The Board of NMC announced the temporary suspension of its shares on the London Stock Exchange to ensure the smooth operation of the market. To restore its admission to trading, the company has promised on providing additional clarity on its financial position to the market.
The Review Advisers of the company have identified potential inconsistencies and discrepancies in the ledger entries and bank statements in the course of reconciling NMC's net debt and cash balances as at 15th December 2019. The Review Advisers and the Committee members are carrying out investigation on these matters to figure out the quantum of discrepancies.
Due to these issues, and delay in review, an individual from the Group’s treasury department has been suspended and the board is reviewing whether other members are involved as well. It has further stated that appropriate action would be taken if found guilty on completion of the independent review. The independent review shall take several weeks to conclude due to unexpected delay and additional work. As a result, the company has delayed publishing of its full year results for the fiscal year 2019 and is expected to announce results post-April 2020.
In addition, the Board of the company has removed the Chief Executive Officer (CEO) and Director, Mr Prasanth Manghat from his position in the company with immediate effect. Also, the Company has given an extension to the sick leave of Chief Financial Officer, Prashanth Shenoy, who has been on leave due to health issues. The Board of the company has though confided trust on Chief Operating Officer, Michael Davis, to serves as Interim CEO in the company for the foreseeable future.
NMC Health Plc-Stock price performance
Daily Chart as on 27-February-20, before the market closed (Source: Thomson Reuters)
On 27th February 2020, while writing at 08:55 AM GMT, NMC Health Plc’s shares traded at the market price of GBX 938 per share. The company’s market capitalisation was at £1.97 billion at the time of writing. However, the shares of the company have been temporarily suspended and the last traded price was GBX 938.40.
On 11th September 2019, the shares of NMC Health Plc have touched a new peak of GBX 3,059.00 and reached the lowest price level of GBX 677.01 on 7th February 2020 in the last 52 weeks. The company’s shares last reported price was at 69.34 per cent lower from the 52-week high price mark and 38.55 per cent higher than the 52-week low price mark.
The company’s 5-day stock's daily average traded volume was 2,727,294.60; 30 days daily average traded volume- 3,805,638.40- and 90-days daily average traded volume – 2,205,831.54. The volatility of the company’s stock was almost same as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.00 with a gross dividend yield of 1.93 per cent.
The shares of the company have delivered a negative return of 64.27 per cent in the last quarter. The company’s stock plunged by 46.89 per cent from the start of the year to till date. The company’s stock has given investors 65.70 per cent of a negative return in the last year.
Business overview: NMC Health PLC
Incepted in 1975, NMC Health PLC (LON: NMC) is an Abu Dhabi-based diversified health care company operating in the United Arab Emirates. The group’s business is differentiated in two reportable segments, namely healthcare and distribution & services. It was the first company from Abu Dhabi to list on the London Stock Exchange and is a constituent of FTSE 100 index.
The group is engaged in business sectors ranging from health care, trading, and information technology and is the largest private healthcare company in the United Arab Emirates and ranks amongst the biggest fertility service providers in the world. In the Gulf Cooperation Council ("GCC"), NMC is one of the leading private healthcare operators.
The Group has a global network of hospitals across nineteen countries ranging from specialised maternity and fertility clinics to multi-specialty inpatient and outpatient clinics and hospitals. NMC is one of the leaders among in-vitro fertilisation operators around the world. The NMC Health group provides long term medical care through its subsidiary ProVita in the UAE.
NMC has a total capacity of more than 2,000 licensed beds across its network. The NMC Health group looked after more than 7.5 million patients in 2018. The NMC Health group for the year ended 31 December 2018, reported revenues of US$2.1 billion and was quoted on the Main Market of the London Stock Exchange in 2012.
The company provides cost-effective services, accurate diagnostic testing and is a leading healthcare provider in every region and community it serves. The company keeps on launching new platforms and upgrade the old products and services to become one of the market leaders in the healthcare market.
NMC Recent business performance
(Source: Half-yearly report, Company’s website)
In the first half of the financial year 2019, the group’s revenue climbed to US $1,236.0 million (Pre-IFRS16) and recorded a growth of 32.6 per cent on a YoY basis. The company’s EBITDA surged by 22.5 per cent to the US$ 276.3 million (Pre-IFRS16) against the year-over period. However, EBITDA Margin (Pre-IFRS16) narrowed by 180bps to 22.4 per cent from 24.2 per cent, and Earnings Per Share (Pre-IFRS16), recorded a growth of 29.1 per cent on a YoY basis to 72 cents.
The reported gross margin in H1 FY2019 surged by 3.6 per cent to 44.1 per cent against 40.5 per cent reported last year for the same period.
Revenue is the income generated by the company from its normal day to day operations. The company’s total revenue increased from US$ 1,603.4 million in FY2017 to US$ 2,057.3 million in FY2018.
PAT (Profit after tax) is used to measure the performance of the company after the inclusion of interest expense and accounting effects for business combinations. The company’s Profit after tax increased to US$ 251.9 million in FY2018 from US$ 209.2 million in FY2017.