no slide title€¦ · cautiously optimistic about outlook - double digit profit growth targeted...
TRANSCRIPT
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Interim ResultsInterim ResultsBriefing Briefing –– 33 March 2003March 2003
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Overview
Profit increase for the period follows two full years of near doubling in profit growth
All divisions contributed to strong EBIT growth
Strong occupancy levels maintained:admissions up 9%, compared with previous year (up 5% excluding Cairns and Lake Macquarie)
Interim dividend 6.5 cents, fully franked
Cautiously optimistic about outlook - double digit profit growth targeted for foreseeable future
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Financial Highlights
NPAT up 25% to $18.5m
Group Revenue up 21% to $320.2m
Group EBIT up 14% to $32.9m
EBIT margin of 10.5% (excluding new hospital acquisitions)
EPS up 23% to 14.4 cents per share
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Financial Performance
Int. Dividend (cents/share)
EPS (cents/share)
NPAT
Profit before tax
EBIT
EBITDA
44%6.5¢(Franked)
4.5¢(Unfranked)
23%14.4¢ 11.7¢
25%18.514.8
23%26.021.2
14%32.928.9
12%45.140.2
21%320.2264.8Operating Revenue
% Inc.2002
$m2001
$m
Half-year Ended 31 December
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EBIT Growth
18.4
21.1
28.9 29.4
32.9
10.0
15.0
20.0
25.0
30.0
35.0
$m
Dec'00 Jun'01 Dec'01 Jun'02 Dec'02
Half-year
EBIT up 14% for the half-yearEBIT margin 10.5% (excluding new hospital acquisitions)
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Net Profit Growth
6.5
9.5
14.816.3
18.5
0.0
5.0
10.0
15.0
20.0$m
Dec'00 Jun'01 Dec'01 Jun'02 Dec'02
Half year
NPAT up 25% for half-year
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Earnings per share
6.0
8.2
11.712.8
14.4
0.0
5.0
10.0
15.0
Ce
nts
per
share
Dec'00 Jun'01 Dec'01 Jun'02 Dec'02
Half-year
Basic EPS up 23% for the half-yearDouble digit growth anticipated for the full-year
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Cash Flow
Except for operating movements in working capital, the half-year EBITDA has translated into strong gross operating cash flow. The effective cash flow management is consistent with prior financial years.
0
15
30
45
60
75
90
2000 FY 2001 FY 2002 FY Dec'02
EBITDACash Flow
Annual
$m
Half-Year2003 FY
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Operations Overview
Profit rise achieved despite challenging environment
Underlying growth in EBIT and NPAT strong, demonstrating organic growth opportunities
Management initiatives result in higher occupancy levels, above industry average
Extra capacity from expansion program being matched with increased demand for beds
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Operations Overview (cont’d)
10.5% EBIT margin, excluding recent acquisitions
Above industry average
Slight reduction in margin reflects higher medical indemnity cost, hospital disruptions from capacity expansion programme
Margins also reflecting ongoing change in revenue mix, e.g. prostheses
Cost containment still a major focus
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Occupancy – Patient Days
200
250
300
350
400
Jun'00 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02
Half-year Ended
Inpatient
Total (Inpatient & DayPatients)
Strong occupancy levels maintained with admissions up 9% (5% excluding new hospital acquisitions, Cairns and Lake Macquarie)
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Industry Challenges
ResponseIssue
Preferred employer status, seek to recover higher wage costs from health funds.
Nursing shortage & increased cost of wages:
Emphasis upon risk management enhancement programme.
Increased cost of medical indemnity insurance:
Quality and strategic position of hospital portfolio, seeking to at least cover higher costs.
Health fund negotiations:
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Long-term strategy on track
Developing a quality portfolio of strategically positioned hospitals
Managing our business well• Experienced management team maximising opportunities,
managing challenges, micro-management (appropriate decentralised management)
• Sustainable cost management
Investing in existing business• Targeting 15% return on assets
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Long-term strategy on track
Developing a quality portfolio of strategically positioned hospitals (continued)
Acquisitions based on strict investment criteria
• Strategic fit
• Moderate to low operating risk
• EPS positive and 15% ROI in short-medium term
• Delivering competitive advantage, consumer demand, reasonable health fund reimbursement rates
Pursuing sustainable growth, maximising returns, including opportunities outside private hospital sector, close to core competencies
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Aged Care
Sector benefitsAgeing population = growing demand, particularly for high quality services
Secure revenue stream
Fragmented industry provides opportunity for rationalisation
StrategyTarget high end, profitable segment
Focus on quality service
Develop broad portfolio of services
Capitalise on core competencies
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Outlook
Comfortable with market consensus for NPAT of approximately $37m for FY 2003
Scope exists for continuing organic growth of existing business
Acquisitions provide opportunity to enhance growth and profit outlook
Targeting double-digit growth foreseeable future
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AppendixAppendixAppendix
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Revenue Growth Time Line
0
50
100
150
200
250
300
350
400
450
500
550
600
$m
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Financial Years ended 30 June
PerthVeteran HospPrivatisation
Feb’94
BrisbaneVeteran Hosp Privatisation
Jan’95
RHC listed on the ASX
Sept’97
Co-located North ShorePrivate Hosp
Opened Jul’98
Alpha Hosp Group
Acquired May’01
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Financial Indicators
(1) Alpha (acquired May’01) excluded as only one month of trading for the period(2) Cairns (acquired Nov’02) excluded as only one month of trading for the period(3) Calculated using rolling 12 months figures
14.313.912.18.0ROE (3)
(NPAT/Shareholder Funds) %
14.314.914.411.7ROIC (3)
(EBIT/Funds Employed) %
78737083Net Gearing %
31 Dec’02(2)
30 Jun’0231 Dec’0130 Jun’01(1)
Six months ended
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Facility Portfolio
O p e r a t i n g D i v i s i o n s
N u m b e r
o f F a c i l i t i e s
L i c e n c e d
B e d s
V e t e r a n 2 8 3 0
C o - l o c a t e d 3 3 7 6
R e g i o n a l M e d i c a l – S u r g i c a l * 1 0 8 5 9
P s y c h i a t r i c 8 5 5 2
R e h a b i l i t a t i o n 2 1 1 9
T o t a l s 2 5 2 , 7 3 6
* Including the Coffs Harbour Day Surgery
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Revenue Analysis
Revenue byPayor Source
6%
52%
7%
35%
Health Insurance Dept. Veteran Affairs
Government Other
Revenue by Operating Division
29%22%
36%10% 3%
Veteran Medical-SurgicalCo-located PsychricatricRehabilitation
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