27 Nov 2023

Radius Care sees drop in profit, but better underlying result

11:42 am on 27 November 2023
Nurse consoling a senior woman in the nursing home holding her hand in the nursing home

File photo. Photo: Kzenon

Aged care operator Radius Care reported an 18 percent drop in half-year profit, due to the previous year's one-off gains.

However, stripping out the one-offs, it delivered a better underlying result after high occupancy rates.

Key numbers for the six months ended in September, compared with a year ago:

  • Net profit $1.4 million vs $1.7m
  • Revenue $84.5m vs $69.9m
  • Underlying profit $10.5m vs $7m
  • Borrowings $97.7m vs $97.7m
  • No dividend vs 0.7 cents a share

Its bottom-line profit of $1.4 million was lower, because the prior comparative period included $1.8m in one-off gains related to previously leased properties.

The 50 percent increase in underlying profit was at the upper end of its guidance.

The company reported occupancy rates at 93 percent in September, which was "well above" the industry average.

Radius also recorded $1.3m in annual savings, following a cost-cutting programme.

"The quality of our operating performance and financial results of the last six months demonstrate the value of our clear focus on our core business," Radius Care executive chairperson Brien Cree said.

The company's borrowings remained unchanged from the previous year, with Radius focused on a debt repayment programme.

It expected the sale of one care home to be settled in January, netting about $19m to help with debt repayments.

The company was "actively progressing" another sale.

The board planned to resume dividend payments after it concluded the debt repayment programme.

It expected improved operating results and momentum in the first half to continue into the second half of the financial year.