Regis Healthcare Projects FY26 EBITDA at Top Guidance with Strong Occupancy and Cost Savings

FY26 EBITDA Guidance Hits Top End

Regis Healthcare (ASX:REG) is on track to deliver an underlying EBITDA of around $135 million for FY26, landing at the upper boundary of its guidance range. This performance is underpinned by sustained high occupancy rates in its mature aged care homes, which averaged 95.9% in the third quarter; slightly up from 95.5% the previous year. The company’s strategic acquisitions, including Rockpool and OC Health, have bolstered its bed capacity and contributed to strong refundable accommodation deposit (RAD) inflows.

Net RAD cash inflows hit $44.5 million in Q3 FY26, bringing the year-to-date total to $223 million. The paid-up RAD balance now stands at approximately $2.3 billion as of March 31, 2026. These inflows are supported by recent acquisitions, room pricing adjustments, and a higher proportion of residents opting to pay RADs. Regis Oxley, acquired through the Rockpool deal last September, reached full occupancy within a year of opening, exemplifying the company’s effective integration and growth strategy.

Cost Savings and Capital Recycling Drive Efficiency

In response to a constrained funding environment, Regis has rolled out a structured cost-saving program aimed at streamlining operations without compromising care quality. The initiative leverages data analytics and AI-enabled tools to optimise workforce planning, automate routine processes, and support decision-making. These technological enhancements are expected to improve roster efficiency and reduce management overheads.

Alongside operational efficiencies, Regis continues to actively manage its portfolio through acquisitions and divestments. The recent sale of two Far North Queensland homes in Ayr and Home Hill generated a one-off pre-tax profit of $25 million, aligning with the company’s strategy to recycle capital into higher-return assets. This move follows earlier acquisitions that have expanded Regis’ footprint and bed capacity, including the addition of 230 beds in Victoria’s Surf Coast and Bellarine Peninsula reported last year.

Government Funding Reforms Could Shift Sector Dynamics

The Federal Government’s recent Independent Review of Residential Aged Care Accommodation Pricing, accompanied by a $3 billion funding package, signals potential changes for the sector. Key measures expected in the May 2026 budget include targeted capital subsidies, increased accommodation supplements, and new payment tiers for homes with more supported residents. The review also contemplates expanded access to interest-free loans for greenfield developments and reforms to RAD and daily accommodation payment (DAP) pricing.

Regis CEO Dr Linda Mellors described the government’s initial response as a positive step toward improving sector sustainability, though the final impact will depend on the details and timing of policy implementation. The company’s resident mix and portfolio composition will be critical factors in realising potential benefits from these reforms.

With an average resident tenure of 2.5 years, Regis anticipates that progressive repricing of existing RADs to current market rates could generate around $400 million in net operating cash inflows over time, enhancing earnings retention. This financial runway, combined with disciplined capital management and operational improvements, positions Regis to navigate the evolving aged care landscape.

Regis’ recent financial trajectory builds on its strong revenue growth and portfolio expansion, including the acquisition of Rockpool and OC Health adding over 800 beds, as detailed in its half-year report earlier this year. The company’s strategic moves to optimise its asset base and embrace technology-driven efficiencies reflect an adaptive approach amid sector challenges and reform uncertainty.