing exactly the same pressures with increased utility costs, energy and staffing.
There's no indications on the tariff yet, but there are conversations around the NHS supporting the sort of cost-of-living crisis within the trusts. We've seen some of those benefits come through in the past. I think it's something that we've got to be very close to to make sure that we can maximize that opportunity. I do foresee, with the inflationary pressures where they are, the NHS and other governments will have to reflect that price accordingly to continue to deliver the service. Like I said earlier, it's an area that we're very mindful of. If you look at October, post the pricing increase, we've seen revenues for the month increase, which has helped support some of the additional increase in utility costs, almost net-net.
It's an area that we've got to be very mindful and keep close to. I think there's some questions about our margin expectation. I think for 2023, we are forecasting and trying to make sure that the margin stays static, even though we are experiencing very high inflation across most of the markets.
Yeah. Thank you, Mark. This is a question about whether the COVID costs are now out of the base. I wouldn't say completely, but we certainly really reduced our COVID costs over the period of this year. There's a small element there in terms of some increased costs around PPE and masks, but actually, most of those costs are now sort of out of the base. We at this stage don't see any other abnormal increases expected over the next 12 months outside of, I suppose, a heightened level in terms of diesel and petrol in terms of load shedding. Peter, there's some questions for you.
Debt levels.
Based on what we are forecasting from a cash requirement for growth CapEx and maintenance CapEx and operational performance, we do not expect that our gearing levels will substantially increase. Obviously, the interest cost will go slightly up as the interest rates goes up. As I said, we are hedged roughly on a blended basis about 30% of our overall debt. Therefore, the interest costs won't significantly increase.
In terms of how we will look at funding from a debt perspective, we will do a combination of bank debt and potentially tap the corporate bond market to diversify more of our debt into corporate bonds if need be.
Okay, there's just a question on our normalization on case mix and what impact that has potentially on our H1 2023 revenue. I mean, you know, it's an interesting question actually because there's a little bit of COVID, right, that was stuck in from H1 2022. There will be a little bit of an impact in terms of the revenue, but the decrease in our revenue per admission will become less pronounced as we go forward.
We certainly don't see the impact that we had this year compared to 2021. There will be a much smaller impact. For 2023, I would expect from a normalization of case mix, we won't have the same sort of extremes of, you know, a 16% increase in admissions and a -10% increase in revenue per admission. That decreased revenue will certainly, hopefully fade away over the course of the year as the COVID PPDs drop off.
The last question is, would you consider reduction in beds in S.A.?
I mean, we always consider, we always review our units in terms of their performance, how we can utilize the efficiencies of the hospitals and the beds in different ways and how we can improve them. Again, we always say, I suppose we always have a review about the portfolio of assets. We're still needing beds in S.A., but in terms of whether we think we're the best operators for those beds. If we do, then we certainly wouldn't sell them. If we don't think so, then it would certainly be one of the options we'd consider along with changing how we use those beds in a different manner. I think those are all the questions we will go through.
If there are any others we'll certainly respond to those individuals in writing back to them. I'd like to thank everyone for their time and for attending this morning. From our side, thank you very much. Cheers. Thank you.
Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us. You may now disconnect your lines.