Ramsay Health Care earnings results

CommSec CommSec

 

1 March 2019

Results ($m)

Half Year 2019

Half Year 2018

Change

Net Profit after Tax (NPAT) 

 290.8

288.0

+1.0%

Revenue 

5,107

4,445

+14.9%

Consensus

4,775

 

 

EBITDA 

728.6

663.8

+9.8%

Consensus

702.0

 

 

EBIT 

 509.9

470.4

+8.4%

Interim Dividend ($)

 0.60

0.575

+4.3%

Ramsay Health Care (RHC) reaffirms FY guidance after reporting earnings lift 

 

Results

  • Private hospital operator Ramsay Health Care (RHC) has reported a group core net profit after tax (Core NPAT) of $290.8 million for the six months to 31 December 2018 (1H19) an increase of 1% on the previous corresponding period (pcp). Excluding the European Capio acquisition, Core NPAT increased 1.8% to $293.2 million. 

Drivers

  • Ramsay Australia saw pre-tax or EBITDA growth of 5.7% to $484.6 million on the pcp driven by volume growth and removing costs. Revenue rose 4.8% to $2.6 billion. The development pipeline continued over the half with $151 million worth of brownfields completed including 124 net beds and 10 procedural suites.
  • In the UK, the business was challenged by a weak first quarter in which revenue rose 1.6% to £209.6 million, although pre-tax earnings fell 9.2% to £44.8 million. Looking ahead RHC said "there were good signs of recovery in National Health Service volume growth in Q2 and we are optimistic this will continue into H2 FY’19. We are also anticipating a positive announcement regarding the 1 April 2019 tariff.”
  • In Europe, excluding the Capio acquisition, Ramsay Générale de Santé (RGdS) saw revenue up 2.5% and pre-tax earnings up 5.3%. Taking the purchase into consideration, revenue rose 25.7% and pre-tax earnings were up 19.1% performance.
  • RHC said since the purchase of Capio it had acquired “a better understanding of the business and it is clear there are substantial synergies and opportunities. We expect Capio to be Core EPS accretive within two to three years but, given the timing of acquisition and delays to processes related to completion, we now expect it to be slightly EPS dilutive to the Ramsay Group in FY’19.”

Dividend

  • RHC declared an interim dividend of 60 cents per share, fully franked - up 4.3% on pcp. The dividend record date is 7 March 2019 with a payment date on 29 March 2019.

Outlook

  • RHC Managing Director Craig McNally said the company was on track to deliver on its guidance for FY19 after an overall solid first half performance. He highlighted near term headwinds in the domestic market , while remaining positive about the long term prospects for the private healthcare sector. In its European operations its immediate focus is on selling non- core assets and streamlining costs as it integrates the Capio business with Ramsay Générale de Santé (RGdS). RHC cited improving conditions in the UK, with "more positive signs emerging in the UK in terms of both price and volume growth. In relation to fuul year guidance : “Barring unforeseen circumstances, we reaffirm our FY’19 Core EPS growth of up to 2% (including Capio).”

Share price

  • RHC shares rose 5.9% in response to the results and are up about 10% year to date. 

Tags:

RHC

Start trading today with Australia's leading online broker

Join now >

Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non-guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 ("the Bank") and both entities are incorporated in Australia with limited liability.
This information is directed and available to and for the benefit of Australian residents only and is not a recommendation or forecast.

This information has been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason, any individual should, before acting on the information on this site, consider the appropriateness of the information, having regards to their own objectives, needs, financial and taxation situation, and, if necessary, seek appropriate independent financial, foreign exchange and taxation advice. CommSec, and its related bodies corporate, do not accept any liability for any loss or damage arising out of the use of all or any part of this information. We believe that this information is correct as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness.

 

Disclaimer

This site is directed and available to and for the benefit of Australian residents only. © Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and both entities are incorporated in Australia with limited liability.

By clicking on the "Download the CommSec App" buttons above, you will be directed to itunes.apple.com or play.google.com. These sites are not affiliated with CommSec and may offer a different Privacy Policy and level of security.

Top