Ramsay Upbeat Over Levy
Sydney Morning Herald
Tuesday August 26, 2008
THE private hospital operator Ramsay Health Care says changes to the Medicare levy surcharge that will make private health insurance less attractive are merely a "bump in the road" and will still allow it to match this year's earnings per share growth.
The operator of hospitals in Australia, Britain and Indonesia expects EPS to increase 10 to 12 per cent this financial year after yesterday reporting it had 11.8 per cent "core" EPS growth in the year to June 30, at the upper end of its guidance range.The private health sector is grappling with the effects of changes in the Medicare levy surcharge, which applies to taxpayers withoutprivate insurance.In the May budget the Government announced a plan to increase the income threshold before the surcharge needs to be paid to $100,000 a year for singles and to $150,000 for couples.Ramsay, whose hospitals rely significantly on privately insured patients, says the fundamentals for private health provision are strong given an ageing population and the Government's reluctance to increase pressure on the public health system.Ramsay booked a net profit after tax of $92.2 million, down 13.9 per cent on a year earlier. But after discontinued operations, specific items and the amortisation of intangibles are removed, the "core" profit after tax rose 11.5 per cent to $123.1 million. Revenue for the year was up 27.4 per cent to $2.7 billion and earnings before interest and tax rose 20.4 per cent to $254.7 million.The company will pay a fully franked final dividend of 17.5c on October 15, bringing its full-year dividend to 32.5c, up 12.1 per cent on the previous year. Its shares rose 35c to $10.25.
© 2008 Sydney Morning Herald
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