Six months into the new financial year, margins are still under significant pressure at hospital operator Al Noor (ANH). Despite a surge in revenues driven by higher outpatient volumes, the impact of ongoing refurbishments at the Khalifa Street Hospital and a one-off negative accounting adjustment dragged the cash profit margin down 90 basis points to 22.1 per cent.
The group has been forced to upgrade facilities at the Abu Dhabi hospital as competition across the region has intensified. This has led to a decrease in patient numbers, which Al Noor is hoping to reverse once the refurbishment is complete. Chief executive Ronald Lavater said margins would continue to suffer in the second half, but the negative impact of the renovation should start to abate in 2016.
Al Noor is still opening new medical centres - two are planned for Sharjah and Al Ain before the end of the year - but these aren't yet operating at full capacity, which has also contributed to the squeeze on margins. Management reckons it could take between two and three years for the new centres to reach maturity.
Analysts at Investec have placed their forecasts under review, but previously expected pre-tax profits of $92.5m, giving EPS of 76.2ȼ, compared with $84.5m and 69.8ȼ in 2014.
| AL NOOR (ANH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 852p | MARKET VALUE: | £995m | |
| TOUCH: | 849-854p | 12-MONTH HIGH: | 1,190p | LOW: 812p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 222ȼ | NET CASH: | $91m | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 225 | 45.6 | 38.1 | 3.7 |
| 2015 | 244 | 44.9 | 36.0 | 4.1 |
| % change | +9 | -2 | -6 | +11 |
Ex-div: 3 Sep Payment: 5 Oct £1=$1.58 | ||||
