Rising Costs and Regulatory Delays: What’s Next for Regis Healthcare?
Regis Healthcare has reported a robust FY25 financial performance, marked by significant profit growth and strategic acquisitions, positioning itself for ambitious expansion in Australia’s aged care sector.
- Revenue up 15% to $1.16 billion
- Underlying NPAT rises 37%, statutory NPAT surges 329%
- Occupancy improves to 95.6%, care minutes per resident increase
- Acquisitions expand portfolio by 862 beds across Victoria and Queensland
- Board declares final dividend representing 100% of FY25 NPAT
Strong Financial Momentum
Regis Healthcare Limited (ASX – REG) has delivered a compelling FY25 result, underscoring its position as one of Australia’s leading aged care providers. The company reported a 15% increase in revenue from services to $1.16 billion, driven by improved occupancy rates and enhanced government funding. Underlying net profit after tax (NPAT) rose 37% to $53.4 million, while statutory NPAT soared 329% to $49 million, reflecting both operational strength and one-off adjustments.
Operationally, Regis achieved a mature homes average occupancy of 95.6%, up from 94.1% the previous year, alongside an increase in care minutes per resident per day to 226.7. These metrics highlight the company’s commitment to quality care amid a challenging sector environment.
Strategic Acquisitions and Development Pipeline
Regis expanded its footprint through several key acquisitions, including two residential aged care homes from Ti Tree Operations in Victoria adding 262 beds, and the home care business BodeWell, broadening its service reach in Victoria and South-East Queensland. Most notably, Regis announced the pending acquisition of four premium homes comprising 600 beds from Rockpool RAC Holdings in Queensland, expected to complete by September 2025.
Complementing acquisitions, Regis has advanced its greenfield development pipeline with the opening of the 112-bed Regis Camberwell facility in November 2024 and secured five additional development sites across Victoria, South Australia, and Queensland. These initiatives align with the company’s ambitious target of reaching 10,000 available beds by FY28, a substantial increase from approximately 7,600 beds at June 2025.
Navigating Regulatory Changes and Workforce Investments
The delayed implementation of the new Aged Care Act to November 2025 has provided Regis and the sector valuable time to prepare for upcoming regulatory reforms. The Act introduces funding adjustments, including reintroduction of RAD retention and increased hotelling supplements, which are expected to underpin sustainable care delivery.
Regis has also responded proactively to mandated increases in care minutes and workforce pay rises, funded by government pricing uplifts. Staff expenses rose 15%, reflecting wage increases and recruitment efforts, but staff turnover improved to 23%, indicating better workforce stability.
Financial Strength and Shareholder Returns
Cash flow generation remained robust, with net operating cash flow increasing 21% to $306.1 million, supported by strong refundable accommodation deposit inflows. Capital expenditure rose to $88.1 million, reflecting ongoing investments in new and existing facilities.
The Board declared a final dividend of 8.13 cents per share, fully franked, bringing total FY25 dividends to 16.22 cents per share; equivalent to 100% of underlying NPAT. This payout signals confidence in Regis’ financial position and growth outlook.
Bottom Line?
With strong earnings, strategic acquisitions, and regulatory clarity, Regis is poised for sustained growth in Australia’s evolving aged care landscape.
Questions in the middle?
- How will the delayed Aged Care Act impact Regis’ operational and financial performance beyond FY25?
- What synergies and cost efficiencies are expected from the Rockpool acquisition post-completion?
- How will Regis manage workforce challenges amid rising care standards and wage pressures?