Ann: UK Non-cash Provisioning and FY18 Guidance Update, page-10

"More relevant is that it is a downgrade of Australian earnings which is the engine room of RHC.
The outlook was downgraded also - "expected to remain challenging"
So what PE applies to a challenging earnings environment?
I am thinking a lot lower than what it is now."


They have basically downgraded to full-year EPS growth that is on par with that achieved for the first half.

So, one wonders what it was that they expected to happen in the second-half that was to cause an increase in the rate of growth.


Of course, the question for long-term shareholders is whether the softness in trading conditions currently being experienced is structural, or merely cyclical.

The only way it can be structural is if:

1. The population ceases to age (i.e., demand for hospitalisation services ceases to increase);

or

2. The public system - already under some pressure - simply bears all the growth in demand.


Watch out for some typically-hysterical media reports over the next 2 years about a crisis in the public hospital system.

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