Shareholders including the country’s biggest charitable foundation, will be very happy with the annual result and higher dividend announced yesterday by Ramsay Health Care (RHC), the country’s largest private hospital operator and a growing international operator.
The foundation was set up with the 36.2% stake held in Ramsay by founder Paul Ramsay who died in May.
That was worth $3.3 billion at the time – at yesterday’s closing price of $52.12 (up 1.5%) the foundation’s holding is now worth more than $3.7 billion.
Now after a solid result for the year to June as well as a sharp rise in dividends, shareholders, including the foundation will enjoy a 20% rise in income for 2013-14.
The company turned the 14% rise in full year profit into a 21% boost to total dividend payout for the year, a move that will take total payout for the year to 85c a share, up from 70c in 2012-13.
The final for the 2013-14 year was boosted to 51c a share, equal to a payout of around 50% for core earnings (which is a bit less than the ratios of some other industrials which are up around 60% to 80%).
Net profit after tax of $303.8 million was boosted by strong growth in its Australian hospitals and the acquisition of French psychiatric operator Medipsy.
Excluding the effects of one-off items, the company’s preferred measure of core net profit after tax rose 19% to $346.2 million.
The underlying result topped market expectations of net profit after tax of $335 million, and was up from $266.4 million in the same period last year.
Revenue rose 17.5% to $4.9 billion, while core earnings before interest and tax rose by nearly 20% to $580.4 million.
The company said it expects core net profit and earnings per share to grow 14% to 16% in the current 2015 financial year.
RHC 1Y – Ramsay sees strong growth ahead
"Given the strong industry fundamentals and the continuing implementation of our successful growth strategy, barring unforeseen circumstances, Ramsay is targeting Core NPAT and Core EPS growth for the Group of 14% to 16% for FY15 (assuming 9 months of Générale de Santé)," CEO Christopher Rex said in yesterday’s statement.
It said it will achieve this with "brownfield developments and prudent acquisitions, the hallmarks of Ramsay’s growth strategy, will remain a priority for the Company in FY15 while it maintains focus on improving performance at its existing hospitals".
"With the finalisation of the GdS acquisition expected in late September 2014, we look forward to becoming the premier private operator in France and integrating GdS into our global operations,” Mr Rex said in yesterday’s statement.
"Ramsay Health Care has now established a strong position in a number of overseas markets. Our ability to manage hospitals across borders and cultures has been well demonstrated and this expertise is invaluable as we continue to canvas further opportunities in new and existing markets.
"We also look forward to producing increased benefits from our successful capacity expansion programme in Australia given the continuing strong demand for health services in this country," he added.
