Key Highlights

  • FY26 Revenue increased 4.9% to AUD 18.660 billion.
  • Underlying net profit after tax rose 19.3% to AUD 364.1 million.
  • Australian admissions and theatre utilisation improved during the year.
  • The proposed Ramsay Santé separation will reshape the group’s structure.

Ramsay Health Care (ASX: RHC) has delivered a full-year result that looks like the clearest evidence yet that its multi-year turnaround is gaining traction, with double-digit Earnings growth across its underlying Business and a major structural announcement — the planned separation of its European arm, Ramsay Santé — that will reshape the group heading into FY27. For a stock that spent much of the post-pandemic period weighed down by cost inflation, elevated Debt and patchy margins across its hospital networks, the FY26 numbers give shareholders genuine reason to view the recovery narrative as more than just hopeful commentary.

For the twelve months ended 30 June 2026, Ramsay reported group revenue of AUD 18,659.6 million, up 4.9% on the prior year (4.0% in constant currency). Underlying EBITDA rose a stronger 8.0% to AUD 2,343.4 million, while underlying EBIT climbed 11.5% to AUD 1,162.2 million — evidence that Margin improvement, not just top-line growth, is driving the result. Underlying net profit after tax increased 19.3% to AUD 364.1 million, with underlying Earnings Per Share up 20.5% to 151.0 cents. Reported statutory NPAT was AUD 329.2 million, sharply higher than the prior year, which had been depressed by one-off items.

What the Numbers Show

The improvement was broad-based across Ramsay's three main geographies. In Australia, the group's largest market, revenue rose 7.8% to AUD 6,818.1 million and underlying EBIT increased 11.2% to AUD 639.8 million, with the EBIT margin expanding 30 basis points to 9.4%. Like-for-like admissions grew 3.3% to 1,234,300, and theatre utilisation improved to 70%, up 90 basis points — a sign that capacity constraints that have squeezed hospital operators in recent years are gradually easing.

Ramsay UK Hospitals grew underlying EBIT by 10.3% in constant-currency terms to AUD 160.5 million, with margins up 80 basis points to 10.2%, even as total admissions fell 5.4% (NHS-referred admissions down 8.2%) — a reflection of the private hospital group leaning into higher-acuity, higher-margin private work rather than lower-margin NHS volume. Elysium, Ramsay's UK mental health and care business, posted a 43.5% jump in underlying EBIT to AUD 31.1 million despite a 4.2% revenue decline, as a turnaround programme lifted margins to 3.0% from a low base. Ramsay Santé, the European operations in which the group holds a 52.79% stake, grew underlying EBIT 11.4% in constant currency to €187 million (AUD 330.8 million), though it continues to record an underlying loss after tax, albeit a narrowing one.

Dividends and Balance Sheet

The board declared a fully franked final Dividend of 48.5 cents per share, up 21.3% on the prior corresponding period, taking the full-year dividend to 91.0 cents, an increase of 13.8%. That represents a Payout Ratio of around 60% of underlying NPAT, sitting within the company's stated 60–70% target range. Group net debt, excluding Lease liabilities and derivatives, stood at AUD 4,563.9 million, with Leverage in the core "Funding Group" (which excludes Ramsay Santé) at 1.83 times — comfortably below the company's target ceiling of 2.5 times. Return on Capital employed for the group improved 110 basis points to 11.0%, while the Funding Group's ROCE rose 150 basis points to 14.8% in constant-currency terms.

The Ramsay Santé Separation

The most significant strategic development alongside the results is Ramsay's confirmation that it intends to separate its European Ramsay Santé business, with a Shareholder vote scheduled for 24 November 2026 and completion targeted for December 2026. If completed, Ramsay Santé will be reported as a discontinued operation in the first half and full FY27 results, with only around 5.5 months of ownership captured in the first half. This is a major shift for a group that has spent years balancing capital and management attention across three very different healthcare systems, and it signals a sharper focus on the core Australian and UK hospital operations going forward.

Why Investors Are Watching

Ramsay's recovery has been closely watched because it doubles as a proxy for broader pressures across private healthcare: staffing costs, insurer negotiations, elective surgery volumes and government funding settings. The improvement in Australian theatre utilisation and admissions growth suggests some of the post-pandemic disruption to elective surgery scheduling is normalising, while UK margin gains show the benefit of a more selective admissions mix. For FY27, management is guiding to further EBIT growth in Australia, UK Hospitals and Elysium, alongside a revised NHS Tariff of 1.24% and continued Investment of AUD 10–15 million in IT and transformation initiatives in Australia. Group Capital Expenditure guidance for the Funding Group sits at AUD 480–520 million.

The group's Funding Group net financing expense, which includes AASB16 lease costs, is forecast at AUD 280–300 million for FY27, with an effective tax rate of around 30%, and the board has reaffirmed a dividend payout ratio target of 60–70% of underlying NPAT. Analysts covering the stock have generally welcomed the combination of margin recovery and portfolio simplification, though some caution that the Ramsay Santé separation will remove a meaningful, if lower-margin, source of group revenue and Diversification once completed.

Key Risks

Despite the improved results, Ramsay carries risks common to large hospital operators: ongoing wage and clinical staffing cost pressure, the pace and outcome of private health insurer contract negotiations, and reliance on continued growth in elective and higher-acuity procedure volumes. The pending Ramsay Santé separation introduces execution risk and uncertainty around final terms, valuation and shareholder approval, while the European business itself carries higher leverage (4.70 times) than the rest of the group. Currency movements affect the UK and European segments' contribution to group earnings, and any renewed pressure on public hospital funding or NHS tariffs could weigh on the UK division.

What Could Drive the Stock Next?

The shareholder vote on the Ramsay Santé separation in late November will be a pivotal near-term catalyst, alongside early trading commentary for FY27 and further detail on how proceeds or residual exposure to the European business might be structured. Continued improvement in Australian hospital utilisation, the trajectory of UK private admissions, and progress on Elysium's turnaround will also shape how convincingly the market accepts that Ramsay's recovery story has legs beyond a single strong year.