No joy at Tuesday’s AGM for shareholders in Ramsay Health Care as demanded to know when they can expect the company to resume paying dividends.
The chair and the CEO both tapped danced their way around a straight answer, citing the continuing uncertainty caused by COVID-19 in its big foreign markets in the UK and Europe.
Ramsay suspended its full-year dividend in August (when announcing its 2019-20 results), explaining it was “not appropriate” given pandemic disruptions.
The company has earlier paid an interim of 62.5 cents a share.
Ramsay shares fell 0.3% at $65.08 on a day when the wider ASX enjoyed a string 82 point gain.
Investors clearly took the lack of news on a resumption of negatives negatively.
Yesterday’s AGM saw chairman Michael Siddle asked for more details on the outlook, including a straightforward question from one investor: “Where’s my dividend?”
Mr. Siddle said the company couldn’t provide earnings guidance given “the uncertainties of the current operating environment”.
“We are very keen to reinstate the dividend and will do so as soon as we can,” Mr. Siddle said.
Management will consider this prior to the February half-year results, he said (Ramsay will not be alone in that timing)
In a trading update earlier this month, Ramsay warned the juggle of coronavirus second waves was having a sustained impact on the business.
The company has signed a series of agreements with the UK’s National Health Service (NHS), the French government, and Australian state governments to help support the public systems in the fight against COVID-19.
Ramsay says it has treated more than 7,000 COVID-19 cases in France, Italy and Sweden.
CEO Craig McNally said In the UK, there had been a slow rebound in surgery volumes as well as “an increase in demand for other services such as oncology flowing from the public system”.
Mr McNally said Ramsay is considering its options to work with governments across the world to offer its services to reduce public hospital wait times amid the COVID-19 recovery.
In a trading update issued on November 13, Ramsay said its “operating results continued to be impacted by the COVID-19 pandemic in 1Q FY’21. Surgical restrictions, regional outbreaks and lower demand for some services, combined with higher costs associated with operating in the current environment, have all impacted the results.
The core Ramsay Australia business reported a 1.5% increase in total revenue during the first quarter, reflecting a 1.7% increase in surgical admissions and lower non-surgical activity.
A major drag on its performance was its Victorian operations. Excluding Victoria, total Australian revenue was up 6.6% and surgical admissions rose 8% over the prior corresponding period.
These operations also weighed heavily on Ramsay Australia’s first quarter earnings before interest, taxes, depreciation, amortisation and restructuring or rent costs (EBITDAR), which was lower than the prior corresponding period.