Reporting Season

Ramsay Health Care gets much needed adrenaline shot from H1 results

Thu 29 Feb 24, 1:01pm (AEST)
ramsay healthcare
Source: Shutterstock

Key Points

  • Ramsay Health Care has reported its first half FY24 results
  • Shareholders hope today’s results signal an inflection point for the company’s performance
  • The company has struggled operationally and financially since the failed KKR & Co. takeover in 2022

Shareholders of Ramsay Health Care (ASX: RHC) have faced challenging times since September 2022, when a consortium led by US private equity firm KKR & Co retracted their $88 per share offer.

The deal fell through due to issues surrounding the due diligence of Ramsay Santé, the France-based European hospital group in which Ramsay owns a 52.79% stake. Arguably though, towards the back end of dealings, it fell through due to Ramsay’s management trying to finagle a few extra dollars out of the deal.

When one considers 88 bucks versus a last price closer to 50 bucks before today’s results, it's fair to say shareholders have reason to be a little sore.

Ramsay has struggled in a post-COVID world of supply chain issues, substantially higher labour and operating costs, and unpredictable volume growth as the pandemic continues to disrupt elective surgeries.

But many of these issues are subsiding at the same time Ramsay is getting a better handle on dealing with them. This makes today’s first half FY24 results release potentially a pivotal one for the company, and shareholders, going forward. Let’s dive in!

Ramsay’s H1 FY24 results overview

Key operating metrics

  • Revenue $8.16B +4.7% vs A$7.89B consensus = BEAT ✅

  • EBITDAR $1.12B -1.3% vs $1.02B consensus = BEAT ✅

  • NPAT $140.4M -28% vs $129.8M consensus = BEAT ✅

Key takeaways

  • Positive developments on renegotiations with Australian health insurers, ongoing, but the company expects these will assist in clawing back inflationary costs

  • Negotiations with the French government regarding additional funding for Ramsay Santé are ongoing, the company is positive but can’t quantify the impact yet

  • FY24 margin pressures continue, but beyond 2024, improvement is expected as spending on tech upgrades and operating efficiencies moderate, benefits will start to reduce costs by FY28

  • Management continues to investigate strategies to improve shareholder returns and unlock value across its portfolio

Outlook / Guidance (FY24)

  • Earnings growth to improve in H2, company expects mid-single digit revenue growth vs +7.0% consensus = IN LINE ⬅️➡️

  • Capex $800M-1.0B vs $990.0M consensus = IN LINE ⬅️➡️

  • Inflationary pressures will continue to negatively impact the margin recovery, given reimbursement structures do not adequately reflect input price increases


Today’s first-half results are a modest but decisive beat of consensus estimates. Investors will be encouraged by commentary around progress on stabilising margins as well as indications of an acceleration of growth in the second half, and the confirmation of FY24 top-line earnings growth numbers.

Broker watch

Most brokers were circumspect heading into the results, so this creates the possibility for both ratings and price target upgrades to flow. Price targets prior to today’s results ranged from Goldman Sachs’ $49.60 to Jardens’s $61.26 with an average price target of $53.59. The consensus rating prior to today’s results was NEUTRAL. 

As usual, we’ll have all the major broker reactions for Ramsay including ratings and price target changes in tomorrow’s Evening Wrap.


Ramsay Health Care (ASX-RHC)
 So far so good on the response to RHC’s first half FY24 results

The last candle is still live at the time of writing, and therefore lacks the all-important close. But, assuming the candle can close around current levels or push higher and remain near the high of the session, it is a substantial and important showing of excess demand for RHC shares.

Long white candles, which close near the highs of the session demonstrate a major shift in thinking towards a company’s earnings outlook. This shift is reflected in the demand-supply environment as substantial price appreciation as demand overwhelms supply (i.e. creating the white body of the candle), while a close near the high indicates unfulfilled excess demand.

Unfulfilled excess demand is likely to continue to act in the market in future sessions, increasing the probability of further price increases.

Another key factor in the RHC chart (assuming it occurs) is the close above several points of historical resistance. $54.10 is a major historical trough that has defined the top of the trading range since it was broken in August 2023. If the breach of $54.10 is successful by today’s close, it potentially paves the way for the setting of a new trading range with $54.10 now acting as support.

The dynamic resistance of the long-term downtrend ribbon is also being challenged. If RHC can also close above this zone today, it will be a strong first signal that the long-term downtrend is changing. 

Support moves to today’s low of $49.45, but this really only confirms previous historical support at $48.95. The next major supply point is likely to be the major historical peak at $59.54.

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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