• Revenue from Services: $564.2 million, up 18% from the prior corresponding period.
• Underlying EBITDA: $68.1 million, up 31%.
• Net Profit After Tax (NPAT): $24.4 million, up 301%.
• Net Operating Cash Flow: $208.6 million, up 37%.
• Net Cash Position: $179.9 million.
• Interim Dividend: $0.0809 per share, 60% franked.
• Average Occupancy: Increased to 95.7% from 93.6% in the first half of FY24.
• Care Minutes: Increased from 210.1 minutes in Q1 FY25 to 215.3 minutes in Q2 FY25.
• Government Revenue Increase: $68 million, driven by AN-ACC care funding increases.
• Staff Costs: Increased by $59 million or 16%.
• Statutory NPAT: $24.4 million, an increase of $36.5 million from a loss in the prior period.
• Capital Expenditure: $32.7 million, up 7.2%.
• Total RAD Liabilities: Increased from $1.58 billion to $1.72 billion.
• Aged Care Government Revenue per Occupied Bed Day: $313.70, up 10.9%.
• Aged Care Resident Revenue per Occupied Bed Day: $107.60, up 3.9%.

• Warning! GuruFocus has detected 3 Warning Signs with ASX:REG.

Release Date: February 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Regis Healthcare Ltd (ASX:REG) reported a strong set of financial results for the half-year, with revenue from services increasing by 18% to $564.2 million.
• The company's underlying EBITDA rose by 31% to $68.1 million, and net profit after tax increased by 301% to $24.4 million.
• Average occupancy in mature homes increased to 95.7%, with spot occupancy reaching 96% as of February 21, 2025.
• Regis Healthcare Ltd (ASX:REG) has a strong balance sheet with a net cash position of $179.9 million, providing capacity for growth initiatives.
• The company is actively pursuing strategic acquisitions and greenfield developments, with a robust M&A pipeline and several development projects underway.

Negative Points

• The aged care sector faces challenges with staffing, particularly in regional areas and for registered nurses, due to a global and national shortage.
• Regis Healthcare Ltd (ASX:REG) is experiencing increased costs due to mandated care minutes and wage increases, which may impact future profitability.
• The company is navigating significant regulatory changes with the new Aged Care Act, which requires adaptation and compliance with new standards.
• There is uncertainty around the impact of new liquidity rules on the sector, although Regis Healthcare Ltd (ASX:REG) currently meets the proposed standards.
• The closure of some homes, such as Bulimba, indicates ongoing challenges in maintaining occupancy and quality across all facilities.

Q & A Highlights

Q: Can you provide an update on Regis Healthcare's care minutes and how they compare to the required targets? A: Rick Rostolis, CFO, explained that Regis started the financial year with care minutes slightly below the requirement but has since increased to an average of 215.3 minutes in Q2, close to the target of 222 minutes. The company expects to meet the target consistently moving forward.

Q: What is the expected impact of the Fair Work Commission's wage increases for nurses on Regis Healthcare's finances? A: Rick Rostolis, CFO, mentioned that the full-year impact of the nurses' wage increase could be around $10 million. The government has committed to fully fund this increase through the AN-ACC model starting March 1, 2025.

Q: How is the ramp-up of the Camberwell facility progressing, and what are the implications for future developments? A: Linda Mellors, CEO, stated that the Camberwell facility is ramping up ahead of schedule, providing confidence in pursuing both acquisitions and greenfield developments. The strong balance sheet supports this dual approach.

Q: What are the current challenges in recruiting staff, particularly registered nurses, in the aged care sector? A: Linda Mellors, CEO, noted that while the market has improved due to higher government-funded wage rates, there remains a global and national shortage of registered nurses, especially in regional areas.

Q: How will the increase in the maximum RAD price per room to $750,000 benefit Regis Healthcare? A: Linda Mellors, CEO, explained that the increase allows for quicker adjustments to room pricing without regulatory approval, aligning with market conditions and providing a better threshold for managing room prices.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.