Radius Residential Care Limited Analysis

Overview

Radius Care is a New Zealand owned and operated company, established in 2003 to meet New Zealand’s growing demand for an aged care and associated health care services. Since then, Radius has become one of the leading specialist health care providers in New Zealand, with more than 20 locations nationwide.

Early in 2010, chief executive and director Brien Cree led a management buyout of the company, which brought it back into New Zealand ownership from foreign investors. Brien's vision was to “bring some good old fashioned Kiwi values and standards” back into the aged care sector, and to make Radius Care the best aged care provider in the country.

Performance

The following information has been extracted from Radius Care's FY25 full year results, released on 21 May 2025:

Key financial highlights:

• EBITDAR per occupied bed* of $27.9k, +13% up on FY24.
• Underlying EBITDA* of $23.5m, +20% up on FY24, adjusted for the sale of a care home.
• Operating Cashflow of $20.1m, +42% up on FY24.
• AFFO* of $8.8m, +18% up on FY24.
• Profit Before Tax of $10.5m, up +191% on FY24.
• Net debt reduced by -8% to $67.7m.
• Cash final dividend of 0.8cps (up 14% on FY24 final dividend), with full imputation credits resulting in a gross dividend of 1.11cps, to be paid on 19 June 2025.

Business performance

Mr Peskett said “the record operating performance was driven by a number of factors:

1. Strong aged care occupancy, averaging 92.8% for FY25 (vs 91.8% for FY24), and lifting to 93.9% in the last week of FY25.

2. Improved mix, with higher revenue, high-acuity hospital and ACC-supported admissions.

3. Increased Accommodation Supplement revenue (+$1.0m / +11% vs FY24).

4. Contribution of Cibus Catering (51% interest acquired on 1 October 2024).

5. Reduced debt and lower interest rates decreasing interest costs by $3.4m.”

Financial performance

Radius Care’s key performance measure, pre-NZ IFRS16 Underlying EBITDA, was a record $23.5m compared to the previous record of $20.9m achieved for the comparative period.

Underlying EBITDAR per bed was $27.9k in FY25 compared to $24.7k in FY24. This key performance metric demonstrates Radius Care’s ongoing ability to deliver industry-leading performance.

Profit Before Tax was $10.5m, an improvement of +$6.9m vs $3.6m reported in FY24.

AFFO of $8.8m was generated, +18% above the comparative period, as higher underlying income was partially offset by increased capital investment. Cashflow from Operations was $20.1m, +42% above the comparative period.

Net Profit After Tax increased to $7.4m from a loss of $8.5m in FY24 (the prior year included a one-off non-cash tax expense as a result of a change in tax regulations relating to depreciation on commercial buildings).

Borrowings further reduced during the year, with a $5.8m reduction in Net Debt as a result of increased operating cashflow and AFFO.