Aged care company Radius Residential Care has posted a higher full year profit as growth in the number of beds and sales offset rising labour costs.
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Key numbers for the 12 months ended March compared to previous year:
- Net profit $2.7m vs $1.7m
- Revenue $133.4m vs $122.3m
- Expenses $132.9m vs $124m
- Final dividend 0.55 cents a share vs 0.89 cps
Radius has been expanding using the proceeds of last year's heavily discounted $50m capital raising to buy four rest homes it had previously been leasing, as well as a site for a potential retirement village.
Chief executive Andrew Peskett said the result was "excellent" given the challenges encountered through the year from Covid lockdowns and other disruptions, and the company was making progress in expanding its property portfolio.
"We now have a development pipeline of 294 additional beds. We're delighted that the majority of these are likely to be our new care suite product where residents buy an Occupation Right Agreement (ORA)."
He said Radius Care's strategy was to acquire facilities it leases, acquire aged care facilities from third parties, develop new facilities and expand its existing facilities.
The company bought four leased facilities, and acquired a fifth from a private operator for more than $60m last year.
"As the owner of a site, rather than lessee, Radius Care can expand and reconfigure it to best suit its needs. All these purchases were immediately earnings accretive due to
borrowing costs being lower than the lease payments."
The company's labour costs rose more than 10 percent and Peskett criticised immigration settings that were preventing getting qualified health workers getting into the country.
"The policy setting is simply not helpful in addressing the critical worker shortage we currently face. There is no logic to where the government has decided to land in regard to allowing skilled and qualified healthcare workers to immigrate to New Zealand."