NIB delivered a solid 16% increase in profits for the first half of this financial year but the shares are clearly not particularly excited. The trouble for NIB (NHF) and Medibank (MPL) is they are facing structural headwinds within the private health sector as Australians are taking up less cover, a trend which wont be helped by the government stimulus ending. Also the next election could see the sector used as a proverbial carrot by the parties through limiting premium increases, not a great position for a business to face i.e. having a government tell them what they can charge. This also has ramifications for the hospital sector and our holding in Ramsay Healthcare (RHC) which we are conscious of.
MM is neutral NHF.
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