Private healthcare operator NMC Health (NMC) reveals a strong set of half year results and a raft of new acquisitions, giving the share price a 5.4% boost to £42.80.
The company is off to a stellar start in 2018 as sales have grown 20.2% to $932m with organic growth coming in at an impressive 13.4% in the first six months.
NMC’s healthcare division, accounting for 73% of overall sales, continues to drive growth with pre-tax profit jumping from $99.3m to $118.7m.
M&A SPREE
Among the various announcements , the company has extended its reach into sub-Saharan Africa via new operations and management contracts with private parties in Kenya for two hospitals.
The contracts are expected to bring in high margin sales and offer cross referral opportunities for NMC’s facilities based in the United Arab Emirates.
Another potential growth driver is the extension of in vitro fertilisation services through ‘value accretive’ acquisitions of IVF clinics in Sweden and Latvia for approximately $25m.
Kenya is once again in NMC’s sights as the hospital operator targets a greenfield expansion in Nairobi to enter this market.
In the UK, healthcare facilities operator Aspen Healthcare has been acquired from Tenet for £10m, providing a cost-effective way to introduce fertility services to the UK.
HIKE IN EARNINGS FORECASTS
Investec analyst Cora McCallum reckons the new acquisitions could add between $10m to $15m to earnings this year and placed forecasts under review until an update in October.
Berenberg’s Charles Weston is less patient, hiking earnings before interest, tax, depreciation and amortisation forecasts by 1.6% to $473m for 2018 vand by 3.4% to $584m for 2019.
