Shares of Healthscope Ltd (ASX: HSO) have lifted by 1.4% today after the private hospital operator reaffirmed its full-year earnings targets and reported a half-year net profit of $58.6 million. This compares favourably to the $27.8 million net loss the company recorded in the prior corresponding period.
Indeed, the stock has been a boon for those who bought shares during its float last July. From an offer price of $2.10, the stock has rallied 35% to $2.84.
The Results
For the six-months ended 31 December 2014, Healthscope's revenues jumped 6% to $1.23 billion which were driven by strong performances from its Hospitals and International Pathology businesses.
The Hospitals division grew revenue by 6.3% while EBITDA (earnings before interest, tax, depreciation and amortisation) lifted 11.1%. Meanwhile, double-digit EBITDA growth was recorded in the International Pathology division, although the Australian pathology business continues to operate in a "challenging industry environment".
Excluding the costs associated with Healthscope's $3.6 billion float last year, the Group's operating EBIT (earnings before interest and tax) rose 10.1% to $142.9 million for the half, while earnings per share hit 3.7 cents, or 4.8 cents on a pro-forma basis.
For the full-year, Healthscope expects to achieve operating EBITDA of $387.3 million and EBIT of $284.7 million. It declared a 3.3 cent per share dividend (unfranked), which will be paid out on 24 March 2015.
Should you buy Healthscope Ltd?
Given the rate at which Australia's population is both expanding and ageing, healthcare companies such as Healthscope could make for excellent long-term investments. Investors could also consider other operators such as Sonic Healthcare Limited (ASX: SHL) and Ramsay Health Care Limited (ASX: RHC), which also boast solid growth prospects.
