Ramsay Health Care share price higher following AGM update

The Ramsay Health Care Limited (ASX:RHC) share price is closing in on a 52-week high after its AGM update…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ramsay Health Care Limited (ASX: RHC) share price was on form again on Thursday.

The private hospital operator's shares ended the day 1.5% higher at $72.41. This leaves them just shy of their 52-week high of $74.12.

Why did Ramsay's shares push higher on Thursday?

This morning Ramsay Health Care held its annual general meeting in Sydney.

At the event the company provided shareholders with a reminder on its performance in FY 2019 and its expectations for the new financial year.

In case you missed it, in FY 2019 Ramsay reported a core net profit after tax of $590.9 million. This was a 2% increase on the prior corresponding period.

This led to core earnings per share of 258.8 cents, an increase of 2.1% on the 279.8 cents recorded in FY 2018.

This result included the acquisition of pan European health care company, Capio. The addition of Capio means Ramsay is now one of the largest private health care operators in the world. Combined, it delivers high quality care to 8.5 million patients that pass through its facilities each year.

Management spoke positively of the acquisition and continues to believe it is a good strategic fit. This is because it has a number of high performing businesses and is a market leader in Scandinavia where it operates hospitals, specialist clinics and primary care units.

Capio also has a large footprint in France, which consolidates Ramsay's market leading position in the country.

It also notes that Capio has been a leader in driving value-based healthcare, digitalisation, and has also been at the forefront in the delivery of elective care in specialised clinic settings. This is something management plans to leverage in its other markets.

It is partly thanks to this, increasing demand, and brownfield projects, that management is positive on its outlook for FY 2020.

FY 2020 guidance.

At the event, Ramsay confirmed that it is targeting core earnings per share growth on a like-for-like basis of 2% to 4% in FY 2020. Though, after factoring in new lease accounting standard AASB16, core earnings per share will be down 4% to 6%.

A better guide to its performance this year will be its core EBITDAR. This is because this metric will not be impacted by the new lease standard. Core EBITDAR growth of 8% to 10% is forecast for FY 2020. This guidance appears to have gone down well with the market.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing end to the trading week for investors this Friday.

Read more »

A young boy points and smiles as he eats fried chicken.
Share Gainers

3 ASX All Ords shares smashing the benchmark this week

Investors are sending these three ASX All Ords shares rocketing 18% to more than 29% this week. But why?

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Alliance Aviation, BHP, Boss Energy, and Orthocell shares are racing higher

These shares are ending the week on a positive note. But why?

Read more »

Man with backpack spreading his arms out and soaking in the sun.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing session for investors today.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a nervous hump day session for ASX investors today.

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Why Collins Foods, DroneShield, Star Entertainment, and Virgin Australia shares are charging higher

These shares are having a good time on hump day. But why?

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors enjoyed a strong recovery day this Tuesday.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

CBA shares hit another all-time high. Can they surpass $200 in 2025?

CBA shares have a tailwind pushing up their price that has nothing directly to do with the bank's business performance.

Read more »