Regis Aged Care reported its 1H 2024-25 results on Monday morning, revealing its earnings were up more than 500% and occupancy was at 96% as of 21 February 2025.
With strong demand for aged care beds forecast, Australia's last remaining publicly listed aged care provider is well positioned for strong future growth, Managing Director and CEO Dr Linda Mellors told an investor presentation.
"Regis will continue to use its strong balance sheet, substantial debt facility and disciplined management of the business to support the active pursuit of further material, strategic acquisitions and greenfield developments to drive increased shareholder value," she said.
In 1H 2024-25, revenue increased 17.5% from the previous corresponding period to $564.2 million. The result was driven by higher AN-ACC funding due to recent acquisitions and reflecting Stage 3 of the Fair Work Commission's Work Value Case and the Annual Wage Review, as well as increased occupancy.
Earnings before Interest and Tax soared 522.9% to $44.4 million.
With a debt refinancing completed in December 2024, Regis now has a total facility of $367.1 million and a strong net cash position, meaning the group is well placed for future refurbishments and acquisitions.
Greenfield developments
The Toowong (QLD) greenfield project has commenced, and developments at Belrose and Carlingford (both in Sydney, NSW) are also set to begin in the second half of the year, adding in total 323 beds to the group.
The group has also signed contracts to acquire sites in Essendon and Coburg in Victoria for future greenfield developments, with settlement on those sites expected in H1 2025-26. These could add an additional 240 beds for Regis, meaning there is the potential for 560 new beds through greenfield developments over the next few years.
Its Camberwell (VIC) home opened in November 2024.
Opportunity for consolidation
Regis Aged Care also highlighted the opportunity for continued consolidation in the sector, with many small providers loss-making and, facing increased regulation complexity and higher staff and care requirements, looking to exit.
The presentation noted there are currently 459 single-home residential aged care providers in Australia and 202 small (2-6 homes) providers.
Other highlights of the result:
- The recent BodeWell home care acquisition is expected to be completed by 1 April 2025, and will double the group's home care revenue to approximately $30 million.
- With the release for consultation last week of liquidity ratios for residential aged care providers, Regis said it "would be compliant today" with the proposed 35% / 10% thresholds.
- Regis also noted the "opportunity" in moving to higher everyday living fees for residential aged care.
- Staff turnover has decreased, and agency use declined.
At the time of publishing, Regis Aged Care shares were a little lower for the day at $6.40, and down from last week's high of $6.70. However, the shares were languishing around the $4.00 mark for much of 2024.
