Regis Healthcare Ltd. · ASX:REG
Regis Healthcare — H1 2020 Earnings Presentation
24 slides from Regis Healthcare's earnings presentation, Feb 26, 2020
Slide 1: 1H FY20 Financial Result
1H FY20 FINANCIAL RESULT Dr Linda Mellors Managing Director and Chief Executive Officer Mr Andrew Grayson 26 February 2020 Acting Chief Financial Officer
Slide 2: Contents
CONTENTS Business and Financial Highlights 2 Strategy 7 Outlook 12 Appendices 14 1
Slide 3: Business and Financial Highlights
BUSINESS AND FINANCIAL HIGHLIGHTS 2
Slide 4: 1H FY20 Financial Summary
1H FY20 FINANCIAL SUMMARY 1H FY19 1H FY20 Underlying 1H FY20 1H FY20 AASB 16 1H FY19 KEY FINANCIAL STATISTICS Underlying v 1H FY20 Reported Underlying1 Impact Underlying Pre AASB 16 Underlying Pre AASB 16 Revenue ($m) 361.5 361.5 (29.3) 332.2 318.2 4.4% Ramp ups $19.3m, steady state ($4.7m) Costs ($
Slide 5: NPAT
NPAT 1H FY20 Reported NPAT of $12.1m was 50.5% lower than 1H FY19 ▪ $13.1m decline in Reported EBITDA (pre AASB 16) ▪ $17.6m decline in EBITDA from steady state due to cost1 inflation (~3%) exceeding Government funding (COPE) indexation (1.4%) and lower occupancy ▪ $6.1m additional EBITDA from homes
Slide 6: Debt
DEBT 30 June 31 Dec1 30 June 31 Dec1 $m 2018 2018 2019 2019 Total net debt, comprising: 403.8 363.6 303.2 281.5 - Development debt – Aged Care2 191.4 88.2 50.4 88.7 - Development debt – RVs2 11.1 12.0 13.3 15.1 - Core debt 209.1 299.0 239.3 204.7 - (Cash)/overdraft (7.8) (35.6) 0.2 (27.0) Core debt
Slide 7: Key Operational Statistics
KEY OPERATIONAL STATISTICS KEY OPERATIONAL STATISTICS 1H FY19 2H FY19 1H FY20 Total operational places 7,142 7,078 Average occupancy1 (%) – steady state 91.9 91.6 90.4 Spot occupancy as at 25 February 90.7% Average occupancy1 (%) – ramp up 49.2 64.9 75.1 Spot occupancy as at 25 February 83.2% Aged C
Slide 8: Strategy
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Slide 9: What's Working Well?
WHAT’S WORKING WELL? Regis Healthcare is one of Australia’s leading aged care providers and delivers high quality care and services across residential, retirement, community and home settings One of Australia’s largest 63 homes Resident care and aged care providers with 6 retirement villages wellbei
Slide 10: Focus Areas 2H FY20
FOCUS AREAS 2H FY20 1. Optimise business performance • Maintain excellent resident care standards • Occupancy – steady state and ramp up • Cost discipline and efficiency focus 2. Review of opportunities • Market pressures • Diversification • Potential reforms post Royal Commission 3. Conservative ap
Slide 11: Development Program
DEVELOPMENT PROGRAM ▪ 7 aged care developments ready for progression ▪ Land is owned ▪ Sufficient licences held to commence mobilisation ▪ Development Approval received or applications being prepared ▪ Construction at Regis Camberwell planned to commence FY20 ▪ Strategically reviewing or pausing oth
Slide 12: ESG Achievements and Plans
ESG ACHIEVEMENTS AND PLANS Environmental ▪ Program maturing ▪ Building initiatives - solar panels and LED lighting ▪ Residents engaged - e.g. growing own herbs and vegetables, recycling ▪ Waste management program planned for FY21 Social ▪ Intergenerational programs continue ▪ Improvement in employee
Slide 13: Outlook
OUTLOOK ▪ Expect improved 2H FY20 EBITDA1 and NPAT ▪ Occupancy improvement in steady state and WA ramp up homes ▪ Full year effect of business performance savings ▪ Expect $50m - $70m net RAD cash flow from completion of ramp up of new homes2 in the period to 30 June 2021 ▪ Slower development progra
Slide 14: Questions
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Slide 15: Appendices
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Slide 16: Appendix A - Glossary
APPENDIX A - GLOSSARY ACFI Aged Care Funding Instrument COPE Commonwealth Own-Purpose Expense A ‘Daily Accommodation Payment’, being the RAD converted to a daily amount and paid periodically (e.g. monthly) by a resident to an Approved Provider for the cost of DAP accommodation. The DAP is calculated
Slide 17: Appendix B - Portfolio
APPENDIX B - PORTFOLIO As at 31 December 2019 No. of homes 63 Total operational places 7,078 Total bedrooms 6,432 Club Service homes 21 Significantly refurbished 59 ▪ Acquisition of 2 Homes in Regional Qld will add 173 new places, settlement due 1 March 2020 16
Slide 18: Appendix C - Resident Profile
APPENDIX C - RESIDENT PROFILE ▪ No significant changes in resident profile during 1H FY20 Incoming Residents3 1H FY20 Accommodation payment profile (576 residents) ▪ Number of incoming residents electing to pay a full RAD remained steady at ~56-58% for the last 2 years RAD 37% ▪ Resident tenure is 2
Slide 19: Appendix D - Funding vs Care Costs
APPENDIX D - FUNDING VS CARE COSTS COST OF CARE ANALYSIS – STEWART BROWN SURVEY 2019 AGED CARE PERFORMANCE SUMMARY 240 220 200 52.3 180 $ per resident per day 160 140.7 140 120 230.1 100 177.8 8.2 80 60 30.1 8.4 40 3.9 7.1 10.7 20 34.9 0 (13.9) -20 Average ACFI Resident Total care Direct care Other
Slide 20: Appendix E - Financials Income Statement
APPENDIX E – FINANCIALS INCOME STATEMENT Variance 1H FY20 1H FY19 2H FY19 FY19 1H FY20 1H FY20 AASB 16 1H FY19 to 1H FY20 $m Underlying Underlying Underlying Underlying Reported Underlying1 impact2 Underlying Pre AASB 16 Pre AASB 16 Revenue Government revenue 222.6 229.7 452.3 229.5 229.5 229.5 3% R
Slide 21: Appendix F - Financials Cash Flow Statement
APPENDIX F – FINANCIALS CASH FLOW STATEMENT Funding 1H FY19 2H FY19 FY19 1H FY20 1H FY20 $m received in Underlying1 Underlying1 Reported Reported Underlying advance 2 Reported EBITDA 56.3 60.4 116.7 73.0 73.0 Change in net working capital (1.4) 7.0 5.6 (5.4) (5.4) Government funding received in adva
Slide 22: Appendix G - Financials Balance Sheet
APPENDIX G – FINANCIALS BALANCE SHEET 31-Dec-2019 31-Dec-2019 AASB 16 31- Dec 2019 Funding 30-Jun-2019 Underlying As at, $m Reported impact1 Reported received in Reported Pre AASB 16 Pre AASB 16 advance 2 Cash and cash equivalents 27.0 27.0 (27.0) 0.0 0.0 Trade and other receivables 8.6 8.6 8.6 10.5
Slide 23: Appendix H - Reported to Underlying Reconciliation
APPENDIX H – FINANCIALS REPORTED TO UNDERLYING RECONCILIATION $'m Half Year ended 31 December 2019 Revenue EBITDA NPBT NPAT 1H FY20 Reported results 361.5 73.0 17.3 12.1 Royal Commission Costs 0.0 1.3 1.3 0.9 1H FY20 Underlying results 361.5 74.3 18.5 13.0 AASB 16 transition impact (29.3) (29.9) 0.1
Slide 24: Important Notice
IMPORTANT NOTICE This presentation contains general information about the activities of Regis Healthcare Limited (Regis) which is current as at 26 February 2020. It is in summary form and does not purport to be complete. It presents financial information on both a statutory basis (prepared in accord