Ramsay announces $481m profit and new pharmacy venture
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Private hospital operator Ramsay Health Care delivers $481 million in net profit and a dividend of $1.19 a share for fiscal 2016.
Australia's largest private hospital operator Ramsay Health Care (ASX: RHC) on Tuesday reported core net profit after tax (NPAT) of $481.4 million for fiscal 2016, up 17 per cent from $412.1 million in fiscal 2015.
It also announced a dividend of 72 cents a share for the second half of fiscal 2016, fully franked--a 19 per cent increase on the same period last year. This brings the total dividend for the year to $1.19 a share, an increase of 17.8 per cent over fiscal 2015.
"The Ramsay result was good across all metrics," said Chris Kallos, a senior equity analyst at Morningstar. Revenue grew to $4.4 billion in Australasia (8.8 per cent), $742.5 million in the UK (4 per cent) and $3.2 billion in France (27.3 per cent).
With 223 hospitals spanning Australia, Europe and Asia, Ramsay added to this total during year, including the completion of nine hospital acquisitions in Lille, France in December 2015.
In addition, the group finalised more than $300 million worth of new developments in fiscal 2016, committing a further $200 million to future developments in Australia and the UK.
Ramsay's managing director, Christopher Rex, also announced the launch of Ramsay's new pharmacy initiative.
"We have commenced a strategic plan to extend our services beyond the hospital walls ... [and] are in the process of establishing strategically located community pharmacies across Australia, concentrating initially in close proximity to our hospitals," Rex said.
This will build on Ramsay's existing portfolio of more than 200 hospital pharmacy dispensaries across its global footprint. It will involve the acquisition of existing external pharmacies, including their licenses to operate.
Once rebranded as Ramsay pharmacies, they will provide specialised medication management, around-the-clock medicine advice, and other community-based services and clinics.
"The move into pharmacies is an interesting one," Kallos said. "That also opens the door further, with the [community pharmacy] space evolving with the support of the government, in terms of more consultative, allied healthcare-type services that are not currently offered in hospital pharmacies."
"They have a long way to go, only currently rolling this out across 19 pharmacies, but it will be a good complementary business to its existing model."
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Glenn Freeman is Morningstar's senior editor.
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