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#Management
Added 4 months ago

David Thodey, former CEO of Telstra, bought over $200k worth on-market at $52 and change in a disclosure filed last week.

Good to see...

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#ASX Announcements
Added 5 months ago
  • SALE OF RAMSAY SIME DARBY JOINT VENTURE
  • REACHED AGREEMENT ON SALE OF ITS 50:50 JOINT VENTURE IN ASIA, RAMSAY SIME DARBY HEALTH CARE
  • DEAL FOR MYR6,056M
  • EXPECTS NET PROFIT AFTER TAX ON SALE OF ITS SHARE OF JOINT VENTURE WILL BE APPROXIMATELY A$630M
  • DEPENDING ON TIMING OF COMPLETION, FY24 NET INTEREST COSTS EXPECTED AT LOWER END OF A$570-600M
  • PROCEEDS TO RAMSAY EXPECTED TO BE ABOUT A$935M AND WILL BE USED TO PAY DOWN DRAWN DEBT OF FUNDING GROUP


The company has announced the sale of its Asian JV, for what looks like a good price. The proceeds will be used to pay down debt, which is also a good move. These operations only contribute a low single digit % of operating profits, so the divestment should be a positive for management to focus on the more important divisions.

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#Management
stale
Last edited 7 months ago

How much egg is on the Ramsay board's collective faces after spurning KKR's approach @ $88? They looked after themselves at the expense of shareholders, and have now destroyed an enormous amount of value - the most I can think of in absolute terms on the ASX, especially for a large and established company like this.

The tomatoes may follow at this year's AGM :)

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#Bull Case
stale
Added 10 months ago

This is a company that I have been following for several years now and the price goes through cycles of growth as they expand overseas with private health care. The current situation as we "come out" of COVID is unclear but I see the potential for an upward cycle as people are able to return to using the medical system again. Will this trend return to previous highs or become a value trap? Only time will tell, but I am happy to take a small position to help follow the company closer.


An investor that I follow, Jun Bei Liu, had RHC as her recommendation focus for 2023 on Livewire, quoted below:

Jun Bei Liu: The best-performing stock for 2023 in my view is going to be Ramsay. We're a big believer in the premium asset that it holds. Its share price is very depressed because of its earnings, which COVID has impacted. It is one of the very few companies that is still yet to recover to pre-COVID levels. We know the waiting list is very long for public hospitals, and that generally translates straight into private hospital volumes. And it is already on the way up. This company will double its earnings and grow phenomenally just recovering from COVID. 

And then on top of that, there's a huge backlog they need to work through, which will take years. The company is trading almost at its asset value. Clearly, the private equity bid stuffed up the valuation somewhat, but now it's back below the pre-private equity bid value. And to me, this is a really good stock to hold, particularly in a slowing economic environment as its earnings are going to grow regardless of the economic outlook.

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#KKR
stale
Added one year ago

Looks like Ramsay is going to try and realise the value from the property portfolio.

RHC AU: Ramsay Health Care is believed to be planning a move to sell a selection of its hospitals to real estate landlords after suitor Kohlberg Kravis Roberts abandoned a $20bn buyout proposal earlier this year.


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#Overreaction
stale
Added 2 years ago

Again the market Baby is throwing a fit here - me thinks -for long term holders this might serve a decent entry point if you believe in the long term tailwinds for this business.

Surely the value of RHC has not dropped by 10% just because the clock has turned around 1 full circle - 24 hrs.

I am topping up here - RHC is a big ship- will come good in fullness of time.Ofcourse there might be more take over revised offers from other vultures.......hovering for a bargain

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#Takeover
stale
Last edited 2 years ago

Reading through most broker research, most seem convinced that KKR comes back with a slightly altered alternative proposal but near the $88 per share offer.

Pure gamble, but at least you own a pretty decent business if it does fall through and it if does looking at 20% upside.

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#Acquisition UK Mental Healthca
stale
Added 2 years ago

"Agreement to acquire 100% of UK based mental healthcare provider Elysium Healthcare (Elysium) for a pre-IFRS 161 enterprise value of £775m (A$1.4bn) from private equity firm BC Partners

Transaction expected to deliver synergies of at least 5mill pounds p.a."


Interesting move into the mental health space - a growing sector with strong government backing and increasing research in diagnostics and treatments (in UK, Aust, France and Sweden in which they operate). They also mention leverage and extension into 'learning difficulties and neurological issues' space. I see this as a HUGE market, at both ends of the age spectrum with many government subsidies being increasingly encompassing of this area.

PE currently at 39.26, a bit on the high side.

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#Business/Trading Update
stale
Added 3 years ago
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Valuation of $77.00
stale
Added 4 years ago
12 month PT was $77. We're there! New 12-month PT for RHC is $87.77 (as at 21-Jan-2020). Go you good thing! Have dropped my price target back to $80 and my valuation to $75, as RHC haven't got that same bullish sentiment behind them now (April 2020) that they did back in January. 05-Oct-2020: Time to update my price target (/valuation) for Ramsay Health Care (RHC). $80 looks like resistance to me, so if they punch threw $80, they could go up a bit more, but it's likely we may not see a catalyst to cause them to breach $80 in the next 12 months. I've settled for $77 once again. I think they'll get back to $77 within 12 to 18 months, so by April 2022. I still hold RHC shares. Ramsay is one of my two favourite large health care companies. The other is CSL. I'm not currently holding CSL - but I'll be buying back into CSL at some point. I last bought them at under $200. I don't think they're heading back down to those sort of levels again, however I think they may get cheaper than where they are now. RHC on the other hand still look like good value to me at current levels, hence I hold RHC.
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#Supporting Public System
stale
Added 4 years ago
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#Capital Raising
stale
Last edited 4 years ago

22-April-2020:  Ramsay Announces Equity Raising

Investor Presentation

RAMSAY HEALTH CARE (RHC) ANNOUNCES EQUITY RAISING AND CAPITAL MANAGEMENT INITIATIVES TO ENHANCE FINANCIAL FLEXIBILITY

Key Points

  • The COVID-19 pandemic has resulted in the suspension of most elective surgery in each of RHC’s major operating geographies and led to an uncertain operating environment 
  • RHC is undertaking an equity raising and announcing capital management initiatives to enhance financial flexibility during the COVID-19 pandemic 
  • RHC is raising A$1,200 million in new equity via an underwritten institutional placement and up to an additional $200 million via a non-underwritten share purchase plan 
  • RHC has received consents to amend or waive key banking covenants from lenders to the Ramsay Funding Group (1) up to and including the December 2020 testing date and will temporarily suspend the ordinary share dividend
  • RHC expects that these initiatives will enable it to strengthen its balance sheet and increase financial flexibility in an uncertain operating environment and position Ramsay for future growth opportunities

(1) Ramsay Funding Group comprises wholly owned subsidiaries and excludes Ramsay Santé and its covenant-lite debt, which is non-recourse to Ramsay Funding Group

Ramsay is undertaking a fully underwritten institutional placement of new ordinary shares to raise approximately A$1,200 million (“Placement”) and a non-underwritten Share Purchase Plan (“SPP”) to raise up to an additional A$200 million (together, the “Offer”).  The proceeds of the Offer will initially be used to partially repay Ramsay Funding Group’s revolving debt facilities which will remain available for redraw. 

Ramsay’s Managing Director Craig McNally said, “the equity raising will strengthen Ramsay’s balance sheet and liquidity position, as well as increase financial flexibility during the unprecedented operating environment. More importantly, it will ensure that we can continue to pursue our growth initiatives and position us to take advantage of other growth opportunities that may arise” 

“Private hospital operators, including Ramsay, are making an important contribution in terms of supplementing the broader public health system in fighting the COVID-19 pandemic,” Mr McNally said.

With more than 500 locations across 11 countries globally, Ramsay plays a critical role in the healthcare systems of each of its major markets. Ramsay is pleased to be partnering with Governments to supplement the public health response to COVID-19 and making a positive contribution to patients within all of its communities during the pandemic. The health and safety of Ramsay’s people is also paramount and it is  taking proactive steps to monitor the impacts of COVID-19 and support them. 

Commitment from Existing Lenders and Covenant Waivers 

[click on link above for this section]

COVID-19 Arrangements with Governments and Health Authorities  

[click on link above for this section]

Dividends

Ramsay has determined to temporarily suspend ordinary share dividend payments.

Dividend payments on Ramsay CARES will not be suspended. 

Details of the Placement 

Ramsay is undertaking a fully underwritten Placement of new fully paid ordinary shares in Ramsay (“New Shares”) to eligible institutional investors to raise approximately A$1,200 million, at a price of A$56.00 per New Share (“Placement Price”) which represents a 12.9% discount to the last closing price of A$64.29 on 21 April 2020.

The Placement will result in approximately 21.4 million New Shares being issued, representing approximately 10.6% of Ramsay’s existing issued ordinary shares, and are expected to settle on 27 April 2020 and be issued, and commence trading on the following business day.

The Placement is fully underwritten by J.P. Morgan Securities Australia Limited.

Due to the nature of the Foundation, it will not be participating in the equity raising. However, the equity raising has the Foundation’s support.

Details of the Share Purchase Plan (SPP)

Following completion of the Placement, Ramsay will offer existing eligible shareholders the opportunity to participate in a non-underwritten SPP, to raise up to A$200 million.

Under the SPP, eligible Ramsay shareholders will have the opportunity to apply for up to A$30,000 of New Shares without incurring brokerage or transaction costs.

The Issue Price of the New Shares under the SPP will be the lesser of: 

  • - the Placement Price; and 
  • - a 2% discount to the volume weighted average price (VWAP) of Ramsay shares traded during the five ASX trading days up to, and including, the closing date of the SPP (20 May 2020).

Ramsay may decide to accept applications (in whole or in part) that result in the amount raised under the SPP being greater than or less than A$200 million in its absolute discretion.

Full details of the SPP will be set out in the SPP Offer Booklet which is expected to be released to the ASX and dispatched to eligible shareholders on 29 April 2020.

--- click on links above for more ---

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Valuation of $47.00
stale
Added 6 years ago
A great company with good management. But I think earnings growth will slow as insurers tighten the screws, and as the company deals with issues in its European hospitals. Using consensus earnings forecasts for FY20, applying a PE of 17 and discounting by 10%pa, Or using a forward yield of 3%, both suggest a valuation around $47
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Valuation of $70.00
stale
Added 6 years ago
Soundly managed, high quality, durable revenue streams supported by inevitable demographic tailwinds. Debt levels are the only drawback. Trading below historical P/E levels and sector averages for a basket of similarly high quality names.
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