Company remains on track to hit profit margin goals.
NMC posts a healthy trading update as it raises guidance for 2018
- United Arab Emirates-based healthcare provider NMC Health raised its full-year core earnings and revenue forecasts
- The company cited strong organic growth but states that profit growth in 2019 is likely to be lower due to expansion costs
- The Share Centre continues to recommend the shares as a ‘hold’ for investors seeking growth and willing to accept a higher level of risk.
Healthcare group NMC provided a positive trading update for the market this morning and raised its full-year revenue and profit guidance. It now expects full-year revenue to grow by 24%, up 2% on its previous estimate, and earnings are forecast to be $480m rather than $465m. The company expects the good growth to continue into next year thanks to a combination of a ramp-up at its key medical facilities and the integration and expansion of recently-acquired companies. However, profit growth in 2019 will likely be lower than this year due to the costs of opening new facilities and integrating a large private medical group in the UK.
Overall this represents good news for investors and the market responded positively with a 3% increase in the shares in early trading. The confirmation that the company remains on track to achieve a 25% profit margin by 2021, and still has the benefit of a large joint healthcare venture with the Saudi government to come, is also very positive for investors. Despite a pullback in the shares in recent months the company has still comfortably outperformed the market over the past two years. It trades on a relatively high valuation so we continue to see the shares as no better than a ‘hold’.
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