Ramsay blames NHS strain for profit warning
SYDNEY: Australia’s biggest private hospital operator Ramsay Health Care Ltd took a charge and cut its outlook for profit growth on a slump in business from Britain’s National Health Service (NHS), sending its shares tumbling to a four-year low.
It marks a rare stumble for a stock analyst favourite that has seen net profit climb every year for a decade with a string of offshore acquisitions. Ramsay is also the biggest private hospital operator in France.
British government strategies to dampen non-essential use of public health were having ”a significant negative impact on volumes, despite the significant and increasing number of people in the UK awaiting treatment”, Ramsay said in a statement.
Theresa May has promised to raise NHS funding by £20bil once the country split from the European Union but ”we do not anticipate immediate benefits for us and expect operating conditions in the UK to remain challenging”, it added.
The Sydney-based company cut its forecast for underlying profit growth to 7%, from between 8% and 10%, for the year to endJune, and wrote down the value of six UK hospitals by another A$125mil.
Ramsay shares fell as much as 13%, their biggest intraday fall in more than a decade. It was down 7% by mid-session, giving it a market value of about US$8.5bil.
Ramsay also blamed weaker trading conditions in its home country for the profit warning. Thousands of Australians are cancelling private health insurance policies every month, according to official figures, as people return to the public system to avoid rising premiums and limits to the services they can access. — Reuters