Ramsay reports $2.7b Australian revenue

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The healthcare giant says its community pharmacy franchise network is performing well, but also reports “challenging conditions” in Australia, citing the bushfires and coronavirus threat

Ramsay Health Care has reported total revenue up 22.5% to $6.3 billion across the group in its half-year financial results, released on Thursday.

Its group core net profit after tax (Core NPAT) was $273.6 million for the six months ending in 31 December 2019.

Within Australia, revenue was up 3.9% to $2.7 billion and EBITDAR was up 2.4% to $530 million on the previous corresponding period.

The rise in local revenue was lower than in other markets, for example the UK where Ramsay saw revenue up 8.7% to £267.6 million (AU$525 million) and a whopping 44.3% rise in revenue in continental Europe to €1.9 billion (AU$3.2 billion).

“Our businesses in the UK, continental Europe and Asia performed well during the period but this was partially offset by more challenging conditions in Australia,” said Ramsay Health Care Managing Director Craig McNally.

“Overall activity growth in Australia remains subdued compared to the long-term average,” he said.

Meanwhile for the full year, Ramsay Australia is on track to complete $168 million worth of projects in the private hospital space.

“We expect the softer operating environment we have been experiencing in Australia to continue,” said Mr McNally.

“While we remain optimistic about the long term, this subdued volume growth, in combination with recent events including the bushfires and coronavirus, create an uncertain operating environment in the short term.

“Coronavirus may indeed create an impact for our global business and we are monitoring the impacts on supply chain and admissions.”

He said growth remained a key focus and management would continue to monitor and investigate acquisition and expansion opportunities, as well as partnerships with government and private healthcare providers.

Ramsay’s expansion into the pharmacy space has noticeably slowed over the past few years.

While the group said it was “committed” to expanding its pharmacy franchise network in 2018, it also indicated it was temporarily slowing the roll-out of the network to focus on supporting infrastructure, notably IT and resources.

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

In a statement to AJP on its plans for the coming year, Mr McNally said: “Ramsay remains committed to the pharmacy strategy and all parts of this business – hospital dispensing, hospital retail and the community franchise network – are performing well.

“We continue to invest in technology, systems and resources to better support and network this business, and to improve the service we are providing to our hospitals, franchisees and consumers.”

The group has had further wins in the pharmacy space over the past year.

Proceedings brought by the Pharmacy Guild against Ramsay Health Care were summarily dismissed in August last year by the Supreme Court of NSW.

The Guild was seeking a declaration that Ramsay Health Care and Ramsay Pharmacy Retail Services held a financial interest in five specific Ramsay-branded NSW pharmacies.

In February this year, the words “Ramsay Pharmacy” were successfully trade marked by the group subject to an endorsement, after first applying three years ago.

Prior to this, Ramsay Health Care had relied on a trademarked logo that included the words alongside an image/device.

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