Australia’s largest home care operator issues earnings downgrade
Australian Unity flags earnings hit from aged care reforms
- Earnings hit: Reform changes and rising costs impact FY26 outlook
- Growth constraints: Funding delays limit home care expansion
- Review underway: Portfolio and costs under strategic assessment
- Sector signal: Highlights mounting pressure on home care providers
ASX-listed Australian Unity has issued a trading update, revealing Support at Home’s introduction has materially impacted earnings.
The mutual is currently undergoing a strategic review of its business portfolios, strategies and structures, commenced under new Group Managing Director and CEO Kelly Bayer Rosmarin, who began in the role in December.
“The Group has commenced a review of its cost base focused on ensuring the group delivers future cash profits,” it says.
The update says FY26 earnings are likely to be lower than previously forecast due to higher-than-expected costs associated with implementing the aged care reforms, integration of Plena Healthcare, and technology upgrades.
After lower earnings were recorded across all business units in 1H26, 2H26 results continue to be eroded by the Support at Home reforms, it states. Delays in implementation and Interim packages at 60% of total funding have also constrained revenue growth.
In addition, an increase in workforce capacity in anticipation of higher volumes has impacted earnings, and consumer co-contributions have reduced service uptake.
In its Wealth and Capital Markets business, Australian Unity has experienced delays implementing new technologies and seen net capital outflows.
The timeframe of the review has been delayed, but a number of non-cash valuation write-downs are expected this financial year, the update reveals.
“The board and management team remain confident in the Group’s capacity to deliver sustainable profitability in the future and are committed to developing a clear pathway to optimise the Group’s portfolio and capture the significant opportunities ahead,” the statement concludes.
Australian Unity announced a review of its residential aged care operations in 2023, ultimately deciding to remain in the sector.
Today, the operator has 12 residential aged care homes, co-located within the group's retirement villages in NSW, Victoria and Queensland. The group has 22 retirement villages in total. Following the acquisition of Plena Healthcare last year, the operator has about 160,000 Home Health customers.
This week, Australian Unity has also taken on the CHSP operations of Inverell-based McLean Care, and looks set to take on their Support at Home packages too.
It is a significant concern that Australia’s largest home care operator, which the Government has asked to take on regional home care operations as part of a managed exit, is experiencing its own serious financial pressures.
This is not a sustainable situation – and the Government must take note.
Australian Unity shares are trading near record lows.
