TIDMNMC
RNS Number : 4596Q
NMC Health Plc
21 October 2019
21 October 2019
NMC Health plc
(the "Company" or "NMC")
Capital Markets Day Update
Reiterate 2019 guidance; expect double-digit organic growth to
continue in 2020; announce further commitments to enhance
governance
In advance of its Capital Markets Day this morning, NMC Health
plc ("NMC" or the "Company"), the leading private healthcare
operator in the Gulf Cooperation Council (GCC) with international
services across 19 countries, is pleased to confirm that business
performance in the second half of 2019 is building on the strong
trends seen in H1 2019. As a result, management expects the second
half of the year to be stronger than the first and reiterates full
year guidance across revenues, EBITDA, net income, leverage and
cash flow conversion. Furthermore, NMC's strategy continues to
offer substantial advantage over competitors in all key markets the
Company operates in. Consequently, FY 2020 is anticipated to
deliver double digit top and bottom line growth.
Reiterating 2019 guidance
Continued strong operational performance in H2 2019 provides
NMC's management confidence in the full year guidance, which is
provided in the table below
(US$m) Post-IFRS 16 Pre-IFRS 16
--------------------------------- ----------------- -----------------
Revenues 2,500 - 2,540 2,500 - 2,540
----------------- -----------------
EBITDA 665 - 675 575 - 585
----------------- -----------------
Net income to equity holders 297 - 305 320 - 330
----------------- -----------------
IFRS 16 lease liabilities 690 - 695 -
----------------- -----------------
Net debt - to - EBITDA Below 3.4 -
--------------------------------- ----------------- -----------------
Capital expenditure guidance for 2019 remains at c. US$100m and
maintenance capex at 3% of revenues.
Strong organic growth to continue in 2020
NMC provides guidance for 2020, anticipating strong double-digit
organic revenue and EBITDA growth, which is summarised in the table
below.
FY2020 post-IFRS 16 guidance
---------------------------------------------------------------------
(US$m) Existing New Projects Combined
------------- ----------------- ---------------- -----------------
Revenues 2,800 - 2,860 45 - 55 2,845 - 2,915
----------------- ---------------- -----------------
EBITDA 750 - 780* (18) - (20) 730 - 760
------------- ----------------- ---------------- -----------------
*: Expected lease rental for FY 2020 at US$105-110m, including
rental for new
facilities opening in 2020
Management expect to open 4 new hospitals: two in Oman (in Al
Hail and Al Khoud areas) and two in the UAE (Dubai Specialty
expansion and a mid-income focused hospital in Sharjah). These
facilities will add total capacity of up to 380 beds. Furthermore,
a 10-bed cosmetics hospital is scheduled for opening in Dubai
towards the end of 2019, along with the addition of number of
clinics across multispecialty, cosmetics and IVF segments in the
UAE and KSA during Q4 2019 and 2020
The aforementioned facilities are expected to contribute
US$45m-55m of revenue in 2020 and, as a result of being in early
ramp-up phase, record a loss of US$18-20m at the EBITDA level (post
IFRS 16), which is already included in the guidance for the year.
During the 2019 Capital Markets Day scheduled for later today,
management will provide guideline for the long-term earning
potential of these new assets expected to join the portfolio in
2020.
In terms of capital expenditure for 2020, growth capex is
projected at US$90-100m, while maintenance capex will continue at
3% of revenues for the year.
Up to US$100m debt repayment planned for H2 2019
Given the combination of a rising cash balance and management's
decision to focus on the integration of previously acquired assets
during 2019, the Company will reduce debt by up to US$100m during
H2 2019. This accelerated repayment will be separate from any
scheduled amortization of long-term debt.
The Company is also in process of attaining regulatory approvals
for the up to US$200m, opportunistic buy-back program announced
earlier this year.
Further strengthening governance structures at NMC
NMC continues to invest in and promote high standards of
corporate governance as it continues its journey from a
family-owned business to that of a company consistent with its size
and scale in the FTSE-100. NMC's management has created a chief
compliance officer role, established two new oversight committees
and makes further commitments to equality.
Formation of new Group Compliance Officer role
NMC has introduced a Group Compliance Officer role to enhance
oversight of the business. The Group Compliance Officer will be
responsible for planning, implementing and monitoring the Group
Compliance Program. The Company is in process hiring the new
Compliance Officer.
Related party committee update
The related party committee formed earlier this year has engaged
a third-party advisor to support oversight of NMC's related party
transactions. A key ongoing exercise being conducted by the
committee is enhancing the robustness of identification of NMC's
related parties.
Formation of new disclosure committee
The Company is in process of setting up a new Disclosure
Committee to enhance the quality of financial disclosures. The
committee will be entirely independent, with members having no
current or past relations to NMC or the Company's auditor. The
Disclosure Committee will provide its views and recommendations on
all financial disclosures by NMC to its Board of Directors and
management. The Company is in the process of identifying members of
the Disclosure Committee.
Commitment to gender diversity
Recognizing the benefits of gender diversity in the work place,
NMC has committed to enhancing the role of women in its management
team as well as in its Board of Directors. The Company is in
process of setting internal targets in terms of gender diversity
and will subsequently formally implement steps to achieve these
goals.
2019 Capital Markets Day
NMC is hosting its 2019 Capital Markets Day on 21 October 2019.
Management will provide insight into the operations of the Company,
along with further details on guidance for 2019 and 2020. For
webcast details please contact FTI Consulting on
NMCHealth@fticonsulting.com. Presentations for the Capital Markets
Day will be made available on https://nmc.ae/investor-relations at
10am UK time on 21 October 2019.
Prasanth Manghat, Chief Executive Officer of NMC Health,
commented;
"We continue to scale the business to ensure that we have the
structures and governance frameworks in place to support our growth
aspirations. I am pleased with the progress we have made,
establishing further controls and procedures. We have delivered a
strong financial performance in H1 2019, which we have continued to
build on and accelerate so far during H2 2019 and today I am
delighted to reiterate our full year guidance. This growth is
underpinned by market share wins, increased capacity utilisation
and selected expansion projects. For the first time we provide
guidance for 2020, which we will refine over the course of next
year. During 2020, we anticipate opening almost 400 new beds across
four hospitals, along with several new clinics across various
segments, delivering double-digit revenue and continued EBITDA
growth."
Contacts
NMC
Asjad Yahya, Investor Relations +971 (0)56 219 0975
Media
FTI Consulting, London
Brett Pollard / Victoria Foster Mitchell +44 (0)20 3727 1000
FTI Consulting, Gulf
Shane Dolan +971 (0)4 437 2100
About NMC Health
NMC is the leading private healthcare operator in the GCC with
an international network of healthcare facilities across 19
countries. NMC ranks as one of the top two in-vitro fertilisation
("IVF") operators globally. The Group is recognised as a leading
provider of long-term medical care in the UAE through its
subsidiary ProVita. Pursing a selective international expansion
program since 2016, the company now has total capacity of 3,109
beds across its network with 48% of this capacity in the Kingdom of
Saudi Arabia (KSA), where the company has introduced long-term and
multi-specialty care services. Moreover, the recent formation of a
joint venture with GOSI/Hassana Investment Company provides a solid
platform for continued growth in the GCC region's largest
healthcare market. NMC treated over 7.5m patients in 2018. The
Group is also a leading UAE supplier of products and consumables
across several key market segments, with the major contribution
coming from healthcare related products. The Group reported
revenues of US$2.1 billion for the year ended 31 December 2018.
In April 2012 NMC was listed on the Premium Segment of the
London Stock Exchange. NMC is a constituent of the FTSE 100
Index.
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END
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