Private hospital and pathology provider Healthscope Ltd (ASX: HSO) on Tuesday handed down its first set of interim results as a re-listed company.
With Healthscope only listing via initial public offering (IPO) in July 2014 and given its operations compete with the likes of Sonic Healthcare Limited (ASX: SHL) and Ramsay Health Care Limited (ASX: RHC) these interim results will be closely scrutinised.
For the six months ending 31 December 2014, the group achieved a 6% increase in revenues to $1.2 billion, a 9.1% increase in operating earnings before interest, tax, depreciation and amortisation (EBITDA) to $193.2 million and a net profit after tax of $58.6 million.
Two of the major highlights from the half included an 11.1% increase in the Hospitals division EBITDA to $166.1 million thanks to improved "bed stock" and a 17.1% jump in International Pathology EBITDA to $28.6 million. The major detractor from the overall results was a weak performance from the Australian Pathology division, which recorded a 23.4% fall in EBITDA to $9.3 million due to a challenging industry environment.
Shareholders on the books are set to receive an unfranked 3.3 cent per share dividend with the stock trading ex-dividend on 5 March and payment due to be received on 25 March.
Outlook reaffirmed
When the prospectus for the IPO of Healthscope was issued, a forecast for operating EBIT of $284.7 million was given – management has reaffirmed this forecast.
The share price has rallied nearly 30% since it first traded, providing IPO investors with massive outperformance compared with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). The rallying share price has sent the market capitalisation of Healthscope to $4.85 billion. With net debt of $837 million, Healthscope is trading on a prospective enterprise value to EBIT ratio of 19.9x. That's a hefty multiple but not out-of-line with some of its health sector peers and suggests the market believes Healthscope can achieve very strong earnings growth over the coming few years.
