Private hospitals operator Ramsay Health Care has reaffirmed guidance of profit growth of 18-20 per cent for the full year, after lifting first half net profit by 46 per cent.
Ramsay also said today that it was looking to further expand in the United Kingdom and France.
Ramsay shares were 4 cents higher at $12.59 this morning.
Ramsay has reported net profit for the first half of the 2009/10 financial year of $78.6 million, up from $53.75 million in the prior corresponding period.
The result included an adverse impact of $12.5 million in specific items, mostly related to the annual deferred non-cash rent expense from Ramsay’s United Kingdom hospitals.
Core profit after tax from continuing operations, excluding specific items, was $91.11 million, up 32.7 per cent from the year before.
Ramsay said the continued strength of its underlying business, expansion prospects in Europe and rising demand for healthcare left the company well placed for future growth.
‘‘Barring unforeseen circumstances, Ramsay reaffirms its recently upgraded guidance for core NPAT (net profit after tax) growth of 18 per cent to 20 per cent for the group for the 2010 financial year, translating to core EPS (earnings per share) growth of 10 per cent to 12 per cent,’’ the company said in a statement.
Ramsay said it was focused still on growing its operations in the United Kingdom and was looking to expand further, too, in France, following the acquisition there of a 57 per cent stake in private hospital operator Groupe Proclif.
The acquisition of Proclif is expected to be completed by the end of March 2010, adding to group earnings per share by the 2012 full year.
‘‘The highly-fragmented French market presents opportunities for consolidation through acquisition of additional hospitals, and the business is underpinned by a strong regulatory framework, funding support and an ageing population driving growth in demand for acute care,’’ Ramsay managing director Christopher Rex said.
Mr Rex said Ramsay had senior debt facilities in place until November 2012 which gave the group the flexibility to fund future growth beyond its current hospitals upgrade program.Ramsay said the first half result was driven by a strong operating performance at its Australian and UK operations, cost efficiencies achieved in the UK and lower interest costs.
‘‘Ramsay has delivered an exceptionally good first-half result due to the combined effect of cost efficiencies and strong organic growth which reflects the resilience of the private health care industry,’’ Mr Rex said.
‘‘In Australia and Indonesia, EBITDA (earnings before interest, tax, depreciation and amortisation) margins improved from 13.6 per cent to 14 per cent driven by continued improvement in cost management, increased hospital admissions and an improved patient mix,’’ Mr Rex said.
‘‘In the UK, the result reflects our forecast improvement in operating costs for the business but also continued growth in NHS (National Health Service) volumes.’’
Mr Rex said Ramsay’s hospital upgrade program remained on track, with more than half the approved funds spent and projects being completed on time and on or under budget.
Ramsay’s revenue for the six months to December 31, 2009 was $1.69 billion, up 4.6 per cent on the prior corresponding period.
The company declared an interim dividend of 18.5 cents per share, fully franked, up from 16.5 cents, fully franked, in the first half of the 2009 financial year.
AAP
