Ramsay Health Care Posts 6.8% Revenue Growth Despite $291m UK Impairment

Solid Performance Amidst Strategic Transformation

Ramsay Health Care’s FY25 results reveal a company balancing growth with significant operational challenges. The group reported a 6.8% increase in revenue to nearly A$17.8 billion, propelled primarily by its Australian private hospital portfolio and a strong performance in the UK hospitals business. However, this growth was overshadowed by a substantial non-cash impairment of $291 million related to the UK region, specifically the underperforming Elysium Healthcare business, which severely impacted net profit after tax from continuing operations, dropping it to just A$24 million.

Excluding these non-recurring items, underlying earnings before interest and tax (EBIT) and net profit after tax showed modest growth, reflecting operational momentum in core markets. The Australian segment benefited from a 3.2% increase in surgical admissions and improved revenue indexation agreements with private health insurers, while the UK acute hospital business saw a 7.6% rise in NHS admissions and higher case acuity.

Capital Discipline and Strategic Initiatives

Capital expenditure was tightly managed, coming in at A$777 million, the lower end of guidance. Investments focused on expanding procedural capacity in major Australian hospitals, while growth capital for Elysium was halted following a performance diagnostic and cost reduction initiatives. Ramsay Santé, the European segment, faced headwinds from reduced government funding in France, prompting a strategic review supported by Goldman Sachs to explore options for optimising shareholder returns.

Operationally, Ramsay is advancing a multi-year transformation centered on three pillars, accelerating performance in the Australian hospital business, strengthening capital discipline, and evolving its culture to foster innovation and efficiency. Key initiatives include the rollout of ‘Big 5’ hospital operations programs targeting growth, procurement, revenue cycle management, workforce optimisation, and AI-enabled operations. Digital transformation efforts continue with upgrades to legacy systems, including a national HR system and procurement pilot.

Leadership and Outlook

To support these ambitions, Ramsay appointed Stuart Winters as Chief Operating Officer – Australia and Andrew Coombs as Chief Commercial Officer – Australia, signaling a commitment to enhanced execution capability. The group also implemented a streamlined operating model from July 2025 to drive efficiency.

Looking ahead, Ramsay expects continued activity growth across all regions in FY26, with EBIT growth anticipated in Australia despite some pressure from changes in public hospital funding arrangements, notably at the Joondalup public campus. The group forecasts net financing expenses between A$600 million and A$620 million and plans a dividend payout ratio of 60-70% of net profit excluding non-recurring items, though the dividend reinvestment plan remains suspended.