Oceania Healthcare reported a 4.1% rise in underlying EBITDA for FY25, driven by strong sales and operational improvements, while launching a new strategic plan focused on growth and efficiency.
- Underlying EBITDA increased to $86.0 million, up 4.1% from FY24
- Operating cash flow rose 6.7% to $110.3 million
- Debt gearing improved to 36.3%, down from 38.3%
- Business optimisation program targets $15m-$20m in cost savings by FY27
- New five-year strategy centered on Connected Care, Inspired Living, Empowered People, and Purposeful Impact
Steady Financial Growth Amid Market Challenges
Oceania Healthcare has delivered a solid financial performance for the year ended 31 March 2025, with underlying EBITDA climbing 4.1% to $86.0 million. This growth reflects steady sales momentum and effective stock sell down across key development sites, despite a 15.5% decline in underlying net profit after tax (NPAT) due to interest charges no longer being capitalised on completed developments.
The company’s operating cash flow also improved by 6.7%, reaching $110.3 million, supported by higher cash receipts from occupation right agreements and increased care revenue. Debt metrics showed positive movement, with gearing reduced to 36.3% from 38.3% the previous year, underscoring disciplined capital management and successful refinancing efforts.
Operational Progress and Sales Momentum
Sales volumes rose by 9.2%, including a notable 17.2% increase in new sales of independent living units and care suites. Key developments such as The Helier in Auckland and The Bellevue in Christchurch saw significant occupancy gains, with The Helier doubling its sales volume year-on-year and occupancy rising to 41%. The rapid sell down of apartments at The Bellevue within 24 months highlights the company’s effective sales and marketing strategies.
Oceania’s business optimisation program is already delivering results, with $5 million in cost savings realised and a broader initiative underway targeting $15 million to $20 million in sustainable savings by FY27. This program aims to enhance operational efficiency, system consistency, and margin discipline.
A Sharpened Strategic Vision for the Next Five Years
Looking ahead, Oceania Healthcare has unveiled a refreshed five-year strategic direction designed to position the company for accelerated growth and evolving market demands. Anchored by the purpose of "Supporting and empowering people to live well as they age," the strategy focuses on four pillars: Connected Care, Inspired Living, Empowered People, and Purposeful Impact.
CEO Suzanne Dvorak emphasized that this plan is not merely an extension of past efforts but a sharper, more ambitious approach to meet increasing care needs and resident expectations. The strategy will guide investment and operational decisions, aiming to create value for shareholders while prioritizing people and purpose.
Dividend Policy Under Review
In a notable development, the board decided not to declare a final dividend for FY25, signaling a review of the dividend policy to better align with operating cash flows. The revised policy is expected to be announced at the upcoming Annual Shareholders Meeting in June, a move that investors will watch closely for indications of future capital returns.
Bottom Line?
Oceania’s FY25 results set a foundation for growth, but investors will be keen to see how the new strategy and cost savings translate into sustained profitability and dividends.
Questions in the middle?
- How will the revised dividend policy impact shareholder returns going forward?
- What specific initiatives will drive the targeted $15m-$20m cost savings by FY27?
- How effectively can Oceania scale occupancy and sales across its development pipeline amid market uncertainties?