Ramsay Investors Push For Shake-Up Of ‘Failed’ Overseas Expansion

Our Portfolio Manager and Partner Ray David providing his insights to the Australian Financial Review discussing Ramsay Health Care.

Blackwattle Investment Partners portfolio manager Ray David said Ramsay’s problem was “a misallocation of capital that just hasn’t worked much like other failed Australian companies that went offshore”.

“We think the company needs a radical restructure,” Mr David said. “The share price tells you it needs to be done sooner rather than later, there is so much latent value there.

“While there have been management and board changes and the reality is execution needs to gather more pace, as industry conditions remain challenging, and the balance sheet is weak”.

Mr David’s steps to fix Ramsay include restructuring Sante via a demerger or partial sale, improving returns in its Australian hospitals business by stopping capital programs and negotiating harder with health insurers, merging its UK business with another provider to improve scale and synergies, and an on-market buyback to return cash to shareholders.”

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