United Arab Emirates-based private hospital operator NMC Health (NMC) keeps the good news coming after it reiterates upgraded guidance for earnings and sales over the next two years.

Catalysts for growth include geographic expansion and focus on higher margin services through operations and management contracts.

The UAE healthcare market is also forecast to grow as an ageing population suffers from more diseases.

NMC expects to deliver a 24% rise in sales with organic revenue representing over half of this growth in 2018. Reassuringly, growth is expected to continue at a similar pace in 2019 with revenue forecast to jump 22% to 24% year-on-year.

Shares in the firm are up only 1.1% at £32 as investors were already aware of the upbeat forecasts.

CASH FLOW TO IMPROVE

Cash flow is expected to improve as NMC Health ramps up receivables collection in its distribution business following a slower performance due to extended holidays earlier in the year.

NMC’s joint venture, dubbed one of the ‘most prominent ongoing developments in the healthcare sector in Saudi Arabia,’ continues to progress well and is expected to be signed early in 2019.

The joint venture with Hassana Investment is set to create a new national healthcare company in Saudi Arabia.

In a further bout of promising news, NMC has sealed a new operations and management agreement to manage a contract in Seychelles.

Berenberg’s Charles Weston says the update confirms NMC’s strong operational execution, in sharp contrast to embattled peer Mediclinic (MDC).

Shares in Mediclinic are near an all-time low amid earnings pressure after its Swiss subsidiary struggled with weaker than forecast in-patient admission growth.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJBell logo

Issue Date: 10 Dec 2018