Regis announces $11M HY profit – pays out $6M dividend to shareholders

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The listed provider has come out ahead of the other listed operators in its half yearly results – but Managing Director and CEO, Dr Linda Mellors has told the market the result had more to do with the Board’s decision-making and did not reflect an improvement in the residential care sector’s finances.

“Our half-yearly financial performance, in part, reflects management initiatives to preserve profitability in the face of an unsustainable residential aged care sector landscape,” she stated.

“Inadequate Commonwealth Government funding and prevailing uncertainty across the sector needs to be urgently addressed in order to ensure provider viability and build adequate capacity for the future.”

The result is 8.9% down on the $12.1 million profit recorded by Regis in the previous corresponding period.

Revenue grew 6.3% from $332.2 million to $353.1 million, but EBITDA fell slightly by 1.2% to $42.6 million. Cash flow was recorded at $49 million with $4.7 million in RAD inflows.

Regis had seven COVID outbreaks among its 15 aged care homes in Melbourne – one of which was large – which saw average occupancy drop from 88.1% in H1 FY20 to 84.1% for the half year, recovering to 86.6% by 31 December 2020 – average occupancy was 88.3% for the period.

In total, their COVID expenses amounted to $9.7 million, which was offset by 7.7 million in Government COVID funding. Regis says it has lodged grant applications for $3 million in aged care support funding for its affected services.

Another $7.6 million was spent on capital expenditure, mainly in capital maintenance and refurbishing homes with its new developments on pause, while a cybersecurity incident reported in August 2020 also cost $400,000.

However, their balance sheet was strengthened by the sale of land for a planned aged care home at Palm Beach on Queensland’s Gold Coast for around $21 million.

In total, the operator made $2.5 million profit on the sale of passive assets and reduced its debt by $98.4 million to $183.1 million.

Shareholders will now receive an interim dividend of two cents per share 50% franked to be paid on 8 April.

Dr Mellors said given the Royal Commission Final Report is due to be released on Friday, the Board did not believe it was appropriate to put forward any earnings guidance.

However, the CEO expressed optimism for the future post-Report.

“We are confident that acquisition and development opportunities will arise post the Royal Commission and we are well-placed to take advantage of any sector consolidation opportunities that may arise.”

Regis has 64 homes across Victoria, NSW, QLD, South Australia, WA, Tasmania and the Northern Territory.

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