Private hospitals group, Ramsay Healthcare is looking to raise a lot of money - $1.4 billion - very quickly, confirmation that the fallout from the COVID-19 pandemic is hitting every sector of the economy.
While the impact of the pandemic on Ramsay Health Care’s hospital income is uncertain most brokers agree, for the longer term, the hospitals are quality assets, catering to the demands of an ageing population.
Yesterday saw a host of downgrades and other poor news from ASX companies of all sizes - all understandable in the current terrible investment climate as the combination of the coronavirus pandemic and the idiotic price war in oil between Russia and Saudi Arabia wreck market confidence and share price.
Australia’s largest private hospital operator, Ramsay Health Care, has produced a result like so many other companies on the ASX 200 (outside the big iron ore miners) in the current June 30 reporting season - OK but nothing to boast about.
The broker has looked at the SARS event to provide a guide to when elective surgery may be able to start up again, but the problem is SARS was all over quite quickly and thus provides little precedent for Covid-19.
Ramsay's UK NHS admissions rose 1.8% year on year in August -- a good result, the broker notes, given an 8.0% increase in FY19 -- however 12-month rolling growth eased to 3.0% from 3.4%. Current admissions and a tariff increase bode well for NHS revenue in FY20, but the increased use of agency nurses to handle the workload reduces margin expectations, the broker points out.