Daily ShareChat: Wakefield Health

By Jenny Ruth

Wakefield Health's profit downgrade has let ABN Amro Craigs analyst Michelle Perkins to slash her 2010 and 2011 net profit forecasts by more than 20%.

The private hospital operator said its first-half net profit could be down between 30% and 40% on last year's first half.

"The extent of the downgrade is surprising given Wakefield's recent investor presentation (on July 20) made no mention of a negative outlook, other than to reiterate cautious comments made in conjunction with the full-year result (announced on May 19)," Perkins says.

A recent uptick in the volume of elective surgeries through the Capital & Coast District Health Board in April, May and June, the months Wakefield noted as being negatively affected, may partly reflect the ramp-up of the new Wellington Hospital "but this trend has obviously not been relicated at Wakefield."

The downgrade is a clear indication Wakefield's operating theatres are not running at or close to full capacity and highlights its high fixed-cost structure, Perkins says.

She has cut her 2010 net profit forecast from $10.7 million to $8.1 million compared with the $10.1 million result reported for the year ended March and cut her valuation of the stock from $9.95 to $8.57.

BROKER CALL:  ABN Amro Craigs rate Wakefield Health (NZX: WFD ) as hold.

Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Printable version

Related News

Wakefield discovers past banking covenant breach, now remedied
Wakefield 1st half net profit up nearly 33%
Wakefield reports buoyant start to the year but expects weaker second half
Wakefield warns of further quake-strengthening costs
Wakefield Health to tap investors for $15 mln to pay for acquisitions
Wakefield spends $6.8 mln on specialist Auckland clinics
Wakefield Health mails out bid for Norfolk
Daily ShareChat: Wakefield Health
Wakefield bid for Norfolk stumbles again
Wakefield sweetens offer for Norfolk

Get quotes for Wakefield Health Limited Ordinary Shares (WFD)