Radius Care Reports 37% Profit Growth and Expands Aged Care Footprint in FY26
Radius Residential Care boosted its profit before tax by 37% to $14.3 million in FY26, driven by strong operational performance and strategic acquisitions. The group now operates over 2,000 beds across 25 care homes and four villages, with a focus on high-acuity care and diversified services including home support and catering.
- Profit before tax rises 37% to $14.3 million
- Net profit after tax up 34% to $9.5 million
- Occupancy steady at 94.9% with EBITDAR per bed up 11%
- Acquisition of St Allisa and Karori Village care homes
- Dividend increased 50% to 1.2 cents per share final
Robust Profit Growth Amid Portfolio Expansion
Radius Residential Care Limited (NZX:RAD) delivered a strong financial performance in FY26, with profit before tax climbing 37% to $14.3 million and net profit after tax rising 34% to $9.5 million. This growth was underpinned by disciplined cost management, improved care mix, and a steady occupancy rate of 94.9% across its 25 care homes and four retirement villages.
The company’s underlying EBITDAR per bed increased 11% to a sector-leading $31,100, reflecting enhanced operational efficiency and a focus on higher acuity residents. Total revenue grew 14% to $202.3 million, supported by accommodation supplements and expanded service offerings.
Strategic Acquisitions and Development Drive Capacity
Radius Care’s expansion strategy gained traction with the acquisition of the 109-bed St Allisa care home in Christchurch, fully integrated and contributing to earnings during the year. The purchase of the 90-bed Karori Village care home marked the group’s first entry into the Wellington market, with settlement expected in May 2026. These acquisitions brought total bed capacity to over 2,000, reinforcing the company’s footprint in New Zealand’s aged care sector.
Complementing acquisitions, Radius is advancing a capital-light new-build programme, including a 100-bed care home in Christchurch (Applefields) and an 80-bed facility in Hokitika. The group also continues to develop boutique retirement villages, with projects underway in Matamata and Invercargill. This balanced growth approach leverages long-term private investment to preserve capital for operations and dividends.
Diversification Beyond Residential Care
Radius Care is broadening its service ecosystem with home support offerings that cater to both ACC-funded and private clients seeking personalised, community-based care. The company’s 51% stake in Cibus Catering has expanded its reach into nutrition management and kitchen operations, enhancing quality and operational efficiency across care homes and external partners.
The launch of Luma, an in-house continence product range, and the growth of Radius Shop’s online retail platform further diversify revenue streams while supporting resident wellbeing. These initiatives align with Radius’s vision of providing integrated, person-centred care across the ageing journey.
Operational Strength and Workforce Stability
Staff turnover remained low at 18%, with employee engagement improving to a net promoter score of +20. The company emphasises internal leadership development, with over half of care home managers promoted from within, supporting consistent care standards.
Resident satisfaction also improved, with 91% overall satisfaction and 95% of residents reporting expectations met or exceeded. Quality certifications remain strong, with most care homes achieving the maximum four-year certification term.
Capital Management and Dividends
Radius Care’s balance sheet remains solid with total assets of $374 million and net debt of $68.7 million as at 31 March 2026. The company successfully syndicated its debt facilities, extending maturities and reducing financing costs, bolstering financial flexibility for growth.
The board declared a final fully imputed dividend of 1.2 cents per share, a 50% increase from the prior year, bringing total FY26 dividends to 2.2 cents per share. This reflects a payout ratio of 49% of available funds from operations, balancing shareholder returns with reinvestment capacity.
Governance, Risk, and Sustainability Initiatives
Radius Care maintains a robust governance framework with a majority independent board overseeing risk management, audit, and remuneration. The company voluntarily discloses climate-related data, reporting a modest increase in total emissions primarily due to portfolio growth and operational activity, while pursuing energy efficiency upgrades such as electric heat pump installations.
Looking ahead, Radius Care aims to sustain clinical excellence and operational strength while continuing to expand capacity and diversify services. The integration of recent acquisitions and progress on new developments will be key metrics to watch in the coming quarters.
Bottom Line?
Radius Care’s FY26 results underscore its capacity to grow profitably while expanding high-acuity care and diversifying services, but execution of new builds and integration of acquisitions will test operational resilience.
Questions in the middle?
- How will Radius balance capital-light development with maintaining care quality amid growth?
- Can diversification into home support and retail meaningfully offset sector headwinds?
- What operational challenges might arise from expanding into new regions like Wellington?
