It’s been a pretty poor showing from Mediclinic (MDC) shares over the past six months. But any chance of a near-term share price recovery was promptly dashed by these half-year figures, which revealed a £164m impairment charge on the group’s 29.9 per cent equity stake in fellow hospital operator Spire (SPI) and a further £98m impairment charge on Swiss hospital business Hirslanden.
The company warned in late October that regulatory changes in Switzerland, which resulted in fewer inpatient admissions and falling revenue per bed, would prompt a fall in half-year adjusted cash profits. This was exacerbated by a disappointing first half from Spire, in which Mediclinic has a share of profit. True enough, interim adjusted cash profits fell 8 per cent to £213m, leaving adjusted earnings per share down 9 per cent at 10.3p.
Better performances were recorded in Mediclinic’s other two markets – South Africa and the Middle East – where revenues grew 5 per cent apiece in local currencies, leaving adjusted cash profits up 6 per cent at the former and 13 per cent at the latter.
Prior to these results, JPMorgan expected cash profits of £484m for the year to March 2019, giving EPS of 26.4p, compared with £515m and 30p in FY2018.
MEDICLINIC (MDC) | ||||
ORD PRICE: | 345p | MARKET VALUE: | £ 2.54bn | |
TOUCH: | 344.9-345.4p | 12-MONTH HIGH: | 712p | LOW: 336p |
DIVIDEND YIELD: | 2.3% | PE RATIO: | NA | |
NET ASSET VALUE: | 445p* | NET DEBT: | 53% |
Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2017 | 1.41 | -10.0 | -6.8 | 3.2 |
2018 | 1.39 | -150 | -22.8 | 3.2 |
% change | -1 | - | - | - |
Ex-div: | 06 Dec | |||
Payment: | 18 Dec | |||
*Includes intangible assets of £1.46bn, or 198p a share |