How Ramsay Health Care Achieved a 253% Profit Surge and What’s Next?
Ramsay Health Care’s half-year results reveal a dramatic net profit rebound, driven by prior year impairments and solid growth in Australia and Europe. The company also announced a strategic acquisition and a proposed share distribution.
- Net profit after tax surges 253% to $160.7 million
- Underlying net profit rises 8.1%, led by Australian operations
- Fully franked interim dividend declared at 42.5 cents per share
- Acquisition of National Capital Private Hospital announced for Q1 FY27
- Proposal to distribute Ramsay Santé shares to shareholders underway
Strong Profit Recovery and Underlying Growth
Ramsay Health Care has reported a striking turnaround in its half-year financial results for the six months ending 31 December 2025, with net profit after tax soaring 253.2% to $160.7 million. This dramatic increase primarily reflects the absence of large impairments that weighed heavily on the prior corresponding period, particularly related to the UK region’s Elysium Healthcare business. Stripping out these one-off items, the underlying net profit after tax rose a solid 8.1%, driven by improved operational performance in Australia.
Regional Performance Highlights
Australia remains the powerhouse of Ramsay’s operations, delivering a 7.1% increase in underlying EBIT supported by higher patient volumes, increased acuity, and better private health insurance indexation. The company’s focus on operational efficiency and digital transformation is paying dividends, with margin expansion excluding the impact of the Joondalup Health Campus funding changes. Capital expenditure in Australia rose to $202.5 million, reflecting investments in new theatres and hospital expansions, notably at Joondalup and Warringal.
In Europe, Ramsay Santé showed resilience despite the withdrawal of French government subsidies and modest tariff indexation. The Nordic operations, particularly Sweden, delivered strong growth and cost control, offsetting challenges in France. The European segment’s underlying EBIT improved by 4.4% in constant currency terms.
The UK region faced ongoing headwinds, with NHS budget constraints impacting volumes in the acute hospital business. However, Ramsay UK managed to increase underlying EBIT slightly, thanks to a focus on high acuity and private patient work. Meanwhile, Elysium Healthcare continues its turnaround journey amid weak local authority demand, with cost reductions and site optimisations underway. The new CEO, Joe O’Connor, appointed in January 2026, is steering these efforts.
Strategic Moves and Capital Management
Ramsay announced the acquisition of National Capital Private Hospital in the Australian Capital Territory for $251 million, expected to complete in the first quarter of FY27. This acquisition is anticipated to be earnings accretive within the first year, further strengthening Ramsay’s dominant position in Australia’s private hospital sector.
Additionally, Ramsay revealed a proposal to distribute its 52.79% stake in Ramsay Santé directly to shareholders via an in-specie distribution, subject to board, shareholder, and regulatory approvals. This move aims to unlock value and provide shareholders with direct exposure to the European healthcare market.
Dividend and Outlook
The company declared a fully franked interim dividend of 42.5 cents per share, representing a payout ratio of 60% of underlying net profit after tax. The dividend reinvestment plan remains suspended, reflecting a cautious capital management approach.
Looking ahead, Ramsay expects continued EBIT growth momentum in Australia, tempered NHS activity in the UK due to fiscal constraints but with mitigating plans in place, and ongoing progress in Elysium’s turnaround. European activity growth is anticipated to continue, albeit with some disruption from industrial actions in France. Capital expenditure guidance for FY26 has been lowered to $755-$795 million, reflecting disciplined investment and a focus on asset utilisation.
Bottom Line?
Ramsay’s robust half-year performance and strategic initiatives set the stage for growth, but investors will watch closely how the UK challenges and Ramsay Santé distribution unfold.
Questions in the middle?
- Will Ramsay Santé’s proposed share distribution gain the necessary approvals and how will it impact shareholder value?
- How effectively can Elysium Healthcare’s turnaround plan restore profitability amid ongoing NHS funding pressures?
- What synergies and earnings uplift will the National Capital Private Hospital acquisition deliver in FY27?
