A year ago, Healthscope (HSO) surprised investors by producing a disappointing full year earnings performance that missed its own guidance. That sent the shares down 5% to just under $2.50.
Yesterday a 19% rise in earnings and the shares were up 1.7% and closed at $2.95.
The company was re-floated by private equity two years ago at $2.10 a share.
The company is the country’s second-largest private hospital operator, and directors attributed the higher profit in 2015-16 to a solid performance in those hospitals and strong New Zealand pathology margins.
Revenue for the group was up 6% to $2.29 billion.
Chief executive Robert Cooke said the strong result was underpinned by the robust performance of the group’s hospitals and New Zealand pathology divisions. Hospitals earnings were up 8.3% while NZ pathology earnings jumped 22%.
“Our hospitals division delivered good earnings growth and margin improvement from underlying operations and successfully renewed multi-year contracts with our largest health fund partners, Bupa, Medibank and HCF, providing funding certainty for future periods,” Mr Cooke said.
Mr Cook says the new financial year will “continue to be a year of significant capital investment” in its hospitals, which is expected to deliver 762 additional beds and 43 operating theatres by the end of fiscal 2019.
The company completed seven hospitals in 2015-16, equating to 163 additional beds and nine new operating theatres.
It currently has 10 projects under construction in Victoria, NSW, Queensland and the Northern Territory.
Healthscope will pay a final 3.9 cents a share dividend, bringing the year’s total distribution to 7.4 cents share, up 5.4% from 2014-15’s 7 cents a share.
