In March this year, Regis has released guidance that FY19 ‘normalised’ net profit would be in the range of $47 million to $51 million, and that EBITDA in the second half of FY19 would be similar to the first – totalling around $113 million for the full year.
But a recent trading update has confirmed that the provider expects to hit “the lower end” of the net profit guidance for FY19.
The $113 million normalised EBITDA will also include $10 million of additional funding as part of the Federal Government’s announcement that it would provide a one-off $320 million funding package for residential aged care in February 2019.
The update comes on the back of lower occupancy rates for providers – average occupancy for Regis for the second half of FY19 was 91.6% compared to 92.8% in the first half.
Regis also says the cost of new regulatory changes such as the Single Aged Care Quality Framework and new Charter of Aged Care Rights (effective 1 July) are expected to be around $3 million – taking another bite out of profits.
However, there is another bright spot. Their Refundable Accommodation Deposits (RADs) are continuing to increase. As of 31 May, net RADs were $130 million compared to $72 million in the first half of FY19.