Eureka Reports FY26 Revenue Up 24% and Underlying EPS Up 10%, Statutory Profit Falls

Strong Earnings Growth Fueled by All-Age Rental Expansion

Eureka Group Holdings (ASX:EGH) has reported a robust FY26 underlying EBITDA of $21.7 million, marking a 29% increase on the prior year and surpassing its guidance range. Underlying earnings per share climbed 10% to 3.45 cents, reflecting the full deployment of capital raised in late 2024 into accretive acquisitions and organic growth across its portfolio.

The company’s Managing Director Simon Owen highlighted the emergence of the all-age rental segment as a second earnings engine, with the number of all-age rental homes tripling to 1,357 sites during the year. This rapid scaling complements the seniors’ rental portfolio, which remains a core stable contributor with 97% occupancy.

Statutory Profit Decline Reflects Non-Recurring Costs and Tax Adjustments

Despite the strong underlying performance, statutory net profit after tax declined 17% to $16.7 million. This drop is attributed to lower net valuation gains, a $4.3 million allowance against acquisition transaction costs on newly acquired properties, and a $1.7 million charge related to a voluntary GST disclosure to the Australian Taxation Office. The latter is a non-recurring, cash flow neutral item.

Finance costs rose as the Group deployed increased debt to fund growth, with borrowings climbing to $137.2 million from $56 million the previous year. The loan-to-value ratio increased to 34.2%, comfortably within the bank covenant of 55%, and the interest cover ratio stood at a healthy 3.5 times.

Portfolio Growth and Capital Recycling Drive Scale and Efficiency

The Group’s assets under management expanded 29% to $500 million, supported by seven All-age rental community acquisitions and development investments totalling $92.4 million. The portfolio now includes more than 4,000 income-generating sites, with seniors’ rental homes slightly declining due to selective divestments and all-age rental sites more than tripling.

Eureka is actively recycling capital from non-core and remote communities, including the divestment of the Broken Hill seniors’ village and the sale of selected rental homes in Brisbane communities. Proceeds from these sales are being redeployed into higher-returning development and acquisition opportunities, a strategy that management says is deliberate and repeatable.

Sustainability and Capital Management Initiatives

In November 2025, Eureka converted its $180 million syndicated debt facilities into Social Loans aligned with Social Loan Principles, reinforcing its commitment to affordable housing and social impact. The Group also launched its first wholesale All-age rental fund in August 2026, with $14.35 million in equity and $14.5 million in senior debt provided by National Australia Bank, in which Eureka holds a 30.9% stake.

This fund was seeded with the Barrier Reef Tourist Park and will soon include the Benalla Tourist Park, providing a capital-light vehicle to accelerate portfolio growth and generate fee income. The Group’s acquisition pipeline exceeds $120 million, with three acquisitions announced post-year-end adding 589 homes and sites, including the $16.8 million purchase of Sunset Beach Holiday Park in Geraldton, WA, featuring a 10% ingoing yield and significant development upside.

Executive Remuneration and Governance

The Board approved amendments to CEO Simon Owen’s remuneration to align with market peers, including a 25% increase in fixed remuneration and adjustments to short- and long-term incentive opportunities. Both the CEO and CFO achieved 90% of their FY26 short-term incentive targets, reflecting strong operational and financial performance. No long-term incentive awards vested during the year.

Governance remains a priority, with the People and Culture Committee overseeing remuneration policies to ensure alignment with shareholder interests and company performance.