Ramsay reports $11.4B revenue – up 24% on last year

Ramsay Pharmacy shopfront

The “market-leading” healthcare group added just five retail pharmacies to its portfolio in Australia, after slowing down rollout of its pharmacy network

Ramsay Health Care has announced a core net profit after tax of $590.9 million for the year ending 30 June 2019 (up 2% on the previous year) and a revenue of $11.4 billion (up 24.4%).

Australia-specific revenue was up 4.1% to $5.2 billion and EBITDA was up 6% to $950.5 million.

“This was a positive result given the volatility of the period, which included a Federal election and the uncertainty created by the potential for private health insurance premium caps and a productivity commission review,” said Ramsay Health Care Managing Director Craig McNally.

He said the Australian business had commenced a restructure of its operating model in response to increased cost pressures across the industry.

Meanwhile the company had slowed down the rollout of its pharmacy network as signalled in last year’s financial report.

In August last year Ramsay said it was “committed to expanding [its] pharmacy franchise network”, however it added that it had “temporarily slowed roll-out in order to strengthen the team and supporting infrastructure, to grow this [pharmacy] business sustainably for the long term”.

This week Mr McNally said: “As previously indicated, we slowed the roll-out of the Ramsay Pharmacy franchise network as we continued to focus on enhancing the capability of the network through investments in infrastructure, notably IT and resources.

“This resulted in only five new retail sites added in financial year 2019.”

This brings the total number of its Australian pharmacy franchises to 59, including the 18 Malouf pharmacies it added to its network in December 2017.

However the Ramsay website so far only lists 43 of its Australian pharmacies.

Ramsay recently had a legal victory in the pharmacy ownership space, with the proceedings brought against the business by the Pharmacy Guild of Australia summarily dismissed by the Supreme Court of NSW earlier this month.

The action was brought by the Guild and three other NSW plaintiffs, who were seeking a declaration that Ramsay Health Care and Ramsay Pharmacy Retail Services hold a financial interest in five specific Ramsay-branded NSW pharmacies.

This would have amounted to declarations of criminality of conduct, as contravention of the National Law.

Justice Julie Ward, Chief Judge of the Supreme Court NSW Equity Division, found it was “not appropriate” for the proceedings to be brought in the context of a civil suit.

In the release of Ramsay’s financial results, Mr McNally highlighted that despite the temporary halt in the pharmacy network, its business continues to grow.

“Today Ramsay Health Care operates across 11 countries, treating 8.5 million patients in circa 500 locations and employing almost 80,000 staff,” he said.

“In the financial year 2019, a focus on growth and enhancing our operating model saw Australia and Continental Europe achieve earnings growth.

“We continue to be well placed in these markets with market-leading positions in Australia, France and Scandinavia, which enables us to achieve improved economies of scale, best practice, cost leadership and innovation,” he said.

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