By Bruce Williams

Ramsay Health Care (ASX: RHC) is a global health care company with a reputation for operating high-quality services and delivering excellent patient care. Ramsay facilities cater for a broad range of health care needs from primary care to highly complex surgery, as well mental health care and rehabilitation. The company employs more than 77,000 staff and treats 8.5 million patients in its hospitals and primary care clinics located in Australia, France, the United Kingdom, Sweden, Norway, Denmark, Germany, Italy, Malaysia, Indonesia and Hong Kong.

While the spectre of COVID-19 remains, profitability metrics will remain below what we would usually expect due to increased costs (PPE, covid-19 screening and cleaning) and reduced revenue because of government restrictions on elective surgeries.

A longer-term benefit has emerged though as the pressure on the public health system has allowed Ramsay Health Care to build relationships with government health departments through public patients utilising private facilities, essentially acting as an overflow. This is important as it is likely that this trend will persist after the pandemic as the pressure on governments to reduce public waiting lists remains intense, particularly in the UK.

We believe longer term demand for Ramsay Health Care services will remain strong due to population growth combined with an aging population in key markets. Also, health services will continue to evolve potentially allowing Ramsay to better utilise its assets. An example of this is out of hospital treatments.

Importantly, RHC has the balance sheet capacity to continue to build new facilities, fund acquisitions or undertake capital management initiatives.

Even though there are short term headwinds, we believe Ramsay Healthcare represents good value given our investment horizon.

If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.