We first mentioned NMC when the shares were reaching up to the £18 level. Each share now costs you close to £32 and the company is a proud new member of the FTSE100.
To recap, NMC runs hospitals and chemist shops in the United Arab Emirates (UAE) with a 25% market share in a population that has grown from 200,000 in the 1960s, to over ten million today. Health insurance is being mandated by legislation and their fertility clinics are growing sales at 20% per annum on a $8k per cycle price point. Their long term care beds for Arabia’s population of severely handicapped cost $500k per annum compared to $1 million in the USA. NMC also has a Distribution division that trades in pharmaceutical products and equipment.
NMC’s strong management and local connections have proved to be a powerful competitive force in the UAE. As they branch out into Saudi Arabia, I watch with interest to see if they can replicate the same levels of growth in the new territory. If things progress according to plan and the UAE assets are also brought up to full capacity, the business should continue to grow in an attractive macro environment.
