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Medibank Private Limited (ASX:MPL) Loses ADF Garrison Contract

Medibank Private Limited (ASX:MPL) has announced that it has lost the ADF Garrison Health Services contract.
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Jaz Harrison

Jaz is a Staff Writer for Rask. She is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.
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Medibank Private Limited (ASX: MPL) has announced that it has lost the ADF Garrison Health Services contract.

Medibank Private is Australia’s largest private health insurer. It also operates the low-cost AHM brand.

What contract has Medibank lost?

Medibank provided healthcare services to the Australian Defence Force (ADF) for the last six years. It served 60,000 permanent and 20,000 reserve ADF personnel.

According to Medibank, the operating profit from the Garrison Health Services contract in FY18 was around $30 million, which compares to $548.8 million of total operating profit in the year. This represents just over 5% of profit last financial year.

The health insurer also said it expects exit costs of around $5 million in the second half of FY19. However, it doesn’t expect any material “stranded” costs.

Medibank will continue to operate the contract until it finishes at the end of FY19 on 30 June 2019.

After coming out of a trading halt, the Medibank Private share price is down nearly 6% in response to this news according to CommSec. 

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