The ASX-listed residential aged care provider has warned it will scale back development plans after the Federal Government’s AN-ACC price announcement and classification reweightings left funding growth well short of expectations.
In an earnings update on Monday (22 September), Regis said AN-ACC funding will rise by just 2.6% from 1 October 2025, compared with the 5-6% increase CFO Rich Rostolis told investors in August he was “banking on” to cover rising costs.
As a result, Regis has downgraded its FY26 EBITDA growth outlook to 3-7%, or $130-$135 million, against 17.4% growth in FY25, when EBITDA reached a stronger-than-expected $125.8 million.
Funding falls short
Regis blamed the 12 September reweighting of the National Weighted Activity Unit, combined with a 4.7% increase to the AN-ACC industry starting price, for the weaker result.
“The negative financial impact occurs as the AN-ACC funding changes do not sufficiently offset anticipated increases in staff costs arising from the 1 October 2025 Fair Work Commission’s Work Value Case (published on 4 September), the Annual Wage Review, and annual changes to direct care workers’ wages under Enterprise Agreements,” the company said.
The 42% increase to the Hotelling Supplement will also be fully absorbed by higher direct care staffing costs, Regis added.
Development plans delayed
The company’s ambitious target of building two to three homes a year will now be revised.
“The timing of greenfield developments will continue to be influenced by the level of sustainable sector funding and, following the recent funding announcement, we anticipate some delay from that provided as part of the FY25 Full-Year Results investor roadshow,” Regis said.
The announcement comes shortly after Regis acquired four homes from Rockpool in July as part of its growth strategy.
The market reaction was swift. Regis shares fell 27% in a single trading day, dropping from a record $9.22 on Friday to $6.73 on Monday – a $2.50 loss that wiped out recent gains.
