This article is from the Australian Property Journal archive
RAMSAY Health Care has lifted its core net profit by 1% to $290.8 million and revenue soared by 14.9% to $5.1 billion in the first half year.
Excluding the Capio acquisition, Core NPAT increased 1.8% to $293.2 million. The company’s statutory net profit, after adjusting for net non-core items after tax, of $270.1 million, was up 9.6% on the previous corresponding period.
The result was driven by the Australian business where revenue increased 4.8% to $2.6 billion. Australia EBITDA was up 5.7% to $484.6 million. Equity accounted share of Asia joint venture net profits up 29.4% to $11.0 million.
In the UK, revenue rose 1.6% to £209.6 million but EBITDAR declined 9.2% to £44.8 million. In continental Europe (inc Capio since 7 November 2018) revenue jumped 25.7% to €1.3 billion and EBITDAR increased 19.1% to €231.3 million.
The group declared an interim dividend 60 cents fully franked, up 4.3% on the pcp.
Ramsay Health Care managing director Craig McNally said the company was on track to deliver on its guidance for FY19 after an overall solid first half performance.
“Our Australian operations delivered 5.7% overall EBITDA growth on the previous corresponding period on the back of volume growth and an ongoing focus on achieving operational efficiencies.
“In the UK, while Q1 was challenging and impacted overall earnings for H1, there were good signs of recovery in NHS 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,”
He said the acquisition of Capio contributed to Ramsay Générale de Santé (RGdS) from 7 November 2018 resulting in increased revenue (up 25.7%) and EBITDAR (up 19.1%) performance.
Excluding Capio, RGdS delivered a half year result which was above expectations, with revenue up 2.5% and EBITDAR up 5.3%.
“While Capio had a dilutionary impact on Core NPAT in its first weeks of ownership, we are in the early stages of establishing and implementing our integration plan and we are confident that synergies will be realised. In the short term we are focused on prioritizing the new executive governance structure for Capio, harmonizing operations in France, divesting non-strategic assets and securing the relevant procurement and other identified synergies,” he added.
Ramsay’s Australian brownfield development programme continues strongly with $151 million worth of brownfields completed in the first half including 169 gross beds (124 net beds) and 10 procedural suites. FY19’s full year forecast of completed projects is estimated to be $242 million. A further $70 million in capacity expansions were approved by the Board during the six months to 31 December 2018.
McNally said after a challenging period there were more positive signs emerging in the UK in terms of both price and volume growth.
“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.
“In Australia, we maintain a market leadership position in terms of the strength and diversity of our portfolio with our focus on delivering high quality services. While there are short term challenges for the private healthcare sector, the long-term outlook for the sector is positive.
“Barring unforeseen circumstances, we reaffirm our FY19 Core EPS growth of up to 2% (including Capio).” McNally concluded.
Australian Property Journal
