The Ramsay Health Care Limited (ASX: RHC) share price was on form again on Thursday.
The private hospital operator's shares ended the day 1.5% higher at $72.41. This leaves them just shy of their 52-week high of $74.12.
Why did Ramsay's shares push higher on Thursday?
This morning Ramsay Health Care held its annual general meeting in Sydney.
At the event the company provided shareholders with a reminder on its performance in FY 2019 and its expectations for the new financial year.
In case you missed it, in FY 2019 Ramsay reported a core net profit after tax of $590.9 million. This was a 2% increase on the prior corresponding period.
This led to core earnings per share of 258.8 cents, an increase of 2.1% on the 279.8 cents recorded in FY 2018.
This result included the acquisition of pan European health care company, Capio. The addition of Capio means Ramsay is now one of the largest private health care operators in the world. Combined, it delivers high quality care to 8.5 million patients that pass through its facilities each year.
Management spoke positively of the acquisition and continues to believe it is a good strategic fit. This is because it has a number of high performing businesses and is a market leader in Scandinavia where it operates hospitals, specialist clinics and primary care units.
Capio also has a large footprint in France, which consolidates Ramsay's market leading position in the country.
It also notes that Capio has been a leader in driving value-based healthcare, digitalisation, and has also been at the forefront in the delivery of elective care in specialised clinic settings. This is something management plans to leverage in its other markets.
It is partly thanks to this, increasing demand, and brownfield projects, that management is positive on its outlook for FY 2020.
FY 2020 guidance.
At the event, Ramsay confirmed that it is targeting core earnings per share growth on a like-for-like basis of 2% to 4% in FY 2020. Though, after factoring in new lease accounting standard AASB16, core earnings per share will be down 4% to 6%.
A better guide to its performance this year will be its core EBITDAR. This is because this metric will not be impacted by the new lease standard. Core EBITDAR growth of 8% to 10% is forecast for FY 2020. This guidance appears to have gone down well with the market.
