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Ramsay Profit Rises on Cost Cuts, Gain in Patients

Aug. 26 (Bloomberg) -- Ramsay Health Care Ltd., Australia’s biggest private-hospital operator, boosted full-year profit 39 percent after cutting costs and attracting more patients.

Net income rose to A$148.3 million ($132 million) in the 12 months ended June 30, from A$106.5 million a year earlier, Sydney-based Ramsay said in a statement today. Sales gained 5.5 percent to A$3.4 billion.

Ramsay, which operates 116 hospitals with more than 9,000 beds in Australia, the U.K., Indonesia and France, said ageing populations and rising expectations for standards of care will drive net profit, which will expand between 13 percent and 15 percent in the 12 months ending June.

“Ramsay don’t look stretched delivering these numbers,” Andrew Goodsall, a health-care analyst at UBS AG in Sydney, said in a note today. Goodsall said the result and profit forecast were in line with his expectations.

Ramsay rose 0.7 percent to A$13.64 as of the 4:10 p.m. close in Sydney trading, compared with a 0.8 gain in the benchmark S&P/ASX 200 Index. The stock has advanced 25 percent this year, the most among the 11 companies on the S&P/ASX 200 Healthcare Index.

Revenue in Australia and Indonesia combined rose 7.2 percent to A$2.7 billion, accounting for almost 80 percent of the total. Sales in the U.K. gained 10 percent.

The company generated revenue in France for the first time since buying a 57 percent stake in Groupe Proclif SAS for 87 million euros ($110 million) in January, and said it may buy more hospitals in the country.

‘Exceptionally Pleasing’

“This is an exceptionally pleasing result because it shows that our hospitals are performing strongly across the group and that they are being run efficiently,” Managing Director Chris Rex said in the statement.

Ramsay has spent about A$460 million of a A$680 million plan to expand hospital capacity in its home country, seeking to tap demand for private beds as more people buy health insurance and the population ages. Ramsay said it continues to look for opportunities to expand capacity in high-demand areas in the U.K.

“Ramsay remains confident about the growth prospects of its U.K. business which continues to perform well in a challenging economic environment and where the new government has firmly indicated a growing role for the private sector in the delivery of health care,” the hospital operator said.

The company will pay a full-year dividend of 43.5 Australian cents, rising from 38 cents last year.

To contact the reporter on this story: Simeon Bennett in Singapore at sbennett9@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net.

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