Resilient Regis delivers a 19.9% EBITDA on $701M revenue from 7,144 beds in ‘difficult’ year

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Regis Healthcare delivered a $138 million EBITDA result in FY21 despite an average occupancy of just 88.9% and staff expenses accounting for 74.3% of revenue.

Management in addition had the challenges of the COVID-19  pandemic, the Royal Commission, the $35 million underpayment of staff revelation and a hostile takeover approach by Washington H. Soul Pattinson and Regis co-founder and Director Bryan Dorman.

The net profit after tax was $19.9 million – which was fully distributed to shareholders as dividends (including Dorman).

The 19.9% EBITDA is a stark contrast to the majority of the country’s 800 residential aged care operators, where approximately 60% are trading at a loss.

There were several standout comments in the Regis investor presentation this week.

The first was the emphasis on their tight management team and focus on recruiting needed talent from outside the aged care sector.

The second was the repeated emphasis on digital efficiencies.

The third was the renewed emphasis on home care over the next three years and retirement living beyond that.

And the fourth was their eye to capitalise on market opportunities that might arise, presumably out of consolidation of the sector.

The group reduced debt over the 12 months from $236 million to $142 million, while maintaining their debt facilities.

We have predicted that the total number of residential aged care operators will consolidate from the approximately 800 currently operating across the country, down to 100 within five years. Regis is making it clear it intends to be a leader in the consolidation by the chart below, including ‘competitor analysis’.