In morning trade the Ramsay Health Care Limited (ASX: RHC) share price has edged higher after the leading private hospital operator announced the successor to retiring CEO Chris Rex.
According to the release the company has hired from within and promoted chief operating officer, Craig McNally, to the top job. Mr McNally's appointment will be effective from July 3.
I think this was a great move by Ramsay. Mr McNally has been with the company since 1988 and is one of its longest serving senior executives.
During this time he has played an integral part in Ramsay's growth strategy, spearheading the company's $1.5 billion brownfield expansions, international market assessment, the acquisition of over 200 hospitals globally, and the development and implementation of new business strategies.
Furthermore, in the past decade he has led the successful expansion of Ramsay's operations in the United Kingdom and Europe. These operations now deliver approximately 46% of total company revenue.
Overall, I feel confident that the appointment will mean business as usual for Ramsay.
Should you invest?
With Mr McNally at the helm I expect to see Ramsay continue to build on the incredible success that Mr Rex has achieved during his time at the company.
So although its shares may change hands at the reasonably expensive multiple of 28x trailing earnings, I believe the appointment ensures that the company remains in a great position to continue its bumper profit growth for years to come.
Especially with ageing populations, longer life expectancy, increased chronic disease burden, and improvements in treatments and diagnostic methods expected to cause an increase in demand for its services.
Overall I would choose Ramsay ahead of rivals Healthscope Ltd (ASX: HSO) and Sonic Healthcare Limited (ASX: SHL), despite the premium.
