The Ramsay Healthcare Ltd (ASX: RHC) share price is edging higher today on the back of the company’s FY20 results. Here’s my take on the report.
Ramsay’s difficult year
Ramsay Healthcare has borne the brunt of the COVID-19 pandemic with mass shutdowns of elective surgeries hitting what was a strong year to February 2020.
The company reported a 43% fall in net profit to $337 million and cancelled its final dividend in light of receiving government support and undertaking a well-timed capital raising; the right decision in the circumstances.
Revenue actually increased 7.3% as the European expansion was included in portfolios, but particularly behind the strength in the company’s Australian operations, up 2.2% to $5.1 billion.
All was on track until February, however, management noted the company was breakeven on an EBIT basis from March until June as the UK, French and Australian governments paid for access to their hospital beds.
Taking a closer look
Hidden in the results is a comparison of lockdown approaches across the globe, with the Australian and UK governments offering little support after June, the French government guaranteeing support until the end of December and Asia generally not placing a stop on any elective surgeries.
The result was a 4.9% decline in UK revenue, but a huge expansion in waiting lists, and a 14.3% increase in European revenue, with Ramsay treating some 7,000 COVID-19 patients thus far.
My take: Difficult year, but well placed for a boom in surgery and treatment post-pandemic.
For a detailed write-up on Ramsay’s result, check out this article from Rask Media’s Jaz Harrison: Did Ramsay (ASX:RHC) report a healthy FY20 result?