Ramsay Health Care’s boss is confident the ageing population and the private hospital operator’s extensive operations in Australia, the UK and France will shield it from any government reforms to the local industry.
The federal government is conducting five separate healthcare reviews, including ones into the Medicare benefits schedule, private health insurance, and prostheses which has spooked some investors about the industry’s growth prospects.
“It’s all on, and I know it’s created a frisson of excitement through the country as people have all sorts of views on what these things mean,” said managing director Christopher Rex after delivering strong interim financial results and upgrading the group’s annual earnings guidance.
The extensive MBS review, which is still in the very early stages, is expected to make “zero difference” to Ramsay and any other private hospital player, Mr Rex said.
He also downplayed the impact of the other four reviews on the company, given the ageing population and growing demand for health care.
At present, more than 10 per cent, or 580 million people, of the global population are now over 65 years-old. The global population aged 60 or over is expected to more than triple by 2050, Mr Rex said.
Population growth will also drive healthcare spending and the need for improved access, he added.
Ramsay operates 221 hospitals across six countries, but its main business is in Australia. The company admits around three million patients annually, and is ranked of the top five private hospital operators in the word.
Ramsay booked a 17.5 per cent jump net profit to $224.8 million for the six months ended December 31 as more capacity came on board. It also expanded in France through an acquisition.
Mr Rex said the Australian business had an excellent first half, recording solid organic admissions growth and positive returns from its brownfield capacity expansion program.
“We are continuing to expand our facilities to meet demand and to this end, we have completed $126 million worth of new developments so far this financial year,” Mr Rex said.
Ramsay forecast Thursday that its core profit after tax, the company’s preferred measure of profitability, and core earnings per share will be up 15-17 per cent in fiscal 2016.
That compares with Ramsay’s previous forecast profit guidance of between 12-14 per cent growth.
Core profit after tax in the first half rose 16.2 per cent to $237.4 million.
Ramsay shares gained 70 cents, or 1.12 per cent, to $63.00.
RAMSAY PROFIT SOARS
*Interim net profit rose 17.5pct to $224.8m
*Revenue up 25pct to $4.18b
*Interim dividend of 47 cents a share, up from 40.5 cents.