Japara’s FY18 profits drop 21.5% to $23.3M – funding cuts and flu blamed

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The listed provider says that the indexation freeze on aged care funding, higher wages costs and reduced occupancy following last year’s severe flu outbreak are behind the drop, which saw its EBITDA fall 15.8% to $50.7 million, from $60.2 million in FY17.

Average incoming bed contracts also dropped from $350,600 in the first half of 2018 to $323,900 in the second half as Japara cuts its prices to try to counter declining occupancy.

There was some good news for the operator however. Its average occupancy is now up from 93.2% to 94%, and CEO Andrew Sudholz says its acquisition of the Riviera Health portfolio at little to no cost and a development pipeline of 1,200-plus places leaves the company well-positioned for FY 2019.