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An Investor’s Quick Overview Of Raffles Medical Group Ltd’s Track Record In Growing Its Business

Raffles Medical Group Ltd (SGX: BSL) runs hospital and healthcare services in Singapore. It also has a network of clinics in five countries and thirteen cities. In addition, the company is developing two hospitals in China.

One of the things that I like to do when analysing a company is to study its track record. The past is no guarantee of the future. But historical information is the most reliable thing that we can use as our basis to forecast what lies ahead.

And this brings me to the main purpose of this article, which is to have a quick overview of Raffles Medical’s historical business growth. The table below is a snapshot of the company’s important financial metrics from FY2013 (financial year ended 31 December 2013) to FY2017 (financial year ended 31 December 2017):

Source: Raffles Medical’s 2017 Annual Report

Here are a few points worth noting:

1. First of all, revenue increased from S$341.0 million to S$477.6 million, up by 40.0% during the period. This translates to a CAGR (compound average growth rate) of 8.8%.

2. Secondly, profit after tax and minority interest (PATMI) has grown from S$ 64.5 million in FY2013 to S$ 70.8 million in FY2017, up by 9.8% during the period. That translates to a CAGR of 2.4% during the period. Similarly, EPS (earnings per share) has grown, though slower, by a total of 3.6% during the period.

3. Last but not least, dividend per share has grown by 34.7% during the period or a CAGR of 7.7% during the period.

In sum, Raffles Medical delivered a respectable growth in revenue and dividend in the past five years. On the downside, EPS growth rate has lagged the growth in its revenue mainly due to expenses growing faster compared to its revenue during the period.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has a recommendation for Raffles Medical Group Ltd.