Australia’s largest private hospitals operator, Ramsay Health Care is maintaining its full-year guidance despite fears Brexit could hit its UK business and add to ongoing problems in Australia.
Net profit in the six months ended December 31 rose 9.6% to $270.1 million from $246.54 million in the year-earlier period. Core net profit edged up a tiny 1% to $290.8 million from the year-earlier $288 million, the company said in a statement to the ASX yesterday on the final day of the December half-year/full-year reporting period.
Ramsay reaffirmed its guidance for core earnings-per-share growth in 2018-19 of 2% after revenue for the December half rose 14.9% boosted by the acquisition of Capio’s French operations by Ramsay’s local subsidiary last year.
Ramsay lifted its interim dividend 4.3% from 57.5 to 60 cents a share.
The shares were up 5.9% to $64.78.
Excluding the Capio purchase, Ramsay reported a modest 5.1% lift in revenue to $5.1 billion and a 7.2% lift in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $728 million.
“Our Australian operations delivered 5.7 percent overall EBITDA growth on the previous corresponding period on the back of volume growth and an ongoing focus on achieving operational efficiencies,” Ramsay chief executive Craig McNally said yesterday.
“While there are short term challenges for the private healthcare sector, the long term outlook for the sector is positive,” he said.
Ramsay said there are positive signs emerging from the UK in terms of both price and volume growth which has continued into the current financial 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,” said Mr. McNally.
Of its billion-dollar Capio acquisition, Mr. McNally said there were substantial synergies and opportunities for Ramsay, but new asset won’t contribute to earnings per share growth this year.
“We expect Capio to be core EPS accretive within 2 to 3 years,” he said yesterday.
