Estia Health and Regis Healthcare have both recorded healthy rises in their share price in the past 12 months, despite the impact of continued COVID-19 lockdowns and the latest wave of infections – indicating that shareholders still see plenty of value in the aged care sector.
The Australian reported this week that Estia’s share price has risen 14.6% in the last year (pictured above) – it closed on Tuesday at $2.11. It has outperformed the average listed company, with the ASX200 only recording a 5.4 per cent rise in the same period.
Regis Healthcare has seen an increase of 3.5% to $1.92 – above the drops recorded when the pandemic hit in March 2020.
The figures are still well below the providers’ listing prices in 2014 – Estia hit the market at $4.48 per share, while Regis landed at $4.01.
But the current prices reflect a turn-around from respective lows of $1.10 and $0.87 in March 2020 when the stock market plunged.
Morningstar equities analyst Alexander Prineas said that while COVID-19 restrictions and uncertainty had “slowed the pace of new residents moving into aged care”, the long-term outlook was strong.
“The infectiousness of Omicron will almost certainly result in more cases. However, the need for aged-care services isn’t going away,” he said.
Certainly, we have seen from previous waves that the end of lockdowns and a decline in cases leads to an increase in occupancy after adult children held off placing ageing parents in residential care.
As we reported here, Regis saw a rebound in its refundable accommodation deposit (RAD) net cash inflow from $4.7 million in H1 FY21 to $47.1 million in the six-month period to 31 December 2021.
