Update: Medi­clinic International

The Daily Telegraph - Business - - Business - Russ Mould is in­vest­ment di­rec­tor at AJ Bell, the stock­bro­ker

A promis­ing trad­ing update and rally in the shares to around 700p ini­tially left this col­umn in the pink with re­gard to its anal­y­sis of Medi­clinic in March, but a messy set of full-year fig­ures and im­mi­nent de­mo­tion from the FTSE 100 will be leav­ing in­vestors in the pri­vate clin­ics op­er­a­tor feel­ing a bit more queasy.

The full-year num­bers were ad­mit­tedly mixed. The an­tic­i­pated im­prove­ment in the South African and Middle Eastern op­er­a­tions was over­shad­owed by the cost of reg­u­la­tory changes at the Hirs­lan­den di­vi­sion in Switzer­land, where the com­pany booked £644m of im­pair­ment charges and write­downs. They left the group’s head­line fig­ures in the red even if the un­der­ly­ing num­bers were per­fectly solid.

Rel­e­ga­tion from the FTSE 100 could prompt some tech­ni­cal sell­ing as tracker funds cut their ex­po­sure but that will pass – and if any­thing it cre­ates an op­por­tu­nity to buy stock cheaply, as long as the busi­ness’s fun­da­men­tals re­main sound, as this col­umn’s ex­pe­ri­ences with Bab­cock, the sup­port ser­vices group tipped in De­cem­ber last year, sug­gest.

Questor says: buy

Ticker: MDC

Share price at close: 543.6p

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