Healthscope injecting funds to boost beds

Interviews

Transcription of Finance News Network interview with Healthscope Limited (ASX:HSO) CEO and Managing Director, Robert Cooke

Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me Healthscope Limited (ASX:HSO) is its CEO and Managing Director, Robert Cooke. Robert, welcome to FNN. 
 
Robert Cooke: Thanks very much, I look forward to talking to you.
 
Lelde Smits: Healthscope has just this week returned to public ownership and listed on the Australian Securities Exchange. What does this new chapter represent for the company?
 
Robert Cooke: Look, the exit event was really about recognition of the growth potential and the quality of the assets that Healthscope has, and hopefully also recognition of the quality of the management team and our ability to deliver on those strategies going forward.
 
Lelde Smits: Healthscope’s stock did rise 5 per cent on debut. What do you believe investors find most appealing about the company?
 
Robert Cooke: So we are defensive, and obviously very defensive. Even in the GFC people still used our services, our volume didn’t dip. And also, I think it’s also sort of dawned on everyone that, the ageing, the demographics, the technology, you know everything about the industry, just means that there is a growth rate that you know is not obtainable in a lot of other industries. So you have the best of both worlds. You’ve got good steady growth, combined with good defensive characteristics.
 
Lelde Smits: What is your strategy to continue building on this appeal and growing the business?
 
Robert Cooke: The strategy for growing the business revolves around three things. First of all is delivering on the brownfields and the ‘relocate and grow projects’ which are well documented, particularly at Gold Coast Private, National Capital, Norwest Private Hospital and Knox. So, that’s adding capacity.
 
We have responded to a number of state government tender opportunities, particularly in the Northern Beaches in New South Wales, which is for more a privatisation model a public hospital up there.
 
And, the last one is that we’re working with health funds to confirm that we have more appeal, because we are providing a very cost effective and most importantly quality service, and we also publish our quality data. So, we’re the first to do that and we’re a long way ahead of the rest of the field in that initiative.    
 
Lelde Smits: Prior to Healthscope de-listing from the ASX in 2010 the company was near parity with rival private hospital operator Ramsay
Health Care Limited (ASX:RHC). How are you now positioned to battle competition in the health care sector?
 
Robert Cooke: We actually compete for patients with primarily not for profit hospitals, which represents over 50 per cent of the industry. Obviously, public hospitals see private patients and day surgeries see private patients. So, in a competitive market sense, we don’t actually compete with Ramsay across the board. There are local markets where it is fiercely competitive but across the board we compete with the not for profit, day surgeries and public.
 
In terms of market perception I’m really not going to comment. I think the market will make its own judgement. I think Ramsay is a really good company. I’ve said that from day one. But, I think there is space in the market for there to be two really good companies.
 
Lelde Smits: Finally Robert, how much will you spend on expanding your hospital offering and where will the funds be injected?
 
Robert Cooke: The structure that we’ve gone out with as part of the IPO sees us with a $300 million-odd facility. And, the Gold Coast project is already separately funding in a separate vehicle. We do have enough fire power. We’re anticipating spending over $600 million in the next three years to put on 653 additional beds. So, we’ve got enough fire power to do what we want to do. And, we’ve articulated those plans to the market.
 
Lelde Smits: Robert Cooke, congratulations again on Healthscope’s debut on the ASX. 
 
Robert Cooke: Thank you for that. It’s been an exciting time for the company and thank you for the interview.
 
 
Ends

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