August 29, 2018 / 11:16 PM / 3 months ago

UPDATE 1-Australia's Ramsay Health Care profit misses estimates

(Adds managing director comment, outlook)

Aug 30 (Reuters) - Australian hospital operator Ramsay Health Care Ltd on Thursday reported a 21 percent fall in annual profit which missed expectations, hurt by declining business in Britain, and said earnings growth this year was likely to be subdued.

Net profit for the year to June 30 came in at A$376 million ($274.78 million), compared with A$476 million a year ago, and fell short of an expectation of A$440 million according to a Thomson Reuters I/B/E/S average of seven analysts.

In June, the company had flagged a A$125 million charge on a slump in business from Britain’s National Health Service. British government strategies to dampen non-essential use of public health services were having “a significant negative impact on volumes, despite the significant and increasing number of people in the UK awaiting treatment,” Ramsay had said.

The company, which has significant European operations and is the biggest private hospital operator in France, said its French unit Ramsay Générale de Santé recognised a A$29.9 million restructuring cost during the year which added to the one-off costs.

Ramsay Générale recently made a $771 million offer for Swedish healthcare company Capio which was rejected on undervaluation claims.

“In full year 2019 we expect underlying earnings growth to be subdued, driven by a combination of challenging circumstances in the UK, a slower rate of growth in Australia, and a neutral outlook in France,” Managing Director Craig McNally said.

Ramsay reported full-year core earnings per share (EPS) growth of 7 percent to 279.8 Australian cents per share, in line with its forecast, but said it was targeting only a 2 percent EPS growth for the current year as it sees higher interest and tax.

Annual underlying profit was A$567 million, up 7 percent from a year ago, the company said.

The company proposed a final dividend of 86.5 Australian cents per share, compared with 81.5 Australian cents per share last year. ($1 = 1.3684 Australian dollars) (Reporting by Susan Mathew in Bengaluru; editing by Rosalba O’Brien)

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