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 Half Year Results, released on 25 November 2024:

Key financial highlights:

• Underlying EBITDA of $10.6m1, adjusted for the sale of one care home, was 14% up on comparative period (pcp).
• EBITDAR per bed was $13.4k2 for the half year, up 10% on $12.2k for the six months ended 30 September 2023. • Net Profit After Tax was $2.0m, up 39% on the pcp.
• Operating Cashflow of $6.6m, up $1.0m on the pcp.
• Occupancy was 93.4% at period end, ahead of industry average.
• Financing costs decreased by $1.8m, or 35%, on the pcp.
• Interim cash dividend of 0.65 cents per share, fully imputed.
• Acquisition of 51% of Cibus Catering, completed on 25 October 2024

Radius Care’s key performance measure, Underlying EBITDA, was $10.6m, 14% up on the pcp, adjusted for the sale of one care home. EBITDAR per bed was $13.4k for the six months ended 30 September 2024 (an increase of 10% on the pcp). These results were driven by stronger operating metrics across the business, despite having one less care home in the portfolio.

Net Profit After Tax was $2.0m (up 39% on the pcp).

Other financial metrics all demonstrated growth on the pcp. Revenue increased 7% on the prior period to $85.4m (adjusted for the sale of one care home). Operating Cashflow was $6.6m (up 18% on the pcp).