Oceania Healthcare has posted a strong half-year turnaround with improved sales, cost savings, and reduced gearing, setting the stage for renewed growth and operational strength.
- Reported NPAT swings to $4.9m profit from $17.1m loss in prior period
- Proforma underlying EBITDA up nearly 20% to $41.8m
- Sales volumes rise 5%, with strong demand for care suites and independent living units
- Gearing reduced to 34.8%, within target range
- No interim dividend declared, awaiting positive free cash flow
A Stronger Financial Foundation
Oceania Healthcare has delivered a markedly improved financial performance for the six months ended 30 September 2025, reversing a prior loss to report a net profit after tax of $4.9 million. This turnaround reflects disciplined execution across sales, operational efficiency, and capital management. The company’s proforma underlying EBITDA rose by nearly 20% to $41.8 million, underscoring the effectiveness of cost-saving initiatives and enhanced operational focus.
Operating cash flow improved by 12.2%, driven by higher cash receipts and reduced supplier and employee payments. Annualised cost savings of $20.4 million have been identified, with $4 million already realised in the half-year, positioning Oceania well to deliver $13.2 million in savings for the full year.
Sales Momentum and Development Progress
Sales performance was a highlight, with total volumes rising 5% to 271 units. Demand remains robust for care suites, which accounted for 161 sales, while independent living unit sales increased 13.4% to 110 units. Developments in Auckland, particularly The Helier and Franklin, are gaining traction. At The Helier, over half the residences are either occupied or under application, with the company targeting full cash recovery by March 2026. Franklin’s presales are building ahead of its January 2026 opening, reflecting Oceania’s sharpened sales capabilities and alignment with customer preferences.
Balance Sheet and Dividend Policy
Oceania’s gearing ratio has improved to 34.8%, comfortably within the company’s target range of 30–35%, supported by $116.1 million in undrawn debt facilities. Despite the improved cash flow, the board has elected not to declare an interim dividend, adhering to a new policy that ties dividend payments to positive free cash flow from operations. This cautious approach signals a focus on strengthening financial resilience before resuming shareholder returns.
Strategic Outlook
The company’s leadership emphasizes a disciplined approach to growth, balancing development activity with market conditions and capital availability. Near-term priorities include completing key projects, further improving care profitability, executing cost-out initiatives, and divesting non-core assets to release capital. Oceania aims to build 100–150 units annually over the near term, underpinning sustainable growth while maintaining financial discipline.
CEO Suzanne Dvorak and Chair Liz Coutts highlight the company’s strengthened foundations and operational momentum as it enters the second half of FY26. The focus remains on converting sales, reducing debt, and returning to positive free cash flow, setting the stage for a potential resumption of dividends and continued value creation.
Bottom Line?
Oceania Healthcare’s disciplined execution has restored financial health and sales momentum, but the path to sustained free cash flow and dividend resumption remains a key watchpoint.
Questions in the middle?
- When will Oceania Healthcare achieve positive free cash flow to support dividend payments?
- How will the company balance development pace with market conditions amid ongoing cost pressures?
- What impact will the planned divestments have on capital structure and growth capacity?