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How Ramsay’s Business Model Works?

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Ramsay Health Care (ASX: RHC) is one of the largest and most diverse private healthcare companies in the world. The business delivers a broad range of acute and primary healthcare services in 480 facilities across 11 countries. Ramsay’s philosophy, “People Caring for People”, has led the business to an excellent record in hospital management and patient care.

Ramsay - report
Ramsay Health Care Operations Breakdown (Credit: Kalkine Media)

The company’s health services

Ramsay was first established in 1964 in Australia and has since become the nation’s largest private hospital operator. Ramsay’s facilities around the world cater to a broad range of health care needs, which include day surgery procedures, highly complex surgery, psychiatric care, as well as rehabilitation. The company’s long-standing excellent reputation has enabled it to successfully treat over 8.5 million patients. In addition to hospitals, Ramsay also established a community pharmacy brand and teaching hospital licensed for aspiring nurses and medical staff. Quality and clinical excellence are two of the main ways Ramsay differentiates itself from the rest of the market. This value also excites investors, since maintaining a great reputation plays a very important role in the industry.

FY2019 Financial Results

Ramsay has a market cap of $13.47bn and trades on a PE ratio of 25.31. The business grew EDITDA by 32% from the last financial year, resulting in the company generating $1.5bn in EBITDA for FY19. Ramsay also announced $11.4bn of revenue for the past financial year, which grew by a robust 24.4% from the previous year. This revenue growth is driven by strong performance across the company’s key business areas. The low PEG ratio is driven by lower product differentiation and barriers to entry, as compared with the likes of CSL.


The company is committed to continuing thriving, by growing its global presence. Their growth strategy is broken down into five key components that create additional shareholder value. These five key components include organic growth, Brownfield capacity expansion, public/ private collaborations, acquisitions and new growth platforms. All of these components, if successfully implemented, will bring additional revenue streams and drive value creation for shareholders.




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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