What's driving Regis Aged Care's earnings upgrade?
Regis flags top-end earnings as occupancy and RAD inflows surge
- Earnings outlook: FY26 earnings expected around $135m at top end of guidance
- High occupancy: Mature home occupancy reaches 95.9% driving revenue growth
- RAD inflows: Year to date RAD cash inflows hit $223m up 14% on FY25
- Strategy shift: AI integration cost savings acquisitions and asset divestments underway
The ASX-listed aged care provider issued a three-page statement before the market opened this morning, saying earnings will be at the top end of earlier guidance.
Regis Aged Care now expects earnings of approximately $135 million for the full year, a 7% increase on the $125.8 million reported the previous year and at top end of the $130 million to $135 million range provided with the 1H results.
Occupancy 95.9%
Earnings are being elevated by "sustained high occupancy", Regis said. Average occupancy for mature homes was 95.9% in Q326, up from 95.5% in the previous corresponding period.
"Occupancy performance continues to benefit from targeted sales initiatives, improved hospital discharge pathways and an increasing shortage of available beds in the market," the operator said.
RADs well ahead of last year
Regis said it has a "clear runway" for strong RAD cash inflows.
The company generated net RAD cash inflows of $44.5 million in Q3 FY26, taking total net RAD cash inflows for YTD March FY26 to $223m, already up 14% on the $195.4 million net RAD cash inflows reported for FY25.
Regis Aged Care had $2.3 billion in paid-up RADs as of 31 March 2026, supported by recent acquisitions, higher room prices, and an increase in the proportion of RAD-paying residents.
AI adoption
Regis is implementing AI tools as part of a cost-saving program aimed building a more "agile and efficient" operation.
Further "streamlining" is underway, with future savings expected in management, support office, and roster optimisation.
The aged care operator will continue to target "quality" acquisitions and greenfield developments, and will divest "non-care" or "lower-returning" assets.
Govt's $3BN supports aged care sustainability
The Government's $3 billion aged care package, announced by Health Minister Mark Butler earlier this month, will support "sector sustainability", Regis said, though further analysis is needed once the final details are released at the 12 May Federal Budget.
Regis’ Managing Director and CEO Dr Linda Mellors, who departs the company in June, said, "The release of the Accommodation Pricing Review and the Government’s initial funding response represent an important step toward improving the long-term sustainability of residential aged care.
"While further detail and consultation will be important, the direction of reform is positive and aligns with the sector’s need for a more sustainable funding and capital framework," she said.
Today's earnings update is a turnaround from Regis Aged Care's 1H26 earnings presentation, where the company extended its development timeline and reported a "degradation" of margins due to AN-ACC funding.
On Wednesday, Regis announced Andrew Kinkade would become Managing Director and CEO from 20 July.
Regis shares rose 2% today to close at $6.63, sending market capitalisation to more than $2 billion.
