Join our community of smart investors

NMC Health snaps up rivals in buying spree

Seven acquisitions made in the period have helped to drive up revenue at NMC Health
March 16, 2016

Strong growth from NMC Health (NMC), the UAE-based private sector healthcare operator, was augmented by a 34 per cent increase in its healthcare division's patient numbers to 3.2m, as the group felt the benefits of seven new businesses bought in the period. Together these acquisitions contributed $88m to total revenue, but having been financed through a new loan facility, the group's net debt pile has also risen substantially.

IC TIP: Hold at 953p

The healthcare division expanded in 2015 and has now overtaken the distribution business in terms of sales. Though the acquisitions contributed 25 per cent of revenue growth in this division, organic growth was also strong at 31 per cent, as NMC continues to benefit from the rollout of compulsory medical insurance in Dubai, where it runs two hospitals.

Formerly focused on multiple therapy hospitals, NMC has started to expand and group its portfolio into specialised sectors. The new long-term and home care assets it has acquired have made a particular impact, helping to drive up revenue per patient by 20 per cent in the healthcare division.

Analysts at Jefferies expect cash profits of $231m in 2016, giving EPS of 82ȼ.

NMC HEALTH (NMC)
ORD PRICE:953pMARKET VALUE:£1.77bn
TOUCH:951-952.5p12-MONTH HIGH:982pLOW: 635p
DIVIDEND YIELD:0.7%PE RATIO:31
NET ASSET VALUE:263ȼ*NET DEBT111%

Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (p)
201144443.833.1nil
201249059.834.34.1
201355169.136.74.4
201464477.541.25.4
201588185.444.36.2
% change+37+10+8+15

Ex-div: 19 May

Payment: 20 Jun

*Includes intangible assets of $413m, or 222ȼ a share

£1=$1.42