Update: Mediclinic International
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
Share price at close: 543.6p