Week Ending 24.08.2018
- The USD strength opens the debate on options of policy or other factors that could end its rally.
- Close to the currency debate is the question whether the Fed may pause based on currency strength or political influence. Fed watchers consider this unlikely.
In a week dominated by politics and profit results, economic developments struggled to feature. News is, in any event, light and with much of the northern hemisphere on hot holidays, markets are not paying attention to anything that does not have an impact on the outlook. The weather conditions across much of the northern world is likely to mess with data trends in July and may therefore be discounted.
For the US, the attention has instead been on comments from the administration that the Fed rate rises are not in the interest of the economy and that the USD strength is caused by external factors. The question is what can or should be done.
On the USD there are few and largely unpalatable or impractical options. Intervening directly into currencies is rare, and unilaterally even more so. There has been coordinated central bank intervention to deal with specific events or unusual moves in exchange rates, whereas the last time the US went on their own (in 1990) it had almost no impact. The US has an Exchange Stability Fund but with only $22 billion, it would have no discernible longer-term effect. Other foreign reserves that could be brought to the task could take the total to $200 billion, still a small number in the context of FX markets.
Talking the dollar down by implying use of such funds may cause some speculative positions to unwind, as that may be perceived as a forerunner for further policy action. This could be the best chance to weaken the USD in the short term.
The US could lean on other countries to manage their foreign reserves to weaken the USD. Notably, China still sets a boundary for its currency and it is possible that trade discussion could include Chinese intervention to limit the fall in the CNY. European countries are also capable, given surpluses in the current account.
The consensus is that USD strength is already overdone, based on a fundamental assessment of real rate differentials, current account positions and outlook. Its trade weighted index is near historic highs and is overvalued against most of its major trading partners.
Trade Weighted USD Index: Broad
The easiest way to get the USD down is to settle the issues that have caused other currencies to weaken, namely trade disputes. For example, the Mexican peso has rallied by about 5% since the potential for its side of NAFTA to come to some arrangement.
- USD strength has been positive for most unhedged positions, though portfolios invariably have multi-currency exposure. Given the messy circumstances, we prefer to wait out a judgement by currency markets on the likely direction. The AUD is at fair value and therefore makes no immediate call to action.
A parallel is the Fed rate rises that are part of the USD story, but by no means are the sole cause. Earlier this year many FX commentators took the view that the large increase in Treasury issuance due to a budget deficit of 5% would swamp demand and push down the dollar even with rate increases. As noted, however, other factors have intervened.
Should the Fed, therefore, pause to limit the USD move given that financial conditions tighten as currencies rally? This argument applies less to the US compared to economies such as Australia, as foreign capital movements are relatively modest in the US given it is mostly a closed economy notwithstanding the attention to the trade deficit. By way of reference, US imports as a percentage of GDP is 14% and exports 12%, which is amongst the lowest (as a proportion of GDP) in the 160 countries on the World Bank database.
The case is rather that Fed Chairman, Powell, as the relatively recent head of the Fed is very unlikely to change course based on commentary from the administration. His evidence for the rate movements is based on the fundamentally stronger US economy, with unemployment at historic lows, corporate confidence and business investment, and not least, a large fiscal stimulus. At best the Fed could suggest that inflation was still too low and that a pause might be appropriate. The risk then would be that financial markets judge the Fed to be vulnerable to pressure and behind the curve, which would require a bigger movement in rates later, as was the case in 1994.
- The safe assumption is that rate increases of 25bp per quarter will unfold as indicated by the Fed projections. But the air of uncertainty will prey on financial markets that have been accustomed to guidance without outside debate.
There is another US feature that will have a longer term impact, yet has not gained the attention it should in light of other influences. The US Cabinet last week asked the Congressional Budget Office (CBO) to model the path of US government debt under various scenarios. Naturally this was a complex task and the CBO presented a range of outcomes. The simple conclusion that there was little chance that debt would diminish, even allowing for a sustained 3% economic growth, and more likely rise as a proportion of GDP.
Federal Budget Deficit Forecasts for 2018-2027
Few countries with high government debt/GDP show good long-term growth as the government sector crowds out private borrowing and cost of servicing debt eats into the fiscal budget. This is especially attenuated in the US as some parts of the budget are no go zones, particularly defence spending. Healthcare is the other where the burden of high costs compared to other countries has not found a policy solution.
- The US budget deficit will require funding of $1 trillion per year for the next ten years. Treasury issuance will ramp up into 2019 and put pressure on the bond market.
Focus on ETFs
- Money Market ETFs have been considered an alternative cash management tool, however, like any ETF it is important to comprehend the underlying assets and possible risks.
Money market ETFs essentially aim to offer cash-like returns while providing investors with easily accessible, cash-equivalent assets. This is achieved through investing in highly liquid, investment grade short-term (usually less than one year) debt and monetary products. These are among the least risky investments of fixed income ETFs. The providers will looking the best interest rates using the money market deposit accounts, online savings accounts and certificates of deposit.
There are three local ETFs in the money-market fund category. BetaShares Australian High Interest Cash ETF (AAA) holds call deposit accounts, as well as notice deposit accounts through the four major banks as well as ME Bank and Bank of Tokyo-Mitsubishi UFJ. This is one of the largest ETFs listed on the ASX and because of its size the fund may be able to obtain a higher interest rate than that of standard retail deposits. However, it should be noted that it is not the same as a deposit with a bank; an investor will not receive the government guarantee associated with bank deposits. The aims to maintain daily liquidity through having 20% of the fund in at-call account, however, the fund can have up to 80% in less liquid 31-day notice accounts. Therefore, liquidity could be tested under circumstances of mass redemptions from investors. The fund is currently yielding 2%pa, however, is expensive with a management fee of 0.18%.
BetaShares Australian High Interest Cash ETF (AAA) versus various rates
The UBS IQ Cash ETF (MONY) holds cash and cash equivalent investments with a minimum of 50% of the fund with the big four banks. Additionally, all investments must have a term of less than or equal to 6 months to maturity and a fund duration of 0.5 years. Currently, MONY is offering a yield of 1.65%. Fees are relatively high for a product such as 0.18%.
The iShares Core Cash ETF (BILL) holds securities that can be converted to cash in a short period of time, including negotiable certificates of deposit (NCDs), cash deposits, bank bills and does not include term deposits and31-day notice deposit accounts. This fund offers a higher level of diversification compared to term deposits as the investment team aims to keep the income and return characteristics similar to that of the S&P/ASX Bank Bill Index. Of the three funds this has the lowest fee of 0.07%, however, it S&P/ASX Bank Bill Index, which would mean the fund is not achieving its objective set out in its PDS. This is a result of having no exposure to less liquid notice accounts or floating rate notes.
- These ETFs should not be considered for long-term investing, as the yields on offer can barely keep up with inflation rates. These ETFs can be used to deploy cash opportunistically whilst still maintaining some liquidity. However, for investors who do not require immediate liquidity should consider term deposits as rates have recently shown signs of improvement as well as the benefit of the government guarantee for accounts up to $250,000.
Fixed Income Update
- Government bonds in the developed world have benefited from the recent Turkey turmoil, while the emerging market sector has come under pressure. We examine the recent market moves across fixed income and make recommendations for timing of investments.
The most pronounced market disruption from the trade restrictions put on Turkey was the negative effect that this has had on emerging markets. These currencies have depreciated as investor money has rejected ‘riskier’ debt markets in favour of safe-haven investments. The biggest beneficiary has been government bonds in the developed world, with much of the flows buying up US treasuries.
The yield on the USD 10-year treasury has fallen to 2.82%, after trading through 3% at the beginning of August. Shorter-dated (i.e. 2-year government bonds) are little changed, with yields only slipping a few basis points over the last three weeks. A fall in yields on the long end and stability on the short end has resulted in a further flattening of the US yield curve. The difference between 2 and 10-year treasury yields has declined to a new decade low of 23 basis points. Interestingly, the fall in yields on longer-dated US treasuries has been in the face of some heavy treasury issuance. The Treasury's borrowing needs in the second half of the year will be the highest since the financial crisis. New debt has been termed out over the last 2 weeks into the 5-year and 10-year part of the curve.
Shift in US yield curve since the recent Turkey trade tariffs
Domestic government bonds have also benefited from the risk off trade, with yields falling right across the yield curve in the last three weeks. The probability of a rate hike in Australia has been pushed back further. The market is now pricing in only a 40% chance of a rate rise by September 2019. This is down from 50% as recently as three weeks ago. We are now looking at April 2020 before a rate hike is fully priced in.
To date, Australian credit also seems to also be broadly unaffected by the emerging market crisis. The Australian iTraxx index, which is a good measure of investment grade credit spreads, has been relatively stable om the last two weeks. Offshore, it is a similar story, with no major moves in credit spreads in US investment grade credit.
Therefore, the risk off trade has been very much centred around emerging markets, and, to a lesser exten,t global high yield credits. Good quality investment grade and government bonds have broadly been unaffected or have benefited from this latest disturbance.
The index measuring emerging market government bond spreads has shown an increase in the spread by some 70bp in the last three weeks. This is the highest level since February 2016. This is driven by a combination of the local currency falls and interest rates rising (to counter the falling currency), causing bond prices to fall. Intuitively, the region appears cheap, although we are mindful that the sector will be volatile and responsive to further trade tariff discussions.
- On balance, our view is that EM appears oversold, and for those with a high-risk tolerance, an appropriately sized holding is recommended. For access, we recommend the Legg Mason Brandywine GOFI Fund. In contrast, unless a global recession is imminent, long-dated bonds look overbought. While we still recommend diversified portfolios have exposure to long duration bonds or funds, timing is important. Those with cash to deploy may be best waiting for rates in the US to push back to the levels of last month before investing.
- BHP Billiton’s healthy cashflow is welcomed by investors, with dividends and share buybacks on the menu.
- While BHP benefits from higher commodity prices, several industrial companies have faced margin pressure as a result, including Brambles (BXB) and Amcor (AMC), hindering earnings in FY18. A proposed asset sale by BXB has been well received by the market.
- Investors are paying a big price for modest growth and another period of competitive pressure in the supermarket sector.
- Coca-Cola Amatil (CCL) has reported better sales than recent trends, although driven by price investment as opposed to product innovation.
- The cycle has been improving for mining and energy services companies. Monadelphous (MND) is still facing a transitional year as it rolls off the peak of the recent LNG capex boom in Australia, while WorleyParsons (WOR) continues to tick all the boxes as its pipeline of work grows.
- Sydney Airport’s (SYD) best defence against rising bond yields is a growing distribution, which is expected to grow by 9% for the calendar year.
- Information technology was the standout performer this week, with a string of positive results. A number of small cap managers will participate in these returns, while Trade Me Group (TME) is the value option in the sector, trading at a significant discount to its Australian peers.
- Star Entertainment (SGR) has rounded out a positive reporting season for gaming and wagering companies.
BHP Billiton’s (BHP) full year result was largely in line with expectations, with consensus figures muddied by the exclusion of its US shale energy assets in continuing operations. Underlying earnings growth of 33% was driven by a better price environment, with all major commodities (with the exception of iron ore which was marginally lower) higher on average over the course of the year. Consistent with its recent priority of higher shareholder returns, full year dividends increased by 42%, with its dividend now just below its peak year of FY15 (although higher for domestic investors following the decline in the Australian dollar).
BHP was able to further increase its post-tax return on capital to 14%. The improvement in the quality of its asset base is clear from the additional rise to approximately 18% following the sale of its US shale energy assets. While rising prices have obviously been the key driver, a focus on productivity and extracting the most from its assets has also been important.
BHP Billiton: Return on Capital Employed by Division
In the past, volume growth was one of the key controllable measures watched by investors as the driver of BHP’s share price, however this has now transitioned to cash flow generation and the strength of its balance sheet. On these metrics, BHP performed well; net debt has now fallen to the low end of its target range and this, along with good cost performance allowed additional dividends above its minimum 50% payout. Although BHP didn’t provide further detail on how it would return the US$11bn proceeds from the sale of its US shale assets (to be received later this year), the most likely outcome is a buyback of both Australian and UK-listed stock. While BHP and its peers have lost the potential upside to earnings implied by spot commodity prices, a healthy dividend yield of circa 5%, buyback support for the share price and a reasonable valuation (at less than 6X EV/EBITDA) provide a solid argument for retaining exposure to the stock.
As BHP benefited from growth in commodity prices, this factor led to a challenging year for Amcor (AMC). While its earnings met consensus forecasts, this was assisted by a low tax rate and hence deemed to be of low quality. Typically cast as having relatively predictable earnings, underlying profit before interest and tax fell around 4% short of expectations and declined 3% in constant currency terms, leading to underperformance for the stock.
In the context of the hurdles AMC had to overcome through the year, the outcome was perhaps not too bad. While AMC faced softer volumes in some of its key categories, the key issue has undoubtedly been the inflation in raw material costs, which were notable in the first half but then continued through much of the year. With these generally passed onto its customers with a lag, a more stable cost environment is required to help catch up and restore margins. Given this recent trend, the company flagged that this is still likely to remain a headwind in 1H19 before the recovery becomes more evident in the second half.
Amcor: Raw Material Cost Inflation
As we recently noted, AMC shares had been weaker on the issues cited above and, to the extent that these are cyclical in nature, some value has emerged in the stock, with its P/E falling to ~16X and now at a discount to ASX industrials stocks. While it has paid a full price for its proposed acquisition of Bemis of the US, the company has a good track record of integration. While earnings pressure is likely to persist in the short term, an improving outlook for longer term investors can be painted through the cycling of weaker volumes, eventual raw material cost recovery and then synergies from its proposed acquisition of Bemis.
Brambles (BXB) faced similar issues to Amcor with cost inflation in FY18, although its full year result was overshadowed by an announcement that is was intending to divest its IFCO reusable plastic container business, which accounts for 14% of BXB’s group profit. The market reaction was likely in response to this, rather than the result itself, and not atypical given the recent history of demergers on the ASX, with investors appearing to value the separate businesses higher than the combined entity.
IFCO was acquired by BXB in 2011 and the RPC business has performed better from a revenue growth perspective (recording a 12% top line CAGR over the last four years, or double the rate of residual BXB business). However, by BXB’s own preferred return on invested capital (ROIC) measure, the business has failed to achieve an adequate return for the company and has hence been a drag on the broader group’s returns. Recent returns in IFCO’s North American business, in particular, have been quite disappointing after it lost a key contract. While a divestment will deprive BXB of a higher growth avenue, the payoff will likely be higher spend on better-returning options in its CHEP division, which still has a large global market opportunity.
BXB’s result itself was broadly in line with expectations, or flat year-on-year. The highlight was better volume and sales growth in its core CHEP business, although this was largely offset by escalating transport and lumber costs. With a high end of financial year exit rate of cost inflation, there appears little prospect of any significant recovery through FY19, with the company noting that surcharges, indexation and contract pricing will only partially offset these through the year. Following a good share price rally into its FY18 result, the stock is probably fairly valued, accounting for the short-term risk to earnings, however further news on the separation of IFCO is the more likely share price catalyst in the next six months.
Brambles: IFCO ROIC
Coca-Cola Amatil’s (CCL) earnings have stagnated in recent years, faced with a structural headwind of declining soft drink sales. The company’s half year result was better than expectations, although this was a relatively low hurdle to clear, with a fall in underlying earnings of 1.6% and an unchanged dividend.
Results were mixed across its geographies. Its core Australian division was more encouraging than recent trends, although benefited from lower redemptions in the NSW container deposit scheme than anticipated; New Zealand recorded healthy growth; while a modest increase in earnings in Indonesia and PNG was a decent outcome given market conditions.
Coca-Cola Amatil: Earnings Summary
A focus within Australia has been to improve the trajectory of volume growth in the business and the company had some success on this front, with only a slight decline for the six months. Of some concern, however, was how this was achieved – via sharper pricing – instead of the innovative growth in products that used to typify the company. Consequently, margins edged down and the short-term prospect of improvement here appears low, with the company reiterating its commitment of ongoing ‘price investment’ into the second half.
On present forecasts, CCL is expected to fall short of its targeted ‘mid single-digit EPS growth’ target this year and in medium term. With a benign earnings profile, investors look to the dividend yield, which is reasonable at 4.6%, although has fallen after a share re-rate through the first half of 2018. Presently, there appears to be better ‘value’ options among large caps.
Among the more cyclical exposures in the Australian market has been mining and energy services companies, which have experienced changing fortunes over the last several years. High levels of activity and investment in the early years of this decade led to escalating revenues and margins, which was followed by a rapid deceleration in both as commodity prices collapsed. The last two years has seen somewhat of a recovery, with a pickup in spending, much of which is ‘catch-up’ capex after the pause that occurred when cash generation became a priority for their customer base. Monadelphous (MND) and WorleyParsons (WOR) both reported this week in the sector, although have contrasting outlooks.
Monadelphous has been among the better managed engineering and construction companies, avoiding the large individual losses that some of its peers have experienced on individual contracts with limited debt on its balance sheet through the cycle, helping to sustain a premium multiple to the sector. The company has benefited firstly from the boom in capital expenditure among the key iron ore operators in the Pilbara, and then transitioned to the large-scale LNG projects around the country.
For FY18, MND reported a 24% rise in underlying earnings and a 15% rise in full year dividends, although notably cash flow was below par. While MND has looked to grow more of a recurring revenue base through increasing its proportion of maintenance capex work, the company is still largely tied to the construction capex cycle and the associated lumpiness of these earnings. By way of illustration, the completion of work at the Ichthys LNG Project will leave a significant earnings gap to cover for the company, with work on this comprising almost a third of group revenues in FY18. MND pointed towards a promising developing pipeline of opportunities in iron ore and base metals, although the timing of these will mean that the flow through to earnings will not be material this financial year. With consensus forecasting a declining earnings outcome for FY19, a forward multiple of 21X appears somewhat expensive.
WorleyParsons meanwhile ticked most of the boxes with its result, with a 39% rise in underlying profit for the year. WOR’s key indicators were positive: it has a rising backlog of work (which increased further from its most recent update); headcount numbers are increasing, showing confidence in the outlook; staff utilisation is tracking above its 85% target and margins are again on the rise.
WorleyParsons: Staff Utilisation
WOR is primarily exposed to the energy sector and hence there has historically been a high correlation with its share price and the oil price. The company addressed its cost base during the downturn triggered by the collapse in oil over 2014-15, taking large overhead costs out of its business. It is now looking to convert this operating leverage into improving margins as the cycle improves and its customer base catches up with investment that was deferred through this period. The natural rate of oil field decline provides support for an increasing amount of work in the medium term. At face value, the stock appears expensive on 24X, although there is a growing expectation of a solid environment for new work and conditions that would underpin further earnings upgrades. WOR has been a significant contributor to our model equity portfolio since added earlier this year.
Sydney Airport (SYD) produced another solid result, with 8.0% growth in EBITDA, underpinning the group’s 8.7% guidance for growth in full year distribution. Revenue growth of 7.9% for the half was supported by a 3.3% rise in passenger numbers, with this flowing through to the key revenue lines of aeronautical charges, retail, property and parking. While passenger growth has slowed from 12 months ago and the domestic market appears to be hampered by a more rational pricing environment by the Qantas and Virgin, the growth in international passenger continues to be critical in sustaining revenue expansion in the high single-digit range. As highlighted by SYD, international passengers are much more valuable to the airport, generating revenue 3-4x that per domestic passenger, given higher associated aeronautical fees and retail spend.
Sydney Airport: Passenger Mix, Revenue and Capacity
The medium to long term opportunity for SYD remians quite sound, driven by the growth in international passengers, particularly from Asia. While China has been key in this development this decade and will continue to be in the foreseeable future, other markets will also be important; the recently announced liberalised air services agreement (which have in the past resulted in a step up in pasenger growth between countries) between Australia and India opens another door for the airport.
From a valuation perspective, the important data point that requires close observation is long term bond yields. These are likely more variable than any change to SYD’s short term operating outlook and, as such, the fall and then recovery in SYD’s share price (and other bond proxies) this year has more reflected the opposite movement in bond yields. Notwithstanding this, SYD remains among the better placed among the bond proxies in the market due to the expected growth in distibutions (8% compound growth expected by analysts between FY17-20) and is trading at close to its average EV/EBITDA multiple over the last few years.
Woolworths (WOW) FY2018 result was well in line with expectations. Net profit was up 12.9% driven largely by the supermarket division (EBIT up 9.6%) and a fall in interest and tax payments. The outcome in other operations was less attractive, but nonetheless in line with estimates.
Opinion on the outlook, however, is now mixed. The impact of the removal of one time plastic bags and the Coles Little Shop promotion have weighed on the sales growth into this financial year, with comparable sales momentum declining from 4.3% in FY18 to only 1.3% so far this quarter. These may prove to be temporary and consumer surveys show no underlying relative dissatisfaction with the Woolworths offer, yet it illustrates how little it takes to swing marginal shoppers between stores. The plastic bag removal may change behaviour for small basket and impulse buyers who do not carry bags with them and dislike paying for bags for a few items. With Coles looking for more traction as it demerges from Wesfarmers, it is safe to say the battleground is likely to intensify.
Elsewhere, the businesses could be described as less bad. Big W eventually scraped into positive comparable sales against a very weak comp, and losses reduced (from $151m to $110m) but showed no signs of slowing. New Zealand supermarket profits eased, though sales picked up a touch.
One notable feature was a rise in cost of doing business. Some of this will be higher wages due to the EBA and impact from the rise in minimum wage rates to above food inflation, but also an active decision to raise the execution instore. Reducing costs by lowering staff has historically always resulted in a payback on sales growth in following periods. With WOW trading at 20X PE for FY19 and a lightweight yield of 3.6%, we believe there are better options elsewhere.
The IT sector has been a happy hunting ground for mid and small cap managers over the last 12 months and the performance of individual stocks is both an acknowledgement of the superior growth characteristics on offer and the increasing premium attached to this in the current market. Among the lesser-known names is Trade Me Group (TME) of New Zealand, which has found its way into the Investors Mutual SMAs.
TME can be viewed as an online classifieds conglomerate (a hybrid that includes cars, property, jobs and general items) and is among the market leaders in its key categories. The parallels and drivers of growth with the individual market companies of Australia (carsales.com, REA Group, Seek) are clear, with the transition from print to online classifieds, followed by growth in ‘premium’ listing. However, there are also differences in each of the markets. For instance, in real estate, TME’s key competitor is 50% owned by the largest real estate agents in a concentrated real estate market, somewhat limiting the prospect of yield growth in this division.
The key critiscism of TME, however, is the position of its Marketplace division, which is a platform for selling new and used general items. Facebook Marketplace has already made inroads into used goods, while the threat of Amazon entering the market in new goods will likely persist. The outlook of the overall business is therefore held back by this division and the varying outlooks on how it counters the growing competition in this space.
Trade Me: FY18 Revenue Mix
For FY18, TME recorded profit growth of 4%, which was broadly in line with expectations. While top line growth was a respectable 7%, earnings growth was more subdued following an increase in headcount and cost of sales. The trends noted above largely played out as anticipated; motors, property and job ads all reported revenue growth of in excess of 10%, while general items grew by just 1%. Compared to its single-market Australian listed peers, TME has a lower but more defensive growth profile given its diversification and the issues facing its Marketplace business, although the positives include a relatively strong balance sheet and dividend yield of more than 4%. Having not enjoyed the same P/E re-rate as the rest of this group in the last 18 months, it screens as good relative value in the sector.
Star Entertainment (SGR) rounded out a positive reporting season for gaming and wagering companies, with a result that comfortably exceeded consensus forecasts. ‘Normalised” EBITDA, which adjusts for expected win rates on its table games for high rollers and gives the best indication of the underlying performance of the business, rose by 14% over the year, with increased momentum evident into the second half. Meanwhile, statutory EBITDA, which reflects actual win rates, declined 6% in what was a relatively successful year for gamblers. A flagged shift in the group’s dividend policy, which now targets a minimum 70% payout ratio, led to the final dividend lifting by more than 50%.
As illustrated in the following chart, while there were positive contributions from both the main gaming floors and hotels in Sydney and Queensland, the real kicker was from the rebound in its VIP high roller business, equating to a 52% increase for the year. This reflects somewhat of a return to more normal market conditions following the disruption that followed the arrest of Crown employees in China, but also market share gains. Another positive metric was the visitation growth in its core Star Casino in Sydney, up 11%, (although somewhat unsurprising given the international passenger growth highlighted from Sydney Airport above).
Star Entertainment: FY18 Key Drivers
SGR also provided an upbeat trading update, noting broad-based revenue growth across the group, ‘pleasing’ VIP volumes and improvement in domestic revenue growth trends. Offering a reasonable forward earnings profile linked to incoming tourism and on an undemanding valuation, we have SGR in our model equity portfolio.
Reporting season concludes next week, with a handful of companies still to announce results:
Monday: Infigen Energy, Regis Resources, Spark Infrastructure
Tuesday: Blackmores, Caltex
Thursday: Perpetual, Ramsay Health Care, Altas Arteria