Ramsay Health Gains Most in 3 Months After Raising Profit Growth Forecast
Ramsay Health Care Ltd., Australia’s biggest private-hospital operator, rose the most in five months after saying profit will grow almost twice as fast as projected.
Ramsay jumped 4.6 percent, the most since July 19, to A$17.40 at the 4:10 p.m. close of trading in Sydney, the stock’s highest since the hospital operator listed shares more than 13 years ago. Profit may accelerate 22 percent to 24 percent in the year ending June 2011, compared with a forecast last month for 13-15 percent growth, Ramsay said in a statement today.
Lower-than-expected interest costs and expansions at five Australian hospitals completed or scheduled for completion since September are helping bolster profit, Ramsay said. The Sydney- based company bought nine hospitals in Paris in January and plans to make more acquisitions in France, Managing Director Christopher Rex said.
“Our intention is to acquire more and more facilities in France and turn our relatively small group into a major player in that country over the next few years,” Rex said by phone.
The stock has advanced 60 percent this year, making it the best-performer among Australia’s eight-largest publicly traded health-care companies.
“The company always under promises and always manages to over deliver,” said Stuart Roberts, a health-care analyst at Southern Cross Equities Ltd. in Sydney, who rates the stock “buy.”
Profit in the first-half will be 26 percent to 28 percent higher than a year earlier, based on accounts for the five months ended Nov. 30, Ramsay said.
Converted Guest house
Ramsay started in 1964 when founder and Chairman Paul Ramsay bought a Sydney guest house and turned it into a 16-bed psychiatric hospital. Now the company has 116 hospitals and day- surgery clinics in Australia, the U.K., France and Indonesia, with more than 9,000 beds. Ramsay paid 193 million pounds ($300 million) for Capio AB’s U.K. operations in 2007, its first overseas foray.
Profit growth is a result of better-than-expected performance in the Australian business, planned expansions and “slightly better-than-expected results from our U.K. business - - which has performed well despite a weak U.K. economy,” Ramsay said. The company said interest costs were smaller than it expected “as a result of lower-than-anticipated interest rate rises coupled with more effective capital management.”
Ramsay is considering alternatives to bank debt, including selling bonds, as it looks at refinancing loans in 2012, Rex said.
Per-share earnings are expected to increase 18 percent to 20 percent in the current year, the company said.
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