Raffles Medical to kick off expansion plans by mid-2016

Headcount will also balloon.

According to DBS, FY13 net profits surged 49% to S$84.9m with revenues increasing by 9.4% to S$341m. This was helped by fair value gains from investment properties (S$3.9m) and disposal gains from property (S$20.4m).

Excluding those, core net profit ended at S$61m (+14.5% y-o-y).

Here's more from DBS:

Revenue growth was driven by both its Hospital and Healthcare services segments, which grew by 12.4% and 6.2% respectively, driven by higher patient load, acuity, overseas contribution and provision of more healthcare insurance services. The lower rate of growth for Healthcare services compared with FY12 (+11.4%) was partly attributed to the cessation of its Prison Service contract in FY13.

Proposed final dividend of 4 Scts per share. Dividends increased on the back of improved profits; and taken with 1 Scts interim dividend paid, FY13 total DPS will be 5 Scts (FY12: 4.5 Scts). Balance sheet remains very short with net cash of S$261m, but we note that a large portion is earmarked for the hospital extension, which the Group announced earlier in January (see our related note on 23 Jan 2014).

With the announced plans for its hospital GFA expansion and recent acquisition of commercial site at Taman Warna (Holland Ave), this will provide further expansion for Raffles Medical in the medium term, which we expect beginning from the latter half of 2016. In the meantime, we expect management to progressively increase its staff headcount over the next 2 to 3 years to prepare for the increase in hospital GFA and new clinic space.

In a separate announcement, it was indicated that Mr Lui Chong Chee, CFO of the Group, has submitted his resignation effective from 1 Mar 2014 to “pursue other opportunities and personal interest”. The company is now searching for a new CFO and in the meantime, Mrs Kimmy Goh will cover the duties. We do not expect a significant impact from the resignation and believe operations will continue smoothly.

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