Australia’s largest private hospital operator, Ramsay Health Care, has produced a result like so many other companies on the ASX 200 (outside the big iron ore miners) in the current June 30 reporting season – OK but nothing to boast about.
In fact, the result was a bit like the Woolworths results out yesterday – adequate but nothing more.
The Ramsay 2018-19 result was influenced by the $1 billion purchase of Capio, a European hospitals and clinics business in 2018.
That can be seen from the revenue figures for 2018-19. Ramsay announced revenue of $11.4 billion for the 12 months ended June 30, up 24.4% increase on the prior year and boosted by the acquisition of Capio (which operates in Sweden, Norway and France).
Eliminating Capio and Ramsay’s revenue grew a more sedate 5.3% from 2017-18.
Ramsay posted a core net profit after tax of $590.9 million, which was up 2% increase on the 2017-18 year. Excluding Capio core net profit after tax was up 2.5% to $593.9 million which was driven by earnings growth of 6% in its Australian hospitals.
On a statutory level, net profit after tax was $545.5 million, up from $388 million last year.
Ramsay announced a final dividend of 91.5 cents a share, up 5.8% on the June half of 2017-18.
This took full year dividend to 151.5 cents a share, an increase of 5.2% on 2018.
“Ramsay Australia’s private admissions growth remains above the industry growth rate, demonstrating our market leading position,” Ramsay’s managing director Craig McNally said in the release.
There was patient growth in admissions for cardiac services and cancer care, the company said.
Regulatory changes allowing private health insurance members to upgrade their cover without serving some for psychiatric care contributed to “strong growth” in mental health patient volumes.
Ramsay is also the largest private hospital operator in France and Scandinavia, has a major presence in the UK, and a growing business in Asia.
For the year ahead, Mr. McNally said the company expected stronger patient growth off the back of opening new hospitals in Australia and improvements in the UK, where earnings fell in 2019.
Looking at its businesses and Australia dominates: there was a 4.1% lift in revenue to $5.182 billion and a 6% increase in EBITDA to $950.5 million.
In Europe, the company reported a 51.7% increase in revenue to €3,401.1 million and a 32.6% lift in EBITDA to €32.6 million thanks to the Capio acquisition.
Excluding this acquisition, revenue would have edged up 2.6% and EBITDA would have been up a mere 1.8%.
In the UK there was a 4.7% increase in revenue to £444.3 million but a 2.8% dip in EBITDA to £99.8 million.
Ramsay shares dipped 0.6% to $67.14.
