Ramsay Health Care expects UK write-down

Company News

by Rachael Jones

Ramsay Health Care (ASX:RHC) has undertaken a review of the carrying value of its assets and slashed earnings guidance.

They flagged onerous lease provisions and asset write downs on its UK hospitals business, following a significant downturn in National Health Service volumes, while it its key local hospitals also remain challenged.

Its statutory financial statements for the 12 months ending 30 June 2018 will recognise a charge of $125 million net of tax, consisting of an onerous lease provision and asset write-downs related to certain UK sites.

The $12.5 billion company has reported it expected a full year core earnings per share growth of 7 per cent rather than the 8 or 10 per cent guidance previously stated.

Six UK sites were identified during the review as requiring onerous lease provisioning and/or fixed asset impairment.

The UK's Berkshire Independent and Ashtead accounted for £60 million net of tax of the provision, while there is no impairment of the goodwill of the UK business.

The charge will be excluded from Ramsay’s Core NPAT for FY18 and will therefore not affect Ramsay’s final dividend for FY18.

Shares in Ramsay Health Care (ASX:RHC) are down 10.81 per cent at $55.45.
 

Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.