Ramsay/RHC

Ramsay Healthcare, the big private hospital operator, is out with its result.

Not bad, it would seem; a sales and EBITDA beat, at first glance.

Consensus EPS is, I think, merely at street rather than the beat highlighted; when results have a number of moving parts, it can be hard to tell what analysts have adjusted for, and what they have not.

The operational recovery continues, with good volume growth, but inadequate pricing, given inflation, would be the short summary. You can see from the below volumes growing at 5.4% (essentially, not quite a perfect proxy) and price growth at 2.4% (clearly too low).

Gearing has dropped from over 3.2x ND/EBITDA to ~2.3x ND/EBITDA, post the sale of Sime Darby. SD was a well-run shop, but defending the balance sheet was arguably more important, and RHC have done that. Gearing is now at an acceptable level, and not threatening.

The Australian arm is performing quite well “back to pre-COVID trends, in many instances” and the UK has also much improved (especially the Elyesium business, mental health focussed hospitals). So at least half the business (by geography) is now firing, with another quarter (speaking very loosely) sold for good money.

It is Europe that remains the problem, overall, with pricing outcomes simply inadequate, but at least for now the news is on-net much better than before. Still a big step up to hit FY guidance, although mgmt paint an optimistic picture, and I think the stock has seen the low’s for now.

More to follow.

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