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Reporting season analysis: Ramsay Health Care

Reporting season analysis: Ramsay Health Care

Ramsay Health Care (RHC) earnings boosted by recent French acquisition

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By Expert Panel 27.08.2015

REPORTING SEASON: Ramsay Health Care (RHC)

Brought to you by CommSec

 

Figure 1: Ramsay Health Care 12 month chart

 

Ramsay Health Care (RHC) earnings boosted by recent French acquisition

- Ramsay Health Care (RHC) posted a below consensus $385.5m annual profit for the 12 months ended 30 June. The result was driven by an 8% lift in revenue across its Australia/Asia operations (group’s biggest earner) and RHC’s recent French acquisition.

- RHC operates 212 hospitals across 5 countries and employs ~60,000 people. The group is now the leading hospital operator in France after finalising the acquisition of Générale de Santé on Oct 14. Revenue in France rose to €1,749.5m (~A$2,780) & accounted for close to 40% of the group’s EBIT. RHC is in the process of acquiring a further nine hospitals in Lille (France).

- Its Australia/Asia operations generated $4.1bn in revenue and $521.4m in underlying earnings, making up more than half the group’s revenue. Locally, there continues to be rising demand for health care and more than 47% participation in health insurance. RHC operates ~70 private hospitals in Australia. Increasing consumer wealth, further potential acquisitions and the emergence of China offer the group growing opportunities across the region. RCH is pursuing an opportunity to operate five hospitals in Chengdu, China. Revenue rose by 8% across its UK operations to £413.2m.

- Looking ahead, RHC is targeting core profit growth of 12%-14% for FY2016. RHC shares are higher on the result in a rising market and have improved by ~7% this calendar year. RHC shares have surged by 490% August 2008.

 

You can see all of CommSec's reporting season analysis by clicking here.

Steven Daghlian, Market Analyst, CommSec

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