Company result

Ramsay do good communications. Instead of handwaving vaguely, in their commentary, about COVID impacts on next half earnings, they make an effort at relative quantification.


Markets hate uncertainty, and reward clarity, even if it is at the margin, and there a loads of companies that are making minimal to no effort to guide the market. We get it, absolutely, but there’s a gulf of difference between the above, and what else we’ve seen, over reporting season.

Otherwise, the result is about as good as you can ask, for a business that is impacted by delays/deferments of surgical procedures due to lockdowns.


Government contracts defray the earnings/revenue impact (for example, the $417.6m cost recovery agreement in place with the NHS) due to reduced elective procedures and non-COVID admissions…

…which we feel is somewhat misunderstood by the market, given how weakly the stock has traded on news of lockdowns. It isn’t a perfect offset, but given the circumstances, it is a very strong pillar of support to revenues and ultimately to profitability.

“Revenue from governments under COVID-19 support contracts” reflects payments made under arrangements with state governments in Australia and the NHSE in the UK to make Ramsay’s facilities and services available to support public health systems during the year.

RHC results commentary

The balance sheet remains in good shape (with the now defunct Spire acquisition, RHC will focus on regular brownfields capex to grow future revenues), and cashflows are strong.

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