RHC – UBS rates the stock as Neutral

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.

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Checking Up On: Ramsay Health Care

Managing hospitals is a tough gig. The Government and private health insurers exert considerable influence in setting the price for each procedure, which means that hospital operators must have a complete focus on limiting costs in order to maximise earnings. Ramsay Health Care Ltd (ASX: RHC) has excelled in this environment, but we wonder if further margin expansion is possible?

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