Promisia Healthcare Limited Analysis

Overview

Promisia Healthcare Ltd is a public company listed on the NZX. It was formed in August 1983 as Genestock NZ Ltd. and has remained as a listed company undertaking a number of diverse activities over the last 30 years. The company came under the control of the current major shareholders and directors in 2003/4 and for some years remained a listed shell company, i.e. the company remained listed on the NZX but it did not have any substantive trading activity. For a period of time the company researched and marketed a dietary supplement called Arthrem and then in October 2020 moved in to the current aged residential care business.

The business's principal activity is the provision of rest home and hospital level care. In addition, care is offered for dementia, respite, palliative and for younger people with lifelong disabilities (YPD).

Promisia Healthcare Ltd currently owns and operates four aged care facilities comprising of 404 care beds. In addition, Promisia operates two retirement villages comprising of sixteen villas. There are also a further 28 villas and 10 care suites in an advanced stage of construction.

Performance

The following information was extracted from Promisia Healthcare Limited's half year results, released 25 November 2024:

Significant strategic progress; momentum continuing

• Strategic growth with acquisition of Golden View Lifestyle Village and Ripponburn Home and Hospital in Cromwell on 29 August 2024
• Refinancing with BNZ with improved terms and tenure, and repayment of second-tier debt and Senior Trust loans
• Successful capital raise, share/warrant consolidation and sale of Eileen Mary facility enabling growth and delivering improvement in key debt and liquidity measures
• Record first half operating revenue and a positive uplift in operating profit1 compared to prior comparative period (pcp)
• Significant uplift in Net Tangible Assets (NTA) to 72 cents per share, up 57% on pcp
• FY25 guidance of significant uplift in revenue with EBITDAF2 expected to be upwards of $4.2m (FY24: $3.8m)

The first half of the FY25 financial year has delivered a step change in Promisia’s strategic growth, with a successful $4.7m capital raising and share/warrant consolidation, the acquisition of two facilities in Cromwell, and the sale of the Eileen Mary village in Dannevirke.

In addition, the Board announced several changes with the appointment of Tony Mortensen as a non-independent director, and Jill Hatchwell being reappointed while the Board undertakes a considered recruitment process. Director Craig Percy’s role has been expanded to provide operational support to Promisia, with a particular emphasis on integrating the newly acquired Cromwell facilities into the group.

Chair Rhonda Sherriff said: “It has been a very busy six months, as we have expanded our network in line with our strategy to acquire larger scale aged care facilities in regions with growth populations.

“We are incredibly excited about the addition of two Cromwell facilities to our portfolio, which have been value accretive since day one. These are in a region with high demand and a strong resales pipeline. We are moving quickly to integrate the facilities into our group and realise synergies. This will allow Promisia to realise its future growth aspirations for the Central Otago region.

“We were also pleased to recently conclude the sale of the Eileen Mary facility in Dannevirke for $6.1m, which allowed capital to be recycled into our Cromwell acquisitions through bridge financing with BNZ. The Masonic Villages Trust is a very experienced aged care provider and will be a quality owner for staff and residents".