No Dividend for FY25: Oceania Prioritizes Reinvestment Over Payouts

Strategic Portfolio Transformation

Oceania Holdings Limited has marked a decisive shift in its business model, focusing on modernizing and expanding its aged care portfolio. Since its 2017 IPO, the company has tripled its total assets to nearly $3 billion, with a significant reduction in legacy independent living units and a growing emphasis on care beds and suites. This transformation is underscored by the sale or exit of 18 sites and the completion of several high-density developments across New Zealand, including locations in Auckland, Hamilton, and Tauranga.

Operational Momentum and Sales Growth

Operationally, Oceania reported strong momentum with occupancy rates rising notably at key sites such as The Helier, where occupancy jumped from 14% to 41% within a year. New sales volumes increased by over 17%, and the company achieved record sell-through rates for new care suites, including a 62% occupancy within 12 months at Redwood. These figures reflect a growing demand for quality aged care services amid New Zealand’s rapidly aging population.

Efficiency Enhancement Program

In a bid to sustain long-term growth and profitability, Oceania has launched a comprehensive company-wide enhancement plan targeting $15-20 million in annualized cost savings by FY27. The program focuses on optimizing the operating model, including right-sizing professional support functions and reducing business service fees. Investments in ICT systems and a dedicated transformation office are expected to drive productivity improvements and operational efficiencies from FY26 onwards.

Dividend Policy and Financial Discipline

Reflecting a cautious approach to cash flow management and reinvestment, the Board resolved not to pay a final dividend for FY25. This decision aligns with a revised dividend policy that targets a payout ratio of 40-60% of free cash flow from operations, excluding development cash flows. The move signals a prioritization of capital allocation towards portfolio growth and operational enhancements over immediate shareholder returns.

Sustainability and Climate Risk Management

Oceania continues to embed sustainability at the core of its strategy, with a formal Climate Transition Plan addressing short-, medium-, and long-term risks. The company was a finalist in the 2024 Deloitte Sustainability Awards, highlighting its commitment to lowering emissions and adapting its villages and buildings to climate challenges. This focus on environmental stewardship complements its broader strategic pillars centered on resident wellbeing, digital care innovation, and workforce capability.