Ramsay Health Care Limited (ASX: RHC) has posted a marginal increase in underlying net profit after tax, while analysts say headwinds in its Australian and UK businesses will weigh on the stock.
The private hospital operator reported full-year revenue of $17.8 billion, up 6.8%, while underlying net profit after tax from continuing operations was $305.3 million, up just 1.7%.
Ramsay shares tumbled more than 12% on the news, down $4.93 to $33.16, while RBC Capital Markets analysts said headwinds in the UK and Australian divisions would weigh on the stock.
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Transformation on track
Ramsay managing director Natalie Davis said the company was taking "decisive action" to improve returns and had made good headway on its transformation plans.
"Our multi-year transformation is focused around three key strategic priorities: transformation of our market-leading Australian hospital business; strengthening capital discipline and improving returns across the portfolio; and evolving our culture of 'people caring for people' to innovate and drive performance," Ms Davis said.
"In Australia, performance in our core private hospitals business is improving, driven by activity growth and improved indexation from private health insurers.
"To drive revenue growth and operational efficiency in the Australian business, we have established our 'Big 5' hospital initiatives for delivery in FY26."
Ms Davis said Ramsay's UK hospitals business delivered an improved performance in FY25, "benefiting from growth in NHS admissions and higher levels of case acuity".
"Elysium continues to experience significant challenges, and having completed our rapid performance diagnostic in H2, we are taking decisive action to take cost out of the business.
"Ramsay Santé continues to be impacted by reduced government funding support for the private health system in France, with performance in the Nordics being driven by improved results in Sweden.
"We are progressing the evaluation of strategic options in relation to our 52.8% shareholding in Ramsay Sante, with advisors Goldman Sachs. Ramsay remains committed to optimising shareholder returns and is reviewing a range of options."
Ramsay said it had made key leadership appointments in July 2025 in its Australian business, which would support the delivery of its Australia 2030 strategy and ongoing transformation.
Outlook negative for Ramsay
RBC Capital Markets said the outlook for Ramsay was negative in light of the results.
"FY25 revenue was in line with expectations, while underlying EBIT and NPAT were slight beats to market expectations," RBC analysts said in a note to clients.
"The final dividend was also higher than expected. However divisionally, the Australian and UK businesses had weaker margins which were offset by better performance from the France business.
"We expect the stock to underperform due to the weakness in the Australian and UK earnings, headwind from a new funding agreement at the Joondalup campus and higher than expected net financing costs."
Ramsay will pay a fully-franked dividend of 40 cents per share on September 25 to shareholders on the books on September 3.
