Overview
NMC Health Plc (NMC) was incorporated in the year 1975 and is the largest private healthcare company in UAE. It provides healthcare services internationally with U.A.E (United Arab Emirates) and Spain being the major markets. The company has two business operations being Healthcare & Distribution and Services. The company owns and manages 135 (approximately) healthcare facilities which include hospitals, surgery centres, fertility centres and medical centres. The company is also involved in the distribution of medical equipment, pharmaceutical products, veterinary products, cosmetics, IT products and consumer products. The company’s shares are listed on the London Stock Exchange and a constituent of FTSE 100 Index.

Key Statistics


Financial Results and Review - FY2018 ($, thousand) 

 
In the Financial year 2018, NMC Health Plc’s reported revenue was $2,057.3 million in the financial year ending December 2018, against $1,603.4 million in the financial year 2017. There was an increase of 28.3 per cent due to the introduction of mandatory health insurance policy in Dubai and all the divisions have shown significant growth as compared to the previous year. The gross profit for the company stood at $841.1 million in FY 2018 as compared to $635.3 million in FY 2017. The EBITDA for the FY 2018 stood at $487.4 million as compared to $353.4 million in FY 2017. There was an increase of 37.9 per cent due to accelerated revenue growth in the current financial year. The profit from operations for FY 2018 stood at $379.8 million against $273.5 million in FY 2017. The company’s reported profit for the year before tax stood at $256.9 million in FY 2018 as compared to $210.4 million in FY 2017. The profit for the year in FY 2018 stood at $251.9 million as compared to $209.2 million in FY 2017. The basic EPS for FY 2018 stood at US$1.196 against US$0.910 in FY 2017. The company reported a diluted EPS of US$1.188 in FY 2018 as compared to US$0.903 in FY 2017.

Share Price Performance

 
Daily Chart as at Mar-26-19, before the market close(Source: Thomson Reuters)
 
On 26th March 2019, at the time of writing (before the market close, GMT 9:56 AM), NMC Health Plc shares were trading at GBX 2,383.00, up by 1.58 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 4,376.00/GBX 2,344.00. The outstanding market capitalisation was around £4.88 billion and a dividend yield of 0.75 per cent.
 
Valuation Methodology


Conclusion
The companies had shown significant growth in both top line and bottom-line performance in the current financial year. The active management team and strategic positioning of the joint venture initiatives with GOSI-Hassana Investment Company will provide growth opportunities to the company in near to medium outlook. The company through both organic and inorganic means can identify new potential markets. Despite the current trading price is on the lower side but the company had shown exceptional YOY growth as indicated by 22-24% rise in the revenue and 18-20% rise in the EBITDA. Moreover, the acquisitions done by the company will help them to achieve FY2019 forecasted growth. Based on the strong growth prospects of the company and the valuation done using the above method, we have given a BUY recommendation at the closing price of GBX 2,346.00 (as on 25th March 2019) with single-digit upside potential based on 14.2x NTM EV/EBITDA (approx.) on FY19E EBITDA.
 
*All forecasted figures and peers have been taken from Thomson Reuters. Currency exchange rate taken for 1 USD = 0.7576 GBP

*The buy recommendation is also valid for the current price as covered in the report (as on Mar-26-19).
 

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