Third Age Health finds growth engine in aged care as profit rises 38%

Aged care drives 38.4% profit growth

Third Age Health Services Limited (NZX:TAH) delivered a sharply stronger first half, with statutory net profit rising 38.4% to NZ$2.104 million for the six months ended 30 September 2026. Revenue increased 20.8% to NZ$12.867 million, while EBITDA rose 34.1% to NZ$3.700 million.

The engine was aged medical care. Revenue from that segment rose 33.8% to NZ$9.153 million, with segment profit before tax increasing to NZ$2.696 million from NZ$1.651 million. Third Age Health provided services to 129 aged residential care facilities at the half-year, up seven from a year earlier, while the number of residents receiving care increased 6.9% to 7,654.

The result builds on the company’s ARC and Cicada acquisitions, which had expanded its aged care footprint in the previous financial year. The interim accounts show NZ$1.568 million of revenue from acquired businesses, although ARC Health and Cicada Health moved into the existing operations category after completing 12 months under group ownership.

General practice remains the weak spot

Community general practice moved in the opposite direction. Revenue slipped to NZ$3.714 million from NZ$3.813 million, while segment profit before tax almost halved to NZ$258,000 from NZ$494,000. The combined enrolled patient population fell 4.3% year on year to 26,031, with the decline entirely in community general practice.

That split matters because the group’s headline growth is not evenly distributed across its two businesses. Executive chairman John Fernandes said ARC Medical Services and Community General Practice now operate as distinct businesses under Crystal Murphy and Greg Clarke, respectively, as management seeks faster decision-making and clearer accountability.

Cash generation supports quarterly dividend

Operating cash flow rose to NZ$1.870 million from NZ$1.521 million, despite a NZ$597,000 increase in trade and other receivables. Cash at the end of September was NZ$3.000 million, while total liabilities fell to NZ$7.100 million from NZ$7.704 million at 31 March 2026. The company also said it complied with its bank covenants during the period.

The board declared a fully imputed second-quarter dividend of 4 cents per share, matching its stated quarterly policy. Combined with the first-quarter payment, distributions for the half-year total 8 cents per share, although the company paid NZ$796,000 in dividends during the period and also paid NZ$184,000 to non-controlling interests.

Technology spending adds a near-term trade-off

Management said it intends to increase spending on cybersecurity and technology infrastructure, accepting some cost to short-term earnings in exchange for what it described as greater long-term durability. The group’s technology and IT expense already rose to NZ$469,000 from NZ$383,000 in the prior comparable period.

The interim statements are unaudited, and no full-year earnings guidance was provided. The immediate question is whether aged care growth can continue to offset weaker general practice economics while Third Age Health simplifies its systems, integrates its operating model and funds higher technology costs without compromising the dividend.