Promisia Healthcare reported a 58% jump in underlying EBITDAF to $6.6 million for FY26, driven by improved occupancy and operational upgrades. The company introduced a dividend policy tied to operating free cash flow, signalling confidence in sustained cash generation.
- 58% increase in underlying EBITDAF to $6.6 million
- Group care occupancy rises from 87% to 94%
- Portfolio valuation up 17.1% to $107.2 million
- New dividend policy based on operating free cash flow
- Debt restructuring lowers interest costs and improves liquidity
Financial Surge Reflects Operational Turnaround
Promisia Healthcare Limited (NZX:PHL) has posted a robust set of full-year results for FY26, with underlying EBITDAF soaring 58% to $6.6 million on revenue growth of 29% to $40.1 million. This financial leap stems from a concerted effort to lift occupancy across its aged care and retirement living portfolio, which climbed from 87% to 94% during the year, edging closer to the company’s 95% target.
Key to this performance has been the successful conversion of Nelson Street’s dementia wing and the near-complete sales turnaround at Ranfurly Manor, where care suite occupancy jumped from around 50% to full capacity. Aldwins House and the recently acquired Cromwell operations also contributed to the occupancy upswing, underpinning stronger cash flows and deferred management fees.
Balance Sheet Strength and Debt Refinancing
Promisia’s balance sheet shows marked improvement, highlighted by a 17.1% increase in the aggregate market valuation of its care facilities and villages to $107.2 million. Independent valuations by CBRE Limited confirmed that each site appreciated by at least 10%, reflecting the operational enhancements across the portfolio.
The company also streamlined its debt structure with a consolidation of lending arrangements through Bank of New Zealand, reducing the weighted average interest rate from 7.1% to 5.7%. Interest-bearing finance costs fell to $2.31 million, down from $2.45 million the prior year, while the loan-to-value ratio improved to 31.8%, supported by over $3.3 million in cash and undrawn facilities.
Dividend Policy Signals Confidence in Cash Flow Sustainability
In a notable strategic development, Promisia introduced a formal dividend policy for FY27, based on operating free cash flow rather than accounting profit. The policy targets returning 20% to 40% of operating free cash flow to shareholders, balancing capital returns with disciplined reinvestment and balance sheet maintenance. Operating free cash flow is calculated by adjusting underlying EBITDAF for cash interest, required debt repayments, cash tax, and maintenance capital expenditure.
This move marks a milestone for the company, signalling confidence in the sustainability of its cash generation following a year of operational and financial consolidation. The Board emphasised that dividend payments will remain at its discretion, taking into account financial performance, funding needs, and growth opportunities.
Leadership and Governance Enhancements
The FY26 results were driven in part by leadership changes, including the appointment of Graeme Dodd as Chief Operating Officer in May 2025. Dodd’s clinical expertise and operational discipline have been credited with improving consistency and accountability across sites. CFO Francisco Rodriguez Ferrere played a pivotal role in financial oversight and capital structure optimisation, contributing to the company’s stronger earnings and cash flow profile.
Governance adjustments include the transition of executive director Thomas Brankin to a non-executive role post the 2026 annual meeting, and the reinstatement of Craig Percy as an independent director. The Board composition is set to shift towards a majority of independent directors by June 2026, aligning with NZX Corporate Governance Code recommendations.
Operational Excellence and Community Integration
Beyond the numbers, Promisia has invested in operational systems including a shared resident management platform and supplier consolidation to build a scalable operating model. The company’s Ran-fit strength and balance programme, originating at Ranfurly Manor, has expanded across all sites, emphasising resident wellbeing and community engagement.
Facility managers like Darren McKean at Ranfurly Manor have driven cultural and occupancy turnarounds through strong local leadership, reinforcing the company’s ethos of creating connected communities where residents feel valued and cared for.
Outlook Anchored on Growth and Acquisition
Looking ahead, Promisia projects at least 20% growth in underlying EBITDAF to a minimum of $8 million in FY27, supported by maintaining occupancy above 95%. The company is actively pursuing earnings-accretive acquisitions and development opportunities consistent with its strategic framework.
While the aged care sector remains challenged by funding constraints and labour pressures, Promisia’s strengthened financial platform and operational momentum position it to capitalise on constrained bed supply and demographic demand growth.
Bottom Line?
Promisia’s FY26 turnaround and new dividend policy set a foundation for growth, but execution on acquisitions and occupancy targets will be critical to sustaining momentum.
Questions in the middle?
- How will Promisia navigate ongoing sector funding pressures while pursuing growth?
- What impact will the shift to a majority independent board have on strategic decisions?
- Can the company maintain occupancy gains and operational improvements amid labour market challenges?