Australian Investment Blog

ASX:RHC 30/08/2018

Ramsay (ASX:RHC) outlook mixed at the result

Stock

Ramsay Health Care (ASX:RHC) $54.40 as at 30/08/2018

Event

Hospital owner/operator Ramsay (ASX:RHC) has been sold off today despite what appears to be a solid result with reasonable, if not messy guidance. The result was broadly in line with expectations, although they beat on the EBITDA line which was largely driven by margin expansion in the Australian business – once again the best segment for Ramsay, growing revenues by 5% but EBITDA +12% over the year. ASX:RHC financial reports and analysis on ramsay

ASX:RHC financial reports and analysis on ramsay

Guidance for FY19 flagging a higher than usual tax hit and increasing interest was mixed with core EPS guided to 2% growth while the market was looking for a mid-single digit uplift. However, stripping out the tax and interest components, EBITDA growth as guided to 4-6% with the market currently placed at the lower end of 4%. Ramsay Health Care (RHC) Chart

Market Matters Take/Outlook

The Ramsay result was more or less as expected, however it was disappointing to not see commentary on the bid for French business of Capio which it is competing for with France’s Vivalto Sante. We see the outlook as better than the market is giving the company credit for. We like RHC as long as it can hold the $53 level. Read our outlook on the healthcare sector here.

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