Ramsay Health Care lifts first half profit 9.6pc
Multinational hospital operator Ramsay Health Care says it is on track to meet full-year guidance after lifting first-half profit 9.6pc to $270.4m.
Multinational hospital operator Ramsay Health Care says it is on track to meet full-year guidance after lifting first-half profit 9.6 per cent to $270.4 million.
Ramsay management is targeting 2 per cent growth in earnings per share for the full year, having booked a 14.9 per cent revenue increase for the six months to 31 December.
This was boosted by the acquisition of Swedish hospital operator Capio, by Ramsay’s French subsidiary.
Core net profit, excluding the Capio acquisition, rose 1.8 per cent to $293.2 million and Ramsay raised its interim dividend from 57.5 to 60 cents, fully franked.
Shares jumped almost 6 per cent today, closing at $64.80. Shares are now trading in line with Morningstar's $65 fair value estimate.
Morningstar equity analyst Gareth James said Ramsay's Australia division, which makes up about 70 per cent of the group, performed well, increasing market share and delivering earnings before interest, tax, depreciation and amortisation growth of 5.7 per cent.
"The market had been concerned that the high cost of health insurance was deterring people from visiting private hospitals, but this result alleviates this somewhat," he said. "Ramsay currently boasts a good portfolio of hospitals across the country."
Ramsay's acquired Capio in October last year via its 51 per cent-owned French subsidiary Ramsay Générale de Santé. Ramsay now has plans to restructure the group and reduce costs.
James said the acquisition helped diversify and deepen Ramsay's European footprint, where it now operats clinics and hospitals in Sweden, Norway, Denmark, France and Germany.
Ramsay managing director Craig McNally said the UK segment was back on track after a challenging period.
“There is some way to go in the UK, and Brexit may pose some challenges in the short term, but we are pleased that volume growth is returning, and tariff looks likely to improve,” McNally said.