Shares in Australia's largest hospital operator, Ramsay Health Care Limited (ASX: RHC), soared 5% within the first few hours of the ASX opening this morning following yet another bumper profit result.
In the year ended 30 June 2015, Ramsay reported a 49.9% revenue increase and a profit of $385.5 million, up 27% on the prior corresponding period.
The Australia/Asia and the United Kingdom businesses both grew revenue and profit healthily. However, it was the French business that took the crown in 2015.
Thanks to the merger of Ramsay Santé and Générale de Santé, in which Ramsay Health holds a 50.9% controlling interest, Ramsay Health is now France's largest private hospital group. During the period, the business recorded a revenue increase of 440% and a 391% increase in earnings before interest and tax.
Ramsay Health CEO Christopher Rex said the result demonstrated the company's ability to deliver on strategy, organic growth, developments and excellent cost management.
"We have successfully developed a global portfolio of hospitals, strategically located to meet the growing demands and health care needs of the communities they serve and operated cost efficiently and according to The Ramsay Way philosophy of people caring for people," Mr Rex said.
Shareholders will be rewarded with a final, fully-franked, dividend of 60.5 cents per share – up 18.6% from last year. Payable on 24 September 2015, this final dividend takes the full-year distribution to 101 cents – up 18.8% year-over-year.
Outlook
"Our comprehensive and sustainable growth strategy has positioned Ramsay Health Care as one of the largest and most successful private hospital operators in the world," Mr Rex said. He added the group has a proven growth strategy, given its ability to become the market leader in both France and Australia.
Ramsay Health is targeting profit growth of between 12% and 14% in the coming year.
Is it time to buy Ramsay shares?
Ramsay is a fantastic Australian business with first-rate defensive and growth characteristics. However, shares in the company are richly priced to reflect these qualities. Therefore, prudent investors are advised to hold off buying in, for now.
