Ramsay Health Care scraps target for FY25 profit growth
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The news: Private hospital operator Ramsay Health Care says it no longer expects to report profit growth during the 2025 financial year after recognising a $291 million impairment on its UK operations.
The numbers: Ramsay said it will recognise total impairments of $305 million on its UK businesses, with a post-tax impact on the group of $291 million.
The company will also release a non-cash tax provision of $64.5 million, related to its acquisition of the European private car provider Ramsay Santé in 2015.
Ramsay said it expects to report first-half net profit after tax between $150 million and $160 million, up from $140.4 million a year earlier.
The context: Ramsay said in November that it expected to report net profit growth in FY25. However, the group no longer expects growth in NPAT and non-controlling interests from continuing operations this financial year.
Ramsay said the value of its mental health services subsidiary Elysium has reduced by an amount "broadly in line with the goodwill generated by the acquisition of the Elysium business", which finalised in 2022.
The valuation has been driven down by "continued occupancy challenges in mental health rehabilitation and neurological services, as well as a slower than planned ramp up in occupancy at new sites", the company said.
Ramsay also noted that a 30% rise in UK living wages since the Elysium acquisition has challenged margin recovery assumptions.
What they said: "We acknowledge the challenging performance in the Elysium business since acquisition and are taking immediate steps to increase focus on operational excellence and improve performance," said Ramsay managing director and CEO Natalie Davis.
"The Elysium team delivers high quality clinical care across its services, and we will rapidly review how we reposition the business in response to structural shifts impacting profitability."
The source: ASX announcement
