Healthscope Rides Insurance Swell
The Age
Wednesday February 20, 2002
Private hospital operator Healthscope expects its full-year result to be bolstered by the swelling of private health-insurance membership lists and the inclusion in its financial accounts for the first time of newly acquired hospitals.
Healthscope yesterday reported a 64.7per cent increase in first-half net profit to $4.86 million, as revenue grew by nearly one-third to $81.5 million.
Investors immediately leapt on the strong result, lifting Healthscope shares to an intra-day high of $2.45.
Healthscope closed with a gain of 14 cents at $2.43.
The directors pointed to a further lift in earnings for the current half as that period would include expanded operations resulting from last year's purchase of Northpark Private Hospital and Sydney South West Private Hospital.
Those two hospitals have a combined bed count of 2000.
During the half-year, Healthscope integrated five acquisitions into its accounts and extended the services of its Victoria House Private Hospital.
Healthscope managing director Bruce Dixon said the flow-on effect from its new hospitals and the increase in the number of Australians privately insured ensured a robust trading period in the second half.
``We anticipate that the consolidation of the private-hospital sector will continue to provide opportunities for Healthscope to expand its operations by acquisitions," he said.
``Similarly, there are also a number of opportunities to modernise and expand the capacity of our key facilities to meet the increasing demand for their services."
Mr Dixon said he was concerned about the likely increase in medical indemnity insurance and the sharply escalating cost of agency nursing, with both issues having serious cost implications.
``The acute shortage of nursing has provided an opportunity for external nurse agencies to increase their fees significantly over the past 12 months. Healthscope has been able to limit the use of agency staff. Strategies have been implemented to further reduce reliance on agencies over the next 12 months."
Mr Dixon also called on the Federal Government to intervene on the issue of
steeper medical indemnity insurance.
HEALTHSCOPE HALF YEAR ($m) 2001 2000 Revenue 80.3 62.5 Other rev 1.2 0.7 EBITDA 9.7 6.9 Depreciation -2.0 -1.7 Interest -0.7 -0.9 Pre-tax profit 7.0 4.4 Abnormals nil nil Tax -2.1 -1.4 Minorities nil nil Net Profit 4.9 3.0 Interim div ? (Mar 22) 3.0 2.0
© 2002 The Age
Share This