Full Year 2026 Regis Healthcare Ltd Earnings Call Transcript
Key Points
- Revenue from services increased 16% to $1.35 billion, with underlying EBITDA up 10% to $138 million.
- Strong operating cash flow of $336 million, up 10%, supported by net RAD cash inflows of $250 million, up 28%.
- Mature home occupancy improved to 96%, up from 95.6%, and total occupied bed days increased 8%.
- Successful ramp-up of Camberwell and Oxley homes, both reaching 99% occupancy within 12 months and generating significant RAD inflows.
- Strategic acquisitions of Rockpool and OC Health added 830 beds, contributing $97 million in revenue and enhancing portfolio quality.
- Accommodation pricing strategy drove average incoming RADs up 20% to nearly $700,000, with recent price increases expected to generate over $500 million in additional cash inflows.
- New 2% RAD retention framework is expected to create a recurring earnings stream exceeding $50 million per annum once fully phased in by FY29.
- Strong balance sheet with net cash position of $174 million and undrawn debt facility of $362 million, providing capacity for growth.
- Employee turnover reduced to 18%, and agency usage dropped to 0.7% of total worked hours, improving operational efficiency.
- Final dividend increased 16% to $0.094 per share, 100% franked, reflecting confidence in cash generation.
- Government funding (AN-ACC) indexation did not include a margin uplift, negatively impacting earnings.
- Staff costs increased 19% to over $1 billion, driven by wage increases and acquisitions, putting pressure on margins.
- RAD retention earnings in FY26 were only $1.3 million, below initial expectations due to delayed uptake and timing of RAD payments.
- Higher Everyday Living Fee (HELF) uptake is still below peers, with a transition year expected to be a revenue headwind.
- One-off costs of $13.7 million related to acquisitions, including $10 million in stamp duty, and $4.3 million for clinical system rollout.
- Effective tax rate was over 33% on statutory profit, reflecting non-deductible acquisition costs.
- CapEx increased significantly to $143 million, with further increases expected, potentially impacting near-term cash flows.
- Occupancy in shared rooms is only around 90%, indicating limited upside and potential for portfolio renewal costs.
- The sale of Ayr and Home Hill homes, while generating a gain, reduced the portfolio size and may impact future revenue.
- Uncertainty around future AN-ACC indexation and government funding settings remains a risk to cost recovery.
Good morning, and thank you for joining us today to discuss Regis Healthcare's 2026 full-year results. I'm joined today by Rick Rostolis, our Chief Financial Officer. I would like to acknowledge Rick, who is presenting his final set of results today.
On behalf of the Board, executive, and broader team, I would like to thank Rick for his significant contribution over the past six years. I am also pleased to note the announcement early today of the appointment of Stuart Hooper as incoming CFO, commencing September 1.
Stuart brings extensive financial leadership experience across the healthcare, infrastructure, and corporate finance sectors, including as CFO of Bupa Asia Pacific and as CFO of Entia. I would like to begin by acknowledging the Wurundjeri Woi-wurrung people of the Kulin Nation, traditional custodians of the land on which we meet today. I pay my respects to the elders, past and present, and I extend that respect to any Aboriginal or Torres Strait Islander peoples on the call. Just turning to
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