The Medibank Private Ltd (ASX: MPL) share price has been amongst the best performers on the ASX 200 index on Thursday following the release of its full year results.
In afternoon trade the private health insurer’s shares are up 3.5% to $3.50.
How did Medibank perform in FY 2019?
In FY 2019 the company posted a 1.9% increase in group operating profit to $528.5 million and a 3.1% lift in group net profit after tax to $458.7 million.
This was driven by a 2.3% increase in premium revenue, the addition of 15,100 net resident policyholders, and a small reduction in its expense ratio to 8.7%.
This positive form allowed the Medibank board to declare a fully franked final 7.4 cents per share dividend and a 2.5 cents per share fully franked special dividend. Management advised that the latter was due to a reduction in its capital range from 12%-14% to 11%-13% of premium revenue.
The company’s chief executive officer, Craig Drummond, was pleased with its performance.
He said: “This is a good quality result, demonstrating that the investment we have made to improve the value and service proposition for our customers is making our business stronger and more sustainable in a challenging market environment. The ongoing strong recovery of the Medibank brand has seen policyholder growth in all four quarters of the financial year for the first time in four years.”
Looking ahead, Mr Drummond believes the company is well-positioned for growth.
He commented: “Looking forward to 2020, the Health Insurance business is positioned to grow, and we are well placed to become a leader in the in-home care market. Our strategy is unchanged and remains driven by the needs of our customers. We continue to pursue opportunities to differentiate and deepen our offer for customers and transform into a broader healthcare company.”
The chief executive officer expects flat overall PHI market volumes in FY 2020 and Medibank brand volumes stabilise by the end of FY 2020 and grow during FY 2021.
Hospital and extras utilisation growth is also expected to remain around current levels for FY 2020, with prostheses expenditure expected to add modestly to claims growth compared to FY 2019.
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