Eureka’s all-age portfolio powers earnings growth beyond guidance

Underlying earnings outpace statutory profit

Eureka Group Holdings Limited (ASX:EGH) grew its operating engine faster than its statutory bottom line in FY26, with underlying EBITDA rising 29% to $21.69 million and underlying EPS increasing 10.2% to 3.45 cents. Revenue reached $56.7 million, up 23.8%, while net operating cash flow climbed 40.9% to $15.20 million.

The headline statutory result moved in the opposite direction. Net profit after tax fell 16.6% to $16.73 million, with the report citing a $4.33 million allowance against acquisition transaction costs, $1.52 million of non-recurring GST review costs and higher finance expenses. The Group also recorded a $1.67 million current-period charge following a voluntary disclosure and amendments to historical business activity statements after an Australian Taxation Office review; Eureka said the overall GST effect was cash-flow neutral.

All-age portfolio becomes the main growth lever

The sharpest operational change came from all-age rentals. Eureka increased its all-age rental sites from 436 to 1,357 during the year, while segment rental income rose more than fivefold to $10.995 million and underlying EBITDA increased to $6.093 million from $950,000. Long-term occupancy reached 95% at 30 June 2026, compared with 86% a year earlier.

That growth came with a substantial funding bill. Eureka invested $92.43 million across acquisitions, development and capital expenditure, including seven all-age acquisitions costing $80.70 million. The company’s portfolio of investment properties grew to $400.2 million from $300.0 million, while borrowings increased by $80.2 million to $136.2 million on the balance sheet, or $137.24 million before borrowing costs.

Debt remains inside covenants but interest sensitivity rises

Eureka reported a loan-to-value ratio of 34.2%, below its 55% covenant, and an interest cover ratio of 3.5 against a required minimum of 2. However, all borrowings were variable-rate at year-end and finance expense rose to $6.57 million from $4.12 million. The company estimated that a 100-basis-point increase in Australian variable interest rates would reduce post-tax profit by approximately $961,000, holding other variables constant.

The Group had $47.76 million of undrawn committed facilities at year-end, alongside a documented but uncommitted $200 million accordion facility. It also entered into a further $20 million interest-rate collar after year-end, while its first wholesale all-age rental fund launched in August with $14.35 million of equity, $14.50 million of senior debt and Eureka holding a 30.9% equity stake.

More acquisitions are already in the numbers

Three acquisitions agreed after 30 June add a further $41.95 million of committed purchase prices: Townsville Lakes Caravan Park for $6.75 million, Mandurah Coastal Holiday Park for $18.40 million and Sunset Beach Holiday Park for $16.80 million. The report says Eureka’s development pipeline contains more than 800 potential rental homes across seniors’ and all-age communities, including projects at Gladstone, Emerald and Kingaroy.

The seniors’ portfolio remains the earnings anchor, with 1,575 owned rental homes and 97% occupancy at year-end, although its underlying EBITDA rose only 3.3% to $20.87 million. Eureka maintained its full-year dividend at 1.46 cents per share, including a final 0.73-cent distribution declared after year-end, but the dividend remains unfranked and the company recorded a net current liability position of $1.94 million.

Preliminary Victorian findings add a separate uncertainty

The annual report also disclosed preliminary findings from Consumer Affairs Victoria alleging two areas of possible regulatory non-compliance at Eureka’s Victorian seniors’ villages. Eureka said it would respond and believes it has defensible positions; no liability was recognised because the findings remain preliminary and no obligation had been established. The issue is therefore unresolved rather than a confirmed penalty, but it adds another item to the execution list alongside integration, development approvals and funding costs.